Good morning to all, I hope your week is getting off to a great start. I would like to congratulate IMAGINE DRAGONS’ that their debut album, Night Visions is certified platinum by the RIAA. That is a rarity these days but it shows that music still has the strong appeal to reach the masses and profit as well. As many of you know I am obsessed with the digital and mobile revolution we are seeing everyday in the music biz. So I called in Seth Schachner who is the CEO of Strat Americas. Seth is a digital executive based in Miami, FL dealing in entertainment, digital media, and technology. When Seth got me his answers back I was floored how much I learned. Join us as Seth Schachner breaks it down on breaking into the industry, negotiating deals for the stars, copyright infringement in the digital age and so much more!

Stoli: Where are we talking from today and how do you usually start a regular day during the week?  

I’m in sunny Miami–a good day starts with some exercise and a work-out—it’s not every day I get the chance to hit the gym, but I try. Espresso helps, too!

Stoli: At what age did you decide that you wanted to be in the music industry and what is your educational background?    

I had a strong sense by the time I was in high school–music and the music industry were much more interesting to me than, say, playing high school football. I was a music editor of my high school paper, I helped manage our “radio” station (which broadcast over the intercom), and I even “freelanced” by writing a rock column for a local paper, The Potomac Almanac.   I had a real interest in the music industry, too–the new wave that hit the US in ’77   or so really made an impression on me–I remember seeing the Clash in 1979 in Maryland, to this day. Columbia University Journalism conference brought me to New York in my junior year of high school, and it felt like home. I knew that’s where I wanted to go. So I went to college and ultimately graduate business school at Columbia, too.   It was a life-changing, fantastic experience there.

Stoli: You have done so much amazing work, what business deal were you involved in where you knew that you arrived?    

Thanks!   At Sony, I had a tremendous opportunity to create what I would call “integrated” mobile handset partnerships with two of biggest artists, Shakira and Ricky Martin.   We pre-loaded individual albums on to Sony handsets, which we branded with wrappers on the handset box–essentially “artist phones,”–and we created custom content with each artist. For Ricky, we released the handset during a tour of Latin America, and we also helped with a large endorsement, so the artist participated in a variety of activities supporting the Sony brand and the handset at his shows. We were blown away by the results…..1.5 million handsets sold in just a few months!     We did essentially the same thing with Shakira few years later, when her album “Loba” was released.   With both of these partnerships, I truly saw the spectacular potential of mobile music, particularly in markets like Mexico.

Stoli: How has mobile & digital technology changed the music business and what innovations are you excited about?  

It’s immensely changed the business–to me, even though Apple and downloads still dominate the digital mix, the biggest change is how the consumer model seems to be steadily shifting towards “access” as opposed to “ownership,” meaning streaming services like Spotify or the new Apple iTunes radio will continue to grow.

Stoli: I am fascinated by the digital revolution in media and music. What device and apps do you use to hear music and would you say the industry has caught up since the release of Napster?  

I’m not sure I would use the words “caught up,” but a couple of key things have happened since that time. For one, music consumption has continued to grow at a tremendous pace—you only have to look or listen to Pandora to get a sense of that.     Second, the major labels and music publishers have steadily and consistently licensed a reasonably large group of digital and mobile music partners–from operators, to mobile handset partners, certainly “ala carte” download stores, and now, increasingly, personalized radio services and of course, subscription partners.   So I wouldn’t say “caught up,” but the majors have certainly tried to seed a lot of new partners and businesses over the past years since Napster.   The issue is that all the “consumption” is not being monetized, and for every “legitimate” service, the industry still struggles to compete against piracy, and, even with all of the new partnerships, it’s smaller than it was a decade ago.     As to apps, I love Spotify, I’m a big Shazam user, and I tune into Santa Monica’s KCRW online virtually every day, to hear “Morning Becomes Eclectic.”   I think it’s perhaps the very best modern music radio show in the country.   I listen to it to hear new artists or releases, and I load ’em into my Spotify playlists right away.     As to devices, a couple years ago, I would have had a more unique response–I had a bunch of great Sony Ericsson and Nokia handsets I could brag about, with great music capability.   Now, I love the iPhone 5 and find it very hard to beat in the gym, particularly when you have a Spotify premium app.     The Nokia 920 Windows Phone is a very solid device for music, too.   I like Sennheiser headphones and earphones, too.

Stoli: Do you feel that digital technology has made it tough to enforce copyright infringement and what can we do about it?    

Ironically, I think there is enough “technology” in the market these days–be it a watermark, an IP look up technology, a DRM, or simple enforcement from an ISP — to make piracy harder.   But I also think there will always be people and technologies who want to skirt the law, and I can’t see it being the biggest priority of every government to enforce the law everywhere. To me, the best response is to launch and offer great, comprehensive, interoperable, and reasonably priced music services. I’m a big believer that if given the right choice, the public will opt for the right choice.   This is not always the case everywhere–so to me, it’s always important to price a service competitively.  

Stoli: What advice can you give to someone reading this who wants to break into the industry but is lost?    

Try to look outside of the bigger “traditional” interests, and look to areas that might be part of music’s future…what about a video service, or an advertising business or ad network that might bring new revenue into the industry, for example?   Branding and the advertising business could be key to music’s future, as brands may ultimately subsidize more and more of the recording industry’s products in the future.   Look in different, new directions than the center, essentially.

Stoli: You have done major deals for artists Ricky Martin, Shakira, and Sony Mobile,and much more. What is a negotiation like and what leverage do you use to meet your client needs?    

It can be intense, particularly when you are trying to fuse together very different products like an album and a mobile phone, both of which have very different product releasing cycles. The hardest part is generally synching up very disparate interests.     At Sony, of course, I was very privileged to work with an artist roster that was world class, and to be fair, that brings a certain degree of leverage to the table. But leverage only gets you so far.   You still need to find a workable deal, fair value for all involved, and of course fair value for music in any model.

Stoli: What kind of clients come to you as CEO of Strat Americas and what are some services you offer?    

I’m having a great experience with Strat Americas. I’m essentially a business developer at large, and I help connect partnerships for different clients. Some are music oriented, one is in video streaming, others involve gaming, apps, and of course mobile partnerships.   I offer business development and management services, and I have a good group of partners around the globe.   I’m based in Miami, too, so while my mix of partners is global, I do have an ability to connect opportunities from the Latin Region. All of this keeps me busy.

Stoli: When you are not working what do you do in Miami to release stress & have fun?    

It’s an easy place to unwind! :) Jet skiing, tennis, cool restaurants, even the occasional indie film, too.   Miami’s a colorful, fun place. I moved here from New York City and really enjoy the lifestyle here. It helps to speak Spanish, too.

Stoli: As a business man/entrepreneur are you optimistic about the economy and do you see things getting better?    

It’s a big question, but I’m particularly optimistic about international markets, and I think digital services–even big ones like Facebook, Twitter, Vevo, and Spotify–still have a lot of international ground to cover, and business and advertising growth prospects internationally.

Stoli: Where do you see music based digital business going and what’s coming up for Seth Schachner?  

I see the digital music business evolving towards a free ad supported streaming services and premium subscription models, the “all you can eat” model for $10/month, or eventually, less, as these services become ubiquitous and need to compete on price, or are subsidized by brands, mobile operators, or other entities seeking to offer music as part of their products.     As to me, I want to keep growing, so I expect to keep building partnerships in video, advertising, and mobile, and I will always retain some music focus, too.

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