labels: Survival Of The Fittest
By Chris Standring
We all know that the record business is
in major transition, has been for a few years now. Still, major
labels and independent labels are trying to figure out what the
new model is. But the real problem with most labels is that they
still want to be in 'big business'. This is the first real issue
labels have got to deal with. Because CD sales are on the downturn,
record labels are cutting back on staff (hence the EMI shake up
recently). But I have my own opinion about this. I firmly believe
any existing record label that has an office staff on salary
is now doomed to fail. And the old model where labels had one
or two successful acts in order to 'fund' 80% of their other failed
acts, absolutely needs to go. Any label existing today thinking
that this is something that even has a chance of working has its
I would go further; a record label these days can barely survive
on the concept of a 'failed' record at all. Harsh news I hear
you say, considering CD sales are so bad right now. But I don't
think so. Actually I've never been more positive about the music
business because I feel like I have finally got a grasp on how
to make it work. Let's talk about that.
So the question you might be asking is "Can a record company
survive at all right now?" I say yes absolutely, but
it has to be approached very differently. First, the concept of
salaried employees has got to go completely. I am watching friends
who have record labels sink right now. They have investors funding
six figure annual salaries. They are signing and advancing new
artists and consequently having failed records. But what is a
failed record? It's completely relative isn't it? If a major label
invests a million dollars into a project and sells 100,000 units,
that record has ostensibly failed. But if an independent label
spends $50,000 on marketing and sells 30,000 units, they are making
a huge profit!
So the answer? A record company, in my view should be a partnership
of no more than 4 or 5 people, none of whom are on salary but
work through profit share alone. If this is a label starting from
scratch then growth has to be a step by step process. If it's
an existing label, the operation needs to be reorganized right
now. Each one of those partners should have a different area of
expertise. For instance:
Get the idea? Each partner absolutely must
have their own individual area of expertise. One of the reasons
why the old model is not working is because staff on salary have
absolutely no incentive to make a situation work, save perhaps
the fear of getting fired. But a partnership situation is very
different. The very lifeblood of the label is at stake so there
is EVERY incentive to get each project 100% right.
- Partner a): The Record Producer
Presents finished masters to the label. Understands the needs
of the market and delivers killer tracks.
- Partner b): Head Of Business Affairs
Deals with contracts, licensing, and royalty payments.
- Partner c): Head Of Marketing
Buys programs at retail and online, solicits situations and
creates opportunities for each project.
- Partner d): Head Of Radio Promotion
Works radio in house and talks to promoters and agents about
situations for the artists on the label.
Labels need to be smart about each artist they sign. From here
on there is no signing quota to meet. Why? because a failed record
means way too much now. Bidding wars? forget it! Labels need to
stop being sheep. That whole thing about signing an artist just
because everybody else is jumping in. Come on! I can't tell you
how many crappy artists I have seen that created such a buzz,
got their nutty advances and were never to be seen again. Why?
because those labels bought into nonsense and paid the price.
Now should be about developing an artist, just like the old days.
Perhaps I am being idealistic but I don't think so. I finally
set up my own record label "Ultimate Vibe Recordings".
As an artist, I just couldn't face the idea of signing another
deal where I was at the mercy of another bunch of loonies who
got it all wrong. And the interesting thing is that now I have
to get it right because my dime is at stake!
Another alternative way to set up a new label is via 'pass through
distribution', where you ostensibly do a joint venture with another
label. I did this recently with a company I know very well. They
take a small percentage, something worthwhile to me as I now have
access to their distribution pipeline. So I now have great national
distribution through Ryko who have a great reputation for paying
on time. That is comforting. I have the benefit of their marketing
expert who of course is teaching me all about retail programs
and effective marketing online and off. I have outsourced radio
promotion and I have two managers who help me keep the wheels
spinning. Theoretically it is a great situation. Of course I am
pretty hard on myself about what track I send to radio because
once again, it is my dime. But so far my new single "Love
& Paragraphs" is having a tremendous reaction, so
I'm thinking I might have done things right, but time will tell
whether I lose my shirt or not!
So with all said and done, how does all this affect you?
Well first, I want to drive home the fact that signing a record
deal is not all it was cracked up to be. Keep in mind that you
need to ask yourself "Do I want to be signed to a label
that may be out of business next year?"
My honest advice to the indie artist right now is to build those
grass roots and create as much as you can to attract the people
you need to be on board with, and be very selective about what
kind of situation you get yourself into. I also think that all
this indie music marketing that so many of us throw out at you
can be horribly overwhelming. It is rare that the creative side
of the brain is as switched on as the business side. We are generally
not right brain-left brain people. Most are one or the other.
And with this in mind I suggest you find a business partner to
start building your career with. Find a tenacious smart person,
possibly a friend you already know, who is fascinated to learn
and figure out the busines side, and how to make it all work.
Somebody who is not going to quit on you in six months. Someone
who believes in you. Attack it together. Set goals, however small,
and build your career. These people are not easy to find but they
are out there.
The music business is waiting for that new guy to come along to
present the new business model. Where is today's Richard Branson?
My advice is to take the bull by the horns and build your own
empire, piece by piece. Maybe that future entrepreneur is you!
| Chris Standring
is the CEO and founder of A&R Online (www.aandronline.com).
He is also a contemporary jazz guitarist presently signed to
Ultimate Vibe Recordings. For more info on Chris' recording
career go to his personal website at www.chrisstandring.com
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