Looking back on your first two years running the company, what are your thoughts?

Ken: I think the building has a lot to do with our success. [Former Disney Music chief] Bob Cavallo had done a phenomenal job bringing the music group under one umbrella, but we were in three different locations. This building was mainly Hollywood Records. We had Walt Disney Records in another building, and our publishing division was on another floor in that same building. One of the first things that we did was we brought everyone together. That was an important cultural shift in creating a more unified music company.
Also, instead of separate A&R for the different labels and publishing, we created one A&R group. It’s about talent, whether it’s a songwriter or a recording artist. An A&R person now has the ability to find a great song, writer, artist or band.

Mio: it’s a little bit of a different approach, but we’re lucky because the publishing company can be so tethered to us. For 10 years before I came here, I was managing writers and producers. Many of the artists here relied so much on outside material. Having that integration between meeting all these amazing writers and trying to find material for these artists, it should all work together.
In terms of roster, we have a very diversified portfolio—writers like Nate Fox, who did the whole Chance the Rapper album and was on a lot of “Top 10 Producers of the Year” lists, and Evan Bogart, who’s certainly been in the eye of the storm in terms of mainstream Pop hits.

K: We also have a Nashville operation that we’re signing writers and artists to, for Country and beyond.

How does your music licensing operate?

One of the first things that we did was combine master and synch licensing; we’re one of the few companies that can. We don’t own 100% of everything, but we own 100% of a lot, on both sides. If you want to license a song, you come to one department. We made that change on a Wednesday and—I’m not exaggerating—we noticed a difference on Thursday. We started doing more billing and making it easier for supervisors and advertisers to license our music which is good news for our creative partners.

In some respects it’s reminiscent of the classic Motown model.

K: You know, you’re exactly right, and it’s actually not that far from the way that Walt Disney had set up early on with the Sherman brothers; they had songs for Annette Funicello and then they wrote for Mary Poppins and Jungle Book. We really are the only label that’s fully integrated into a studio. The writers that we’re bringing in, and the artists, but particularly the writers, have the ability now not just to write for our artists or external artists but also for video games, digital books, TV and film.

Taking the “corporate synergy” idea to its logical conclusion.

K: We work with virtually every division of the company and that is incredibly exciting. We’re all on the same team and have fantastic partnerships with Radio Disney, Disney Channel, ABC and ABC Family. We’re working with cruise ships, with theme parks in Japan and China. It’s a different thought process than a traditional label. You can say to a writer, “Hey, would you like to write a song for a ride in Shanghai, or Florida?”

Frozen is a textbook example of that.

K: Yes. Demi Lovato sang the end-title song (“Let It Go”); Idina Menzel’s character sings it in the film. It was a great marketing vehicle; we were able to get support from all around the company. Now it’s really an Idina song with an Oscar campaign, and it’s taken off. Idina’s version is at AC and Hot AC radio, I think the song was sitting at #12 on iTunes this morning—not that I’m watching or anything. It’s great to be the #1 record five out of the first six weeks of the year. It’s just become a phenomenon, not just here, but around the world. the album is #1 now in South Korea and the songs are taking over the charts in there, and it’s the English version—this is before the Korean version even came out. Speaking of Frozen, when you look at all the different areas of marketing required to give something the best chance of success, you have to focus on the localization of it—whether it’s radio, marketing or working within the company. It’s a little old-school, but I am very proud of our team for over-manufacturing the physical album. You have to bet on something and it’s paying off in our ability to fulfill orders. The retail ratio is maybe 60% physical to 40% digital right now. As our business changes, we have to over-manufacture to be prepared for Easter, the Oscars, the DVD and in-home window, the Golden Globes and so on. On top of that, it’s been #1 on Spotify, which has caught us by surprise. I don’t think we thought that this was going to be the streaming title. I mean, it was us, Drake and Lorde. You know, we did not forecast that it was going to be this top streaming title. YouTube and VEVO have been a big part of it as well, so that’s been really exciting.

Your artist roster is strongly female, particularly the highest-profile acts.

K: It’s not really intentional. It’s just that they’re artists that we think are special. Some of that is because of the development through the Disney Channel, but then you look at Grace Potter or ZZ Ward. When Mio came on board, officially, the first two projects he had to work on were Demi Lovato and Selena Gomez, who were the two biggest successes for us out of the gate. Selena had a #1 single and album. Demi’s album debuted at # 3 in the US and reached # 1 on iTunes in over 50 countries around the world. She’s now selling out arenas. I think it made a statement. Mio and I were going around town, kind of preaching about what we were trying to accomplish here. Between those two, and then ZZ Ward following up on the artist-development level, we were delivering.

M: I wanted the perception of us as a player in the crossover business. I wanted to show that we could really have a #1 Pop record, that we could cross these artists over and have them be a part of the fabric of Top 40 radio.

K: A lot of people have been talking about ZZ; we’re on the third single now, “Last Love Song,” and it’s taking off. Her albums sales are at 100k and tracks at 300k, which is great, but her touring business is also doing really well. She’s selling out shows across the country now, and we’re very proud of that. She’s had more than 70 syncs. ABC Family used her music around Pretty Little Liars; ESPN has used her music; and so did ABC’s Nashville. Her music works across the company. The same is true of Grace Potter and the Nocturnals; they’re going on their fifth album. There’s also another new artist we’re really excited about now, Lucy Hale. She’s from Pretty Little Liars. Lucy’s been on the road pretty much non-stop since November promoting this album, while knowing that she’s got to go back to filming in March. The album will come out this summer.

You also have music that’s focused outside of what people might traditionally think of as the Disney audience.

We want to focus on the highest-quality creative we can, similar to other divisions of the company such as Pixar, Marvel, Lucasfilm, and ABC or ABC Familyit’s family entertainment. We don’t release R-rated movies, so our music isn’t of that ilk. When we’re looking for artists, we’re looking for people who are stars, and whom we think we can help in achieving their goals. There are different evers that we can pull within the company for those artists.

M: We’ve been focused on striking a balance between things that come to us from the channel and building a freestanding artist roster. We’ve made a commitment to getting more in the Alternative music space. We just did a joint venture with Kevin Augunas, who has Fairfax Recordings. Kevin signed Gotye and worked on the last Lumineers record. He’s a great nurturer and incubator of talent; he can develop it and we can upstream it when it’s ready.

Say a bit about your team.

K: We’re trying to foster an environment where people have opportunities for personal growth. I think we’ve really done that, especially in the last two years, and I’ve been a beneficiary of it in my career. In marketing, we have Robbie Snow, who oversees global marketing for the Disney Music Group. Rob Souriall is our VP of marketing for the Disney Records team, and Linc Wheeler, who was a marketing director, was recently promoted to oversee marketing at Hollywood Records. Our promotion team is led by Scot Finck, who is one of the most positive people I have ever met. Dominic Griffin runs our global licensing unit; as you can see, we didn’t hold it against him that he worked at HITS. There’s also Lillian Matulic, who’s now overseeing publicity for the Music Group. Trevor Kelley handles digital marketing globally for DMG. We have a creative department led by Dave Snow; Curt Eddy oversees sales. David Abdo, who started with me in our digital department, handles virtually all of our global operations and strategy, so everything from working with our partners in China and Japan and the production department. Chip McLean is Our SVP of Business affairs and runs our global concert business among other responsibilities. We are very bullish on our future concert business.

How would you say you’re positioned going forward?

K: Incredibly well, given the great team we have here, plus a very diverse business. We’re able to be patient because we have a consistent flow of exciting projects such as Frozen, Marvel’s Guardians of The Galaxy, Demi, R5, the upcoming Muppets film, Disney Jr.’s Sophia the First or Lucy Hale. We aren’t in the quick-hit business. We’re trying to build sustainable brands and careers for our artists and partners and The Walt Disney Company has some of the most exciting brands in the world.