KOCH HIM IF YOU CAN

Koch Entertainment President Bob Frank has been with the label since June, 1999, when he coordinated the deal with Walter Yetnikoff’s Velvel Music Group that created the company. Before joining the music legend’s label as President in 1997, the 37-year-old music biz veteran spent eight years with PolyGram Records, including four as GM/Sr. VP of Mercury Records Nashville, to which he was appointed at the age of 28, the youngest PolyGram exec to hold the GM title in North America.

Since the formation of Koch Entertainment, the company has dominated the independent chart, with 44 albums from its five wholly owned labels cracking the charts over the last two years. The group is made up of Koch Records; the Alan Grunblatt-helmed hip-hop imprint In The Paint; the Nashville-based country label Audium Records, the classical music Koch International Classics and the cabaret/Broadway-oriented DRG Records, as well as its successful children’s division. The company’s marketshare has hovered between .4 -.5, with a roster that includes familiar names Dwight Yoakam, Carole King, Opeth, Joan Baez, Ringo Starr, Bob Geldof, B.G., KRS-One, Turk (Hot Boys), Public Enemy, Inspectah Deck (Wu Tang Clan), Charlie Daniels, The Spooks, Jeffrey Osbourne, The Kinks and Sammy Kershaw, as well as a lucrative deal with World Wrestling Entertainment. Not to mention kids’ sensations The Wiggles, Bob the Builder, Pokemon, Barney, Madeline and Strawberry Shortcake.

Frank took some time off from his day job performing inside a purple dinosaur costume for kids’ birthday parties to waste some time with HITS’ own inner child, Roy "Boy" Trakin.

You’re one of the few who could wear a T-shirt with the legend, "I survived Velvel Records." What was it like working for Walter Yetnikoff?
I was with him for two years and had a great time. If it weren’t for Velvel, we wouldn’t have been able to consolidate it into the Koch Group to create Koch Entertainment. It turned out to be a great move. It’s always good to take big risks early in your career like that. I would jump in Walter’s foxhole any day of the week. He’s a fucking lion. You learn more from a guy like him in two years than you would from your average record executive in 25 years. He’s just an incredible personality and an incredibly smart guy.

It seems like there’s room for a mid-level indie label out there amidst the industry’s problems.
Timing is everything in this business. We’re in a perfect spot. We’re able to come in and take advantage of the chaos. We have the company structured to do deals with artists who have a strong history. Our mix is more heavily skewed towards people whom you’d know. We still do deals with developing artists; you need that balance. We just did a deal with Dwight Yoakam and Joan Baez and we have a record coming out with Ringo. So, it’s names that people know, with strong fan bases, who’ve had major-label deals and lost them, or decided they wanted to be a big fish in a smaller pond. We keep things pretty lean. We have a low overhead. As an independent, you have to. And we’re 100% privately owned. Which is one of our biggest strengths. We don’t have to run around and raise money. We’re able to focus on what we do. We look at the opportunities out there, and for a mid-sized company, like ours, if we sell 50k on something, we can make a little money. If we sell 500k, we can make more than a major would make. We sell a million, and we’re having a party. We’ve built the company over the past four years with a great many singles and doubles. Over the past couple of years, we’ve had a couple of triples. And, if you get the home run, that’s great, but we’re not going to build an infrastructure around that.

You don’t play the radio game like the majors do.
We have and we can. We have experienced people, but just because you can doesn’t mean you should. We’re doing a lot more on the Adult side now. We have Chico DeBarge at Urban AC. We’re going to have Jeffrey Osbourne going to Urban and Urban AC. Are we going to compete with Shakira and Mariah? No. That’s not our world. We know that. Over time, we could evolve into that. But you have to start somewhere. Look at how A&M and Interscope started.

Do you consider yourself a boutique label?
Not really. If you look at the marketshare of, say, EMI in the U.S., they’re only four or five times larger than we are. It’s not like they’re 20 times larger. We keep growing and cutting deals. We’re more deal-driven than A&R-driven. We’re not Clive Davis trying to break pop acts. We’re doing deals with artists who’ve had deals before, for their catalogs. That’s where we’re strong. We have five labels: Koch Records; Audium, our country division run by Nick Hunter; In the Paint, Alan Grunblatt’s rap label; Koch International Classics, for classical music, and DRG, which is one of the premier labels for Broadway shows and cabaret, run by Hugh Fordin, who earned a Grammy last year for The Producers. All niche markets. To have such a talented group of executives on the team is a blessing.

What’s the relationship like between the labels and your distribution company?
It’s like when I was at Mercury with PGD. We’re always complaining about something, and they’ll complain that we are late with everything. It’s very healthy. At the end of the day, they are an incredibly well-run machine under their President Michael Rosenberg.

Can Koch not only survive, but thrive, in this brutal business environment?|
I believe we will continue to grow. Our net sales are up 125% over the past two years. We’re very young and aggressive, as far as the company and staff. Everyone here is very, very hungry.

Tell me about some of your developing acts.
We have a great new metal band, Opeth, for North America, through our deal with Music for Nations, a U.K. rock label. We think we can do very well with them here.

What is your label’s relationship like with the major gatekeepers, MTV, radio, mass media, etc.?
We pick our shots carefully. We don’t cry wolf every time we think we have something. We take risks, but most of them are outside the realm of MTV or mainstream radio. We’ve had videos on MTV. Audium has had videos played on CMT. But we don’t need to do that to thrive. We have a rap act from Cash Money, B.G., who looks like he could do very well. The video’s going to BET at this point and could eventually end up on MTV.

Do you do many multi-album deals?
We do all sorts of deals. If we make a profit, the artist will make money, too. Our deals are more about the back-end than the front-end. We don’t give out huge advances. Many of our deals are traditional, with advances and royalties. But we’re not going out there and burying them in recording and video costs.

What about tour support?
Very infrequently, but we will do it. For a band like Opeth, that will be out there on the road, we’ll give them something. Most of the acts we sign are self-sufficient on the road. We don’t have one set of rules. We make rules and then break them because we’re still trying to grow the company. It forces you to have no rules.

You’ve been successful in children’s records, too, with The Wiggles.
It’s a niche we can compete in and be successful. Basically, it’s a different business. It’s about pure marketing and capitalizing. We’ve sold more than 3 million Pokemon albums around the world. It’s an important part of our business. We don’t want to be dependent on one specific niche or genre, in case something crashes and burns. That’s why we’ve branched out.

What has the transition been like for you, from the major label world?
Both sides have their positives and negatives. As an independent, we don’t have the catalog to compete with a major. It covers up your fuck-ups. We don’t have that luxury. Which means I have a lot less hair than I used to. And get a lot less sleep. Being part of a smaller organization has its own rewards, the most important of which is, you control your own destiny. As an executive, you’re really involved in every aspect of the business. As an independent, we don’t have any specialists. Everybody has to do windows.

This may be the model that the entire industry evolves into.
If you look back at the history of the business, the independents forged the way. For us, it’s a necessity. We don’t have the luxury of hiring another 25 people. We’re keeping it real lean by expanding people’s roles. It really gives them great experience and down the road, it’s invaluable. On the other hand, the guys we’ve hired from major labels have received some incredible training that they bring here. But you have to do it all. As Walter Yetnikoff said, "There’s nobody to sharpen your pencils anymore."

What did you bring to Koch from your experiences in Nashville and the country music business?
Nashville is a very contained community. It was like going to college. I worked with great people. It’s much like our children or hip-hop divisions. It’s a circumscribed world where relationships are important. I went to the toy fair recently and it was a lot like that. Everybody knows everybody else.

You have turned what seem to be negatives into opportunities.
We’ve had to tighten our belts like everybody else. But it’s enabled us to close deals with artists that were let go by the majors. And there are a lot of them. We can make a very nice living selling 100k, but we want to sell 500k and a million, too. Our business model is such that we can do well on that 100k. We had 44 records on the independent chart over the last two years and those records ended up selling between 50-100k pieces. That’s the model.

The World Wrestling Entertainment connection has been valuable to you.
The last three-CD set went platinum. It’s a great relationship. It’s still a strong brand. They have this incredible TV show with strong ratings. Not as strong as they once were, but still strong enough to produce a platinum record. And they can keep selling this forever.

What’s your attitude toward file-sharing?
We don’t see it as the bugaboo the major labels do. Do we like it? No, it affects us dramatically, especially on the hip-hop side. Not only digital downloads, but hard goods piracy. We’re a bit more open to it for marketing opportunities. We were against Napster and the illegal ones that are out there now. But the reality is, it’s just going to get bigger. We’ve done deals with companies like Listen.com and Full Audio. We’re very proactive. Those we haven’t closed deals with, we definitely want to. We’re realistic about the way the marketplace is going. The toothpaste is out of the tube. It’s unrealistic to think we can stop it. We just have to figure out how to maximize it and—I hate to use this word, but—monetize it effectively. That’s one of those dot-com terms. The initial complaint was that all the guys who were originally into it were techies, not record guys. Now, with the retailers getting into it, it can be a positive. They at least understand the record business. They’re our partners.

How committed are you to your independence? Would you do a deal with a major?
We’re pretty fiercely independent, both from majors and the banks. That’s our mantra. In fact, our new tagline is "fiercely independent." We just don’t see it in the cards. Of course, my last name isn’t Koch, but Michael Koch is a maverick. He’s a very independent guy. That’s why I enjoy working with him so much. I only have to answer to one guy. You don’t have the politics you have at other companies.

How’s morale at the company?
It’s great. We read everyday what’s going on, but we don’t have many of the same issues that they do. Those problems are self-induced, to a degree. After all is said and done, they still have a wonderful business that should be a money-making machine, as soon as they deal with their overhead issues, which we don’t have. But illegal downloading and piracy are issues for everybody. No one’s immune. When I walk home, cross Canal Street and discover all of my In the Paint records on sale for $5, it can be pretty disconcerting.

Do you have any kind of five-year plan for the company?
We do and we don’t. At PolyGram, we used to do stuff like that, but by the time five years had come and gone, the company was bought and sold 14 times. Nobody knows what’s going to happen. We have more immediate conversations, like what opportunities do we have right now and how to use those opportunities to continue to build. That’s what we want. To continue growing. We want to grow our publishing division, which could become an important part of our company.

Any personal goals?
This is an incredibly rewarding place to work. I’m having a great time. I don’t know what’s going to happen next except I’ll lose more hair. By the time I’m 40, I’ll be completely bald, but my four-year-old daughter will still love me. In all seriousness, my personal goal is to keep growing this puppy into a big profitable monster. With the team we have in please, anything is possible.

Who are some of your mentors in the business?
Besides Michael Koch, the three most influential, great record guys would be Walter, Luke Lewis and Eric Kronfeld. I’ve been extremely lucky to be able to learn from these guys the different aspects of the business.

Any other hobbies?
I’m just a record junkie. My hobby is listening to music. And playing with my four-year-old daughter. That’s the best hobby in the world. I’ve got about 25,000 CDs and probably every new wave piece of vinyl ever released. When I was working in the clubs in the mid-’80s, I got addicted to it. I’ll always enjoy the early Duran Duran albums. I guess this almost qualifies as being outed.