This CEO relies on gut feel and instinct rather than data-driven decisions in the music industry.
This CEO relies on gut feel and instinct rather than data-driven decisions in the music industry.
The Evolution of Music Consumption: From Record Stores to Streaming
Introduction
Once upon a time, if you wanted to listen to a particular artist, you needed to drive to a record store and buy their album or CD. And for many years, buying that album usually cost considerably more than seeing that performer play live. However, with the advent of YouTube and streaming platforms like Spotify, everything changed. Suddenly, tens of millions of tracks were available at your fingertips.
Changing Landscape of the Music Industry
While the accessibility of music increased with streaming platforms, it also had its drawbacks. Most artists now make far less from releasing music, leading to a surge in live concert ticket prices. However, this doesn’t deter fans of megastars like Beyonce and Taylor Swift from shelling out hundreds, or even thousands, of dollars to see their idols perform.
Matt Gudinski, CEO of the Mushroom Group, which promotes concerts for megastars across Australia and New Zealand, believes that fans are unlikely to draw the line and find even the cheapest tickets too expensive. Mushroom Group, founded by Michael Gudinski in the 1970s, has been instrumental in helping artists build long-term careers and giving them creative control.
Mushroom Group’s Influence in the Music Industry
Mushroom Records, a division of the Mushroom Group, has been home to some of Australia’s biggest acts, including Kylie Minogue, Jimmy Barnes, Vance Joy, the Temper Trap, and Split Enz. The company is credited with pioneering the “360” model, which encompasses an artist’s recorded music, tours, merchandise, and use of music in films, TV, or advertisements. This model offers artists a well-rounded approach to their careers. For example, Madonna signed a 10-year “360” deal with Live Nation worth a reported $120 million in 2007.
As Mushroom celebrates its 50th anniversary, Matt Gudinski attributes the company’s survival and prosperity to the approaches taken by his father, Michael Gudinski. Michael was a towering figure in Australian music, and his untimely death in March 2021 led to a state memorial in his honor. Mushroom released Kylie Minogue’s debut album, and she expressed her gratitude for the opportunities the label provided.
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Matt Gudinski’s Journey and Mushroom’s Ethos
Matt Gudinski joined Mushroom at the age of 17, working alongside his father for the past decade. Despite taking the reins as CEO, Matt ensured that he built upon his father’s foundations while also imprinting his own unique approach. The essence of Mushroom’s ethos remains the same—to help artists build long-term careers, avoid chasing overnight success, and maintain substantial creative control.
While data plays a significant role in the music industry, Gudinski believes that “gut feel and instinct” continue to be pivotal for Mushroom Group. Removing these elements would diminish the essence of what makes Mushroom unique. Artists may now have more freedom to start their careers using platforms like YouTube, but being signed to a label still provides benefits. With an ever-increasing number of artists competing for limited opportunities, it becomes challenging for them to cut through and take the next step.
The Impact of Streaming and AI on Music
The rise of streaming platforms has given music fans an avalanche of choices, from established artists to emerging talents. With endless new content being uploaded daily, it’s easy to discover something new. However, Matt Gudinski admits that he doesn’t listen to albums from start to finish as much as he once did, a reflection of the changing consumption patterns in the streaming era.
While streaming brings challenges to the industry, Gudinski believes it has overall done more good than harm by making music more accessible. Big record companies, like Universal Music, have experienced lucrative profits from streaming.
However, the potential impact of artificial intelligence (AI) remains uncertain. Gudinski acknowledges that AI may challenge various aspects of the industry and even blur the lines between real artists and manufactured characters. Mushroom has already received pitches for live shows featuring AI-generated artists. As a leader in the industry, Gudinski recognizes the need to cautiously observe how AI develops before fully embracing it.
The Continued Growth of Mushroom Group
While Mushroom has a rich history, it remains forward-thinking. The company has relaunched its record label in the UK, now working globally, and recently signed a global distribution deal with Universal. With 250 staff spread across Australia, Europe, and North America, Mushroom continues to play an essential role in the music industry.
The future of Mushroom Group as a private company remains uncertain. While a sale is not part of their plan, Matt Gudinski recognizes the challenges faced by any entity investing in new music, regardless of their size or structure.
In conclusion, Mushroom Group’s contributions to the music industry are unparalleled. From supporting artists’ long-term careers to embracing new technologies cautiously, Mushroom Group is a force to be reckoned with. As music consumption continues to evolve, Mushroom Group remains at the forefront, shaping the industry and delivering exceptional experiences for artists and fans alike.
