Sunday, November 6, 2011

The 10 commandments to successfully run a label [part 1]

By Emmanuel Legrand

This is the first of a two-part series on indie labels that was originally commissioned by MIDEM for the 2011 edition of the music trade show. I thought its content would still be of interest and relevant a few months after it was initially published on the MIDEM blog in January 2011. In part two, we will hear from veterans of the indie sector.

Think of a music world without Motown, Atlantic, Verve, Island, Elektra, Sire, Chrysalis, Virgin, Rough Trade, Mute, Def Jam, 4AD, Sub Pop, ECM, World Circuit, Domino, Bella Union, to name but a few…
These labels have all made a significant mark in the popular culture of the 20th Century. They are trusted brands. Their strong image was backed by impeccable artistic credentials. Their heritage is huge, and (at least at their beginning) they all abided by the independent ethos, financially and creatively.
One thing that links them all is that they could all be identified to specific individuals – Atlantic/Ahmet Ertegun, Verve/Norman Granz, Island/Chris Blackwell, ECM/Manfred Eicher, Motown/Berry Gordy, Domino/Laurence Bell…
None of these entrepreneurs who started some of the best-known labels of the past 50 years had millions in the bank and a good understanding of how things worked. It all happened organically.
After all, when Ahmet Ertegun and Herb Abramson founded Atlantic Records in 1947, they did it with a few thousand dollars borrowed from Ertegun’s dentist. In the early days, they did everything from recording artists to manufacturing and shipping records, not to mention billing. And they learned their trade this way. That they could also spot and produce geniuses was a bonus too… Artistically, they first focused on jazz and R&B before moving into mainstream rock.
In Detroit, Berry Gordy set up his label in a house and tried to copy the car industry’s assembly line in order to produce music at the most efficient cost. And it worked! Not least because he had also assembled around him what was probably the most talented generation of songwriters and musicians.
Across the Atlantic Ocean, emulated by the advent of the 45rpm, Frenchman Eddie Barclay started to build up what would become the most successful indie label in the country, attracting talent such as Jacques Brel, Léo Ferré and Charles Aznavour.
In 1959, Chris Blackwell started Island in Jamaica with a few pounds and lots of goodwill, until he got his break with ‘My Boy Lollipop’, which allowed signing some of the most creative artists of the times (Nick Drake, John Martyn, Roxy Music, Cat Stevens, Free, King Crimson, Traffic, and, of course, Bob Marley and U2). 
Later, Terry Ellis and Chris Wright went on to set up Chrysalis Records because nobody in the establishment would dare to sign the acts they were representing.
Closer to us, the 70s generation of Martin Mills (Beggars Banquet/4AD), Daniel Miller (Mute), and Geoff Travis (Rough Trade) started their labels with no money and little knowledge of the business, but with a fearless DIY mentality. There was also this eccentric Brit named Richard Branson who started a mail order business, which morphed into Virgin Records, and ended up with an airline company, courtesy of Mike Oldfield’s ‘Tubular Bells’…
The hip hop/urban music era saw the rise of likes of Russell Simmons (Def Jam), Sean Combs (Bad Boy Entertainment), Tom Silverman (Tommy Boy), among others.
Altogether, these gifted and talented executives – many of whom have been celebrated at Midem over the years – created the music business as we know it. They nurtured some of the world’s most popular artists. And if, unfortunately, most of these independent music houses have now fallen into the major’s fold, and some have even stopped to exist as imprints, their spirit is still alive.
But could the same success stories be replicated today? Is there a new generation of entrepreneurs ready to carry on the flag of independence? And under which conditions would these executives approach the business? These questions will be at the heart of Midem 2011’s Indie Summit. A panel regrouping the founders of some of the most creative new labels to have come up in the past few years will offer their views on how they have made it.
To feed the debate, we have asked a series of “elders”, who have all started independent labels at some point I their career, to share their experiences. Their recommendations can be read in full below, and we have tried to sum them by putting them into “The 10 Commandments” (or shall we say the 10 “rules of engagement”?) for aspiring music entrepreneurs.

Our “elders” were:
Bob Frank, Merlin (USA)
Martin Goldschmidt, Cooking Vinyl (UK)
Richard Gottehrer, The Orchard (USA)
Michel Lambot, PIAS (Belgium)
Korda Marshall, Infectious Records (UK)
Martin Mills, Beggars Group (UK)
Simon Raymonde, Bella Union (UK)
Tim Renner, Motor FM (Germany)
Dan Storper, Putumayo (USA)

1. Just do it!
If you feel like doing it, just go for it! Do not find reasons not to do it, for you will find a million. As Tim Renner from Motor FM states, do it if you feel you have a mission, a passion for it. For Martin Goldschmidt, managing director of UK indie group Cooking Vinyl, is goes down to one question: what are your motives? “Why are you doing it?” he asks. “If you want to get rich, forget it, get a job in a bank. If you want to hang out with stars, wrong answer. If you want to turn people on to music you love and work with musicians you are passionate about then welcome to the club.”

2. Be passionate
All the people surveyed for this piece agree that passion will be the most important driver for anyone willing to build a business in the music sector. “You have to have passion, passion for the business, passion for talent. Don’t think you are in it to make money,” offers The Orchard’s co-founder Richard Gottehrer. Adds Korda Marshall, co-founder of Infectious Records, “You have to have passion, a love of music and a lot of self-belief. If you are simply trying to set up a business, don’t start.”

3. A lil’ bit of money helps, but don’t count on it
Long are gone the days when an ex-major label executive could start an indie label with a staff of 15 in lavish offices before even releasing one single (we have names!). Most indie labels were started with limited funds. Ahmet Ertegun started Atlantic with $10,000 he borrowed. Seymour Stein and Gottehrer each put in the pot $10,000 to start Sire. Tom Silverman borrowed money from his parents. Having a little bit of capital (from friends, business relations, even venture capitalists) helps starting, but, as PIAS co-founder Michael Lambot says, it can also put a lot of pressure on you. “Don't be in a rush to be the next Interscope,” says Bob Franck, who ran US indie Koch. “Start small and grow organically at first.”

4. It’s all about A&R
Spotting the right talent is an art in itself. That’s where time, resources and energy have to be channelled. “You have to chose artists that you love and give them the best of you,” says The Orchard’s Gottehrer. “You have to have talent to recognise talent and help artist with a direction.” Infectious’ Marshall goes as far as saying you should only sign artists “you would mortgage your house for. You also should look at A&R in terms of space. You cannot compete with majors because you cannot afford it, so find your own space.” Motor FM’s Renner adds, “Don’t go for the “fast hit” if you don’t have the money and manpower to compete with the majors.”

5. But it is also a business, so control your costs
“If you ignore the money and the business side you won't survive,” snaps Cooking Vinyl’s Goldschmidt, who adds, “You have to get the balance right between music and business. The music bit is easy. If your music is great it will get noticed, if not you will waste your time. The business side takes a lot of learning and you need to get it right.” For Infectious’ Marshall, success is all in the manner you “manage and control your expenses”. “The secret of making money is not spending,” he says. To which Gottehrer adds, “You have to manage expenses and expectations.”

6. Be different
Chose an angle, a niche that makes you stand out. Ex-Cocteau Twins turned label manager Simon Raymonde, explains, “I can't see the point in having a label that's LIKE someone else's, or that signs bands that someone else would. I don't compete with other labels for bands and don't wish to.” Indeed, all the great labels had something that made them different from the competition, which Bob Franck sums up by saying, “Do not try and be all things to all people.”

7. Chose who you work with
It’s a people’s business and who you work with is paramount. Work with like-minded people. For Bob Frank, “Never work with people who don't bring the same joy, love and passion to the label that you do”. Bella Union’s Raymonde is blunter, “Working with dicks is a real pain and if you work with people you like, at least if the record doesn't sell, you KNOW they're nice and they did their best.”

8. Promote your music and your artists on all platforms
In the 1980s, Island records made a poster, which was sent to all the people working with the label. It featured a beautiful drawing of an island, with the strap line, “Something terrible happens if you don’t promote…” and in very small font size, at the bottom of the poster came just one word: “Nothing!”. In the world of music it is all about reaching out. And today, reaching out means using all the tools at your disposal. As Putumayo’s Dan Storper puts it, “Music unfortunately doesn’t usually sell itself. Make people aware via promotion, marketing, social networking, etc. Build word of mouth.” And, as Beggars Group chairman/CEO Martin Mills, explains, “The most important thing is to spread the word: if the music is wonderful and connects everything else will follow.”

9. It’s not simply about recordings
Running a label is about A&R but includes activities in management, financing recordings, pitching to music supervisors, finding good agents, hiring a PR company, working out licensing deals, etc. In the 21st Century, it is advised not to think simply in terms of recording. PIAS co-founder Michel Lambot says labels have to be more than labels and be “music houses”. Adds Lambot, “Try to provide your artists with the best environment for them to thrive and develop. You have to look at all aspects of their career and also get revenues streams from all aspects by getting access to all rights.” Korda Marshall agrees, “It is important to have a bundle of rights and not simply the rights to the master recordings.” Recordings have a value in itself, but, building a music company is about building a brand.

10. Stay focused and accept there will be mistakes along the way
You cannot be in places at all times, so chose your battles and stay focused on your game plan. As Putumayo’s Storper puts it, “Don’t spread yourself too thin.” And in the process, you will make mistakes, but that’s part of the plan too, says Beggars’ Mills, “Music is an imperfect industry, you have to take risks and that means you'll make mistakes – accept them and learn from them.” Bella Union’s Raymonde adds, “I think mistakes are good to make as long as they don't affect the bands!”

10 Bis. Be lucky and have fun!

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