|Record Labels :
Suvival of the Fittest
By Chris Standring -
- February 2008
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need to ask yourself 'Do I want to be signed to a label that may be out of
business next year?' "
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 days numbered.
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
- 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.
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.
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
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!
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
with music released on his own label Ultimate Vibe Recordings. The music is
marketed at NAC and Urban AC radio. For more info on Chris' recording career go
to his personal website at www.chrisstandring.com