May/June 2022

by Richard Thorne

RMNZ CEO Damian Vaughan Departs

by Richard Thorne

RMNZ CEO Damian Vaughan Departs

When Recorded Music NZ announced in February that Damian Vaughan was stepping down after nine years as CEO, the accompanying media statement noted that he would be leaving behind a lasting legacy across Aotearoa’s music industry. That’s an accolade not afforded many. Richard Thorne talked with Vaughan a few weeks before he farewelled the job.

Damian Vaughan was happy to talk with NZ Musician when he first took on the role of CEO of Recorded Music NZ (RMNZ), and is enthusiastic with the idea of bookending his nine-year experience with an interview on departure. Actually, he’s an enthusiastic guy in general, a trait that likely helped earn him one of the apex jobs in our music industry at a decidedly young age. With just a few weeks left of his tenure as CEO when we talk, is he happy he’s made the right decision in resigning from RMNZ, and perhaps the music industry?

“Yeah, yeah, absolutely,” he laughs. “I’m not going to anything. I think it’s good that change happens… and mentally I want a new challenge. I laugh about it, but I feel like I have achieved everything I wanted to, and was involved in heaps of amazing things – but I maybe got to the stage where I felt I was doing the same thing.

“The last two years have skewed that heaps, because we were focusing on Covid and supporting the industry, and MusicHelps – which did inspire me – but slowly now we are morphing back into that old normality, and it’s maybe time for me to do a new thing.
“It’s all blurred up a bit with Covid isn’t it?” he observes.

Vaughan started in the job at just 34, and now 43 has two primary school-aged kids he’s keen to enjoy more time with.

“I can spend a few months figuring out what’s next. I’d love to work in music again, in some other capacity – but other jobs don’t come up that often, so maybe it won’t be music.”

He is keen to retain his role as a trustee of MusicHelps, the charitable trust that, alongside other roles, provides care and support to Kiwi music people experiencing hardships.

“That organisation really came to the fore in the last few years. Covid put us through the roof in terms of awareness of what MusicHelps does. In 2020 we raised close to a million bucks through our sources, (eg Spotify), and distributed all that as grants. That support we’ve been able to provide is what it’s all about, isn’t it?”

Backtracking a bit to the end of the noughties, Vaughan returned to Auckland having been working in licensing at the British music copyright collective PRS, in London. He was soon employed as the head (sole full-time employee) of Independent Music New Zealand (IMNZ), and within the course of a year had developed and introduced that organisation’s since key public initiative, the Taite Music Prize. Recognising the value of his UK experience APRA NZ soon snaffled him up, and he spent three years in the songwriter-focused music rights management organisation.

“The thing I’m probably best at is licensing, knowledge of collective licensing and collection societies. I’ve done it on both sides, publishing and recording, and back again!”

Vaughan started as head of RMNZ immediately after the entity, a sort of junior version of PRS, was created (in name), through the merger of PPNZ and RIANZ.

“Yep, the first day! It was helpful I think, it was a new start but with all the same people doing the same functions! I had been at APRA and had been working on the development of OneMusic as a big project for about two years prior to that, and working quite collaboratively, so I knew all the [RMNZ] people. I think it was three months later that we launched OneMusic, and spent another six months to a year migrating the staff involved in that business into APRA.”

A joint licensing initiative across the two member organisations, OneMusic has proven a great success, since emulated across the Tasman. He estimates OneMusic processes around 35% of his organisation’s collected revenue.

“For RMNZ the revenue split is 50% radio, about 15% TV and the rest from public performance – so it’s a sizeable chunk of the income. For APRA I don’t think it’s as big as that, because they get more money from TV and live performance streams, but it’s still meaningful. That part of the business was very resource-heavy, lots of people on the phones and dealing with accounts!”
Perhaps as a hangover from the pre-millennial era of RIANZ, RMNZ started out with a questionable reputation. Host of the annual NZ Music Awards, it otherwise wasn’t seen as particularly in touch with the local industry, or supportive of Kiwi music makers.

“There was a perception (unfairly), that it was kind of closed,” Vaughan concurs. “Maybe a bit of a shadowy organisation that represented major label interests, and didn’t really have an industry presence, or personality maybe? It was my hope to see that change, and I do feel we have achieved that.”

“I think we are more community orientated, and NZ artists-focused. Sure there are multi-national label members and board members, but their interests are in NZ artists and the health of the NZ music industry too. So it was always my hope to focus more on the local industry, and I think we have!”

Back in 2013 RMNZ had 15 staff (five employed with RIANZ and 10 with PPNZ). Technology, not least in the music industry, has moved on in leaps and bounds since, so how many does RMNZ employ in 2022?

“About the same,” Vaughan laughs, mentally tallying. “Yeah 15, plus some IPI guys who don’t report to us really, they are employed out of London. So that really hasn’t changed in a sense, but our revenue has grown from $11M to about $16M now, so that’s about a 45% growth over the nine years. Basically the industry revenues have doubled. Our costs have been relatively the same, so our distribution has grown by about that sort of proportion too. Your biggest costs are staff.”

It’s almost comical to think that less than a decade ago music piracy was the industry’s majorly hot topic, RIANZ (in)famously injecting itself into that challenge with the much derided Burn & Get Burnt campaign. Vaughan’s time has seen music streaming cement itself as the vastly dominant consumption and fiscal force.

“Streaming has helped overcome piracy. It does remain an issue, but even then it felt like it was on the wane, and it has kind of faded into the background. That method of listening to recorded music, with the rigmarole of piracy, was far outweighed by the ease of the streaming services, first Youtube, and then others since.

“The revenue peak of the NZ music industry was about $120M back in 2001, and then it steadily declined to half that in 2014, and now it’s back up to that level again.

“I would maintain we’re in a million times better situation now than 5-7 years ago, and even 20 years ago, when 95% of the revenue was CD sales, but the industry didn’t see the next 10-15 years of pain coming!”

On a macro level streaming revenues have indeed helped return global industry revenue figures and profits, but from a more micro view the issue of artist pay per play is ongoing, with little change. Vaughan notes that isn’t a campaign RMNZ has taken an active position on, and we couldn’t expect to achieve any impact from here. Around that aspect of streaming he equivocates.
“This doesn’t excuse it, but I’d go, ‘When I started the industry [income] was half the size, so it’s doubled now and 80% of it comes from streaming. Ten years ago the industry income was half the size, and was based on a mix of CD sales and DVDs, so it’s a completely different world.”

“The proportion of NZ music consumed by streaming here is around 10% (it should be more but it isn’t), and it’s roughly the same in CD sales and downloads.

“So compared to 10 years ago we are in a better position locally. Streaming took over from another means of income where it was sales-based – so money up-front with no further pay; to no money up-front but with open-ended future payments.”

Licensing commercial radio and TV use of music makes up the lion share of RMNZ income, with each subject to periodic royalty rate negotiations that sometimes turn into high stakes legal battles. Vaughan has overseen several in his time, and laughs gently when asked if they had become increasingly onerous.

“I won’t lie, they’re painful! How those radio broadcast licenses work is it’s a share of their revenue – the proxy being that they [radio] sell more advertising because they’ve got more listeners, and that means we benefit from those listener numbers too.

“Taking a step back, I think any realistic person would think that paying only 3% of their revenue, for say 50-70% of their airtime – arguing that would seem like a nonsense. But the Radio Tribunal decision when it went from 1.5% to 3%, cost millions and millions, over three years of negotiations.”

That happened in 2009, well before Vaughan’s time, but he says he still felt left with the task of repairing some relationships, though it has come good with time. NZ, he reckons, sits among the upper-quarter of rates worldwide at 3.05%. Australia’s by way of example, has been locked by law since the ‘60s at just 1%. The UK rate, as another comparison, is 5%.

“We’ve done three rounds of negotiations, some just extensions and agreements to postpone until another year. We did a serious round three years ago and we are back doing it again now.”

The most evident show of local community largesse from the organisation has always been in staging the nation’s annual music awards, which had became real red carpet affairs

“I like to think that winning a Tui is a pinnacle achievement and important for any artist. It should be. And we are the kaitiaki, the guardians of that 56-year history of acknowledging NZ artists and their recorded music achievements – so it does have real importance to it.

“I’m grateful that I had nine years of organising a fun party and doing all those cool things, like the artist-designed Tui we’ve done in the last three years. Richard Taylor’s one was next level.”

Introducing artist-designed Tui trophies is just one of many changes made in his time – a period in which the NZ Music Awards lost practically all its sponsors, and risked a loss of mana.

“Yeah, just about on the arrival of Covid it fell off a cliff. Vodafone decided to finish up ahead of the 2020 awards and we lost other commercial sponsors too. I feel grateful to have lived through that Vodafone NZ Music Awards period, we got to put on amazing shows that way outstripped the scale of our industry.”

“I think that event sponsorship changed, and so did the actual awards events scene, it started to decline globally. We had a peak here, but the Oscars, the Grammys, the ARIAs, everything like that is a shell of what it used to be. The landscape had changed by about the end of ’19 and then Covid happened on top, and no one was willing to spend money.”

He describes the last two ceremonies as being quite hard, Covid forcing a different approach for each.

“I really loved what we did in 2020, with the first [re-named] Aotearoa Music Awards – I loved that so much! The idea was to do it like a Later With Jools Holland, because we didn’t know if we could have an audience, and we pulled that off! We had eight stages around Spark Arena, with the camera in the middle and did a 31/2 hour show – which was stupid in hindsight [he smiles], but it was awesome!”

Helping to fill the sponsorship void NZ On Air and Te Mangai Paho stepped up their support, and TVNZ became a new partner.
“2021 was even harder. It was so clear that we couldn’t even repeat the same thing, there couldn’t be any audience, so we ended up just doing a TV show. The plans around the Music Awards changed every week for three months. It was exhausting for everybody involved, but I’m glad we did it.”

jo oliver

Jo Oliver

With the crowd numbers then capped at 100, the CEO couldn’t even be in the room himself. He’s unsure how the 2022 event will play out.

“Ultimately, I think the most important thing for the artists is the acknowledgment of their peers, which they can use in future self-promotion.”

Covid, of course, had an impact on RMNZ’s collection revenues. Vaughan says that from a peak of about $15.8M in 2019, income fell to about $13M in 2020, which he extrapolates to a 15% drop on return from a hit song from one year to the next.
“Last year it got back up to those pre-Covid levels, $15.4M, and I’d expect this year to be flat, so around $15M. The biggest challenge is that the rights for which we are entitled to collect are limited. They’re for broadcast and for public performance. Looking longer term I don’t think there is going to be much more to extract out of that. Our label and artist members can enjoy growth out of the streaming area, but that’s their own stuff, we don’t get in that space.”

Shortly after his departure was made public in mid-February Jo Oliver was announced as the new CEO. Oliver has been RMNZ’s General Counsel (legal and political lobbying specialist) for four years.

“She’s amazing, she’s awesome,” Vaughan enthuses about his replacement. “Just a fantastic mind, and over the last two years has really spearheaded a lot of initiatives that haven’t been widely acknowledged. She really drove the SoundCheck Aotearoa initiative (with others) and that’s a needed response by the industry. She is one of the world’s best minds on music copyright, so an absolute star.

“Through the Covid period she has been such an asset to the industry in lobbying work, supporting our government entities in their work, but from an industry position. Great connections. She is Wellington-based, so that will be a change, but we have all been working remotely over the last two years pretty well, so maybe that’s not as much of an issue as it was!”