Aside from his cigar, the portly accountant couldn't look any less a rock-and-roll impresario. But when a call comes in, his cell phone belts out "Two Minutes to Midnight," a headbanging showstopper by heavy-metal gray hairs Iron Maiden — one of his acts.
Andy Taylor, 54, organized college dances at Cambridge University until he and friend Rod Smallwood discovered "the Maiden" in a London pub in 1979. Since then, this "least fashionable band on earth" (Taylor's words) has sold 55 million records with scant airplay — and Taylor and Smallwood's $248 million Sanctuary Group Plc. has become a monster hit in a flagging industry.
As the music "majors" — Universal, EMI, Warner, and Sony BMG — shed staff and ax artist rosters amid declining CD sales, Sanctuary is enjoying a five-year run of profit growth. Why? Sanctuary creates long-term, soup-to-nuts franchises around artists, many cast off by bigger labels. It's the UK's largest independent record company. But it's also the biggest music-management company on the planet, looking after 120 acts. And with 150,000 songs on its books, it's one of the largest independent owners of music intellectual property rights.
Taylor calls it a 360-degree business model. Sanctuary recognizes that CDs represent only a small slice of the public's musical appetite. So it records the Strokes and the Libertines, among others, but it also arranges tours for 350 acts, sells merchandise at shows, and licenses the rights for commercials, movies, music downloads, and cell-phone ringtones.
Sanctuary favors "long-term artists" — acts that have dropped off the Top 40 yet command unswerving loyalty among fans who'll pay $70 for a concert ticket and $40 for a T-shirt. Take Morrissey, a former singer with the Smiths. His last album for Universal's Mercury Records, 1997's Maladjusted, sold barely 100,000 copies. Seven years later, his You Are the Quarry has hit nearly $1 million in sales for Sanctuary, and his live concerts consistently sell out.
The formula works because when it adds artists, Sanctuary often retains their managers as employees to look after the relationships — enticing them with bigger roles. That's why Mathew Knowles moved to Sanctuary in 2003. His daughter Beyonce was pop's biggest star, and he also managed Destiny's Child, the biggest girl group since the Supremes. Now he heads Sanctuary's Urban division. "When I met Andy Taylor I realized our belief systems were the same," says Knowles. "What's best for the artist is best for the company."
A version of this article appeared in the January 2005 issue of Fast Company magazine.