Terry McBride on fan communities, TikTok, and building Nettwerk to be a ‘generational’ music company

Terry McBride, CEO of Nettwerk Music Group

Trailblazers is an MBW interview series that turns the spotlight on music entrepreneurs with the potential to become the global business power players of tomorrow. This time, we meet Terry McBride, CEO of Nettwerk Music Group. Trailblazers is supported by TuneCore.


When Terry McBride was 21 years old, he had to make a decision. At the time, he was a civil engineering student at the University of British Columbia, a field hockey star for Canada and a music fanatic.

“I couldn’t do all three, I had to pick one,” he reminisces. “So I took a sabbatical, I stopped playing hockey and I started a record company…”

And so Nettwerk Music Group – co-founded with McBride’s great friend, Mark Jowett (now Nettwerk’s President, International, A&R, publishing) – was set up in McBride’s bedroom, stacks of vinyl demarking the border between office and personal space, and passion making up for the lack of funding. One of the label’s first releases was by Jowett’s own band, Moev.

“We worked evenings and weekends because Mark and I both had day jobs to pay the rent,” McBride – now Nettwerk chairman/CEO – laughs.

“After the first 10 years, when we looked at what we had collectively taken out of the business, we would have been better off if we’d been on the dole! But we didn’t care. We were young and foolish, we had a dream and that was where we were going. And, in the end, it worked out just fine.”

And, indeed, Nettwerk recently celebrated its 40th anniversary as one of the planet’s leading independent powerhouses, giving the team a rare opportunity to look back. McBride, however, generally prefers to look forward, earning an enviable reputation for divining where the music industry is heading, long before the rest of the business catches on.

“I took a sabbatical, I stopped playing hockey and I started a record company…”

So, he built a management company and publishing division alongside the label, long before it became de rigueur. He co-founded the all-female travelling festival, Lilith Fair, with his artist Sarah McLachlan, and helped show festival headliners didn’t have to be men.

And, while Nettwerk’s Vancouver base meant the label had always looked south to America rather than just across at Canada, McBride also thought globally at a time when many label heads thought the music industry began and ended in North America.

Most famously, he spotted the potential for digital music as the rest of the music industry fought a bitter battle against Napster and its pirate brethren. He funded the legal bills of a fan accused by the RIAA of illegally downloading music and then embraced YouTube while it was still the industry’s public enemy number one.

Along the way, Nettwerk’s various divisions have helped make stars of everyone from Skinny Puppy to Tiësto, Barenaked Ladies to Coldplay, and Dido to Passenger.

And, now in 2024, it persists as the very model of a modern indie label powerhouse, with a host of rising stars including Paris Paloma, Mallrat, SYML, Hollow Coves and The Paper Kites, and an innovative ‘community’ approach to breaking them in the streaming age.

Nettwerk sold off most of its publishing catalog to Kobalt in 2016 and formed a strategic partnership with private equity investment firm Flexpoint Ford in 2023, but remains independent. And McBride himself is a ball of nervous energy, enthusing about his new artists and never holding back on either a counter-intuitive industry opinion or a prediction for the business’ future.

The industry should enjoy these visionary outpourings while it still can, as McBride – who also owns the YYoga chain of wellness centers – plans to take a step back from frontline Nettwerk duties at some point in the not-so-very-distant future.

In the meantime, however, it’s time for him to hunker down in Nettwerk’s shiny London office and talk MBW through why he took on the RIAA, why TikTok is “toast” and why everyone in the ‘90s US radio business thought Oasis were “assholes”…


YOU AND MARK JOWETT WERE FRIENDS BEFORE YOU STARTED NETTWERK. IS THAT WHY YOU’RE STILL HERE?

Absolutely. Because friends can deal with elephants in a room before they become big. They can deal with issues quicker and, even if it’s a tough issue, we can be laughing three minutes later. That allows you to move past things quickly.


WHAT’S THE TOUGHEST ISSUE YOU HAD TO DEAL WITH?

We always have tough issues! In the early days, I wouldn’t move on a mechanical [royalty] on discounted records, so we lost a Nine Inch Nails deal. Mark wasn’t happy!

“We have a no assholes rule. Life is too short.”

Another one was when I told him to let Avril [Lavigne] go so she could sign with a major, because the manager at the time was going to ruin my relationship at Sony, which is where Sarah [McLachlan] and Dido were. The way that we work was far more important than hanging onto an artist.

And then she came back nine months later like, ‘Why did you ‘fire me’?’ And I said, for the same reason you fired your old manager – I couldn’t have that type of person inside my relationship with people who I trust and work with every single day. We have a no assholes rule and life is too short.


WHY DID YOU MOVE INTO MANAGEMENT AND PUBLISHING AS WELL AS THE LABEL?

Just because the artists wouldn’t do anything! In the early days, we’d sign artists thinking they’d go out there and work. No! So, we became management and agents so we could arrange for them to work. They were too small for any publisher to care but, if you don’t get registered with all the societies, you don’t get anything anyways, so we did what we had to, in order to make it work. It was being pragmatic like, if they’re not going to do it, we’ll have to do it.


WHY DID YOU GIVE UP MANAGING ARTISTS YOURSELF?

My first marriage ended and it had a lot to do with me not being around, frankly. When you’re away six months of the year, it’s hard. I looked at it and went, I love the music but sometimes I don’t like the dramas that created the music and I don’t have a life.

So, if I want to have a life and to restart, I need to be stationary. I need to do what I love, but not be away for six months of the year. So I made a life decision.


WHAT MADE YOU EMBRACE DIGITAL MUSIC WHEN SO MANY OTHERS THOUGHT IT WAS KILLING THE INDUSTRY?

We were at that really interesting time, where there was either a death star, where we get paid nothing and it’s gone. Or there’s a system that is better than free, because of the value add.

That was the big argument of the time; the music business and the RIAA viewed music as wine, and I viewed it as water – as a utility, but when you put in a bottle you can sell it for three or four dollars.

“The RIAA viewed music as wine, and I viewed it as water – as a utility, but when you put in a bottle you can sell it for three or four dollars.”

I pointed to live – live wasn’t going down, it was going up. So music was being shared, communicated and consumed in a very positive way, but it was about the experience.

At that point it was mostly downloading, ripping. So, it was a hassle. Someone will pay not to have the hassle like, you can’t take water and go walking around with it – but put it in a bottle and it’s not a hassle now, it’s convenient. And that was the argument: we need to make it easy for people to carry and share.


AT THE TIME, SAYING THINGS LIKE THAT DIDN’T GO DOWN WELL WITH EVERYONE IN THE INDUSTRY…

I argued with the RIAA [over prosecuting fans over illegal downloads]. None of those people had deep enough pockets to defend themselves – they were being blackmailed into paying $50,000-$70,000 and lawyers were taking half of it. So I was like, this has to stop – and there was only way to stop it, from the inside. It wasn’t going to stop from the outside, the lawyers were making far too much money.

“The business can grow if you monetize the emotion and realize that you don’t own it, the fans do.”

It just wasn’t a good model; it was the industry putting up a moat, versus understanding that songs are emotions. Yes, they’re lyrics, melodies, bridges and chords, but when a fan attaches their own emotion to that, that song belongs to the fan.

That fan can hear that song 10 years later and know exactly what they were doing when that song become part of their life. And the business is the monetization of that emotion, but their model was to shut that down, to restrict it.

I was like, the business can grow if you monetize the emotion and realize that you don’t own it, the fans do. And that’s what they didn’t get.


LET’S TALK ABOUT SOME OF THE ARTISTS YOU’VE WORKED WITH. WERE YOU SURPRISED TO GET TO RELEASE COLDPLAY’S DEBUT ALBUM, AFTER CAPITOL INITIALLY PASSED ON IT?

I’ll be a bit controversial here. About a year earlier, a certain band named Oasis had a massive hit on alternative radio Stateside. They came to America and they were utter assholes to those same radio programmers. So, over the next year, almost no British artists were added to US alternative radio.

So, for a band like Coldplay, there wasn’t a starting point and as such all of the EMI labels passed.

So Nettwerk released Parachutes and a fellow called Tom Gates, who’s still with Nettwerk, was on the road for literally six months doing nothing but walking into every single radio station, giving them the story and not giving up. We finally got it to stick, and then EMI came back in! (Laughs)

But it didn’t matter. A song [Yellow] that should have been on the radio, that should have been heard by people, that was incredibly uplifting, got there. That’s all that matters.


HOW DID LILITH FAIR COME ABOUT?

Sarah had toured so much around [1993 album] Fumbling Towards Ecstasy, she was burned out. To write another record meant she had to leave home, it was daunting.

So I went, you’ve got to get going again – you’re happy, you live in the woods, the last thing you want to do is tour again – just do five or six shows this summer.

So typical Sarah, challenging – ‘OK, but I don’t want to headline. And if you can’t find me a good support slot with someone I really love musically, then I want five or six acts on the bill and they all have to be female’. That was the challenge the year before Lilith.

I think she did two shows with Sting which were perfect for her and then we did three different shows, in Detroit, LA and San Francisco, with all-female line-ups. They did really well and she absolutely loved it; talking with the other artists, doing a big jam at the end, it got her juices going.

We had one more show in Vancouver and I said, ‘You’ve got three weeks to come up with a name for this, because we’re going out next summer and you’re going to have a shitload of fun. I need a name so I can trademark it, and then we need an album before we go’.

But now she was excited to go, that whole barrier [causing] the writer’s block had been dissolved. She was like, ‘This is meaningful, this is what I want to do, because it creates change’.


PEOPLE STILL SAID IT WAS COMMERCIAL SUICIDE AT THE TIME…

And that didn’t really change! There were major agencies Stateside that wanted nothing to do with it, and there were certain agents who, even if we gave them an offer, would not submit it to their artists. Even when we had success, it was tough.

They saw it as sandboxing their artist within a certain area. The major booking agent on it, Marty Diamond, was a competing agency, and they couldn’t see past that.

The interesting thing is, when we launched Lilith, there was only half a dozen stations that would support female music, it was still 70-80% male. But the Hot A/C format was 30-40 stations by year two, because the stations would come out and see 15-20,000 people, moms and daughters, and they’re like, ‘Holy crap, these are the CEOs of the household – if they’re here for this and I shift my format to start playing these artists, I have a market’. And sure enough, that’s exactly what happened – it actually created a whole format at radio.


THEN WITH AVRIL LAVIGNE, YOU NOTABLY TARGETED EMERGING INTERNATIONAL MARKETS RIGHT FROM THE START…

Yeah, our first focus was Asia. I’ve always had a strategy that you need to be successful on at least two continents, preferably three. For each continent you’re successful on, you’ve got 10 years. By the time you’re not cool on the first one, you go around [the others] and 20 or 30 years later, you’re actually cool again because of nostalgia. Avril just finished her most successful tour in North America because it’s been 20 years.

I spent a lot of time in mainland China. It was challenging because the infrastructure wasn’t really there; you could walk into a city of 10 million people – of which there are, like, 50 of them – and the infrastructure was in the city, but the infrastructure to get to the city was challenging.

So doing a mainland China tour was something else – it was a production nightmare, but we managed to pull it off. There were some funny episodes.

“I’ve always had a strategy that you need to be successful on at least two continents, preferably three.”

I remember being at a tennis stadium in Beijing, there was a stage and then there was 120 feet of empty space, because people were not allowed on the floor. And I’m like, ‘Avril, that’s the way it is – you can’t do anything’.

A friend was trying to get into the show, I go upstairs to get them in and, by the time I come back down, the floor was full and the fire chief and police chief were coming on stage, saying unless those people went back, the show was over! In five minutes, Avril had told people to come down.

Fortunately, we got the show going again. Then the very next show was at some soccer thing, we were where the net is, and the closest audience was at center field! They knew what she’d do and they weren’t letting it happen!


NOT MANY PEOPLE WOULD HAVE EXPECTED BARENAKED LADIES TO BECOME A MASSIVE BAND. HOW DID YOU MAKE IT HAPPEN?

They were amazing songwriters, amazing performers, but no one took them seriously because they had a huge sense of humor and they brought it on stage. But you could not find a better vocalist than Steven Page or a better guitar player than Ed Robertson. And as songwriters together? Astounding.

My whole conversation with them was, no one takes you seriously so there’s a way to do this. Write your album but, when you come back, you do exactly what I say and we will break America.

If you’re so great live, stop having some backstage guy with a barbeque on stage handing out hotdogs to people. I get that humor and it’s hilarious but people need to take you seriously, because you are serious musicians, songwriters and performers.

They were a decade before YouTube. If they’d had YouTube channels, they’d be even richer than they are now, because their humor was hilarious.


WHY DID YOU DECIDE TO EMBRACE YOUTUBE AT A TIME WHEN MUCH OF THE INDUSTRY WAS SUSPICIOUS OF IT?

I look at where the fans go. And YouTube right now has the perfect model: it’s a generational model in that, with the creation of YouTube Shorts – which has pretty much shut down the growth of TikTok – they have created a pathway where my kids will not leave YouTube.

“Spotify will slowly but surely become the older audience and YouTube will become the younger audience and who knows what will come under that.”

There’s no need to leave the ecosystem so they effectively own that 10-25-year-old audience. Spotify will slowly but surely become the older audience and YouTube will become the younger audience and who knows what will come under that.


AND WHERE IS TIKTOK IN ALL THIS?

They’re toast.


REALLY? MOST PEOPLE IN THE BIZ SEE IT AS VITAL FOR BREAKING RECORDS…

You need to look where people are actually going. Yeah, it creates viral moments, but it doesn’t create viral movements and I’m more interested in movements than moments.

They are great people working there and it serves a purpose, but I don’t think you get emotional engagement from it. You don’t get meaningful change from it.


IS AI POTENTIALLY ANOTHER NAPSTER MOMENT FOR THE BIZ?

That’s yet to be seen. Anyone who trains a model upon existing intellectual property and then doesn’t pay those creators, is doing a disservice to the artists and to humanity.

“Anyone who trains a model upon existing intellectual property and then doesn’t pay those creators, is doing a disservice to the artists and to humanity.”

Napster was about breaking a monopoly and making music free so that you could share it, and I had no issue with that, because it was growing the music business, the music business just couldn’t see it.

AI done wrong is a replacement of the business and it will hurt.


NETTWERK WORKS ACROSS ALL GENRES. WHAT’S THE CONNECTING THREAD BETWEEN YOUR ARTISTS?

Communities of overlapping fanbases. Because, if I can’t build an artist a community over a body of work, that allows them to tour if they want to, but not need to because they’re making enough money from their intellectual property, then I haven’t done my job.

You can do that at scale if you market a community and not an individual artist, because you create a high tide. When certain artists inside a community release music, it uplifts other artists, that’s how the algorithm works.

“if I can’t build an artist a community over a body of work, that allows them to tour if they want to, but not need to because they’re making enough money from their intellectual property, then I haven’t done my job.”

The most profound effect we’ve seen is with Paris Paloma’s record – it affected about eight other Nettwerk artists with a gain of 20-30% of algorithmic streams within a single week.

Communities used to come out of cities like the grunge scene in Seattle. And, when a scene broke, the whole scene broke – even the ones at the bottom did quite well. Communities now are more niche but because they’re worldwide, they’re valid.


A LOT OF BIG INDIE BUSINESSES HAVE BEEN ACQUIRED IN RECENT YEARS. HAVE YOU EVER CONSIDERED SELLING NETTWERK?

No. We’re building it to be generational. The artists are generational, the staff and the company is generational and Mark and I want the next generation to take it over.

The only way that I would consider a sale is if that were guaranteed. In the next five years – Mark and I will still be involved and Ric [Arboit, Nettwerk President, Label] also, but more on helping, using our knowledge and having this type of blue-sky session. We want them to have a run at it because they’re really good people who love what they’re doing and will help artists make a difference. We want there to be a legacy.

Nettwerk has got an active roster of 300 artists. I’d like to get it to 500 and we can do that because of the community model.

We have about 50 artists right now that could not tour and do quite well from their intellectual property, some incredibly well – I’d like to at least double that.

Mark and I have no issue handing it off – we’ll be there to help, but do I really want to be dealing with HR issues or a board of directors? I got into it for music. I can deal with that stuff and I’m OK at it, but I prefer to deal with music. So, if I could lose that in the next five years, I’d be even happier than I am now.


Trailblazers is supported by TuneCoreTuneCore provides self-releasing artists with technology and services across distribution, publishing administration, and a range of promotional services. TuneCore is part of Believe.Music Business Worldwide

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