Digital Motion dot net

I’ve been going through a lot of old boxes of stuff, doing some spring cleaning. It has reminded me of what it was like running a record label in the not-very-distant past. I started Unit Circle Rekkids at one of the best and worst times in history to start a label, 1994. I’d been doing some cassettes on my own before then, but after moving to Seattle and joining Vassily, I decided that I wanted to put out our 7″, and to me that meant that I wanted to start a label for real. I’d already been doing a zine for a few years, but a label was closer to my heart.

1994 was a great time to start a label in many ways. Indie labels were pretty well established as legitimate members of the music industry and there was a good network of college radio stations and magazines that catered to indie label fans. Production costs of vinyl (pretty much dead and not yet revived by DJ and hipster culture) and CDs had come down into the range of reasonable for a small operation. There were still a lot of distribution outlets as well. Labels like K, Sub Pop and others had shown that you could actually survive putting out good music that wasn’t overtly commercial. A ton of great labels started in this time.

1994 was also a crappy time historically to start an indie label. There was an indie explosion for all the reasons stated above. A ton of labels jumped onto the scene and would flame out after one or two releases, but they would be competing for all the same eyes that your labels was. The cost was reasonable, but it was still pretty high if you were doing multiple releases. The cost of a single CD release could easily cost five or six thousand dollars or more depending on the contract with the band and what the label paid for up front. At that cost, you needed to sell a thousand or two discs just to break even. We didn’t know it at the time (although there were certainly inklings), but the whole model of music distribution was about to be blown away by the internet and bad business designs. The larger labels were getting into a funk that was what was allowing the indies to thrive, but at the same time it was affecting the whole business, especially distribution.

In the mid-to-late 90s, there was a wave of distributors failing and dropping labels. Many distros had been doing their own semi-pyramidal schemes. Distros were always waiting to be paid by the stores, but stores were always waiting to pay until they had to (records stores have always been low margin businesses). If there was a release that was doing well, the distro would be selling it as fast as it could. The label would demand payment for “sold” inventory immediately before sending more (the one time in the relationship when the label had any power). The distro wouldn’t have been paid yet by the stores, so it would “borrow” money from less-successful labels accounts to pay the label with a success. The distro would be essentially going into a situation where it was paying money it owed to record label A to record label B while waiting for the record stores to pay it back for the already sold copies of label A’s release. This was a pretty fragile situation. All it took was a big chain of record stores to go under, or the distro to get too extended, and the whole thing would fall apart. When the distros went under, you were lucky to get your unsold inventory back. Chances of even getting pennies on the dollar for your sold inventory were pretty slim. Lots of small distros went under then, but some pretty big ones went down too and they took out a lot of labels as they fell.

The internet was starting to happen as far as digital sales went, but there wasn’t an established mechanism or even file format. There were a ton of start-ups trying to become something like iTunes. Most of them were funded about as well as the labels that they sought to work with. I lost a ton of time and money dealing with these various start-ups promising to become the answer to digital distribution for music on the internet. A lot of them wanted all the digital rights to our music, others wanted per-song and up-front fees to serve our music, others were selling our music or CDs but weren’t ever paying us for them. It was a complete and utter mess.

The hardest part though was that as a label, you had to deal with the gatekeepers. In those days, aside from touring constantly, a band had to build up their fan base via the press and radio. While there was an explosion of music magazines in the 90s (the cost of their production had also come way down), it was a serious amount of effort to track down all the places to get your music heard and then get those places to actually hear it. For years, I made it a habit to walk into any music or magazine store and buy any magazine I saw that I thought would possibly review Unit Circle’s releases. Any time I traveled, I would return home with stacks of free weeklies, zines, import music magazines or just new magazines I hadn’t seen before. I would put the stack on my desk, read through them and then enter their info (and any other info I saw in their pages) into my database. To find radio, it was a lot easier. CMJ tracked all college radio, a subscription to their trade edition was pricey, but it let you know what every college station in the country was playing. Over the years, I built up a database of a few hundred magazines and a few hundred radio stations that would possibly be interested in my releases. The care and feeding of this radio and press database easily took 25% of my time running the label.

When I was preparing for a new release, I would spend weeks putting together promo kits for all the various venues. Then I would send out all the press copies (as early as I could) and then the radio copies (closer to the release). Then I would wait a little bit and try to follow up with every outlet. There was no mechanism to go directly to fans except direct mail which was very expensive and time consuming and only got to the people who had already contacted you. Radio stations and magazines got hundreds of releases each week (I know, I worked at both in the 90s). Getting them to even open your packages was incredibly difficult. For 300 press copies sent out, you’d be lucky to get 75 of them to even send back the postage-paid reply card to say that they received it. You’d maybe get a dozen reviews if the band had any sort of recognition. For 300 radio copies, you might actually get enough air play to make the charts on a few stations. Back then, though, this was all done on paper. To find out if you were charting on any radio stations each week, you had to actually scan the top 30 lists for every college station in the country that reported that week. Every week. Nothing makes you want to rip out your eyes than scanning a few thousand lines of text to check for a couple band names every week. Sending out promotional copies and tracking my recent releases was easily 50% of my efforts running the label.

The one thing that would get you reviews was buying ads in the magazines, but of course that also added to the cost of each release and put the label (and artist) further into the hole. Plus, for all the ads that I ran in all the magazines over the years, I can pretty much say that I saw almost no sales from it directly. I was mostly acting as a benefactor to the magazines to get some good press.

The reviews and radio play you got was your currency though. It was what got you more reviews and radio play. Reviews and radio play helped you convince distributors to carry your releases, actively sell them and get them into stores. The problem was that unless you had a real hit record, getting good press or radio play didn’t necessarily translate into sales, and then you were still dependent on the store to pay the distributor, and the distributor to pay you.

It was multi-directional chain of sucking. In one direction many bands were trying to get the attention of fewer labels who were trying to get the attention of fewer radio stations and magazines to get the attention of distribution sales folks to get the attention of record store buyers all of whom were getting constantly barraged by folks seeking their attention. In the other direction, record stores were avoiding paying distributors who avoided paying labels (some of whom) avoided paying their artists.

About 20% of my time was spent working with the distros. Making sure they were stocked and trying to sell Unit Circle releases, bugging stores to request Unit Circle releases from the distro, packing up CDs to mail to the distros, and bugging the distros to pay me the money that they owed me.

The remaining 5% of my time was the “fun” stuff: listening to demo tapes (which I almost never did because I didn’t have time (sorry bands who sent me tapes)), working with bands, and working on new releases. 95% of what I did was mundane office work and was no different than any other manufacturing business. It was The Office, except that I was everyone from the regional manager, to the receptionist, to sales, to accounting.

Where was the music fan in all of this? No where. Really, they were divorced from the music on so many levels. They bought the record (hopefully) from the stores, they maybe read the reviews (I doubt many folks ever read reviews of bands they never heard of), they possibly heard the music on the radio. From the label perspective though, the music fans were out there somewhere. If you were lucky, you might get a nice note in a mail order envelope, but mostly not.

There was only one way for the musicians to connect with the people who bought their music and that was to tour constantly. It was the only true way to actually build a following then (and it is still the best way now, I’d say). It took years of hard work playing the same cities over and over, slowly building a fan base, earning no money, sleeping on people’s floors. That was what really sold the records and made the band successful because that was the true connection between the people that made the music and the people that listened to it.

Now, we are in a new world.

There still are the places you want to be covered in, but they aren’t the gatekeepers. Musicians can interact directly with their fans, build their fan bases, get their music to new people, and even sell their music all without middlemen. It is still a lot of work, but it is very different work because it is about the direct interaction rather than trying to get the attention of the gatekeepers. The cost of production continues to decline and distribution continues to get easier. Word of mouth spreads faster as well. All of this has changed the equation to put the power into the hands of the actual creators as opposed to the middle men and distributors.

Of course, the downside today is that lowered costs of production and easier access to potential fans means that the competition for attention is fiercer than it has ever been. It is just as easy for an artist to produce quality work and go completely unnoticed today as it was 10 years ago. Instead of not being able to get a label to release their work, they can’t get anyone to come to their myspace page. The new technology lowers the bar and democratizes the process, but it still doesn’t make sure that the cream will rise to the top. A current artist may now spend 75% of their time tweeting, friending people on social networks and trying to get people to hear their music and only 25% of their time actually making music.

At least now though, everyone has a shot.

[Update 7-12-09]
Trent Reznor posted some pretty sage advice about making your way as a new music artist in the current world in the NIN forums.

No comments