The Look Back spins a Music Industry Download with Grammy Award winning music industry veteran Tom Sarig to share the latest trends in the Music business and his latest project.

Summary

Podcast Summary: The Look Back – Insights into the Evolving Music Industry with Tom Sarig

Episode Title: The Look Back spins a Music Industry Download with Grammy Award-winning music industry veteran Tom Sarig to share the latest trends in the Music business and his latest project.

Release Date: April 30, 2025

Host: Keith Newman, former journalist and Startup + GTM executive.

Guest: Tom Sarig, Grammy Award-winning music industry veteran and founder of Antifragile Music.

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1. Introduction and Personal Connections

Keith opens the episode with enthusiasm, expressing his admiration for Tom Sarig's work with iconic artists. Their mutual appreciation for music sets a friendly tone for the discussion.

• Keith [00:27]: “I didn't even know you were my idol before. We talked a little while back, but Lou Reed, Roxy Music, the violin, I mean, just like go down the list of my favorite bands from back in the day.”

• Tom Sarig [00:50]: “Yeah, I managed Lou Reed for the last 10 years of his life... These artists teach you how to be a better man, a better manager, more strategic manager, have better instincts with creative things for the young acts…”

2. The Transformation of the Music Industry: Rise of Streaming

Tom delves into the seismic shift from physical formats to streaming services, highlighting how platforms like Spotify and Apple Music now dominate the market.

• Tom Sarig [02:50]: “Streaming has become most of the business. I think it's 75 or 80% of the recorded music revenue... Streaming has really taken over.”

He explains the initial skepticism surrounding streaming subscriptions and how consumer behavior evolved over time to embrace access over ownership.

3. Streaming Platforms and Artist Equity

The conversation addresses the contentious debate about whether streaming platforms provide an equitable income for artists. While acknowledging the imperfections, Tom argues that streaming has generally benefited more artists than traditional sales.

• Keith [06:01]: “There's a general perception... that only the top 10% or even really the 1% are making money.”

• Tom Sarig [06:32]: “More artists are making money and able to make a living through streaming than we're ever able to make a living through record sales... It's much better for a lot of artists.”

Tom emphasizes that while top-tier artists still dominate earnings, the streaming era has created a middle class of musicians who can sustain themselves financially, something unattainable in previous decades.

4. Antifragile Music: Tom Sarig’s Latest Venture

Tom introduces Antifragile Music, his record label focused on acquiring and nurturing mid-level artists. He discusses the strategic move from artist management to label ownership, driven by the sustainability and scalability that Antifragile offers.

• Tom Sarig [10:27]: “I started Antifragile... almost immediately it went really well. We did really well, sort of right out of the box.”

Antifragile Music specializes in purchasing catalogs of artists who are successful but not yet mainstream, providing them with the necessary resources to scale their careers without the unpredictability of traditional management roles.

5. Evolution of Music Discovery: From Radio to Social Media

The shift in how audiences discover music is a focal point, with Tom highlighting the decline of traditional media like radio and MTV in favor of digital platforms.

• Tom Sarig [16:03]: “I believe that like 95% plus of music discovery for people of all ages is on either Instagram, Facebook, TikTok or YouTube.”

He elaborates on the effectiveness of targeted social media advertising compared to traditional advertising methods, which lack measurable outcomes.

6. Genre Blending and Cross-Pollination

Tom observes the increasing blending of musical genres, reflecting the eclectic tastes of modern listeners. This trend fosters creativity and broadens the appeal of artists across diverse audiences.

• Tom Sarig [32:05]: “I look for really great songwriting, really interesting personalities and that can exist in every genre.”

He appreciates the flattening of the global music landscape, despite personal reservations about certain genres like K-pop, recognizing the positive impact of diverse musical influences.

7. The Role of Talent Shows: American Idol and The Voice

Keith and Tom discuss the diminishing returns of talent shows like American Idol and The Voice in producing lasting, influential artists. While acknowledging their entertainment value, Tom notes their reduced effectiveness in artist development.

• Tom Sarig [34:07]: “Those shows are not really producing really great artists. It's hard to break through that.”

He contrasts the early successes of these shows with their current inability to consistently launch impactful music careers.

8. Future of Antifragile and Music Industry Trends

Looking ahead, Tom outlines his goals for Antifragile Music, aiming to sign more artists and continue fostering their growth in an industry that increasingly values digital presence and strategic marketing.

• Tom Sarig [37:23]: “Months to sign, you know, 10 to 15 more artists to Antifragile... I've been blessed and been able to make a really good living at it at the same time.”

He underscores the importance of mentorship and support for artists navigating the complexities of the modern music landscape, striving to bridge the gap left by diminishing traditional guidance structures.

9. Personal Insights and Conclusions

In wrapping up, Tom shares his passion for music and the fulfillment he derives from helping artists achieve their potential. He reflects on the synergy between cultural turbulence and creative output, suggesting that challenging times often inspire remarkable artistic expression.

• Tom Sarig [38:07]: “There's always great culture when there's a lot of turmoil, whether it's economic or social turbulence. And I think it makes for good culture.”

Keith echoes these sentiments, expressing optimism for the future of the music industry and appreciation for Tom’s contributions.

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Key Takeaways:

• Streaming Dominance: Streaming services now account for the majority of music revenue, fundamentally changing how artists earn and how music is consumed.

• Equity in Streaming: While not perfect, streaming has enabled a larger number of artists to earn a sustainable income compared to the era of physical sales.

• Antifragile Music’s Strategy: By acquiring mid-level artist catalogs and investing in their growth through modern marketing techniques, Antifragile supports artists in ascending to greater success.

• Shift in Music Discovery: Social media platforms have become the primary avenues for music discovery, replacing traditional channels like radio and MTV.

• Genre Fluidity: The modern music scene is characterized by significant genre blending, catering to diverse and eclectic listener preferences.

• Talent Shows’ Decline: Shows like American Idol and The Voice retain entertainment value but struggle to produce lasting, influential music careers.

• Future Outlook: Continued focus on nurturing artist development through strategic investments and leveraging digital tools will shape the future of the music industry.

Notable Quotes:

• Tom Sarig [02:50]: “Streaming has become most of the business. I think it's 75 or 80% of the recorded music revenue.”

• Keith [06:01]: “There was a 90-10 kind of law... Only the top 10% or even really the 1% of the 10% are making money.”

• Tom Sarig [16:03]: “95% plus of music discovery for people of all ages is on either Instagram, Facebook, TikTok or YouTube.”

• Tom Sarig [37:23]: “I've been blessed and been able to make a really good living at it at the same time.”

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This episode provides a comprehensive overview of the current state and future direction of the music industry, enriched by Tom Sarig's extensive experience and strategic insights. Listeners gain valuable perspectives on streaming economics, artist development, and the evolving mechanisms of music discovery, making it a must-listen for anyone interested in the business of music.

Transcript

[Tom Sarig]

Foreign.

[Keith]

Well, this is a great day already. I get to pronounce Tom Sarig and welcome him to the podcast. Look, how are you from midtown New York today?

[Tom Sarig]

I'm doing very well, Keith. How are you?

[Keith]

Gosh, great to talk with you. I'm doing well. You know, first of all, I didn't even know you were my idol before. We talked a little while back, but Lou Reed, Roxy Music, the violin, I mean, just like go down the list of my favorite bands from back in the day.

[Tom Sarig]

Are those your favorite bands? Really?

[Keith]

You got, you got to meet and work with them all.

[Tom Sarig]

Yeah, I managed Lou Reed for the last 10 years of his life. About 10, 11 years of his life.

[Keith]

Well, not necessarily his best years, for sure, but they were great, though.

[Tom Sarig]

Actually, I will say that he's a guy. I, I, one great thing I can say about him, amongst other things, that he was an artist who really lived life to the fullest and pushed himself till the very end. He was working. He worked harder than most other young artists that I've worked with. And he was a, you know, managing when I was a, my, when I had my period of 10 years with running my, building my own management company, working with older artists like a Brian Ferrier, Lou Reed or Violent Femmes or Ricky Lee Jones or things like that. Those artists teach you how to be better man, a better manager, more strategic manager, have better instincts with creative things for the young acts, you know, the, and, and it made me a better, made me a much better manager for the younger acts, you know.

[Keith]

Oh, thanks for sharing that. I think that's a great, that's a great point. We won't dive too much into the, the historical stuff because I could go into those topics for quite a while.

[Tom Sarig]

I'm sure you don't, you don't want to hear any, like, weird stories or any, like, you know, late night.

[Keith]

Oh, my God. Oh, my God. You, you, Andy Warhol and Lou sitting around.

[Tom Sarig]

I could write a book, but I won't.

[Keith]

Well, how about we just do this podcast? I think it's so phenomenal to grab you in this time because I've, I've dove into a whole bunch of areas of topics of how AI is this tidal wave tsunami effect on the whole economy and digital transformation. But we haven't really dug into my favorite business, the music industry. I spent some time in, and I love what's happening in the world, but I want somebody to give me a level set with digital gaming. Kind of taking over. Is Spotify, the new king of music? What's with Apple, what segments are hot. Tom, give me a macro. Zoom in on what's going on in the business right now.

[Tom Sarig]

Well, certainly streaming has become most of the business. I think it's 75 or 80% of the music recorded music revenue. And, you know, physical, what's left of physical formats is like 10 to 15%. So streaming has really taken over, you know, streaming. I think Spotify and Apple launched in North America, Western Europe around 2011. And it took a few years to catch on. People were kind of didn't know whether to trust paying $10 a month and not actually owning anything. You know, I have 2,000 pieces of vinyl at home just collecting dust, right? And you know, you're, you. Someone, someone convinces you to pay $10 a month for access to all the music in the world, but you don't actually own any of it. That's a big kind of leap of consciousness in a way for some people. So streaming, especially for, for sort of older crowds, streaming was a little slower to catch on. But by 2000, I'd say sort of 15, 16, 17. The streaming numbers, streaming subscriber numbers, especially like in the, what we call the first world, North America, Western Europe, Japan were exploding, really. And I was, I, I'm, you know, I've been an A and R executive for many years before that, so I'm always watching what new records are coming out. And I was suddenly seeing a lot of acts on Spotify that were, you know, on Spotify you can sort of follow the number of streams they, they publish the number of streams right on the, on the platform. And I was noticing many artists getting tens of millions of streams which I'd never even heard of, which that never had never happened before to me. So I knew this was a really exploding business and that we, that a new sort of class of artists was being created back, you know, back even before sort of 10 years ago. I think that most of the routes to success were either you got, you were lucky enough to make enough noise that you got signed to a major label and hopefully the major label put a lot of effort and money, etcetera, behind you like a Warner Brothers or Sony or Universal, or you sort of toiled in obscurity locally or regionally or otherwise, right? There was, there wasn't that much in between. Of course, that's a vast oversimplification. But the streaming era has created this sort of like middle class of artists. There's, there's, you know, I think Spotify published that in 2023, over 9,500 artists made over a hundred thousand dollars just on Spotify just in 2023. So that should give you an indication of like, how there is a. There are a lot of tens of thousands of artists that's just on Spotify, but there are tens of thousands of artists who are earning in the hundreds of thousands of dollars essentially making a living through music sales, which they were never able to do as a small independent act. They had to rely on touring and touring and touring. And now artists can really, can really have a real income from. I wouldn't say they can get super rich, but they can have a very serious income that can pay for their lifestyle, such that they don't have to wait tables at night or, you know, or work in some office during the day or that sort of thing.

[Keith]

That's what I was going to ask you too, because I think there's a general perception, and I don't know if this is based in anything close to reality, but that there was a 9010 kind of law, like 90% of the artists out on Spotify, itunes, are not making money. It's a wasteland. And Only the top 10% or even really the 1% of the 10% are those that are making money. Do the artists feel like Spotify is, has become a more equitable platform than what we've had in place before?

[Tom Sarig]

Well, there's always going to be artists at the sort of the lower end of things that are going to complain that something's wrong with the system. And the Spotify and the whole streaming ecosystem is by no means perfect. Right? It's by no, by no means is it like completely equitable all the time. That being said, more artists are making money and, and are able to make a living through streaming than we're ever able to make a living through record sales, that's for sure. Some artists are, are complaining that Spotify or Apple or Amazon don't pay enough royalties per stream. Right. Which, which, you know, those are the artists that are not getting in the millions of streams, you know, but you have to, you have to kind of separate the two concepts. You know, selling an album. In the days of selling albums, whether you went up to Tower Records or whatever, your favorite record store and bought a CD or a piece of vinyl, you know, the, the relationship between the consumer, when you bought the record and the record label, which I used to work at, started and ended with the person buying the record, you know, they paid their 12.99 or 15.99 for the CD. I think that was that that was the height of the price and, and that was, that was all the money that the record label was ever going to make from the consumer. Now music is really the gift that keeps giving, which is a positive for artists who have real fan bases because you know, over the lifetime of a fan going back to their favorite music over and over and over again, the labels and the artists will make a lot more money because the streaming will amount to a lot more than just the one time purchase of a CD or vinyl. So it's much better for a lot of artists. But always there's always going to be artists that's sort of at the bottom of the food chain who are going to complain, but those are artists who wouldn't have had a chance in the past, I don't think. Mostly, you know.

[Keith]

So it sounds like things have evened out a little bit though in terms of. We went from, you know, the digital industry went to Napster and that model was not sustainable, you know, that like. And then people were complaining early on about Spotify, Apple taking advantage of the artist. To a certain extent it feels like maybe that's been more balanced.

[Tom Sarig]

It's definitely been more balanced. And in general, I think the, the, the music content, music selling and streaming ecosystem has become much more equitable for the entire community than it was back in the days of selling vinyl and CDs. You know, the major labels used to control sort of the end cap they call it, which is like the place in the store at Tower Records where the, where you get to see right when you walk in to see the records. So there was a lot of things that kind of swayed people one way or another. And, and the accounting from record labels was not always clear with physical units. I think much more fair, much more linear and clear now with digital music because every song, every recording has its own, what's called an ISRC code, which is sort of like a Social Security number for recording. And that can be tracked throughout, you know, streams and wherever a song goes. Whether we license to something outside of Spotify and Apple, like a peloton or a meditation app or something like that, you can really track streams in a way that's much more efficient than the old days when, when records used to fall off trucks, you know what I mean? And then you didn't get.

[Keith]

The old. Yeah, from the moonshine days.

[Tom Sarig]

Yeah, the record business used to be a trucking business. Literally. Yeah, know.

[Keith]

Wow. Tom. Fun stuff. So that takes me forward to another segment of the market. That's really exciting. There's been a lot of purchases made of, you know, these artists and their libraries. Right. Some huge names selling and buying and making tons of money in this area. I know Antifragile Music. Your company is getting hotly involved in library purchasing.

[Tom Sarig]

Yeah, so I. I've had sort of several different periods of my career. I started off my first decade in the business, I worked in a R for several different major labels. And then my second decade in the business, I started a management company. That's when I managed some of the acts that you mentioned. Right. And then around 2017 and 18, when I was noticing these acts, like I mentioned getting a lot of streams on Spotify and Apple and whatnot, I decided to take some of the money that I'd saved from my management company and I started a record label that was anti fragile. We did really well, sort of right out of the box. I think we'd done like $1 million in streaming income within a year. And that was the cue to me to like, get out of management. I was. I love artist management, but artist management entails literally flying around every week. Going to Europe. I think I went to Europe like every other week for 11 years, you know, and that was. That was really tough on my family. And. And it's so. It's exhausting. And also with artist management, there's. There is uncertainty. Like you mentioned, Lou Reed died while I was managing him. Or, you know, certain artists break up when they reach their peak, so you can't control the income. So I was looking for kind of something else to do. And I. And I had started my career as an A and R executive. You know, I was always. My talent, I always felt, was finding artists when they were sort of young and helping them develop into something much bigger and better and helping sort of be a shepherd for them and helping steer their career into. Into where they wanted to go and realizing their best potential. And so I. In 2017, mid 2017, beginning of 2018, I started antifragile and I started signing artists mostly to smaller, like licensed deals. And it was easy because you don't. You don't have to pay for manufacturing records so much anymore. I mean, we make vinyl for a bunch of acts with. Who sell them on the road. But the selling of physical units in record stores for young, developing acts is kind of over, you know, especially in America, where vinyl is now returnable. If, you know, the. The record store won't actually order the Vinyl unless they're 100 sure they're going to sell it because they have to Keep it. Yeah. The major labels instituted that plan during the midst of the. The low period. Right. And so. So. So it's very hard. The record stores that are left are filled often with either the most popular artists. Vinyl, like Taylor Swift may have a vinyl or James Brown, Marvin Gay reissues or things like that. Not. There's not a lot of developing artists in the few remaining record stores that are around. So it's mostly a streaming business. And. And we do make vinyl, you know, limited amounts, a thousand or two thousand for artists to. When they go on the road to tour, because vinyl has sort of become a keepsake how fans support their. Their favorite artists by buying vinyl at shows. But. So I started anti Fragile in 2018. I started doing deals with artists and license deals, and almost immediately it went really well. I had. I've always had a staff of sort of between six and 10 people, depending on how busy we were. And so my management company staff kind of morphed into a marketing staff for a label and a publishing company, too. We also were very involved with public music publishing. And. And so we just started doing our thing. I hired a publicist at the time. I hired a radio person at the time. I don't have a publicist or a radio person anymore because those people, those industries don't mean much anymore, you know.

[Keith]

Yeah.

[Tom Sarig]

The discovery, that's another thing that's really changed, really, in the last, like 10 years or so when I was coming up in the industry. Well, when I was coming up, MTV was really king. Right. And a lot of artists were discovered or broken, as they say, through radio, through television, and through the media, through press. Right. I think I used to subscribe to 35 music magazines. And, you know, I read. I was just a music nut as a kid, right. Yeah. And as a professional as well. But those things, though, they still exist. They're kind of meaningless. There's not enough people listening to the radio anymore.

[Keith]

It's sad for me to hear all this because I'm a former dj, college dj, and, you know, same with me.

[Tom Sarig]

Same with me. I love.

[Keith]

Oh, man. I used to.

[Tom Sarig]

I have a Sonos in my apartment and I listen to Sirius XM a lot. And I love radio and I love hearing new music that I don't know on radio. But at some point, radio, you know, radio is terrestrial. Radio has always been, Keith, an advertising business, not a music business. Right. So once, once their ad dollars started to suffer, stations like KROCK in Los Angeles, which was this great station that kind of established the Cure and Depeche Shout out. Exactly. Jed the Fish. So that station which was the number one alternative station in America for like 35 years, they've had to revert to playing a lot of what they call classic alternatives. So like old stuff like Nirvana and Soundgarden and the Cure, which are not. Which are great records but that takes the place of a new, new artist spot. So those radio stations are not breaking artists anymore. And it's partially also because the attention span is not with radio or press or television anymore.

[Keith]

It's interesting, I was going to hit you with this question too because remember the old saying, video killed the radio Star song and MTV launched social media killed them all.

[Tom Sarig]

Yeah, yeah.

[Keith]

I was going to say, well now isn't it TikTok and Instagram that are the taste makers and Absolutely.

[Tom Sarig]

Like I, I'm. I believe that like 95% plus of music discovery for people of all ages is on either Instagram, Facebook, tick tock or YouTube.

[Keith]

YouTube, yeah, of course.

[Tom Sarig]

It's one of those, it's where, you know, I go home a lot of times and you know, at my age I, I don't even watch TV that much. I go through my YouTube scroll to see like what. Yeah. Things that I follow and that I'm interested in may have like some short form programming. That's. I think that's what TV is becoming more and more, you know, I'm definitely.

[Keith]

Discovering more music on social media than I am listening to the radio. I want to dig into antifragile though. What is the opportunity that you, that you saw that said this could really be a big business. It'll take me away from all these other successful things that I was doing.

[Tom Sarig]

Well, I saw that, that with. When I started eight years ago, I signed a bunch of different acts and they were musically, they were really all over the place from singer songwriters to pop music to kind of alternative rock to hip hop oriented soul music, things like that. Because my tastes are very eclectic and I never wanted to be just in one kind of music. Yeah. And my team was really good at PR and working social media, helping artists work their social media doing. We do a lot of social media advertising. So we'll make little clips, 15 second clips, 30 second clips which nowadays you can use AI and we'll talk about AI in a bit. But I think it is a huge plus for our business, not a minus. And, and so we make tools that we use as marketing tools. Little clips that we put on Facebook and Instagram and you. And in Tick Tock and you especially Instagram and Tick Tock, but Also Facebook and YouTube ads as well. We spend a lot of money with those companies trying to get our cool, quick, short content in front of other similar but bigger artists platforms, you know, so if we have like a great sort of like gal singer, songwriter who's one who we think is wonderful starting to do well, we might create a clip and put it, you know, pay the advertising dollars to put it in on Instagram near a social, a Taylor Swift clip or something like that, you know, or on YouTube or that sort of thing. And we have advertising expert, I have a couple advertising experts here who do that week to week. And that's how music discovery happens. But in a way it's really like, it's really like a great linear way of, of seeing. You can actually see how the ads are working and how they're translating, how they're converting to streams directly. In the old days, you would put up a billboard on the highway and you had no clue of how that billboard was helping sell your product or not. There was actually no way to quantify that. Right. And even you could even argue a television commercial, how do you really quantify how much that's adding in sales to your product? But with, with social media ads you really can, you know, and that's where the attention span. And so I saw that there was a, a big business, I saw that there was a big business developing in something that I love, which my, my, my, my calling has always been, like I said, developing younger artists into great, mature, fabulous artists that are changing the world and moving culture. And I've never worked with just kind of like any old bobblehead that was going to be a hit. I want, I always wanted to work with and have continued to work with, whether it's the veteran artists or the younger artists. I've always worked with artists that I thought were culturally significant and kind of had the, had the chance to change the world, so to speak, you know, and that, that's really, I found that when I've, when I've kind of worked and chased those kind of artists that some people might think those kind of artists are less commercial. But I actually think there's more commerciality in artists that have really something to really say, you know, and you can, you know, go by the example of like a Bob Dylan or Kurt Cobain or whatever it is, you know, who. That might not immediately be apparent, might not immediately apparent that they're commercial, but their music is so great, it kind of rises above everything, you know, so.

[Keith]

Is the Is the model then for you to find that one hit artist and then the rest, everything will kind of even out or mine hasn't been that.

[Tom Sarig]

Yeah, mine has been like. We had several different artists that did really, really well. Like put. We have marketing budgets for every record. I signed a lot of music over the last eight years and we, we bought some artists out and then we sold later to other people and had had a, had a really great return on investment. So I began to see that there was a, there, there was an opportunity in sort of the middle market as I call it. You know, the, the. The business of music, IP music, intellectual property. That's been a very hot investment space for the last, I don't know, five years or so. The story of hypnosis is very popular and them going under and all that. And there's all these great big companies out there, you know, Primary Wave and Round Hill, Concord, etc. That are mostly bidding on the household name. Big star artists, right? The big catalogs, including the major labels like Sony Music I think bought Queen's catalog for half a billion dollars or something like that. They bought a Bruce Springsteen's catalog. And those other companies that I mentioned, Harb Review is another one. They're buying mostly sort of well known artists, stars, artists with big catalogs. The problem is, and this has been in particular problem for this one company, Hypnosis, that's quite well documented that have just sort of either gone under or kind of morphed into another company. Because I think part of the problem may have been that they overpaid for a lot of the music that they got involved with. They paid multiples that were very, very high. Like as I've heard, sort of 25x earnings for any business you look at, if you're going to buy a photography business or a burger business or a music business paying 25 to 30 times yearly earnings, it's gonna, you're gonna have to really do well to make that money back and make that a profitable business. And so I think because of the competitiveness of it and because of the, the sexiness of trying to corner the market of I have this big star, I have that big star, there's been a lot of crazy bidding going on. Whereas I saw, just because of my record label, the, the patterns of artists that I've been signing and having success with, there are artists that are sort of in the middle. The example that I gave before of Spotify Publishing, the Factoid that over 9,500 artists made over $100,000 on Spotify, just. On Spotify, just in 2023, there are tens of thousands of artists who are making somewhere between a hundred thousand dollars and a million dollars a year. And those artists are, a lot of those artists are great artists that are on their way up and getting better. And their catalogs are worth a lot as well. And I think those, those artist catalogs can be bought by, for much lower multiples because the artists are still in their development stages, they're not huge yet. And it actually is doing a great service for the artists. The artists, Artists of at this level say an artist, say you have a band from Boston and they're making a half million dollars a year between streaming and, and touring and all that, that sounds like a lot of money, right? But after they pay their manager and their lawyer and their accountant and they split it four ways between the band members and they pay their taxes, they're not rich, right? They're wealthy enough such that they don't have to wait tables at night anymore like they would have had to in the 80s, 70s or 80s, right. But they have, but they're, but they, they are at a point where they are not exactly rich. And they're kind of, to use a baseball analogy, I say they're kind of stuck on first base. They're doing really well, but they're kind of stuck on first base. They don't have a label, they're independent. And without that extra push of. They need two things really. They need money to get to that next level to tour internationally, to be able to afford a bigger record producer, to do things like be a force to afford like a possible guest star. That's one of the things we sometimes do as a marketing play and as a creative play on some records is we'll pay for a bigger guest star to appear in one of our developing artist records. These artists need more money in a big way in order to get to that next level. And the other thing that they need that they don't have because a lot of these artists, remember, are completely independent. They may, they usually have a manager, but besides that, they've never had a label. They've never had any kind of label marketing infrastructure. So what we do is we buy into their catalog, but we pay them a bunch of money. Not 25x but more like, you know.

[Keith]

One time purchase or is it a relationship? Like on a, on a recurring revenue basis?

[Tom Sarig]

It's a, it's a one time purchase of the catalog. But the hope is that it becomes a real relationship for a while. Because a lot of the artists that I've worked with in my time, I've had sort of long, long lifelong relationships with, with, you know, if I love an artist's music, I'm a fan forever and I, I want, whether that art, whether I'm working with that artist or not, I, I wish them to do well. You know, when I, when I started Antifragile, we were doing really simple one album deals because I didn't want to hold artists down for too long. No one knew where streaming was going. And so some artists did really well with us and then went on to another label after us because they didn't know us any more records and ended up doing much worse with a bigger label than they did with us. And so, you know, but I wish them well. I wish those artists well no matter what. And I, I try to choose artists that I think are really special and unique and have something to say for the world. But so the, the deal is that we have, we look to find these artists that are, that are, that are fantastic, that have been around for a few years, that we think are on their way up, that have a big future.

[Keith]

Yeah.

[Tom Sarig]

Yet they have some catalog that's out. They have a few albums that have been out already, some records that have been out sort of three or four years. We buy into their catalog, we pay them a certain big sum of money which will enable them to do these things that they don't have the ability to do right now. And also, and a lot of the times we will also give the artist like a passive participation in. Once we buy their, their catalog, we'll give them 10 or 20% so they can participate in the upside. Because usually when we acquire a record and start working on it, we can add revenue because we put them into.

[Keith]

The social media, you know.

[Tom Sarig]

Exactly. We pitch for, we pitch for sinks. You know what sinks are like music and film, television and video games. We do the social media stuff. We do all that stuff. And so we give them marketing infrastructure which helps not just their catalog, but helps hopefully their current records as well.

[Keith]

We've talked a lot about how the relationship works with the artist. How does this relate to being a great business for like, for like somebody who is thinking about getting into the music industry?

[Tom Sarig]

Well, it's all, you know, just like the stock market. It's, it's buy low, sell high, kind of. Right. Yeah, you know, it's, I don't, I don't mean to state it that crudely because it's, it's not where if it was as simple, it's much harder than stock market because we're dealing with humans and we're dealing with art. Right. And that's a very subjective thing. And so, you know, every artist I sign is me placing a bet on an artist that I think is wonderful, talented, and can be, can have more success today than they've had yesterday and more success tomorrow than they've had today.

[Keith]

So is the secret sauce the, the economics that you've discovered the. Your listening ear to identify the right artist or the marketing muscle that you have behind that artist to help them hit that next level of, of, of downloads?

[Tom Sarig]

That's a great question, I think is truly a tricky sort of mix of both. And it's got to be both. It can't just be. If this was just sort of looking at the numbers and finding artists that had the numbers to invest in, we'd make a lot of mistakes. And I think there are certain investors in music out there that have been driven by accountants. And I am actually a former accountant, but I'm a, but I'm a music person first and foremost. I've been a music nut and an A and R executive for many, many years. So I, we, we look for artists that fit the, fit the investment thesis. First they have to make the numbers work and then we drill down, like if I'm looking at 20 different artists that, that might fit the investment thesis. We then have to do things like drill down into their social media and look at their relationship with their fans. We have to interview the artists, we have to talk with them repeatedly, whether on Zoom or in person. Go see them live.

[Keith]

So it's funny, instead of the Billboard charts, you're looking at TikTok talk and Instagram and oh yeah, for sure. Whose user counts? What are you looking at? What are the, the key metrics in that world?

[Tom Sarig]

We're looking at views of posts, at engagement, at growth, you know, of all those things. And, and I think artists that, you know, it's, it's rough I, for artists these days because they have to be really good at developing some sort of relationship with their fan base. I, I used to say that artists used to have only to worry about two things in their career. The two tent poles. The first ten pole was like recording, you know, all the thought and process that goes into writing songs and picking a producer in a studio and all that sort of stuff, so recording. And then the second tent pole was live performance, so touring and finding an agent and all the, that sort of. Where are we going? To tour, who's going to be our opening act, all that kind of stuff. There's now a third tent pole in the last sort of six plus years, which is social media. An artist has a responsibility, especially new artists that have. Artists that have been grandfathered in. Artists that are 10 years or more older than that can get, can get away with not being great at social media. But artists that have come along in the last sort of five, six, seven years, they have to have a talent and an acumen for building an engagement and a relationship and an ability to entertain over social media. Or they're going to be left or they're going to be behind.

[Keith]

We could go on a whole bunch of rants here. I mean, I remember going to see Miles Davis back in the day and he played with his back to the audience the whole time. He didn't give a who was there. But it was an amazing show that blew my mind and just like totally.

[Tom Sarig]

I mean, when I managed Lou Reed, he would play concerts, he wouldn't play one of his hits and I. People are coming to hear certain songs. Eventually he did, he got older, but he. At first, you know, artists are, that's why artists are great. They're very sort of, they make music for themselves, which is, which is wonderful.

[Keith]

You know, today, could you imagine not saying, I'm not going to do any video, I'm not going to do any social as an artist. How do they. I don't know, maybe they.

[Tom Sarig]

Yeah, that would be a young Miles Davis today. You know, that genre even like they have to do social media. They have to be good at it.

[Keith]

You have to, you would have to lead with that before you're, you're exactly.

[Tom Sarig]

Right, you're exactly right to say that.

[Keith]

It'll almost like.

[Tom Sarig]

Yeah, you have to build, you have to start with that. You know, that's how you sort of seed your fan bases, by leaking out little bits and bobs of songs and videos. And the good thing is that there's all these tools today that make it easy and cheap. Which leads me to like the AI thing. You can take a piece of your music and there's umpteen different, you know, text prompt to video tools out there. AI tools out there where you can make music video clips for next to nothing. You know, there was a time when we had. Years ago when I worked at Arista Records, we had to make a Whitney Houston video for a million dollars before we even started the campaign. You know, that was part of the game. You had to have some grand thing that we're going to give to MTV and blah blah. And nowadays, bless you, nowadays you don't have that expense. You can, you can do so much more with so much less.

[Keith]

That's fascinating. So let's talk about the genres too that are changing and the whole explosion. We got to mention things like American Idol and the Voice. Yes. How that's infused the music industry and how these genres are shifting and changing. Right. We grew up in a day where it was, you were jazz, country, pop, metal. Now it seems like everything's sort of blending together. What's going on in terms of those artist categories and the impact on some of these TV artists as well.

[Tom Sarig]

Yeah, I think there is a lot of cross pollination, but I think that was always there. I think most people take most people's tastes like I like all kinds of music. I love metal, I love hip hop, I love country. I look after great personalities and great, great songs, you know, like, like I don't know if you saw the Woody Allen film Broadway, Danny Rose. Yeah, but he says I look for songs and stars, you know, that's all, that's all it's about, you know, which is there's some truth to that, you know. So that's my lowest common denominator is I look for really great songwriting, really interesting personalities and that can exist in every genre. And now I think most people really have eclectic taste. Most people have tastes like me. Like they like a lot of different genres of music. They just like good music in different genres. And I think that was never serviced in the past and now you see a lot more cross pollination of that. And I think that's a real positive thing in music that's happening, you know.

[Keith]

Yeah, I like it too. You've even got me to like some country music of late and, and also.

[Tom Sarig]

The flattening of the world with like I, I don't love, to be honest much. K pop, a lot of it is a bit brainless to me. But the fact that it's happening I think is a positive thing. Thing. The fact that, that the music world is really a flat world now that there are people, there are kids or, or adults in.

[Keith]

No, I love you mention that I love you mentioned that. It's true. What about American Idol and the Voice which everyone loves to hate but sometimes watches it or like you do such a great job producing those shows. It's insane.

[Tom Sarig]

I think, I think now those shows have matured to the point where they're always great tv, right. But they're not really developing hit Artists much anymore? Any of them, you know, in other countries, you know, the Voice is. I think the voice is licensed to like 30 different countries or something. It's on in like Uzbekistan, you know, but it's really like. It's very much. I think a lot of those. Those shows are not really producing really great artists. It's hard to break through that. You know, the weird sort of.

[Keith]

That's a good point you made with the distinction. It's great TV and they do a great job with the video.

[Tom Sarig]

Oh yeah, it's very entertaining. Just to see who's going to win in the competition.

[Keith]

How many of them break through into really selling units and. And moving volume in.

[Tom Sarig]

In the first few years of American Idol, you had like Kelly Clarkson and. And what's her name, the country singer, blond one, you know, and. And there was. There was a bunch of. Of artists that did break through, but it's been a while since, like, I could be wrong, but I think it's been a while since any major ones have broken.

[Keith]

Well, they do covers too. They don't really write their own stuff, so how extendable is that? Anyway, let's get back to Antifragile because I know I'm taking too much of your time. Tom. What? Huh?

[Tom Sarig]

It's fine. Happy to talk to you.

[Keith]

No, I'm enjoying this conversation. We can go into so many other pockets, but what kind of music are you into? So it's funny, I. I was thinking as you were talking about, the last stuff that I've discovered has been through the social channels and I. I have.

[Tom Sarig]

This list of Bay Area music, Guy.

[Keith]

Journey, and yeah, I have all that stuff. And we go to the local festivals out here. You know, our outside lands is still one.

[Tom Sarig]

I love outside lands. Yeah.

[Keith]

Because it's so cross cultural. It's so.

[Tom Sarig]

Oh yeah, one of the great American festivals. Yeah. Yeah.

[Keith]

We really have a great time. And then, you know, we love bottle rock too, which is a little bit more subdued. But not always.

[Tom Sarig]

No, I. They should. They don't have that much music at the wineries. I feel like they should. I went to Australia with Violent Femmes once and some of the wineries there have literally have like stadiums at. Built for the winery. Like so with you.

[Keith]

I brought this up separately. They have these. They even have great venues with stages.

[Tom Sarig]

Right, right. Yeah, they should. They could. They would have real artists come to play those and play for a lot of money because a lot of those are like adults with money that won't mind paying a little extra to see an artist. The wineries could be much more sort of useful.

[Keith]

We do have the mountain winery here, but that's quite a diversion.

[Tom Sarig]

Yeah, yeah, that's, that's its own thing.

[Keith]

I think that's a classic venue. So we've got great venues, I mean.

[Tom Sarig]

All up and down the coast, San Luis Obispo and all, you know, William at Valley in Oregon and all that sort of stuff, you know.

[Keith]

No, I gotta come out to see some more music, some more new music as opposed to the old stuff that I go see. But anyways, I love what, I love what you're doing. It sounds fantastic.

[Tom Sarig]

It's fun because I, I, I feel like I'm using my skill set of developing or finding artists that I think are really special and have a real future and making great music and haven't made their best music yet. And I'm helping them develop and get to the next level in an, in an industry now where there's not a lot of, like, direction laid out for artists all the time. It's kind of like a, you have to sort of find your own path and a lot. And, you know, people need all the mentorship and all the help they can get. There's precious little of that, I think, in the music industry now. So if I can invest in an artist to enable them to further their career, give them some marketing help to enable them to get there, to get more people to discover them, I've done a good thing in the world and made some money along the way.

[Keith]

Money aside, what is your sort of goal for the next 6, 12, 24.

[Tom Sarig]

Months to sign, you know, 10 to 15 more artists to antifragile in terms of catalogs and record deals in general, and just to keep doing what I'm doing. My, my, you know, my lucky lot in life is that I've got to work as a talent finder and talent developer in music for like 27 years now. I've really been blessed and been able to make a really good living at it at the same time. So I feel like I've really been blessed.

[Keith]

What a great, what a great story. I, I, I like where things are headed now again in the music industry. Artists are happy, there's good stuff coming out and I think so, yeah, there's.

[Tom Sarig]

Always, there's also always great music when there's kind of political turbulence in the world. And I think now is a particular, I wish there were even more acts that were kind of speaking politically, but I think right now is a really good time for. There's always good culture when there's a lot of turmoil, whether it's economic or so social turmoil. And I think it makes for good culture, usually, you know, I agree 100%.

[Keith]

I'll. I'll be listening. I'll be watching. And thanks for sharing all this.

[Tom Sarig]

Thank you. My pleasure. Anytime, Keith.

[Keith]

Be great.

[Tom Sarig]

Take care.