Scott Cohen - Leaving the Orchard
Scott Cohen is the co-founder of digital distribution company The Orchard. He joined MTF Director Andrew Dubber at a music industry event in Manchester for a conversation about his journey - from a back room behind an umbrella shop way before there was a digital music ecosystem to his recent retirement from a global powerhouse that he helped to create. A retirement that hasn’t lasted very long…
AI Transcription
SUMMARY KEYWORDS
orchard, music, music industry, people, world, business, thought, working, stores, artists, years, itunes, hear, called, lower east side, future, digital, catalogue, chief innovation officer, company
SPEAKERS
Scott Cohen, Andrew Dubber
Andrew Dubber
Hi, I’m Dubber. I’m the director of Music Tech Fest, and this is the MTF podcast. Scott Cohen is or rather was the co founder of the orchard, bringing digital music distribution to the world before there was even a marketplace for it. He’s the chairman of sound diplomacy, music strategy consultancy, and he’s been a member of the British Phonographic Industry Council. He recently became the chief innovation officer for Warner Music Group. Now I caught up with him at an convention, an independent music industry event in Manchester, where we shared a panel, I took him aside backstage and chatted to him about his life, his career, and his thoughts about forging the future of the music industries. Now, I’ve spoken to Scott a lot over the past decade or so. And we haven’t always agreed 100% about everything, but he is someone I really respect in an industry where that’s not always warranted. And he opened up in this talk about a whole bunch of things I’d never heard before from him. It was a really fascinating conversation for me, and I hope you enjoy your Scott Cohen. Scott Cohen, really lovely to have you here. We’ve crossed paths a few times over the course of the music industry career over the last decade or so many times. Yeah, so So tell me a little bit about your story. Where did Where did this all start for you? And I mean, not not the beginning of the orchard? I mean, why music?
Scott Cohen
Um, I’m probably the outlier in this. I was never a musician. Except when I was like, 10 years old. I played the trumpet in the school band. Uh huh. But aside from that, I have no musical ability. Was your family musical? No. Not at all. Okay. And I never had dreams of being in the music industry. I love music. but so did every kid, you know, who didn’t? Particularly in the era when I grew up, we all you know, went to our bedrooms and put on albums and dim the lights and lit a candle and tried to read the lyrics and understand what the hell Robert Plant meant in those Led Zeppelin lyrics. And I don’t know, 50 years later, I still don’t know what the hell he’s talking about, but love that music. And then I kind of just fell into it. It was definitely not by design, I started managing artists in the 80s. And again, just because I was helping some people I knew. And I didn’t think that was a career. And it certainly wasn’t what I wanted to do. It was just happen to happen. Right?
Andrew Dubber
Right. So there’s no kind of deliberate trajectory for you at least that got you as far as the origin.
Scott Cohen
No, no, there’s there’s no deliberate trajectory and anything in life, you know, life happens. And if you want to assign some meaning to it and say, this was my grand plan, great, but things just happen.
Andrew Dubber
What you, they happened, and you look quite prescient, because they did so you like was it? 95?
Scott Cohen
Well, alright, so So yes, and no, I mean, how do I put this? So in 95, my business partner, Richard Gottehrer, who was great music guy. Now here’s a real musician, songwriter producer, started Sire Records with Seymour Stein, real legend in the music industry. He and I had a little label together in New York. That was failed. So as a way to reach a market that we couldn’t reach. We started running digital campaigns in 1995. So dial up modems.
Andrew Dubber
I mean, that’s super early. That’s like really, really early.
Scott Cohen
Yeah, yeah. Yeah. I mean, most people didn’t even have a computer or internet connection, like Netscape Navigator was was not far behind that, correct. I mean, this is, I mean, it’s funny, because what when I first met Richard and you know, in this early days of the web, you know, and, and, and, um, and he tells me who he is, you know, this producer and songwriter and founder of Sire Records. And then, you know, you think you’re going to do what anyone else is going to do, which is, you know, just go Google the guy. Except Google wasn’t invented yet
Andrew Dubber
to hear television. That’s not very popular. Yeah. So.
Scott Cohen
So yeah, super early days. But we what we started to recognise was, this is going to be an amazing tool, that the World Wide Web that to reach people to push content through because when we were, when we were reaching people back then it was only text base, there was no photos, there was no video, there was no music, you could talk about music, but you couldn’t hear music, right? And then even much later when music started happening online, and you could start to download it, you could download it on your computer, but you couldn’t get it off of your computer. So, you know, we went through those changes.
Andrew Dubber
Well, two things there. One is it was a bandwidth issue, I guess. And but but secondly, there was nothing to put them on to mp3 players weren’t even
Scott Cohen
there. Yeah, the first mp3 player was the the Diamond Rio, which I think was September 98. And it was immediately sued by the music industry, the RIAA, as a an illegal device.
Andrew Dubber
Yeah, there’s a patent that isn’t that.
Scott Cohen
Yeah. But but but crazy that the music industry thought that somebody could take music, organise it the way they want, listen, the way they want, would be illegal, it should be stopped. We’ve definitely come a long way. So Richard, I have this record label back in 95. And it is just a shit label. We don’t know what the hell we’re doing. I actually thought he knew what he was doing. Because he’s, you know, the old veteran, but he never ran the day to day of a business, you know, our record business. So he thought I knew what I was doing this kind of sharp, young, you know, artists manager, but neither of us knew anything, which drove us onto the internet. That’s why we were doing it not because we wanted to it was because we couldn’t get our records on radio, we couldn’t get press coverage. And we couldn’t even get distribution. And if you don’t have those three things, I’m not sure what your function as a record label in the mid 90s was. So that’s when we started doing these online campaigns where we’d go into you remember AOL, America Online. So we would have we had 10 computers connected with 14 four modems to the internet. And we had a bunch of unpaid interns, and they would log in, go into these message rooms where people were talking about music, and then they would click on the person’s name. And that back then you could then send them an email. All right, so we would say, hey, if you like this band, check out ours. Well, in 1995, we got 100% response rate. I would say, everyone that received an email from us said thank you, right? Well, because it was often the first time they ever received an email. And it was about a relevant marketing message targeted just for them. And we had to do it one by one, because also the CC hadn’t been invented yet. So we’ve literally had to go one person at a time, which is not exactly scalable.
Andrew Dubber
Right, open rates on email campaigns not being quite what they were.
Scott Cohen
Yeah. Yeah. But the Yeah, the world definitely changed. Imagine if you had 100%. Not only open rates, but response rates. Wow. Wow. That’s amazing. I mean, again, back in 95. I couldn’t imagine somebody that would not open an email. Because you didn’t even get one a day. Yeah. Yeah.
Andrew Dubber
Incredible. So the orchard seems like a really rich metaphor, as a as a concept. What What did you sort of invest in that name?
Scott Cohen
Oh, it’s very funny. Because Richard came up with the name, we didn’t know what to name our company. And what’s interesting is we were actually on orchard Street, 45 orchard, on the Lower East Side, in a back room behind an umbrella shop. And the Lower East Side of Manhattan, is actually where the immigrants would come, you know, you can picture them, you know, stopping at Ellis Island, seeing the, you know, seeing the Statue of Liberty. And then when they finally land on to Manhattan, they come at the Lower East Side, that was the immigrant area. And it was a place where people started and grew out of, and the reason it’s called orchard street is because there was a gentleman named Delancey that several hundred years ago, had an orchard all of the Lower East Side of Manhattan was his orchard. Wow, his apple orchard. And so we had this idea, this kind of metaphor of, you know, a place to grow. You know, it was it was an orchard where things kind of grew. And it was a place where people grew. And you know, from poverty and the Lower East Side, and if you made it, you moved uptown, and and you were in business. And so we thought that’s perfect. This is going to be a place where we can start things. So it was everything from starting careers for young musicians to starting a tech business ourselves to to saying, Yeah, what is it? What is an internet business look like? Several years before even the.com bubble started? Right. Right.
Andrew Dubber
So you started and this is the kind of the interesting bit for me you started a digital distribution service. Before there was anyone to distribute to
Scott Cohen
Oh, yeah, yeah, I guess again. Looking back, it seems so funny, but at the time, we’re so stupid, like we go, let we have this brilliant idea where we’re going to digitally distribute music and and we forget The two fundamental parts of that is there were no stores to distribute to. They did not exist yet. And we had no catalogue anyway. So so we open a business with no music to distribute. And even if we had it, nobody to distribute it to
Andrew Dubber
Right, right, but you’re kind of living proof of, you know, it’s amazing what you can achieve when you don’t know what you can’t do. Yeah. And it’s and how has that sort of played out through the trajectory? Because this was, I mean, this is a long time ago, and the orchard has grown somewhat, since they are a little bit. Yeah. So I mean, tell me about that path. And you know, what’s really interested, particularly and what’s been sort of the challenge of that?
Scott Cohen
Well, well, again, the first challenge was, we’re trying to build a business in something that doesn’t exist. But I was, I was convinced it would exist, not because I can predict the future, but because you can look around and see what’s happening in other industries, you looked at what was happening in telecommunications, you looked at what was happening in broadband, you looked at what was happening in other related industries and go, this will impact the music business. And I can see where it’s going. I don’t, because I we saw where mobile phones were about to go. We saw that broadband was going to launch. It was obvious, it was inevitable. You know, it’s like, when you think about something like, I don’t know, autonomous vehicles, these are inevitable technology, there will be autonomous vehicles in the future. The thing that I can’t tell you is, what’s the timeline when that will happen? Who the company is going to be? Is it going to be Tesla? Or is it going to be, you know, GM? Or is it going to be a new company that we haven’t heard of? And I and I’m not even sure of the shape of it? Are they going to be like cars? Are they going to be flying drones or something that we haven’t imagined yet? But nevertheless, the concept is inevitable. And that’s what I saw in those early days of the web was that it’s inevitable this, I didn’t know if the orchard would be the company to succeed. I didn’t know which, how people would exactly consume the music or which stores would be there. Because I mean, iTunes wasn’t until 2003, or America. So we’re talking a long way. I mean, Napster wasn’t even until 1999. Yes. So I didn’t know how it would play out specifically, but I knew how it would play out generally. And I knew we would get to this issue, I knew that there were stages that people had to get through to get to where we are today that maybe you think of it as ideas might be revolutionary. But the change is evolutionary. And you had to get people from buying CDs, to then buying CDs online. That was the original digital music business. Yeah, for sure. To then downloading music, which was, I own it, to paying for those downloads to say, all right, it is a commercial business, to where we are now with an access business where I pay some amount per month, and I’ve unlimited access to music. And so it took 20 something years for that process to go through. And that was where I probably screwed up the most was the timeline.
Andrew Dubber
The the interesting part for me, I think, is not just that these things are inevitable and that you at least have the clarity to recognise that if not predicted, but but at least to go look this, this is a thing that’s going on. But actually you made it happen. And there’s an extent to which you seem not to be taking credit for that. But actually, you were the one actually in there making this change. come to fruition. If you want to continue the orchard metaphor.
Scott Cohen
Yeah. Okay, so all right, so fine. I’ll give myself credit for actually doing it. Because ideas are pretty cheap. Everyone’s got ideas, you know, but can you actually invest the time and do it? And so I definitely invested the time, invested everything. So I started with whatever small pot of money I had lost that very quickly. So that was gone. That was off the table. And then truly invested everything. I mean, at some point, by the early 2000s, I was well over $3 million in debt. When I say $3 million in debt, I don’t mean we had a business plan and we raise some funds and none No, no, I mean, literally owed $3 million to everyone to every artist, to every label, to our land, lower to the electric to the to the IRS, you know, the tax authorities. And even though I phrase it as I owe them money, they call that tax evasion. Yeah. Which is punishable by you know, prison sentence. So so I’m like, Oh, I owe this money. They’re like, it’s not called you owe us. So So I lost everything I own, I lost my, my, my home, all my possessions. I was homeless, but not living on the streets. I was living in the office for a couple of years. And and all of this, I’m saying it’s really important not to romanticise it because people think Wow, so cool. What an amazing time. There’s nothing romantic about it.
Andrew Dubber
Yeah, I have to say, That’s not what I was thinking.
Scott Cohen
Yeah, yeah. No. Like, I’ll I’ll go to a university and lecture to kids and like, Oh, it’s cool. I’m like, No, it’s not cool. It’s so not cool. Um, but yeah, I put in the time, and I put in everything I had to just drive this forward.
Andrew Dubber
Was there a point at which you you’re sitting there, like in your office, which is now where you sleep? Going, you know what this isn’t working, I need to do something else? Or did you just go I need to push harder. I had
Scott Cohen
to push harder. There was no other option. If I didn’t make it work. I had no ability to pay off millions of dollars in debt and no ability to clear my tax liability. I had to make this work. I had no choice. Because Yeah, the easy thing would have been to walk away. And there were many times I could have walked away, but I just have to see it through.
Andrew Dubber
Right. Right. And it’s and it’s ended up I mean, when was the point where you went, you know what this is working now.
Scott Cohen
Um, when was the point. So, so it’s always been a bit of a journey. I think the first real point when I said, this is working is when iTunes launched. And the month after iTunes launch, we received our first check. And that check equals more money than we hadn’t made, I think in one month than the previous year, maybe even the whole history of the company put together. And that was only surpassed by the second month check, which was double Wow. And then doubled. Again. I’m like, holy shit, this is finally working. And I would get, I would get, you know, messages from people go. Have you heard about this new thing about downloading music? Like, real? Like, Nick? Yeah, I’ve been I’ve been homeless for eight years. And now, you know, this is what I’ve been working on, you know,
Andrew Dubber
right. Wow. Wow. So who were the kind of the key figures for you? As part of this, like, musically speaking? Were there people who distributed their music through the orchard at that time that just blew up on on iTunes? Or? Or was it just a mess that you had all of these artists in the catalogue?
Scott Cohen
Yeah, I mean, it was we were definitely in the long tail. What was interesting is, actually we call it the long tail, we were the the only part of it. I remember, when iTunes launched, we were sitting on the largest catalogue of digital music in the world. And that’s because even the major labels didn’t have the digital rights to their biggest artists. So if you wanted legitimate digital music, essentially, you’re getting it from the orchard, not directly as a consumer, but you know, through iTunes and stores like that.
Andrew Dubber
Was that the not going direct to consumer a deliberate choice for you? Is that something you dabbled with it? There was no other option?
Scott Cohen
I mean, it’s funny, because I don’t know where this conversation is going to go. But that is part of the future that we we will be able to do that. As an industry.
Andrew Dubber
Yeah, I get that. But But I mean, people you will essentially you were waiting for people to set up online music stores. Correct. It didn’t never occur to you to get you know what, maybe we should set up an online music store.
Scott Cohen
Now, that number, I mean, it occurred to us but that what we didn’t want to be a consumer facing business to be a store. That’s a it’s a very different proposition than what I would I had envisioned, right. And was that vision, the key to what the origin became 100% because the stores have come and gone and they will continue to come and go,
Andrew Dubber
but you’ve got the catalogue.
Scott Cohen
Right? Right. Content is king. Uh huh.
Andrew Dubber
That’s still the case and still a thing
Scott Cohen
and honestly, if you look at you know, traditional brick and mortar stores and how well they’ve done in the digital space, yet all those original digital stores where are they today? What can you name a download store anymore? And the only one we can still name is iTunes and it’s it’s it’s, you know, a tiny fragment of what it once was.
Andrew Dubber
Yeah, well, I’d wave a flag for band camp at this point that I love band camp, but but that’s when I think of where I buy music online that’s the store that yeah, that I go to the the the okay this there’s a bunch of things that are really interesting to me. The place that it came out of, I think is really interesting, but the orchard didn’t stay there. Did you start to need staff in different places Did you need you know people to ask Are or to sort of find the catalogues?
Scott Cohen
Yes, I mean it so. So again, you know, part of our strategy was, you know, due to who we were and what we were in this, you know, that we weren’t big and dominant, we were little. So the URL, the first 10 years was marked by, will go everywhere else. They’re not. And the there was the big major labels. So we, they didn’t think Eastern Europe was important. They didn’t think Africa or the Middle East, or India, or Asia, or Latin America, they did not think those were important territories, America, in the UK, those are important territories. So we started setting up offices all around the world, in the places that they weren’t, and giving access to independent artists and independent labels that had no route to market. And, and we were explaining again, it starts in the earliest days, when you even have to explain what digital music is, and what a download is to somebody that doesn’t own a computer to an artist or label in another territory. were worth talking about dial up modems, in the early days of, of broadband, but they’re still haven’t even they might not have electricity, you know, hello, you know, we’re talking about downloading music in the early 2000s. Right?
Andrew Dubber
Is the the metadata when it comes to that sort of thing, a problem particularly with you know, different languages haven’t different character sets or, you know, different spellings, or, you know, what genres are called, and those sorts of things that that cause a, sort of a big problem pieces, that still causing a big problem for everyone in the industry.
Scott Cohen
And it’ll probably be resolved in ways that are different than what we’re thinking now. And and, you know, it’s, it’s funny, because when you think about metadata and music, and and, and search and recommendation, and you know, I think when I started in the music industry, you searched for music alphabetically. So go to a record shop, and you would literally go through the racks in alphabetical order, ABBA, Aerosmith, you know, and sometime later, you find like ZZ Top after an hour, yeah. And then then the iTunes Store comes out. And it would be silly to search alphabetically, they sorted it by genre and sub genre. So they’re like, do you want rock and you’d go to rock, but under rock was death metal next to singer songwriter, you know, that’s two sub genres of rock. And, and that created an interesting world and more opportunities. So people didn’t search alphabetically anymore. They started to search by genre. But now we’re in a world where we don’t search by alphabetical order, or genre. We search completely differently, you don’t go into Spotify, for example, and, and put in genres music is just music, it’s, it’s good music, it can be on a playlist, because it has a mood or an emotion or, or, you know, it could just be pop. And you think about what that meant for the world, once we got rid of the genre, because, essentially, the way the music industry and metadata worked was anything that wasn’t from the UK or US or Canada or Australia. Was world music. Yeah. Just everything was world music. And it would drive people crazy, because they’re like, No, no, this is, you know, heavy metal or it’s pop or Nope, World Music, right? Because of the country of origin. So all of a sudden, you get to a to a Spotify world. And you have like one of the biggest bands in the world right now is BTS, a Korean boy band that sings in Korean, but they made it onto the right playlist. And because of that, it was able to grow it five years ago, they would have been in world music, slash Asian Music, you know, as sub genre. Yeah, and just be buried forever. Right. Right.
Andrew Dubber
And you spend all this time with the orchard and you’ve seen all these changes and their counterpoint quite recently you went? That’s enough? Is that what happened? That’s exactly.
Scott Cohen
It’s so funny, because we haven’t talked but that’s exactly what happened. It was I was there at the beginning of December 2018. And it was our, what we call the all hands meeting at the orchard. So staff comes in from 40 offices around the world. They’re giving territory presentations, these are our artists, people are presenting their budgets. We’re looking at all the new technology that we’re rolling out and everything looks amazing. I mean, truly, I’m in awe of what, what the company has become. And also at this point, it’s owned by Sony, and I’m standing there thinking, This is amazing. But I’m kind of done. You know, what, what more do I have to contribute? I mean, I’m not the CEO, I’m not running the day to day of the business. I’m kind of done, you know. And I did that, in my mind, I didn’t do anything about it. I went away on a holiday for with my wife, we left for nearly a month, travelling to Guatemala, extraordinary country, ended up in LA at the tail end the last week of the month long holiday. And I decided, that’s it. I’m retiring. And how
Andrew Dubber
long did that last?
Scott Cohen
So I made the announcement I told I told the CEO and the CEO of the company, I’m like, you know, I’m going to retire that now. Like, how are you going to retire this year? What a shock? We should do some planning, like, have you given thought to the dates. And I’m like, I don’t know, end of the month. And this was like, January 20, right on there, like 10 days notice or something. And, and, and, and I retired. And right after I made that announcement, which was not a public announcement, I started talking to Max losada, who’s the CEO of Warner Music Group. And he was asking me, you know, Hey, what’s going on? And I was kind of like, Well, you know, I’m actually retiring. You know, I have a good life. I don’t, I don’t need to do this anymore. And he made me an offer I couldn’t refuse, and then created a new position called the Chief Innovation Officer for the Warner Music Group. And I essentially retired on a Friday, did everything I ever wanted to do over the weekend, and started at Warner on a Monday morning. Oh, wow.
Andrew Dubber
That’s, that’s quite a trajectory. So what is the job of the Chief Innovation Officer at Warner Music?
Scott Cohen
Well, it’s interesting, because, you know, from the orator perspective, it was the challenge was, how do you take something from the ether, something that doesn’t exist and create a company and also, you know, we created an entire industry, an industry that didn’t exist. And take that from nothing to you know, a billion dollar a year company. This is a very different challenge. This is a company that’s already generating billions, and has a long history, an incredible legacy from Led Zeppelin and Fleetwood Mac and the Grateful Dead to Ed Sheeran, and Dua Lipa and Stormzy, and all these amazing artists. But how do we future proof it? So it’s, you know, how do we how do we see what’s beyond the horizon? Like, in today’s environment, it’s all about Apple Music, Spotify, Amazon, Twitter, Facebook, Instagram, we understand the landscape. But what comes next? What’s post streaming? What’s post social? What’s post web? What is that world going to look like? And what do we need to do to get there so I work with the, with the executive team at, at Warner on, let’s build the things that will shape the future of the music industry.
Andrew Dubber
So that seems to be the kind of the overarching theme of this has been not, you know, to predict the future, but to recognise the kind of the inevitabilities within it, and then to sit down and go about making it happen.
Scott Cohen
That’s exactly it. So it’s, it’s understanding what blockchain is, and parentheses what blockchain isn’t. What it what it what what it can do now, but what ultimately, it’ll do in the future what VR will be what AR and M, virtual reality. augmented reality mixed reality. Sorry, I have no idea who might ultimately hear this and not know these terms. There’s a lot of acronyms. Yes, sorry. And so knowing the inevitability of these things, what will it look like, and, and shaping the company?
Andrew Dubber
Fantastic. So there’s no book that’s sort of the next thing for you sit down and write the history of the orchard or or go or some sort of inspirational speakers second
Scott Cohen
night neither neither although I do I do go out and speak quite a bit and, and I’m always happy to tell my story there was there was a long time when I was embarrassed by my story, you know, embarrassed that I had lost so much money or owed so much money embarrassed that I was homeless. Even my family didn’t know I was embarrassed by all of this I guess I’m older now and yeah, now I don’t give a fuck
Andrew Dubber
so well also that the narrative makes sense retrospectively, you know, this kind of rags to riches story, we understand that right? You know, the rags but not fun. But the you actually went through that whole process and you you know, you persevered and you persisted. I guess you were probably lucky in some ways from from and there will have been people who helped you but but you stuck with it. And I think that’s really interesting.
Scott Cohen
fortunate in so many ways, you know, that that that that I was born in the right country to the right parents in the right, you know, things that I that were not of my doing, you know, it isn’t because I worked hard. There’s lots of people in this world that work incredibly hard and have absolutely no opportunity to to to get ahead like I did so. So the beginning part was added was not my doing it was fate that put me here. The the the part is, I just wanted to make sure I made the most of this, this opportunity that I had, because most people aren’t so fortunate. I mean, even just you know, being a white male gives you privilege. And it’s sad that it does and hopefully that that won’t be the case for the next generation. But it is what what it is. And I just thought, well, I can’t screw this up.
Andrew Dubber
Let’s go. It’s been really pleasure to talk to you. Thanks so much, today. Thank you. Cheers. And that’s the MTF podcast. If you can think of someone else who might be interested in hearing that, please send them a link. And if you share, like rate and review, of course it would really make a difference. And I’d certainly really appreciate it. Now I’m off to South by Southwest where I’m going to be recording a lot more of these sorts of conversations. I’m really looking forward to it. If you want to make sure you hear some of those, make sure you subscribe. Have a great week and we’ll talk soon Cheers.
