Way Behind The Music

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Backup Player Coran Capshaw rarely steps from behind the curtain. He built his company to help artists like John Legend supercharge their brands and businesses.

Unsung Masses Just some of Musictoday's 200 employees. Many are musicians themselves, including Nathan Hubbard (at lower right), who runs day-to-day operations. All of them are rabid fans.

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The first time he met Capshaw, Flohr recalls, "I was scared s--tless." It was 1993. Flohr was then vice president of A&R (artists and repertoire) at RCA and had come to Charlottesville hoping to sign Matthews. Capshaw had deliberately avoided a recording contract; the band was playing 200 or so gigs a year across the Southeast, building a rabid, mostly collegiate audience. "We needed them more than they needed us," Flohr admits. At dinner, Capshaw wavered, but eventually the two hammered out a deal largely influenced by the Dead's philosophy. "Rather than the label's saying, 'Here's what we're going to do with you,' they called the shots," Flohr recalls. "They said, 'We'll take some of your money, we'll put out an independent record, and we'll tour--boom, boom, boom.'" Boom is right: Under the Table and Dreaming, the group's first album for RCA, has sold nearly 7 million copies to date, and the band has become one of the industry's top-grossing concert acts.

The incident revealed what has become a recurring theme in Capshaw's career: a tenacity and talent for challenging the status quo, finding a soft spot in the industry's armor, and ultimately exploiting it to secure power for the artist. RCA got recording rights, but Dave Matthews retained merchandise and online rights. Later, the band negotiated the ability to release its own live recordings. Piece by piece, Capshaw was crafting a highly profitable and largely independent operation. Within a few years of teaming up with RCA, Matthews had produced three multimillion-selling albums and was filling football stadiums (and selling half of those tickets). Along the way, Capshaw built the mechanism for recording live shows (ATO Records, which now boasts more than a dozen acts, including David Gray and My Morning Jacket) and selling shirts, CDs, and tickets (Red Light Management).

Those early CDs contained the seed of what Musictoday would eventually become, in the form of a mail-order insert for merchandise. Capshaw and the band were designing and selling their own goods and pocketing "the retail spread." As that business expanded, it outgrew the spare room at Trax. Then, in the late 1990s, they began offering items online--and the bigger picture revealed itself. The infrastructure had fallen into place for a much bigger operation. "I realized that we could do it with more than just Dave Matthews," says Capshaw. "We had the potential to help other bands."

It wasn't just the artists' interests he was thinking of; Capshaw's a fan himself and wanted to change an industry that all too often took people like him for granted. His "pre-sale," for example, was a reward for a band's most loyal fans, a way of giving them the first shot at great seats for a few bucks less (typically, half the usual surcharge) before the public sale. By winning over more bands to the concept, Capshaw was in position to propel broader changes in the industry. But not before encountering big-time resistance. In 2002, Ticketmaster--the Microsoft in that space--sensed a potentially lethal threat and deployed its lawyers. "They tried to shut down the artist-to-fan concept," Capshaw says matter-of-factly. "There was a series of letters they sent to promoters and venues, some back and forth there." Pause. "But we worked it out."

Ulysses S. Grant couldn't have said it better. As part of an exclusive agreement, Ticketmaster would allow Musictoday to sell 10% of tickets for its clients' shows. That sounds modest, but it represented a seismic power shift, as even Ticketmaster will tell you: "Musictoday went up against a big entrenched company and got it done," says David Marcus, Ticketmaster's vice president of music. "That requires a serious amount of fighting and skirmishing. You have to give them credit for shining a light on the path to the future. Coran's an aggressive, smart entrepreneur. Sometimes it takes small innovators to get mature companies back to innovating again."

Capshaw doesn't come across as the skirmishing type. Sitting in the top-floor conference room of Red Light Management, in downtown Charlottesville, he seems every bit the 48-year-old Deadhead, as laid-back as his black Lab Emmy (as in singer Emmylou Harris). He has thick, bushy gray hair, a reflective manner, and a deep voice softened by a slight drawl. C-Ville Weekly, a local paper, once called Capshaw the Donald of Charlottesville because of his many real estate projects, which include this very office building, an amphitheater, various apartments, several restaurants, a club, and a microbrewery. ("We joke that Coran pays you on Friday, and you give it back to him over the weekend," says Donohue.)