There is some irony in the fact that AWAL has recently been finding its best-ever chart success, of all places, in the UK.
That success has included one UK Top 20 single – TikTok-driven viral track, Golden Hour, by JVKE – plus a major-league hit for Lizzy McAlpine, Ceilings, which reached No.6 on the Official UK Singles chart in March.
Such achievements represent a rather warmer business climate for AWAL in the UK versus year-and-a-bit ago – when the music company was being poked and prodded by representatives of Britain’s Competition and Markets Authority (CMA).
During an interrogative investigation, the CMA threatened to scupper Sony Music’s freshly-announced acquisition of AWAL in the UK. Ultimately, however, in May 2022, the CMA green-lit the $430 million deal.
Both Golden Hour and Ceilings, each by US-based singer/songwriters, have established themselves as significant global successes via AWAL: Celiings has over quarter-of-a-billion Spotify streams to date; Golden Hour has over 680 million, and went Top 10 on the Billboard Hot 100 in March.
Each track’s chart achievements represent a new era for AWAL, which has traditionally worked with independent artists who earn a good living from dedicated fanbases – but who previously didn’t typically puncture the upper echelons of the weekly pop rankings.
For Lonny Olinick, CEO of AWAL, this all represents a natural market progression – proof that, as streaming democratises access to audiences, so too does it democratise the ability for tracks (from what some call ‘middle class’ artists) to enter the Top 10 most popular songs of each week.
Says Olinick, who joined AWAL (then at Kobalt) in 2016 and was named its CEO in 2018: “We’ve built [AWAL] brick by brick, team member by team member, artist by artist – and it’s all been preparing for this moment, both in terms of the business environment and music environment we see today.”
Speaking from AWAL’s Los Angeles HQ, Olinick adds: “AWAL is now at Sony, we’re fully settled, we’re delivering results, and we’re really confident about what we can bring to the market on behalf of artists.”
In the main, what continues to separate AWAL from its major label peers is the structure of the now-Sony-owned firm’s agreements with artists. AWAL receives thousands of requests from artists to distribute their music each month; it only accepts a limited percentage of them.
From there, AWAL starts committing a flexible range of financing and other services (marketing, sync, A&R, playlist pitching) for acts in its system whose popularity demands it, usually in return for a higher margin of said artists’ revenues. Sources tell us that the ‘top tier’ of AWAL deals – under the AWAL Recordings brand – see the company ink exclusive licensing agreements for artists’ music, which last anywhere from 4 to 10 years.
“We’ve built this company brick by brick… it’s all been preparing for this moment.”
These licensing deals are particularly important when it comes to acts who subsequently leave AWAL for big-money major label deals. In the past, this cohort has included Madison Beer (Epic), Rex Orange County (RCA), Steve Lacy (RCA) and, more recently, girl in red (Columbia).
As artists like these benefit from major label marketing spend, their catalogues – still operating under those licensing deals with AWAL – enjoy a natural lift in consumption. In turn, this accelerates AWAL’s ‘shallow catalogue’ income, which the firm uses to reinvest in new artists.
Below, MBW asks Olinick about life at AWAL under Sony Music, his company’s current wave of success, and how he feels about saying goodbye to artists who leave AWAL for major labels…
People at major labels used to point at AWAL and suggest you simply signed artists they didn’t want. Now you’ve started having ‘proper’ chart hits.
We’ve tried to build something that’s different – not just a distributor or ‘label services’ or ‘artist services’ company, but a real music company that does [flexible] deals and manages to be aspirational for artists.
I look at AWAL as the best artist development company in the business; that’s our superpower. We’re great at A&R, finding great artists, helping develop them. The first thing we ever do, when we look at whether we’re signing something, is to ask: ‘Does this artist have vision? Do they have conviction? Do they know where they want to go? And can we help them?’ Not: ‘Can we insert our own vision?’
The truth is, the music business is a pretty simple business. If you have great artists and a great team, great things happen. If you don’t, the opposite happens.
We’ve always said we were not interested in the ‘long tail’. When you run a business [i.e. like most DIY distributors] that is ‘fixed-fee’ it leads you to see each artist as [having the same value]. That’s a different kind of business to AWAL. We’re incentivized to help our artists earn and to build careers – because we only make money when they make money.
For a long time now at AWAL we’ve focused way above the ‘tail’ and towards this middle [tier] of artists. I always believed that the music industry gatekeepers were going to lose power and that would mean that our artists, when they had songs that connected, with the right team around them, would be able to do amazing things. That moment is now here for everyone to see.
The top tier of AWAL artists sign short-term licensing contracts; a handful of superstar artists have signed similar-looking deals with major labels in the past few years. How well differentiated is AWAL’s offer vs. your major label competition these days?
There’s no uniform deal here – there’s always nuance. But by and large, the thing I always look to is: are we providing something super compelling for artists in the value proposition we’re offering?
That includes the money, the term, the rate, but it’s also the service we’re providing and the team we’re surrounding [an artist] with. I’m extremely confident that when you [combine] the deals [we offer] plus what we deliver we’re really differentiated in what we do.
There are deals [at labels] today where people are willing to do shorter licensing terms with artists involving fewer options and lower rates. But those are still the outliers; it’s not the norm. So I think we’re well differentiated, but I also think the industry is generally becoming more artist-friendly and I think that’s a great thing. At AWAL, by maintaining the structure of our deals – reasonably short-term agreements, fewer options, better splits – we give artists a lot of freedom without them having to trade away from a team that’s capable of taking records as far as they can possibly go.
A number of artists have left AWAL to sign deals with major labels, many of them at Sony, including girl in red, Steve Lacy, Rex Orange County and others. Some would say you ‘lost’ these artists. What’s your take?
When you give artists the power of choice, you have to respect that. I’ve always been a believer that, yes, you can [lock artists down] contractually, but really you want the relationship to be solid and for them to actually want to be where they are.
“We’re competitive people with a team that’s capable of doing work at the highest level.”
All of the artists you mention are huge successes for AWAL. They got to a sizable place and built a really great catalogue business with us. We were lucky to be in business with them and we’re still lucky to be in business with them.
We’re competitive people with a team that is capable of doing the work at the highest level. So do I want [top-tier artists] to leave? Of course not. But at the time same, if you give artists contractual freedom, you better also build a business model that makes sense if they exert that freedom. Our model is prepared for that.
What do you mean?
Firstly, all of the [projects mentioned that signed with majors after AWAL] are examples of things that have worked tremendously well for the artists. That becomes a huge driver for other artists [to sign with AWAL] who want to be part of this business.
Secondly, when we invest in artists, we do so through [licensing] deals that keep the records we’ve worked on in our system for a certain period. And given the nature of our deals – how beneficial they can be for artists [in terms of royalty splits] – those artists are typically quite happy to keep their [catalogue] in the AWAL system. So irrespective of what the ultimate outcome is for an artist [i.e. whether they stay with AWAL for new releases or sign elsewhere], there are lots of ways we both benefit, whether they stay forever or just for a phase of their career.
Has being part of Sony Music changed the dynamic at AWAL? Do you intend to ‘upstream’ artists into Sony labels?
Our job is to take things are far as we possibly can for our artists. We’re competitive and we believe we’re capable of taking things all the way. I really believe there are going to be more and more top artists who choose to be in different models.
There are lots of things we’ve found hugely beneficial from being part of Sony. When you look at Peter [Edge] and Fleck at RCA, Sylvia [Rhone] at Epic, Ron [Perry] and Jen [Mallory] at Columbia, I’ve enormous respect for what they do and what they bring to the table. If an [AWAL-signed] artist feels that [a move to a major label] is something they’d like to consider, we’d have every intention of finding them a great home in the Sony system where it makes sense. That hasn’t been the main thrust of what’s happened so far. I will say that we’d never be in the business of ever forcing anything on an artist. That’s not in our DNA, and it’s certainly not in Rob [Stringer’s] DNA to try and put an artist where they don’t actively want to be.
What would you say the biggest difference is between The Orchard and AWAL within the Sony system?
By and large, The Orchard has focused mainly on labels. We focus mainly on artists and that’s our intent; we’re at our strongest when we’re empowering creative entrepreneurs and individual artists. Having now seen it from the inside, there’s no one in the world that’s better at supporting independent labels than The Orchard. They’re an incredible organization.
When Sony acquired AWAL, some people in the business – who I don’t think saw the bigger picture – suggested that Rob Stringer had just done the deal to buy market share. What did those people get wrong?
A lot of the ideas that Kobalt brought to market were truly revolutionary and changed the industry in a lot of positive ways.
When it came time to look at what made sense for AWAL [as it sought a new home], there were three things that were really important. One was capital and the flexibility of capital structure – a [parent company] that could really invest; AWAL has done amazing things, but we’ve just scratched the surface of what’s possible.
The second big consideration was international, having the ability to tap into a global reach that would have taken a huge amount of time, energy, and capital to build ourselves. The third thing was fit-for-purpose tech: we did very innovative things with AWAL at Kobalt, but the truth is we wanted to build new things that, again, would have taken investment, time, focus and energy.
Interestingly enough, when you start looking at Sony as a partner, you have a business that meets all of those criteria – capital to invest, a global footprint where AWAL can have an international presence in a very different way to anyone else, and the best technology in the business for artists and labels.
Being [part of Sony] has honestly been better than even I expected, both in terms of support of the AWAL business, and a willingness to be thoughtfully aggressive – getting our technology up to speed, building new products, and partnering with local territories to build out an AWAL business in multiple markets.
AWAL is still an Anglo-focused business right now. And although we feel like we’re just at the beginning of that story, we also have really ambitious goals for non-Anglo music, including music in local territories.
Rob [Stringer] is a music person, first and foremost. He wants to really support artists in whatever style they want to be supported. And, humbly, AWAL is the best in the world at what we do.
So yes I’m sure market share came with [AWAL for Sony], but I think this [acquisition] was much more about investing in all of the unreached potential of AWAL, and how Sony could unlock that.
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