Recently, on a professional Industry group, someone posted the question, "Whatever happened to all the pioneering record labels?" I thought I would try and give some perspective on that topic here.
There is one problem that has always been a problem in this industry..but even more so today:
Investment and operating capital, or just plain simply: MONEY! For years I have been trying to set the framework for just such a pioneering label. I did some A&R consulting for a label in the past and got to see first hand the pretty ugly financial truth to operating a label. From that vantage it's quite easy to see why there aren't a million pioneering labels out there. Problem #1: Distributors don't pay fast enough, or at all. Shelf space is finite, subject of fierce competition, and being downsized and out-dated more each day. And returns can crush a label owner and come unexpectedly at any time from a distributor.
Now, during this technological 'weeding out' phase where all these new "models" for distribution and marketing (iTunes, etc.) are competing for dominance in the market, we are in an odd flux where no one is quite sure what the rules are, and, as usual, the established "powers that be" are fighting desperately to regain control of and/or co-opt the innovations that were created specifically to circumvent their system in the first place.
Right now most people with the entrepreneurial spirit, experience, and technical capacity to run a label are busy throwing down in their craft and maintaining financial solvency. IMHO a couple of things need to coincide to create the circumstances that can foster a successful "Pioneer" or alternative label:
1. Money: But that's not enough on its own... you could give someone 100K to get operating and when that money ran out and they were waiting to get paid by distributors, the repo men would already be coming gut the label's office.
2. Research and Experimentation: New distribution methods and their roles in the emerging evolution of this industry need to be studied and paid attention to. A new label pioneer will have to be clear on how they are going to divide their energy between divergent markets and distribution methods.
3. Cooperation: A community of Artists and Labels being innovative and proactive in marketing (viral and otherwise). Artists have got to get over the notion that getting signed to a label means having everything done for you, and Labels need to be in tune with the Art, Artists, the audience, the markets and the money side simultaneously, if a label is to be more than a part-time expensive, time consuming hobby with every bit as many liabilities as a major label (a lawsuit for copyright infringement looks exactly the same when it arrives on your desk as when it arrives at Sony...only difference is the average indie label doesn't have an army of attorneys on retainer. To really make a splash that gets sufficient marketing attention (even for a niche market) it requires co-mutual and creative partnerships and activity that moves that agenda forward with grace and purpose.
4. A Market (with enough disposable income to be customers):
However odd or eclectic one's "niche" might be, a label has to find their market and get them to the door with cash in hand.
5. Luck: Yup, good ol fashioned luck…to be in the right place at the right time, to meet the right people, to sign the right Artists, to hit a market trend just before the ride is about to begin with a quiver full of just the right arrows to hit that mark.
So while this laundry list of the complications and obstacles to running a successful label seems daunting, there are some, myself included, who are working to stir the air enough to start creating the conditions for that perfect storm…In this economic environment however, the process becomes even more lengthy and challenging, no matter what clever angle you come up with. The prize will go to those who have the time, passion, skill, money, and perseverance to weather the economical and technological storm that is creating our current condition, and to be lucky enough to create or choose a business model that works.
Here’s wishing the best of luck to all those taking the time to make the effort!
T. Reed – TAO X Productions - Nightmare Sound Laboratory
