Generally business Q&As are fascinating by dint of who’s being interviewed. Generally they’re fascinating due to what will get mentioned.

And generally, as was the case at this time (February 9), they’re extra-interesting due to who’s asking the questions.

Sir Lucian Grainge, Chairman and CEO of Common Music Group (UMG), was quizzed earlier at this time at Pershing Sq. Holdings’ annual investor convention by somebody he’ll have grown to know effectively.

Pershing Sq., want we remind you, is the funding entity run by billionaire Invoice Ackman which, since summer time 2021, has owned a ten% slice of UMG.

Within the latest previous, Ackman has forecast that Common can rating repeated 10% rises in annual revenues over the following decade, in addition to repeatedly verbalizing his respect for Grainge and his senior workforce.

Right now on the PSH convention in Knightsbridge, London, Grainge was quizzed reside on stage by Ackman himself, who promised a “freewheeling dialogue” that might be gentle on “Wall Avenue stuff”.

The duo delivered on that pledge.

There was little-to-no monetary chatter between the 2 executives, and Grainge didn’t volunteer too many particulars when questioned by Ackman about how/whether or not Common plans to squeeze extra income out of TikTok (UMG is pre-earnings name, so Grainge was cautious to not make “forward-looking statements”).

There have been, although, some revelations about Grainge’s personal story, ideology, and profession – in addition to a quick however fascinating chat in regards to the potential affect of AI on the music business.

Ackman made his admiration for Grainge’s achievements clear from the off, telling the PSH viewers that the British music exec is “perhaps one in every of solely two icons I’ve had the chance to work with as an investor”.

Listed below are three highlights from the dialogue.

1) It’s all all the way down to successful and run

When Sir Lucian Grainge was 13 years previous, rising up in North London, he was out on his bicycle and was hit by a truck driver. The truck driver sped off, however Grainge’s father – who owned a file retailer – was decided to trace him down.

Grainge senior did simply that; he employed a lawyer, and sued the person behind the wheel. Because of this, Grainge junior was awarded GBP £4,000 in compensation – an honest sum of money for any teenager within the mid-seventies.

The now-music exec gave his dad half of the money to purchase a automotive, however used the remaining to bankroll each his personal transport (a beat-up Mini), in addition to his personal early foray into music administration

“I fell right into a scene with recording engineers,” mentioned Grainge. “Effectively, they weren’t actually recording engineers. They have been the fellows who put the two-inch tape on the multitracks [in the studio]; and, actually, they have been the fellows who would order pizzas for the musicians.”

These people did, nonetheless, have the keys to recording studios – that means Grainge was in a position to smuggle acts in beneath the quilt of darkness to file demos via the night time “till the cleaners acquired there at 5am”.

“Actually, they have been the fellows who would order the pizzas for the musicians.”

“We have been form of large gamers [as a result],” mentioned Grainge, “as a result of we had entry to studio time, and in these days in case you had entry to studio time, you have been God”.

Grainge grew to become the supervisor of two Australian writers (seemingly: John Vallins and Nat Kipner) who have been behind a No.1 Johnny Mathis hit (Too A lot, Too Little, Too Late).

From there, Grainge constructed up a “miniature community”, partly developed on the Midem convention in Cannes (the place a teenage Grainge, who’s by no means been an alcohol drinker, would sip lemon juice and water all night on the well-known Martinez to maintain down his prices).

Finally, Grainge started calling varied UK file firm bosses from a payphone from his father’s store, asking for a job.

The then-Chairman of CBS Information UK, Maurice Oberstein, obliged, and gave Grainge his first salaried position within the music enterprise – as a expertise scout in CBS’s publishing firm.

Grainge’s first signing, famously, was The Psychedelic Furs.

2) “I panic once I take an aspirin…”

Chatting with Ackman, Grainge skipped via his rise Common Music Group’s ranks, together with his profitable stints as the top of UK label Polydor, and as each the top of Common Music’s UK and worldwide operations.

Grainge additionally mentioned the aftermath of the fateful yr of 2011: The yr that Spotify launched within the US, and the yr that Common – beneath its new CEO, Grainge – launched a profitable takeover bid for its rival main file firm, EMI Music

However maybe essentially the most fascinating a part of Grainge’s dialogue with Ackman was the British music exec’s observations on himself, and the tradition he’s fostered inside UMG down the years.

Ackman requested Grainge how he was in a position to swap between conferences with Prime Ministers and main traders to assembly with famous person artists and songwriters, or Daniel Ek, in the identical day.

These characters all have “robust perceptions of self” famous Ackman, who requested: “How do you make [each of them] really feel good leaving the room?”

Grainge replied that he was “miswired and cross-brained”, which allowed an uncommon relationship between his personal “left-brain” and “right-brain”.

He continued: “I panic when I’ve to take an aspirin and I’ve by no means drunk alcohol, however I can have enjoyable with expertise and artists, and I can join with [them]… I really like characters, I really like folks that suppose for themselves, [and] I really like backing individuals.”

“We have now to be a company of nice characters… [but] everybody that works for me has to have the ability to depend, they usually have to have the ability to say no.”

On the opposite facet of his mind, Grainge identified that his mom was a chartered accountant (aka enterprise supervisor), and he’d inherited a few of these expertise: “I can say no, and I can depend!”

Grainge identified that this mixture of numerical and artistic pondering was one thing he seems for in all of his senior executives.

“You want to have the ability to speak about prices and P&L, how effectively we’re working the enterprise,” he mentioned. “[But] that’s of completely no curiosity to the artist neighborhood. They wish to know they’re going to be backed, coated, and invested in. And ‘funding’ is available in two kinds: Not solely by way of danger, but in addition the capital to execute, to [do] the work, to market [music], to create short-form content material, to make movies [etc.].”

Grainge famous his dedication to maintain the worldwide working of Common Music Group “extremely decentralized”.

This mannequin was undergirded, he mentioned, through a multi-label construction in lots of international locations that UMG operates in. (And it operates in lots of: In response to Grainge, UMG is lively in 200 markets and is “on the bottom” in over 70.)

When Ackman recommended that it might have been due to Grainge that Billie Eilish signed to Common, Grainge replied: “I didn’t signal Billie Eilish; the individuals at Interscope signed Billie Eilish. However I introduced these individuals in, and [those people] are what makes Interscope as nice as it’s.”

He continued: “I hope that our tradition, a tradition of invention, retains entrepreneurs [like that] within the firm. And that culturally they wish to be with us and to proceed to do what they do.

“We have now to be a company of nice characters… [but] everybody that works for me has to have the ability to depend, they usually have to have the ability to say no.”

3) AI a risk – or a possibility?

Early on throughout Grainge’s dialog with Ackman, the Common boss identified: “Each time there’s been any disruption in music or sound, or in expertise, somebody someplace within the incumbency is petrified about it. And I’ve by no means been [that way]. I’ve by no means been afraid of change.”

This theme circled round once more later, when Ackman requested Grainge in regards to the potential risk to the music enterprise from generative AI.

On ChatGPT particularly, Ackman requested: “ChatGPT can write a potem; it may well write lyrics. Is that this a instrument that artists will use to boost the standard of their music? Or is it a disruptive risk?”

“If [AI] will help people enhance – however not detract from high quality or authenticity – then I’m open-minded about it.”

Grainge replied: “It’s an excellent query. I’m very conscious of [the debat around AI].”

But Grainge recommended his pure place was, as soon as once more, to embrace slightly than to run scared.

He in contrast the present wave of latest generative AI instruments to the delivery of the polyphonic synthesizer in music – “with two palms, you might play the orchestral work of 40 musicians… and there was panic”.

Summing up, Grainge mentioned: “If [AI] will help people enhance – however not detract from high quality or authenticity – then I’m open-minded about it.”Music Enterprise Worldwide