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Terry McBride talks to WestEast MEN about how one man’s imagination exploded into a pioneering digital music group.

Our ‘IMAGINE’ issue would not be complete without the cult-leading CEO of Nettwerk Music Group, Terry McBride, as ‘Imagination’ was the first answer he provided in our interview during Music Matters 2009 in Hong Kong.

Several years ago McBride stood amidst a crowd of wine experts at an international conference, giving them a bit of choice advice on the future of the wine business:

“The first thing wine companies should do is to start putting smart-codes on their bottles,” he suggested. His silver tongue went on fluently in front of the audience: “When you consume a wine in a restaurant and really like it, you’d be able to quickly scan the bottle, go to the webpage, read about it, and instantly order. Otherwise, by the next morning you’ve forgotten what the name of that excellent wine was. Even if you vaguely recall the label, there may be eighty labels that look exactly the same. If you want to grab a bigger market share, and attract more consumers, you have to make it easier.”

His audience was “stunned silent”, but McBride saw promise in this spontaneous suggestion. “If you brainstorm creatively, you can dream up a successful business in any industry,” said McBride, CEO of Canada’s largest independent record label Nettwerk Music Group. And this is exactly what he has done in the last 25 years.

“Back when I was attending university for Civil Engineering, I did everything from lifeguarding to DJing at a nightclub. I was just living my life,” said McBride. With little experience, few connections, and no real veteran savvy, McBride jumped into a field too unique at the time to be classified as ‘music’, ‘digital media’ or ‘creative industry’.

While men in the music industry are often stereotyped as either rock stars or profiteers, McBride is a creative, yoga-loving entrepreneur who cares what his artists do for the world. He represents an indie power counterweighing commercial labels and the paradigm of copyright protectionism.

Terry McBride founded Nettwerk in 1984 with his friend Mark Jowett in Vancouver after leaving the University of British Columbia. The new label worked to release music they liked but didn’t appear in the racks of BC’s major music stores. Nowadays, musicians of all genres are released on the Nettwork label, including pop princess Avril Lavigne, trip hop band Alpha, Barenaked Ladies, funky Jamiroquai and siren Dido.

“I didn’t know what I was doing,” said McBride about the start-up period. After all, the name ‘Nettwerking’ that the company has been using since the very beginning, doesn’t really hint at any great ambitions. Fortunately, McBride believes that no knowledge means no limit:

“We are an independent company, so we are not tied down to anyone else’s way of thinking. This is probably the greatest advantage. I had no limits. They (the experienced) all work out of a sandbox, I work on a beach.”

During Music Matters 2008, McBride said the music marketplace was 70% physical and 30% digital. This year, music elites would not be surprised to learn that almost 40% of music consumers are going online and that this global village has increased by 25%, according to a survey released at this year’s Music Matters. In regard to music devices, CD’s now only comprise 4% of the market, whilst the computer triumphs at 32%.

“I think this industry has great opportunities over the next couple of years, to really come back. Because we are about to see a profound shift in behavioural habits of the consumption of music,” McBride explained. “In the digital space, only five percent of consumption is monetized. So there’s immense opportunity. 95% of people consuming music digitally don’t pay for it, but they spend time doing it.”

“So if you think, where is music going? In my view, it is to smart phones, applications, and cloud computing. Those three things are all converging.”

After the millennium, major labels remained dependent on CD releases, regardless of the rise of peer-to-peer technology. The dramatic success of Shawn Fanning’s Napster from 1999 to when it folded in 2001, was an indicator that music sharing was rapidly gaining popularity.

“Songs are not about lyrics – they are about emotions. When a song means something to [an artist], it means something to a million different people,” McBride reflected. And this sensation is what most music giants neglect as they continue attempts to leverage commercial interest, with 70% of revenue generated by rack inventory at HMV.

By contrast, Nettwerk Music Group consolidates the genesis of a new music model by making their songs downloadable from Nettwerk’s own store, Puretracks.com, and Amie Street. As one of the first major companies that gave up on traditional DRM format and started to release songs in mp3, Nettwerk is noted for having played a key role in pushing music to a brand new era of digitalization.

Just prior to the birth of iTunes, Nettwerk had monetized digital music downloading. In 2007, teen rocker Avril Lavigne’s comeback hit ‘Girlfriend’ was successfully pushed globally via multiple media formats like video games and film. The track’s creative release in eight languages, including Mandarin and Spanish, made it the best-selling digital track of the year. “Because it’s all micro. There’s no real cost. The cost is the creation of that mask, and the marketing of that mask,” McBride said of digital music distribution.

Now Nettwerk has morphed from an indie record company to a multi-media group, branching out with revenues from music production, artist management, publishing, and even graphic design. Today, Nettwerk is represented by offices in six major cities, including New York and London. When asked about his top priority, McBride resorted to the narrowest yet most high-potential answer: “The future”:

“I don’t have goals. Goals put you back in that sandbox, and you can’t get beyond goals. Many become so focused on their goals and anything else, any other opportunities, you just [become] numb to it.”

In fact, this music industry guru has recently added yet another genre to his career: yoga. After three years of yoga practice, Terry McBride set up his own yoga studio YYoga last year, zealous to stretch his creative mindset to this ancient art.

“Music is, after all, within yoga,” said this imaginative enthusiast. “Yoga gives me 60 to 90 minutes of silent thought. It is no different than someone running, no different than playing tennis. You’re in that zone. All the other issues annoying you are not in that area. It’s a great feeling.”

Published in WestEast Men’s Collection Issue#2 IMAGINE (2010 Spring)