As general counsel for one of the UK’s premier record companies,
Rupert Skellett tells The In-House Lawyer about the realities of being at
the forefront of negotiations with some of the world’s most exciting artists.
The In-House Lawyer (IHL): Start by telling us a bit about your pathway into law and how you ended up working in the music industry?
Rupert Skellett (RS): I initially read English Literature at University and ended up working in book publishing for Penguin. But, I decided that wasn’t for me, and I felt that I needed some kind of ‘skill’ that would make me employable: I was great at analysing and reading literature, but, not really much else. So, I completed a law degree at City University of London and then went to bar school and then a commercial set of chambers. When my pupillage finished, I didn’t fancy going to the bar, so I managed to get a job in Simkins, in their music department. I was there for a year or so.
Then, I went to work for a sole practitioner – James Rubenstein – who worked from his flat in West Hampstead, which was a bit weird, but it was great because it was a very hands on sort of training: I’d sit about two yards away from him in his office. His clients included a few record labels, one of which was Domino, and another was Beggars. I ended up doing a lot of Beggars’ work. So when Martin Mills, the owner of Beggars, decided he wanted an in-house person, I’d already been doing the job for a couple of years and essentially, I was the natural choice. I will have been at Beggars for 20 years in January.
IHL: Tell us about your work day, what items fall under the realm of legal at Beggars Group?
RS: Well for me, the priority of the work is to find new recording artists to sign. That is basically the goal, the one thing we all strive for. What we try and do is sign independent, alternative music and that’s generally UK or US based. Although, that is slightly changing in recent years. The idea is: that we don’t find acts which we think are going to sell loads and loads, instead we sign acts because we like them; we think they’re interesting; and we think that people should hear them. That’s the most exciting part because you go to see an act play live, and then hopefully you negotiate with them and sign them. So, that’s obviously a big part of the job: negotiating the terms of the deal and drafting the recording agreement. A lot of my work, apart from negotiation, is drafting in-house, probably more so than private practice. It’s a specialism, certainly for a music in-house role.
IHL: What’s involved in the negotiation stage?
RS: You’ll often be in competition with a bunch of other labels, the artist’s lawyer will be representing the artist and then they will be representing various terms they have in other offers from other labels to you. Then, you have to decide whether you want to match them or not. There are things we can offer that other labels can’t: we very much pride ourselves on being a global company and that means we’re able to offer a really good deal to artists, because none of the revenue we receive goes through an inter-company royalty matrix – which other major labels operate. This is our distinct advantage.
We also sign far fewer acts than other major labels in order to really concentrate on each act. The way we’re set up is that we have our own people on the ground in every major record market in the world – who only work on our releases. We can bring a real focus to pushing, promoting and marketing our artists, much more so than other major labels. If you sign to a major label in the UK, you don’t really have much assurance that you as an artist, are going to get any priority when your record is released in the US: you basically have to try and persuade your UK label to convince your US label to get behind you. Whereas, with us, it’s much more top-down. The company is run from New York and London, what we sign is prioritised throughout the world.
IHL: You’ve been working for Beggars Group for around 20 years now, how has the music industry changed in those years?
RS: The industry has changed massively in the last twenty years. For a long time, it was in the doldrums. For the first 15 years of this century, the global record industry kept on going down and down, to the point where it basically became half of what it was in the heyday years of the 90s, with CDs and the rest of it. The problem was piracy. Piracy was a huge problem which came with the internet. There were attempts in the early 2000s to license various services and they didn’t really get off the ground. So, for a long time we were fighting piracy and tech companies who didn’t value rights in the same way that we do – so that was a real problem. But, since 2015, the global record industry started to grow again and that’s down to the streaming services – Spotify initially, then Apple Music and Deezer, for example.
IHL: Tell me more about these streaming services, how have they changed the market?
RS: Spotify specifically– because it provides a free service and has basically removed any need for anyone to pirate any music. There’s no real excuse to pirate and it’s a lot more convenient. Still, there’s a certain amount of technological knowhow that you need to pirate music. However, things the music industry has been doing, in terms of blocking pirate sites, has helped. Trying to get search engine companies to co-operate with that, is quite tough. So, that’s what I was saying about trying to persuade tech companies to play nice with rights. That’s been a major challenge, but there are signs that is improving. But, it’s down to those efforts in the industry and also the availability of companies like Spotify, who have a great service – you basically have all of the world’s music at your fingertips, in a nice, easy way to find music.
IHL: You mentioned piracy a past challenge to the music industry, what are the current challenges that you face today as a GC?
RS: What’s really interesting about today, is that when I was a teenager and in my early twenties, I was really into dance and house music. And, you couldn’t get it anywhere – it was really hard – there were a few record shops in London – a handful outside of London, there were barely any radio stations –and that was really exciting. But, now you have the exact polar opposite problem, you don’t have scarcity, you have too much content – so much content. Every day, hundreds of thousands of tracks are uploaded on Spotify.
IHL: That must be quite difficult for you when you’re searching for talent, there’s so much content out there, where do you begin?
RS: This concerns going down the path of monitoring data. That’s obviously quite easy to do now, because there’s so much data out there and so many data collecting systems. Other record labels quickly initiate their flagging systems for anything that looks as if it’s doing quite well and they just sign whatever is on that data system. Whereas, we still definitely operate on the basis of seeing the artist play live, meeting them, getting a feel for their vision and obviously whether we love their music or not. So, the massive challenge is, even if you do sign the artist, how do you get that artist content above the tidal wave of other content that’s out there? That’s something that we’re really good at, because we are quite niche, and we have this global army of fans who promote an artist’s music. That is the real challenge now: the enormous amounts of content generated, which is down to cheaper recording processes and distribution. I mean, anyone can upload content, get a distribution partner and then have your music up on Spotify.
IHL: Has social media had an impact on the growth of an artist?
RS: Social media is very important to an artist’s career now. But, you can experience a problem where you’re massive on social media but that doesn’t translate into consumption or sales of recorded music. So, you need to be careful that you tie them all together properly. There’s a lot of ‘well, why you can’t do this?’ promotion, and it’s a constant battle between ‘promotion’ and rights exploitation, and getting paid for rights exploitation. If you’re exploiting rights, you need to pay for them, because that’s our business and that’s what we thrive on.
IHL: You spoke earlier of royalties and licenses. What’s the role that you play in the acquisition of a song?
RS: We have a publishing company, but we, the record company, handle the recordings—this is a separate copyright to the song itself. So, our music publishing company handles rights and acquires rights to songs. They sign songwriters to exclusive songwriting agreements. I’m involved in that side of things: the signing of songwriters, in much of the same way as the record side; helping negotiate terms with the publishing company and then drafting the agreements. But, in terms of licensing songs, for instance, if someone were to use one of the songs in a TV programme, or in a computer game, then we have a global licensing department who handles those things.
IHL: You said that you work with alternative music, so you have a couple of clients from the UK grime scene, who have in the past, been faced with criminal allegations, how do you deal with that? What are the ramifications when clients face criminal proceedings?
RS: We’re as supportive as possible, where we can be. Mostly this is an issue for the manager and the artist lawyer, not us as the label. But I do remember that with Giggs, when we were about to sign him in 2006, the Metropolitan Police phoned us up and told us not to sign him. But, we went ahead anyway, because, we thought it was wrong to deny him of the chance of generating a professional career as a recording artist. Yes, people might make mistakes, but you have to give them a chance to change, it didn’t make any sense for us to say: ‘you’re going to be punished for the rest of your life for something you did when you were younger.’
IHL: If you could give yourself one piece of advice at the start of your career, after you qualified with your law degree, what would that be?
RS: Be careful what you wish for.