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The music industry is now driven by data, but this CEO still makes decisions based on 'gut feel and instinct'

Jul 29, 2023, 16:30 IST
Business Insider
Matt Gudinski is CEO of the Mushroom Group.Mushroom
  • Mushroom Records was founded in Australia in the 1970s by Michael Gudinski.
  • His son Matt joined the company at the age of 17 and became CEO when his father died in 2021.
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Once upon a time, if you wanted to listen to a particular artist, you needed to drive to a record store and buy their album or CD. And for many years, buying that album usually cost considerably more than seeing that performer play live.

YouTube and streaming platforms like Spotify changed all that, putting tens of millions of tracks in your pocket.

But it's also meant that most artists now make far less from releasing music, which is partly why the cost of seeing them play live has soared.

That's not stopped many fans of megastars artists such as Beyonce and Taylor Swift shelling out hundreds – or even thousands – of dollars to see their idols play live. Will fans one day draw the line and say even the cheapest tickets are now too expensive?

That doesn't seem likely, says Matt Gudinski, CEO of the Mushroom Group, which promotes concerts for the likes of megastars such as Ed Sheeran and TayTay in Australia and New Zealand through its Frontier Touring division.

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Michael Gudinski with Ed Sheeran at the start of his 2018 Australian tour in Perth.Matt Jelonek/Getty Images

Mushroom also has a recorded music operation that's been home to some of Australia's biggest acts, including Kylie Minogue, Jimmy Barnes, Vance Joy, the Temper Trap and Split Enz.

Some in the industry credit Mushroom with pioneering the "360" model – where one company has a deal that encompasses both an act's recorded music as well as their tours and other aspects such as merchandise and using their music in films, TV or adverts. (Madonna signed a 10-year "360" deal with Live Nation worth a reported $120 million in 2007.)

Kylie Minogue started her recording career on Mushroom Records.Don Arnold/Getty Images

Mushroom is celebrating its 50th anniversary and Gudinski says the approaches taken by his father Michael, who founded the company in the 1970s and ran it until his untimely death aged 68 in March 2021, helped it survive and prosper.

Michael Gudinski was such a towering figure in Australian music that the Victorian government held a state memorial in his honour, with performances and messages from the likes of Minogue, Sheeran, Sting and Bruce Springsteen.

Mushroom released Minogue's debut album and she thanked the entrepreneur for taking a "scrawny girl from Melbourne to the world and back home again," ABC News reported.

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Matt Gudinski, now 38, joined Mushroom when he was 17 and says he worked alongside his dad for the past decade. "I had no reservations about taking the reins and building upon the foundations my father laid and the amazing legacy he built, but was determined to do it my own way. We worked so well together for many years as we both had a different approach that complemented each other."

Gudinski insists that Mushroom's ethos remains the same – helping artists build careers over the long term, not chasing overnight success and giving them substantial creative control. "Once we really believe in something, we commit to something and stay the course."

Vance Joy performs in Madrid, Spain in April.Mariano Regidor/Getty Images

While many decisions in the music business are now driven by data, "gut feel and instinct" remain part of the equation for his company at least. Take that away, Gudinski says, and they'd "lose the essence of what makes Mushroom what it is."

The rise of YouTube and other platforms means artists now have more "freedom to start their careers and get themselves out there," but the Australian says artists still benefit from being signed to a label. He likens the music business to a situation where there used to be "10 opportunities and 100 artists. Now there's 1,000 artists – but still only 10 opportunities." That makes it "really challenging" for artists to "cut through and take that next step."

Music fans are also faced with an avalanche of choice, with endless new content competing with more established artists (tens of thousands of tracks are uploaded every day to platforms like Spotify.) As Gudinski puts it: "There's always something else put in front of you that you discover you like."

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Does he still listen to albums from start to finish? "Not as much as I once did – I'm even reluctant to say that."

Streaming has brought challenges to the industry, but he thinks it's "probably done a lot more good than not" by making music far more accessible.

It's also proved lucrative for the big record companies, with Universal Music this week posting a 8.7% rise in revenues for the first half of the year to just over 5.1 billion euros, for example.

Kylie Minogue performs at the Mushroom Records 25th anniversary concert in Melbourne in 1998.Martin Philbey/Getty Images

But if many artists not quite at the level of Taylor Swift or Coldplay are already struggling to make a living from the music business, it's not likely to get any easier given the potential impact of AI. Gudinski thinks the jury is still out, but admits: "It will challenge many parts of our industry; whether that's for the better or the worse still remains to be seen. There's no doubt it's going to have a big impact."

He says Mushroom's already had several pitches for live shows by manufactured characters, or "artists that are not artists." Despite its history of being a leader rather than a follower, Gudinski says AI might be one time for the company to wait and see how it all shakes out.

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Michael Gudinski founded Mushroom Records in 1972.Mushroom
In the meantime, Mushroom has relaunched its record label in the UK that was once home to acts such as Garbage in the 1990s, has 250 staff working in offices in Australia, Europe and North America, and recently signed a global distribution deal with Universal.

"There's not many independent record labels, to use an old term, working with artists on a global front anymore," Gudinski says.

Will Mushroom remain a private company in its sixth decade and beyond? While a sale is "not part of our plan," he adds: "Never say never … it's a really challenging time for anybody – independent, major label or listed company – to be investing in new music."

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