There are plenty of music products companies that frequently grab headlines with big news—acquiring new brands, inking big deals, collaborating with retailers on cool events—but few of them are having as fantastic a run as Hal Leonard Corp. The Milwaukee WI-based company, whose roots are in print publishing but whose portfolio of offerings has increased exponentially as a result of its distribution activities, is now recognized as one of the highest-profile and most successful organizations in the music products space. This month, The Retailer speaks to Doug Lady, Senior Vice President, who has been with Hal Leonard since 1991, about the company’s history, its unbreakable partnership with the dealer channel and its extensive involvement with online content, as well as its potential to reach even greater heights.
The strategies discussed may well be a case study in how to succeed in today’s music market.
The Music & Sound Retailer: Let’s begin with your personal background. Trace your own history with musical instruments, music products and making music. Touch on what initially captured your attention. During your earliest years, what steps did you take to pursue that initial interest?
Doug Lady: I came from a very musical family. My parents not only encouraged me to be involved in music but, in fact, essentially insisted upon it from an early age. Luckily, I didn’t have to be pushed too hard. I was excited about playing from the beginning. My mom taught violin and played violin in the Peoria Symphony for 28 years. One of my uncles played flute in the orchestra, and another played cello. My dad didn’t play, but he appreciated music and supported my interest. There are early pictures of me “air conducting” the “1812 Overture” on a mini podium. (Pretty nerdy, yes?)
I began on piano and, although my parents were not wealthy, they enabled me to take private lessons on other instruments, too. It was up to four instruments at one point: piano, trumpet, drums and organ. Basically, the idea was to make sure I had no time to get into trouble. (At least, that was the theory. Then, of course, l discovered girls while in high school!)
After music school, I worked at a couple retail music stores in Illinois. That’s where I began learning the music retail business, prior to coming to Hal Leonard in 1991. Many of us at Hal Leonard worked in music retail at some point. We feel it is very important to have this background, so we know intimately what it’s like to interact with customers and how best to serve their needs.
The Retailer: Given that Hal Leonard is the world’s largest music print publisher, in addition to being the distributor of a wide range of music products, it’s clearly a well-established and well-respected company. Tell us a bit about Hal Leonard’s history, detailing how the company has evolved from its early days to today.
Lady: Yes, we are the world’s largest print publisher and, although some think of us as a “pop” publisher and distributor, we are much, much more than that. Hal Leonard is the largest educational print publisher, as well, representing the number-one-selling methods and teaching materials for band, orchestra, piano, guitar and many other instruments. In fact, to retrace our history, the company was founded by three musicians and former bandmates who led a popular jazz band in the late ’30s. They were Harold (Hal) Edstrom; his brother, Everett (Leonard) Edstrom; and Roger Busdicker. In fact, the band was named after the two brothers: “Hal Leonard.”
After World War II, two became band directors (Harold and Roger) and Everett started a music store in Winona MN. Harold and Roger saw a need for their school bands to have access to popular music arrangements to keep students interested and to keep them playing. The three gentlemen decided to publish those arrangements, and that’s how the company began. The founders started by gaining the licenses to create popular arrangements for school bands, orchestras and, soon thereafter, choirs. Over the last 68 years, our company has innovated and evolved in many areas: from our first publishing of school band and choir arrangements, to creating the leading home organ instruction course in the 1950s (Pointer System), to the first self-teaching methods with audio (Learning Unlimited) in the 1970s. Then, we dove into the world of popular music from the 1980s forward, enabling us to make popular music available and accessible for musicians of every instrument and all ability levels.
Hal Leonard has experienced growth and expansion in many areas in recent years. We have incorporated technology into many of our physical publications, enabling musicians to stream or download audio and video from our proprietary My Library cloud to accompany their Hal Leonard songbooks and instructional publications. Also, the latest technological component to Essential Elements, the number-one band and string method in the world, is Essential Elements Interactive (EEi). It connects the teacher to the students and parents, so they all “interact” online in the school music learning and playing experience! We also continue to update our successful Digital Retailer program, allowing dealers to complement their physical print offerings with digital download sales. Now, they can offer digital downloads in the HTML5 format through our own Noteflight technology.
The Hal Leonard team.
The Retailer: You’ve been affiliated with Hal Leonard for nearly 25 years, currently serving as the company’s Senior Vice President. What keeps you motivated and eager to come to the office each morning? What’s the best, most rewarding part of your job?
Lady: I am very lucky to be working with some of the most creative, passionate and talented people in the business. People who visit our offices are amazed at the average tenure in our company. Both in our Milwaukee and in our Winona offices, we have a number of employees who have worked at Hal Leonard for 20, 25, 30 years and beyond.
As far as the most rewarding part of my gig, there are many answers to that question. I like the fact that our corporate culture encourages new ideas and concepts from all our people. Our Chairman, Keith Mardak, used the phrase “do it” years ago, well before Nike adopted its version. We are definitely a “do it” company. Our product-development team comes up with some phenomenal products (more than 3,200 per year), but we also invite other employees to come forth with their ideas. Of course, we also get a lot of feedback from our dealers on what cool, new products or tools could be produced to help get more people playing music. It makes the job rewarding when some of your ideas come to fruition and then they succeed.
Hal Leonard boasts highly efficient, technology-integrated production and distribution facilities.
The Retailer: When you look at Hal Leonard as it currently exists, what would you say you’re the proudest of? What makes the company stand apart not only from direct competitors in the print music publishing and distribution categories, but also from companies in the broad MI industry? What’s the “secret sauce” at Hal Leonard?
Lady: Well, I would say that, from an altruistic point of view, I, as well as probably most of us here at Hal Leonard, am proud to be able to provide innovative products and tools that in some way are helping people of all ages and abilities to learn to play a musical instrument or to sing. What could be more rewarding than that?
As to what sets us apart in the industry? On the front line, we strive to be available for our dealers when they need us. Our EZ-Order line is open seven days a week, until 9pm Central Time on weekdays and until 5pm on weekends. We want to be here when dealers need us, and when they are open. Our sales staff of 45 people is extremely knowledgeable about our product, and they’re trained to be the best in the business in customer service for dealers. And our Dealer Access Web site enables dealers to gain access to product information and to upload their orders seamlessly at any time, 24 hours a day. We’re currently working on enhancing the Dealer Access site to add even more bells and whistles to enhance the retailer’s experience.
None of this could be accomplished without our “backbone,” which is the well-oiled machine that is our distribution, printing and warehouse center in Winona. Our new distribution facility was built in 2008 and it’s state of the art in every way, with the goal of getting orders out the door in the most expeditious and accurate manner. Ninety-five percent of our orders ship in 24 hours and, being centrally located, we can reach either coast in a couple days. Our Winona employees have an incredible work ethic. We actually have third-generation workers, whose grandparents worked for Hal back in the ’40s and ’50s! I guess that might truly be the “secret sauce” here.
Hal Leonard is a beloved fixture at NAMM shows.
The Retailer: Hal Leonard recently announced its Virtual Music Vault program, which launched March 1. The company now has boxed subscriptions for sale for Noteflight, Groove3 and Drum Channel. With both the Vault program and boxes, Hal is making access to popular software and Web sites for musicians easy via retailers, thus creating a new product category for stores. Share details about this initiative.
Lady: This is an exciting new concept that we have developed for our dealer network. It was announced at NAMM and expanded upon at Summer NAMM. With the change in consumer patterns trending to online video downloads and subscription services (à la Netflix), we now have a very cool way for dealers to benefit from providing this online content to their customers. We now actually have four subscription boxed products that dealers can either sell in their stores or sell online: Noteflight (online musical notation and composers community), Groove3 (a provider of online training videos for gear and software), Guitar Instructor (video lessons, tabs, play-along tracks) and Drum Channel (online video drum lessons). The benefit is that customers can get great deals only available through retail, which they can’t get online. By purchasing subscription boxes or downloaded codes from retailers’ stores or sites, they can get extra free months or years of subscription access.
The Virtual Music Vault is an incredible tool that gives retailers instant access to some of the top brands of software that we represent, such as Cakewalk, PreSonus, Propellerhead, Acoustica, IK Multimedia and Antares (Auto-Tune), along with many others. All these subscriptions and software programs are available for retailers to sell at the store level, or from their Web sites via the Vault program.
The Retailer: Discuss Hal Leonard’s commitment to the brick-and-mortar MI store channel. Is working collaboratively with brick-and-mortar music dealers a key part of Hal’s bedrock, fundamental approach to doing business? Expound on Hal Leonard’s dealer-focused philosophy.
Lady: Definitely always has been, and always will be! That has been Hal Leonard’s core philosophy for years. We have a staff of 45 salespeople: about half are phone sales and support, whereas the other half travels regularly to their territories, visiting music dealers to see how they can help them be successful with print. As mentioned, many of our district sales managers and account managers worked in music stores previously, so they have a retail background, as well as print product knowledge, to help them be great counselors to our retailers. Also, with us now being very involved in distributing technology products, such as recording software, live gear and accessories, we have a highly trained sales “Tech Team” that also visits stores frequently to make sure our dealers understand all the technology products that are available from Hal Leonard.
In the past, prominent manufacturers needed to require large minimum purchases from dealers to be able to represent those lines. Now, because of our ability to provide streamlined consolidation with Hal Leonard shipments, our retailers can order what they need and test the waters on new lines. That is healthiest for our retailers, because we feel it’s about “sell-through”…not just “sell-in.” We are only successful if our dealers are.
The Retailer: Is there anything the dealer channel could do that would be helpful to Hal Leonard as a company? Do you have any suggestions for the dealer channel that would help retailers, in addition to helping your own company?
Lady: Well, what’s helpful for Hal Leonard is our dealers succeeding with, and profiting from, print music. Although a good number of dealers see the value of assigning a dedicated print manager to their staff, we realize not all of them are able to do that. That’s why we have a very successful Vendor Managed Inventory (VMI) racking program that enables us to manage our dealers’ print inventory for them. It utilizes our systems and expertise, and it makes things simple. In tandem with this is our SAFE (Seasonal Automatic Fully Exchangeable) program. With SAFE, we refresh the racks with new and seasonal product and we call back any slow-moving or non-seasonal titles, making dealers’ print inventory fresh and relevant at all times. I would ask those retailers who are intimidated by print-music management to consider those two programs. Let us make it easy for you with VMI and SAFE!
The Retailer: What does the future hold for Hal Leonard? What can company-watchers expect over the next year…five years…10 years?
Lady: We regularly look at what future potential diversification we could consider for our company that would benefit our retailers and consumers, as well as grow our own organization. A few years ago, we changed our name from Hal Leonard Publishing to Hal Leonard Corp. We feel as though we are continuing to become a true “music company,” providing more and more tools for all musicians, whether it’s via printed music on a page, reference books and software to record and teach, gear to play and perform with, or accessories and gifts for the musician. On a related note, we were recently honored to again receive a “Company to Watch” designation at the “Best in Show” event at Summer NAMM, which was voted on by a dealer panel. It was also noted that Hal Leonard has been named in each of the last 10 years’ worth of “Best in Show” events. That helps to reinforce to us that the programs and products we’re creating are valued by our retailers. It’s motivating to continue to raise our own bar to help our dealers succeed in serving more musicians.
Further, we feel that teaching music through technology is clearly part of the immediate and extended future. As Hal Leonard has done for years—and as we plan to do well into the future—we want to provide the most innovative and educationally sound solutions to help teachers succeed in getting kids into music programs and keeping them playing for life. Of course, our retailers are the conduit in providing those solutions. They have been a part of our success for 68 years, and I know they will be in the future…whether it’s five, 10 or 68 years from now!