From Lollapalooza to IPO
|Photo by Jenafer Gillingham|
WHEN MARC GEIGER WAS 4 YEARS OLD, he decided he could fly. So he donned a Superman cape and mounted the railing of the balcony outside his family's second-floor Connecticut apartment.
Although his mother grabbed him before he could take off, who's to say he couldn't have done it? After all, Geiger's taken huge leaps over nearly two decades in the music business, as an agent, record executive and online entrepreneur. Among other things, the 37-year-old businessman co-conceived the Lollapalooza music festival, for which he's received creative if not financial props. He established the alternative-music department at Triad Artists. Now, his Internet music company, ArtistDirect, is flush with $97.5 million of new equity investment, and an initial public offering just around the corner could bring in another $800 million. Geiger may prove to have, at the very least, X-ray vision for music's Next Big Thing.
And it's all because he's a spreadsheet guy. The compulsive filer who overhauled Triad's computer system is now looking to tidy up a bigger mess: the music industry. In the new world order, as he sees it, music will be branded by artist, not record label or genre; T-shirts, concert tickets and recordings will be purchased and delivered at the click of a mouse; and tour, interview and band news will be transmitted instantly online. In other words, Geiger is positioning ArtistDirect to become an institution -- the Kleenex, Band-Aid or Xerox of online music commerce and information.
"It was just obvious to me," he says. "What's the Warner Bros. studio store? What's the Armani store? Just substitute Rolling Stones for Bugs Bunny -- and put it online. It's not like it wasn't done. But people in the music business weren't doing it."
ArtistDirect is hardly alone in claiming to be making over the music biz. With the imminent broadband revolution promising to make high-speed Internet delivery of recordings a commercial reality, scores of music entrepreneurs are staking claims in cyberspace. MP3.com, a San Diegobased company delivering music online, took a giant step forward in credibility last year when it gave Alanis Morissette equity in its company in exchange for the opportunity to sponsor her tour with Tori Amos.
But Geiger already has a comprehensive online-music infrastructure in place. ArtistDirect includes a search engine (the Ultimate Band List), a fan-driven community site (iMusic), downloadable music, and authorized "channels" conducting sales for more than 90 of the world's biggest pop acts, from the Backstreet Boys to the Beastie Boys. There's also a booking agency and a record label called Kneeling Elephant.
Geiger wins the big artists' loyalty by offering them equity, plus ownership and control over their own "channels." For someone like Aimee Mann, whose critically acclaimed career was undermined by record-company indifference, this has made the difference between receiving royalties and not. Bought out of her Geffen contract during the Seagram/Universal merger, Mann is now with ArtistDirect, making $2 a unit on her record Bachelor No. 2, as opposed to zero on her last Geffen recording, I'm With Stupid. (Mann's splashy contributions to the Magnolia film soundtrack didn't hurt.)
"It's a very simple setup -- they do our work for us and we get paid," Mann says. "What could be better?"
Geiger has another edge: a long track record in championing artists, especially the edgy ones. Bands he loved, such as the Cocteau Twins, the Chameleons and the Wonderstuff, couldn't get arrested when Geiger brought them to Triad's attention in 1984. "It was like, why am I feeling like I'm the only one seeing this crop of amazing artists and nobody even cares?" Geiger recalls.
When the cyberdust settles, ArtistDirect stands to cash in on the Geiger mystique. "Geiger saw the hole he could drive the truck through," says Bruce Haring, author of Beyond the Charts: MP3 and the Digital Revolution. "If in fact all these promises pan out, and the Net becomes the way most people get music, he's got some valuable real estate already locked up."
SITTING IN HIS CLUTTERED ENCINO office, decorated with New Order and Jesus & Mary Chain posters, the always-juiced Marc Geiger is under strict orders not to multitask or to reveal too much. The company refiled for its IPO in January (the initial filing was in September) and is currently muzzled by the Securities and Exchange Commissionmandated "quiet period."
Staying focused, much less sitting still, is a tall order for the boyish, terminally preppy-looking Geiger, who appears more CPA than CEO. To avoid temptation, he moves away from his desk and phone, grabs a colorful juggling ball and squeezes as he tries to cram his 37 years into an hour.
With a jock's hunger for competition (he played baseball at UC San Diego), Geiger promoted concerts for Humphrey's Concerts by the Sea, a music venue on San Diego's Shelter Island, while still in school. By his 1984 graduation, he was managing the Australian band the Church.
Geiger also worked as executive vice president at American Recordings (formerly Def American), signing bands like Medicine, Swell, and Jesus & Mary â Chain merely because he liked and believed in them. Although his esoteric sensibility gave Rick Rubin's label critical credibility, these bands were commercial Kryptonite.
The disappointing sales certainly weren't for lack of trying. Geiger is nothing if not messianic about his musical discoveries. When his younger sister, Nicole, was a teenager living in Palo Alto, he took her to Berkeley to scour used-record shops for a grounding in the classics: Bob Dylan's Blonde on Blonde, Van Morrison's Astral Weeks and Neil Young's Everybody Knows This Is Nowhere. Alas, his efforts were for naught. "She still ended up a Deadhead," he laments.
His stint at Triad was more successful. Shortly before bolting the agency in 1990, Geiger stumbled upon the idea for Lollapalooza while hanging out at England's Reading Festival with Jane's Addiction drummer Stephen Perkins. "I will put this all together, but you gotta headline as your farewell tour," Geiger told Perkins. Lollapalooza co-founder Perry Farrell (then Jane's Addiction's lead singer) took the festival name from a Three Stooges episode.
"The thing about Lollapalooza was that it wasn't genius," Geiger says. "It was a movement in time when Nirvana and Jane's embodied this underground movement of diverse bands who were shut out of the mainstream."
But by 1996, alternative had become the mainstream. Geiger had an idea to keep it fresh: Metallica. "That's where Perry and I fell out," Geiger says. "He was furious about it. I felt it was absolutely the right thing to do." Of course, two years later, Metallica is in regular rotation at "alternative" station KROQ.
Geiger feels he and fellow Lollapalooza architect Don Muller got screwed financially on the festival, but says he learned from getting the shaft. "It was one of the things in my life where you think you did great things and you hope people will recognize it and reward you for it," he says. "When those rewards don't come, you light a fire under your ass and say screw it, I'm never going to get burned that way again."
For a new direction, Geiger turned to his other great love, the Internet. The former computer-science major discovered AOL in 1990, and did a deal with the company on behalf of American Recordings. But when the Mosaic Web browser came along, Geiger saw something much larger. "It was like, see ya, ball game over," he remembers. "I actually think [the Web] is bigger than electricity." Soon after, Geiger (with Rick Rubin) purchased a little site called the World Wide Web of Music at a bargain rate in the neighborhood of $1,500 ("something like that," he grins) and renamed it the Ultimate Band List. It turned out to be a wise investment for Rubin, now a partner in ArtistDirect along with former agent Muller, who oversees the company's talent agency and label.
Geiger drew up ArtistDirect at Muller's kitchen table with Steve Rennie and college pal Keith Yokomoto. Synergy was the watchword.
"If you're only doing one thing, you're not taking advantage of all the levels," Geiger says. "When we started [in 1997], people were like, they're an agency, they're a record label, and they do some other stuff. And I think today a lot of people don't even know we have an agency. I love that."
With 180 employees, a pending move from the Valley to the E! building on Wilshire, and the eyes of the music industry upon him, Geiger has managed to tie all of his obsessions into one neat little package, just like a spreadsheet. "We want to be the company that facilitates the relationship between the band and the audience, and that relationship is a big word, because it means so many things -- media, downloads, streaming video, information, community, marketing, commerce," he says. "It's like Factory Direct. You're buying from the manufacturer. Who's the manufacturer? In my eyes, it's the artist."
The record labels don't like it, but they're hedging their bets. Sony Music, Warner Music, Universal Music Group, BMG Entertainment and Yahoo! are all ArtistDirect investors (BMG distributes Kneeling Elephant records).
Jim Guerinot, manager of Sony Music artists the Offspring and owner of his own label, Time Bomb Records, explains the polarization: "Third-party companies like ArtistDirect and MP3.com are gleaning relationships directly with artists . . . and then going public and selling stock and . . . directly competing with [the labels]."
For the moment, technology is playing catch-up to the hype. Although ArtistDirect's revenues for the six months ending June 30, 1999, were up 185 percent from the year before, the company's net loss was $8 million, compared to $2.4 million the previous year. But with AOL's purchase of Time Warner, online content is king. And Geiger seems, again, to be in the right place at the right time.
"I didn't know it would happen this fast, to be honest," he smiles. "But that was the dream."
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