The savvy business sense of its founder, Klaus Heymann, is no longer seen as a liability; it’s enabled him to keep the company making money despite the fact that the classical recording business is changing so fast that every time I’ve talked to him over the past 10 years, Naxos has had a different primary source of revenue.
“We can’t live off CD sales anymore,” says the German-born Heymann, 75, speaking by phone from his base in Hong Kong. When Naxos began, Heymann proved that you could make money selling tens of thousands of copies of works nobody had ever heard of; as CD sales gradually declined, the company has variously relied on proceeds from digital downloads, audio books, and other ventures. Today, it looks to YouTube, where a tool called Content ID crawls the site, figures out how many of a given company’s videos are illegally posted, and – rather than removing the videos – calculates that company’s share of advertising revenue. “That’s become an income stream,” says Heymann, estimating that it covers about 75 percent of his recording budget.
“iTunes, Audible, SiriusXM,” he adds. “Wherever there’s a source of revenue, we squeeze it out.”
Twenty years ago, this kind of talk branded Heymann as a miser, a businessman exploiting artistic talent. Today, he’s often heralded as a visionary, a businessman using practical means to keep a valuable artistic resource afloat.
“Klaus is a heroic figure in classical music,” says Joseph Horowitz, the co-founder of Washington’s Post-Classical Ensemble. Horowitz has served as a consultant for Naxos’s American Classics series, which focuses on otherwise neglected works by American composers, past and present. The Post-Classical Ensemble has also released two recordings on Naxos — DVD reissues of classic 1930s documentaries with scores by Virgil Thomson (“The Plow That Broke the Plains”) and Aaron Copland (“The City”). It’s just one of a number of ensembles in the greater Washington area that have found in Naxos a platform and a step to larger international attention — from individuals such as the pianist and composer Haskell Small, who teaches at the Washington Conservatory of Music, all the way up the food chain to Marin Alsop and the Baltimore Symphony Orchestra.
Heymann has always been something of an outsider, starting out by importing luxury goods including high-end stereo equipment to Asia, and organizing classical concerts as a way to promote his wares. Perceiving a ready Asian market for classical CDs, he set out to fill it. His unorthodox background has stood him in good stead as he keeps changing his company to find new ways to make money. Audiobooks have done well; Naxos is the major distributor of other classical labels; and the company has been in the vanguard of all manner of digital content. The flagship here is the Naxos Digital Library, which offers on-demand access to the entire catalogue. Anyone can subscribe, from schools and libraries to some Naxos artists; the Baltimore Symphony Orchestra offers it as a free perk to its subscribers.
That the BSO is a loyal Naxos artist is a clear sign of the changing times. “The days of recording companies fronting all the upfront costs are over,” says Paul Meecham, the orchestra’s president and CEO. “We’ve done things with Decca in the last few years. No one is upfronting the cost. It’s not just Naxos.”
Small, the Washington-based composer, financed the 2011 recording of his “Lullaby of War” on the American Classics series himself. He doesn’t see a drawback; quite the contrary. “I was excited to do it with Naxos,” he says. “To be perfectly frank, I own [the rights to] a lot of the stuff in my discography; Naxos is the only one I don’t own outright. For the pennies that dribble in [from the other recordings], Naxos is a much better deal on the whole.”
Naxos is also one of the few entities in the classical music business that embraces things that are different and unusual. Opera Lafayette, the Washington-based company specializing in French baroque opera, first approached Naxos with the e-mail equivalent of a cold call; they had recorded the French version of Gluck’s “Orphee,” and wondered if Heymann might be willing to release it. Unlike most cold calls, it worked. “He said, We have the Italian version, but we don’t have the French version, and we like it, so we’ll take it,” recalls Ryan Brown, Opera Lafayette’s founder and conductor. It was the beginning of a fine relationship; Opera Lafayette’s eighth Naxos recording, the first-ever of Andre-Ernest-Modeste Gretry’s “Le Magnifique,” is coming out this month. “When I started suggesting things to Klaus,” Brown says, “it was obvious that they have this omnivorous appetite for music. They were very open to suggestions of things that were out of the way or hadn’t been recorded before.”
“Look, Naxos is a gift to us,” says the Post-Classical Ensemble’s Horowitz. “When I proposed to Klaus that he do three DVDs with films that are not well known and the addition of live music and content out of the blue and he said yes in three minutes, it’s a very unusual person.” He adds, “Klaus is an impresario; he makes decisions quickly. He doesn’t study a project. If he likes it, he’ll say, I’m doing it. He’s not afraid of doing things that haven’t been done before — an unusual asset in what’s left of the world of classical music. He has an entrepreneurial intelligence that’s not that common.”
Naxos is widely seen as having pioneered a new business model for recordings, but there are other ways to slice and dice the same model. The label Avie, for instance, also produces self-financed recordings, but leaves the rights in the hands of the artists. “It’s all based on artist ownership,” says Melanne Mueller, who co-founded the label with her husband, Simon Foster, in 2002. “Artists come up with financing of their recordings. They own everything, and earn the majority of the revenue. We take a commission.”
Kenneth Woods, a conductor who has released several recordings on Avie, prefers this to Naxos. “Naxos’s strength is the huge catalogue and the breadth of what they cover,” he says. It’s “great for the listener and collector; not so great to the artist.” And, he opines, “it’s hard for a lesser-known artist to get the kind of exposure on Naxos that I can get on Avie.” Ryan Brown might beg to differ; the international reviews, particularly in France, of Opera Lafayette’s Naxos recordings may have helped influence his company’s invitation to perform last season in Versailles.
Naxos has certainly practiced a kind of “flood the zone” approach to music. Heymann thinks in terms of complete sets rather than individual discs: American Classics or romantic masterpieces, the complete works of C.P.E. Bach (the 18th-century German composer) or Alfredo Casella (the 20th-century Italian one). “I’m a sucker for good repertory ideas,” he says, with a chuckle. Even he admits that Naxos probably releases too many recordings.
But when he runs through some current projects, his real motivation becomes apparent. The maverick businessman genuinely loves music and delights in demonstrating its range and variety. “We’ve got the first volume of the complete Villa-Lobos symphonies, then the Penderecki orchestral choral works from Warsaw,” he says. “Then Simon Mayr,” an early 19th-century Bavarian composer whose operas Naxos is bringing out, one by one, two of them this year. “And the third volume of the Haydn piano trios. Can I say no to any of this?” he asks. In today’s classical music world, most people would probably answer, “Yes!” It’s only for Klaus Heymann that this question remains rhetorical.