Rhino Records Co-founder: Richard Foos

[Music] You're listening to the Business Leadership Series podcast with Derek Champagne. My guest today is the godfather of reissue culture. That's Richard Fouce. The co-founder of Rhino Records and Shout Factory, now Shout Studios, where he built two highly successful companies by seeing value where others saw obsolescence. While the entertainment industry was chasing the next hit, Richard built businesses around existing music, film, and television catalogs, helping create an entirely new category. Rhino records later, late '80s sold to Time Warner. I'm really excited to talk to you, Richard. Welcome to our show. Thank you. And I'd love you to description some things I never thought about, so thank you. I got to tell you, as I was thinking about this, I told you before we was press record. I was excited to talk to you. I don't know whether I need to thank you or blame you for my obsession as an Arkansas boy musician who feel lyrr of Los Angeles and the iconic spots that were out there. And I went to visit and went to Music School Musician's Institute and did that world for a long time. For Rhino records, that iconic image, you were part of the landscape that shaped my excitement about going and seeing what that whole business was all about. It was just something incredible. So thank you. And I'm your partner. I just remember I've been thought of this since it happened, but in 1969 I was going to USC and there was a restaurant called Alice's Restaurant and somehow the group Black Oak Arkansas comes from Arkansas lands there and starts hanging out and that was sleeping there and everything. I was doing a non-profit and they did a benefit for us and I was hanging out with Jim Dandy and my first hanging out with rockers and experience. Well, I'm sure that you have many stories about including the artists that came and performed live. But I want to hear about you. Like our listeners love to know who we're talking to. You built an iconic brand a different way. So just, I mean, kind of take us through some of your story to got you to Rhino records. You got it. You know, I was a child of the '60s, didn't know what the age I wanted to do. But I loved music and thought, God, could there be a career in music and stuff? But just happened that I started seeing little ways that I might be able to crawl in there and friends family had a surplus electronic store I asked, could I get a bin to put some news records in? They said, yes, did it for a couple of years and, you know, I was ready to do my own. My own record store, Westwood, right by UCLA had no use record store and I thought, what an opportunity. And you can get, you know, rent was not much more than $100 a month for a little place. And then even then I couldn't get in Westwood Village, so I got, you know, furthered down and didn't realize that UCLA students didn't have cars. So. So it took a while to, you know, establish a business, it was, it was, it was stopped. But the real fun to me was putting out your own record, that was such a dream growing up with 45s with all the different labels that I think I can make my own, you know, 45s. So we, a few years into the store, we made a 45 that was like a theme song for the store we gave it away for Christmas and the artists that came in that did the song, which in the back room of our store, I think the set player was this eccentric LA Street artist named Wildman Fisher, who was most famous because Frank Zappa, the first album I think he ever produced with what he discovered Wildman Fisher on the LA Street, so did a double album with him, you know, this crazy acapella singer who kind of bombed at the mouth. And anyway, the manager and eventual partner was a rock writer and sent a copy of the 45 to Sean Peele, the most famous DJ in England, he plays it and becomes the number 50 record of the year in England and Virgin Records, which had just started, they were only a distributor, they ordered a thousand records, and we go, wow, we're in the business. Richard, tell me the name of the song. Go to Rhino Records by Wildman. Yeah. Go to Rhino Records. Just write on the nose. I love that. Yeah. Anyway, so, you know, we start putting out records in 45s and then we put out our first album, which was with, you know, Wildman, but we soon saw that what was most missing, because, you know, we could see in the record store and what we grew up on, the music that we grew up on, if it wasn't the Beatles of Stones, Led Zeppelin, who was all out of print, and there was no way to get it, so you could find a used copy somewhere. And so we started going to the record companies and we, you know, chased down independent producers who owned their recordings and, you know, and most of these, you know, records had never been reissued, so they weren't. So people were willing to, you know, you had to pay an advance because nobody had trust anybody in the record business, so we have to get, you know, get enough money from sales of the store to get the few thousand dollars to pay the advance. And then it was rough at first because we didn't have big artists and there wasn't really a reissue business, but there were lots of indeed distributors that would, you know, take our records on consignment and we kind of etched through and then at some point you were able to deal with the major labels, and the first big artist that we were able to do a best of was James Brown, in 1978, it's probably '79, and if you can believe this, all James Brown music was out of print except for his new album that wasn't selling, because the record labels, you know, they just said, you know, they ran it like a business and the arc of the head is, it's a hit, you know, if it's a big enough hit, go make an album, but then you know, once it's not a hit, it's not being played, there's not really always a radio, so it's not being played, out of sight, out of mind, bringing the next hit, record goes out of print, never to be in print again, and so there's literally, unless you had your brothers old 45s and you collected them, or you could find an album in a James Brown album and use record star, there was no way you didn't listen to the music of this iconic artist James Brown, so we put out a James Brown greatest hits album, it's all way beyond anything we'd ever put out before, we then got the rights for it on CD, that, 'cause CDs were just starting in the early 80s, that blew up, and we were able to duplicate that with other, you know, with other artists, soon the record companies got wise, but we started doing it themselves, but by that time, we had established ourselves, so we did lots of compilations, so you named it genre, we would do the pendant of either Bob Set or series of CDs on that genre. I mean, first of all, it's extremely innovative, especially for the time, and you know, we'll get to that about entrepreneur specifically, how they can think about, have that type of mindset, but it's hard to even imagine that you couldn't find an artist that you liked and not find their old stuff with, I mean, I came in the music business around the turn of the century, as far as seeing, basically when Napster and all of that was disrupting, so that was another big change that happened, but, you know, to think of not being able to find something just as hard to believe. There's not, you know, there's not, if there is oldies radio, they'd be playing 300 songs of the entire past, and maybe, again, for James Brown, maybe they're playing, I got you, but that's it, so you can't even, if you can't somehow find the record and don't have it, you can't even, James Brown music, if a sense doesn't exist, and that goes for hundreds and hundreds and hundreds of, you know, artists, I remember, in my case, as I really get in the music in the late 60s, I started listening in 1961, but I didn't, so I started moving in the late 60s, I go to a, and I'm just fanatic, but I remember, I go to one of my first rock shows, and the headliner is a little richer, and I'm thinking, who's a little richer? Wow. There'd be no, I had no idea, a little richer. I've been a giant music fan for a decade. but I had no idea the little Richard existed because he didn't have hits after 1960 so he wouldn't be played on the radio his records would all be out of print so. So in some ways then the the reassure culture that you push forward I don't know if you would say this not but what did that do for the artist as far as the thing and bringing them back in the spotlight or making them accessible to other generations. Well it helped them get rediscovered and I guess you don't know that I think about it if we got reviews you know maybe in your local paper maybe say somebody saying you know look at the little Richard well James Brown CD came out on Rhino or album came out on Rhino you have to get it it's maybe people read it and then that's where they maybe discovered James Brown. Things in the 80s you know you start to get you know hearing music on films and lots of things get rediscovered by films there's even movies like you know LaBamba there's few bounds so there's now new ways for people to hear older music but that's that's the 80s that's not a you know which was in the DNA of the record companies is hit records hit rock you know that they're only thinking about that right you know not you're not going into the past or thinking that they have this treasure chest trove of great music. When did you realize you were on to something I mean there's nothing more exciting for an entrepreneur than realizing one it could be even be an uphill battle but when you realize you've discovered something that's not being done and even though it's going to be hard work you have kind of the secret sauce and the access that others don't know about what was that like or when did that traction did you realize it was very slow and what one boom but I guess the sonic boom would be stuff would happen like okay 1987 then I believe in 1985 when the muckies that you know 20 year anniversary tour and then MTV starts playing the shows rewriting the shows it becomes the biggest hit in the history of MTV and we had just reissued all the all nine of the original mucky albums and they weren't you know they were selling a little bit but they all go into the billboard charts at one time because it wasn't have nine albums by our two hundred now they were in the lower ends of the top 200 but they were all you know all in there so there you would have these in front of you know big events they hate to say it but like an artist dying or or a movie or something they would bring it the artist into the consciousness and then that's what we do if we just put out a lot of great stuff and had a big catalog stuff would just start happening tell me about kind of the transit well first I want to ask you about some of the bands that played there you had Nirvana Sound Garden weezer Wilcove yeah yeah yeah in the the record store we would have you know live concerts now and the record the funny thing was you know the record store was a thousand square feet so you could maybe shove 30 40 people in to see Nirvana or project or whatever but these that's before the bands you know we were like a cool in the record store yeah yeah bands would want to play there and but you know there were dozens of bands that didn't make it to tell me about the the transition with a time Warner the aqua you're an indie indie company you built yourself over the years and then there's the time Warner acquisition what was that like for you that was great because numerous levels but you know we loved for me growing up by far my favorite label was a Latin act they had all the cool R&B stuff and I loved even you know the early stuff like the drifters and we're one of my first bands I totally love you know Otis running and Wilson Pickett are we to find them and like most labels they just hadn't thought about their great catalog they were just trying to have new hits so they needed a company to come in and be their reissue arm so we made a joint venture deal with them and we're able to like you know go in and do you know reissue their unbelievable stuff was so much fun and so great and then they had an option in about 10 years to buy the other half of the company but this time it had been Warner time Warner time Warner AOL and it got more and more corporate so I left and started a new company called Shout Backery and we more we start out as you know going music but that but that's when the business started really going downhill and all these record companies just started their own reissue division so there wasn't the opportunities that they're been passed and then we so we morphed into doing the same thing with film in TV which had allowed the same opportunities or had them been a company like artists that really went into and worked with all the creators in the studios to you know really shows that were for various reasons difficult to come out well you've created an iconic brand a legacy in the music space I was watching a I was watching a Rhino records like vlog yesterday that was talking about the history of it was it was it was it was pretty modern and and they're going through the history and showing the picture of your first space and I know that was part of your older history and you moved on from there but it's just it was exciting to see from my perspective how you were innovative and you and you made a significant mark in a space that that's important to me as well it's funny that we were innovative about the past innovative about the past yeah that's right yeah so that's a question I have for you when we talk you know when I talk to your PR team they're talking about talking about why entrepreneurs often overlook their greatest opportunities by they overlook what's hiding in plain sight I'd love to hear your perspective then because I see that often too and especially especially with AI and all the stuff we have going on right now it seems like it's not a race to the bottom it's not our agency that we have we're doing some of it but I see a lot of dogs chasing their own tail instead of having vision well I think I guess not only did we you know work with reissue culture but we maybe we're the first companies that worked with fan culture right so we under so we totally understand that the DNA of the fan because that's who we were and still today and I guess AI could be to change that but still today well let me give you an example with you know something I'm working on a little bit let's say live music you know if you take any band that people care about most bands that people care about their live music and want to own they want to own multiple shows that deadheads being the ultimate example of I'm sure if you go to dead I you know they'll say I own 423 dead concerts and I can tell you which ones are the best and it's inexhaustible you know and there's other bands where they're similar the thought press on that process Frank Zappa because we did a project with them and I know called beat the boots so but still most bands the state the Rolling Stones there might be six commercial recordings of the Rolling Stones in their 50 year plus history but how many shows have they played 5,000 I don't know and you know people want the Stones collector I don't know if they want to all 5,000 I want a lot of them so that we're still the record companies and the power and it's these still aren't super serving the fans so fans will get we'll find a way to get them so they'll go online and there's websites that have elite you know bootleg you know concerts you know hundreds of Rolling Stones concerts so people get them one way or the other but you know and we've seen now the anime shows in Comic-Con incredible thirstiness of fans for things that they that things they love and I'm not sure that the record companies in the studios totally get that or maybe they don't even have they bandwidth you know they're trying to have you know service they're superstar artists and have hits and whatever but I think that's what we understood the ravenous of a fan for things of days that they love and try and try to super serve them. And we tried to we we really thought about, okay, if you love Otis Redding, you're gonna love him on different levels. So we would have a box set that would have almost everything, you know, for the Uber fan, for the next level, a two-CD set, the casual fan of greatest hits. And for the, I'm just trying to, you know, discover him or whatever, a budget eight song. So, you know, so we thought about, you know, fan first, you know, what do we want? How do we how do we super serve them in a way that they're and get them the level. But the level, the way that they want to interact with that are the artists that they love or the music they love. I like that. I'm thinking of what you did at Rhino Records and you took the hits from that. The hits from what works from that. You went to, to shout factory, started that, took the, the hits from what worked for that. And now, now you're, you're focusing the way you are now. I really like that thought process. And you're, you're giving the fans, the rabid fans, what is most important to them at the different levels. And that access, that access to different views of what they're fanatical about is highly coveted. One of the things for entrepreneurs is that thinking of the customer first, of the audience first, and what's rare or important to them. Yeah. And what niches aren't being where they're not being, you know, for, for us in our businesses, we, we just tried, yeah, we kind of, I'd say the secret of being a bit, being successful in business is to have a product that at least some people care about and stay in business. So, you know, it starts small, you know, sometimes even if you have access to more capital, maybe don't use it. Prove the concept starts small and, you know, grow, grow slowly. And at least that's what we did. I've seen founders push things out. And I've seen it before they know if there's a demand for it or not, because they're so in love with the idea. And someone told me not too long ago, you don't have to tell somebody there's been a fire somewhere because they'll know because there's, there's scorched earth. And, you know, to your point, you know, if you tell everybody about it, you know, when there's fans and there's fans that care about something, that's the scorched earth, you know it. And so, you know, that kind of makes me wonder what, what do founders, what mistakes do they make sometimes when they're looking for market opportunities? Here's, here's what I've seen a lot in the record business. I don't know why this happens. Many record companies, record companies entrepreneurs, they get a hit really quick. You know, maybe they, because maybe their first idea is an itch or an artist that they've been looking at that's under appreciated and it's really think that they've got something different or unique. And they go big and then just blow out, that happens almost every film independent film company through the years. The same thing they find a film that's dirty dancing. This example, that was an independent company and Rambo films and accidentally trying to hit and then you go, I know so much more than the studios and you're experiencing so many record companies, you know, do that and whether, you know, they get a little niche like heavy metal and they do that and they think, oh, we can have pockets. They can't. Right. And they go bust, you know, but go bust and yeah. So you got to suppression of egos. You have that lucky fluke, you have this tiny niche, but that's all there is in that niche. And the problems we had and went up into a direction that we luckily calmly down was my partner, I love novelty music when we're growing up and a lot of our early records were our own ideas for novelty records. And the first ones we did was the same thing. I had one funny, great idea, which was what if we had an orchestra of kazoo's playing either big rock songs or classical pieces. It was very funny. And so we formed a spony group called a temple city kazoo orchestra. And it was, you know, I'm very minor hit. We got to play it on the local underground radio station. It sold many more than we thought, but not, you know, we thought, okay, any stupid novelty idea we have, we can put the record out and it'll sell. Plus we did like a follow-up kazoo record with bond. And we never had another successful novelty record in the history. And we'd still do them on occasion. But that one was the most successful one we had. And luckily, we knew our wheelhouse and our expertise was reassuring. Looking back, what decisions had the greatest impact on your success? I said, the decisions to really, for the most part, stick to our lane and realize what we were the unique part of our market was and go forward in the biggest way possible. What was the most exciting project or the one you're most proud of Richard? Well, the one side was our one flu kit. And I guess most record labels that were in a long time, again, if they didn't have that flu kit in the beginning, you know, you put out hundreds and hundreds of albums and then one hits and only one hit. And that was the reissue of a record that a friend of mine had done 10 years earlier. And he was playing a club every once a month. And he said, "You know, the record had been out of print for 10 years." And he said, "You know, I know I could sell 1,000, I play every month here, a couple hundred people, they're begging for the record. I know I could sell a couple thousand. I go a couple thousand, we'll sell a thousand here. All right, we'll put it out." So Andy goes, "Oh," and one other thing, a couple months ago, one of the songs from the album was played on the show, "Family Ties," and NBC got the most calls they'd ever gotten requesting where they could get the record. It was out of print, so of course, they couldn't tell it more together. So we put the record out, the family, they reprise the record on the Family Ties show. We make a single anywhere, any record station that plays it, it goes through the chart, through the phones, start lighting up, like they've never seen before, at Longby Hall. It was called "At The Moment" by Billy Vera and the Beatles, and Longby Hall, we have a number one record and a gold outlet. But it was the one we didn't remote the successful hit record we ever had. Wow. And that's exciting. Oh, great story. And here's a guy he's eating out and living, playing a small club, and now he's playing, you know, theaters. I don't know if he ever got to arena. You know, going on the tonight show and whatever, and he's, you know, had a career, you know, ever since that, as far. Oh, and then Michael Booblay puts it on the song on his album. Okay, you know, the album, it just keeps, and it sells 10 million copies, plus. So, you know, and that was your friend's song? Yeah, he wrote? Yeah, that's exciting. Oh, that was, that was the one that nothing was quite more exciting than that, having a number one. Of course, and unheard of for like a small in the label to have another number one record. The other, looking back, the other amazing thing we did, we started a film company at Rhino, called Rhino Films, and we didn't make many films, but one we did that what we really did, the impossible. Yes, we got the movie film, "Pear and Loving" made, and that had, you know, 30 years after the book had been, you know, everyone was, you know, there's not a name in Hollywood that wasn't trying to, you know, get it made. And it was the same thing that through, I guess, me and my partner, just, we just never give up. You know, so, you know, if it took 10 years to do something, we would do it for 10, you know, we were just relentless about wanting something, and just figuring out how to get, navigate through all the little, you know, problems and troubles and figure out. You enjoy that part, I guess I was curious about Motivation. I was figuring out how to get inside the cracks and, you know, it's kind of like treasurine, detective, all the, all the stuff on stuff like that. Yes, so that, that Motivation, you problem solving, creativity, and doing the impossible. what seems like it could be impossible unless you put the steps together. Yeah, a lot of times it's, I remember, you know, there's a band that, my partner and I like, you know, that we knew what, you know, breaking even or do a little bit of business, and we took 10 years for us to get it, you know, get the rights, but we put it out. Wow. 10 years trying to convince the label or convince your friends. Yeah, owner, you know, the owner of the masters and something else, but we never, you know, and there are cases where we did give up and then paid for it because we didn't, you know, somebody tells us no four times and they say, okay, it's no, but then the fifth or sixth time someone else went to them and they were ready to sell or license or whatever. So your first four were just wearing them down, they had a couple more nose in them before they said yes, and that's right. You don't know how many people said no before you went and asked, right? So you might get it. You know, I had another thing for entrepreneurs, I'd say is no, doesn't mean no, that means now don't just keep, you know, keep going for anything. I've made a mistake at, you know, somebody say no, and then believing it and then sure enough, someone else comes in and gets to do. Any, any exciting projects right now or listeners should know about that you're working on. Yes, I'm looking at my list here. I'm working on a one of the things I'm hoping I want to really try to do as I get as I have the time and whatnot is most there were tons of local music shows in the 60s. So every city had their own, you know, the biggest one that what eventually red national was American bandstand. But every city had, you know, their own versions of shows and because the way that shows were done, they were syndicated, they were, you know, they'd send out the shows to all the stations on that tape every week, decisions would have to then ship them back. The tapes get erased and so therefore tons of them great music and artists that there's no visual representation of have been lost. One of the great shows was called upbeat live show out of Cleveland for eight years that had incredible artists on in color. And it's all 99 plus percent of its loss. It's most famous. One clip they have is Otis Redding's last clip, literally two hours before he got on the plane that crashed. Wow. See his last performance. But so anyway, I'm doing a doc. I'm working on a doc about the search for the loss of beat tapes. Yes, I want to see that for sure. You know, our company shop factory, we sold to a private company a few years ago and it's not on a consultant. It's not called radio. And it's the biggest now they've merged with another company. It has the biggest archive of old films and TV shows. So everybody looked for a radio because of the website radio entertainment. I'll put a link to that and we showed that to somebody 2000 films. And somebody like cult films, the Golden Princess Library that has loads of early martial arts films and Roger Corman, who was my idol. The greatest B, the Z filmmaker in history started the careers of Jack Nicholson, James Cameron, Peter Bach, Donovich, dozens of others. Well, that's exciting, Richard. I'll put a link to that in the show notes. And I wanted to just say thank you again for being our guest today. I appreciate you. I could talk to you all day, but I know you've got a you've got a schedule too, but I just really enjoy hearing your stories from an authentic place and I just appreciate your willingness to share this piece of history and for being a part of it. It's just very exciting and personally exciting to me too. So thank you so much. Great to be on that you awesome, Richard. I'll talk to you soon. [Music]