Digital West

Lady Gaga Manager Talks Tech Startups, Music Marketing and That 99-Cent Stunt on Amazon

Troy Carter Has Become a Rising Star on Silicon Valley Circuit

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Troy Carter, Lady Gaga's manager and head of Coalition Media Group
Troy Carter, Lady Gaga's manager and head of Coalition Media Group

If you'd heard Troy Carter's name at all before this summer, it was most likely in conjunction with Lady Gaga -- an artist he's managed since 2007 and has helped connect with brands from Google to Amazon to Starbucks.

But in recent months, Mr. Carter has become a rising celebrity in his own right among the Silicon Valley circuit, investing in a number of hot startups including link-shortening service and, just last week, and a new $20 million "talent fund" with Menlo Ventures' Shervin Pishevar.

And then there's Backplane, a mysterious celebrity social network backed by minority investors such as Lady Gaga and former Google CEO Eric Schmidt. Despite high-profile coverage from Techcrunch and The New York Times, Mr. Carter is still mum on plans for that one.

Mr. Carter -- a savvy manager and marketer who helped make the fall 2009 premiere of Lady Gaga's "Bad Romance" video a global event on social media -- knows all too well the importance of timing and intrigue. "Stay tuned," he said.

Mr. Carter, who is giving the closing keynote at Ad Age 's Digital West Conference on Tuesday at San Francisco's Yerba Buena Arts Center, spoke with us about his recent investments, music marketing and a certain Amazon price promotion for Lady Gaga's latest album.

Ad Age : These are busy days for you. Tell us about this new Menlo Talent Fund you've started with Shervin Pishevar.

Troy Carter: Shervin and I are really good friends and we've been doing quite a few things together over the past several months, specifically starting with Backplane and a couple companies soon to be announced. It made good sense to partner up with somebody as smart as Shervin. This is something completely separate from Backplane. You'll probably hear some really cool announcements coming soon, there's some really cool things in the pipeline.

Ad Age : And then there's, which you just invested in alongside a handful of other investors, such as Madonna's manager, Guy Oseary. What interested you there?

Mr. Carter: I think first of all, even more than Turntable itself, I think [CEO] Seth [Goldstein] and his partners over there are just really bright guys and really smart guys. With Turntable, the product speaks for itself. There's a lot of stickiness around it, how do you engage people around it outside of just radio? This is one way to do it. I'm very proud of what those guys have done so far. I'm really happy that they let me participate.

Ad Age : It's a hot market for music startups right now, from Turntable to Spotify to Myxr to Clear Channel's Iheartradio. What does all the competition mean for digital rights management? Does it commoditize songs or create more value and leverage in your negotiations?

Mr. Carter: The more people are listening to music and experiencing it, the more value for both the music companies and the artist, especially when their financial model is built around that . With the music industry, everybody is starting to understand that doesn't begin with a piece of music. A lot of people get the music for free but still come to the concert or buy merchandise. We're getting music to as many fans as possible. The music industry really has to learn a lesson from the tech industry about what scale means at the end of the day and learning how to monetize.

Ad Age : is another hot startup in a crowded space: link-shortening services. What sticks out to you about that one?

Mr. Carter: Just like with the guys, [founder] Alan Chan is a really smart entrepreneur who came up with a great product, and so far he's doing a great job. To me, as A&R people and as managers we're in the business of finding talent. It's no different than working with these engineers who just want to make good products. What I like about is the simplicity of it. When you can explain it to people, like "five-second billboards in front of a link shortener," it makes a lot of sense. We've used it internally and it works really well for us. People are catching on to the product.

Ad Age : Your launch campaign for Lady Gaga's "Born This Way" was on par with a blockbuster movie, with so many huge marketing partners helping to deliver first-week sales of 1.1 million albums. But you caught a bit of flak for deeply discounting the album to drive first-week sales, and saw a huge 80% drop that second week. Was that disappointing to you at all, and how do you feel about where the sales figures are right now?

Mr. Carter: We're at 7.2 million albums, within a 90-day time span. So that 's very, very substantial. You can't look at the scoreboard at the beginning of the game. It's not how you start, it's how you end. For us, we sold 23,000 the first week Gaga came out with the first album, so we've come a long way. I think the industry, they're more hyped on first-week numbers, and it was a cool thing being able to pull off that many units. If we ended up selling 2 million total after it was all said and done, that would still be impressive. But nobody ever looks at the long-term.

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