What's shocking about spending any time talking with Drury is just how low-margin the modern music business has become. Though expenses can vary dramatically by geographic location, artist and musical genre, the basic rule is that 70 cents of each sales dollar flies right out the door to cover the cost of music publishing rights and artist royalties. "There are real nuances to how that split works," he said. "But basically, you are looking at a round number 70/30 economics for digital music, with streaming companies being on the wrong side of that split." Then the real costs start: Streaming music firms face significant management expenses to administer royalties and publishing. "In some Western European countries and in Canada, there is a limited number of collecting societies," he said. But in America, he says, there are hundreds of entities that collect royalties, each with the legal power to drag an infringing music service into court.
Even more stunning is how basic questions such as the overall size, growth rate and fundamental profitability of the global music business are still very much an arrangement in progress. "The lucrative CD era was a bubble," he said. "It was a long ride, but it's over." And the assumptions for how much the world will spend on music are subject to intense debate. "There are optimists who say we are at the beginning of a new boom in sales," he said. "And music is truly global. But it is still to be worked out how much customers are willing to pay for music." Tellingly, Drury chose not to comment on my question about what it feels like to run a business that in many ways is bigger than Pandora and Spotify -- which, by some measures, have a combined value of nearly $10 billion -- but is valued at far less. Rather, he said the world he operates in works another more subtle way: "We are trying to square the circle when it comes to finding return in the music business."