November 13, 2009

By By Ed Christman, N.Y.

While labels are losing sales and profits, which leaves them with less money to invest in new artists, ?American Idol? judge and hit songwriter Kara DioGuardi sees other segments in the music industry stepping in to fill the void.

At the Media and Money conference at the Roosevelt Hotel on Nov. 13 - during her keynote Q&A with Billboard editorial director Bill Werde - DioGuardi said managers and promoters may step up to the plate and adds that music publishers are already investing in artists careers. Moreover, she thinks that private investors might come forward and can also see more instances of fans helping to pay for their favorites artists? next albums. Finally, "Whose to say that Verizon or AT&T won't want to own the artists one day," she added. She also opined that with 360-deals now dominating the landscape, labels need to step up and bring more to the table for the right to participate in all income streams.

In a wide-ranging interview, DioGuardi talked about her early career, how songwriting led to starting a business, and her experience as a judge on ?Idol.?

In the beginning of her career, Dioguardi said she was fortunate to have worked at Billboard ? she worked at the magazine in the nineties ? as it helped her understand different music revenue streams. When most writers are starting out, they usually have to give up a piece of their publishing to get an advance so that they have money to live on, she explained. But DioGuardi said that she saved money from working at Billboard, didn't need an advance and thus was able to keep all of her publishing. "I bet on myself," she said. But even though she kept her publishing she still had to share money with co-songwriters and producers, even though she was the one getting them the work. "I thought to myself, this is silly," she said. So she launched Arthouse Entertainment as an investment and to nurture young writers. The company has a stable of writers and producers.

When it came time to sell, "I looked at it like selling stock, you buy low and sell high," she recalled. "I knew I had an incredible run" of hits so she put her publishing together with Arthouse and sold a minority interest to Bug Music. Moreover, the deal gave her a partner with deep pockets so she can do bigger deals. Also, it gave her a partner whose strong suit is as an administrator.

That leaves Bug with the responsibility to chase all the pennies, while allowing DioGuardi and Arthouse management to concentrate on running Arthouse. DioGuardi said that allows time for think tank tasks like how to position the company's writers so they can do music for Broadway, video games and film. DioGuardi pointed out that one of the things that she brings to the table for her writers is her inside track on a lot of different projects. She is still a prolific writer and at anytime will have an in with a lot of different projects, which gives her the edge in helping the Arthouse writers and producers get involved in those projects.

She pointed out that she often works with a lot of younger artists and tries to act as a teacher for them. She feels she has a moral obligation to teach them about the business they are entering.

Moving on to the overall music business, she noted that while the industry is suffering, music is still in demand and publishing is the core of the industry. "Its always about the great songs," she said. Songs have a long life and can be covered by many other artists and in other languages too, she added.

When DioGuardi was first starting out the industry was still built around the album. At that time, you could have a track on the album, which didn't get on the radio but that was okay because albums still sold, she said "Now its more about the singles so songwriters have to concentrate on writing singles," she said. The switch in emphasis away from albums to the single has impacted the industry. "I am not sure it has affected the industry in a good way," she added. Since it?s all about hits, it sometime seems like artists have to break in a month or its over. There is no more incubating artists, she complained, although she added that she works at one of the few labels that still develop artists, Warner Bros. Records, where she is a senior VP of A&R.

She says she decided to work for Warner Bros. because as a songwriter, "I have broken a lot of careers" and has seen all sides of the music industry, but she never saw the ins and outs of a record label. The more you know, the better for your career, she said.

As for her experience as a judge on one of America's most popular shows, "one of the first things I learned about ?American Idol?-sure it has music and performances and songs-but this is a TV program. Its about making dreams."

She added that she sees first hand the power of television, and believes that her role as a judge will enhance her ability to brand herself. On the departure of Paula Abdul from the show, she said, "Paula was the heart of the show. She nurtured the kids and empathized with them."

On the other hand, she added, "I tend to be more critical because it?s a hard industry and you are going to be rejected, but that's okay because it will make you better."

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