Business Time: Record Label “Virtual Panel”

Frank Woodworth: I think it will depend on the hardware that people adopt. Cassettes became popular because of the Walkman. CD’s began their rise once people started buying CD players. MP3’s became popular when people started listening to music on their computers and ubiquitous once the iPod was adopted. If there is hardware to make streaming easy, portable and clear then I think that will be the future. If another electronic device becomes dominant, then that format will be.

HT: Do you use any form of protection against piracy such as watermarked review copies, internet policing agencies to remove illegal downloads, or DMR?

KC: I’m working on an indie level, so I don’t have the funds or time to watermark review copies or anything like that. I just have to have faith that the music writers, DJs, and promoters I’m sending advance copies to are going to respect the artists and the position I’m coming from enough not to leak stuff early. But I’ll tell you, it happens all the time when the same day one of our albums is released, we see it up on a torrent or file share site.

And that’s really a HUGE slap in the face. As an example, when our new Garage A Trois album Power Patriot came out, the same morning there was a link to download it free on one of those Phish message boards. I mean what kind of asshole does something like that to working artists/musicians such as Garage A Trois. They self fund a studio record out of their own pockets, we squeeze enough resources together to get it pressed and released and some fucking squirmy d-bag hiding behind the anonymity of the internet takes it upon himself to give it away for free.

FUCK that person and everything he’s about. They can come up with a 100 ways to Sunday to justify their behavior in their own mind, but the bottom line is they’re doing a huge disservice to the music and the artists. It’s essentially taking money straight out of working musicians’ pockets. So, in that case we will issue letters to remove those links where we can, but usually by the time we catch it, the damage is done.

FW: We rarely use watermarks, but when we do it is for the artist integrity. If an album is not ready to be released because the artist has not decided upon the artwork or album order or something else that is important to their vision, then watermarks protect against premature release of an incomplete statement.

Once an album is manufactured then there is really nothing you can do at that point to stop it from being shared, so we like to say that if your album hasn’t leaked then you have a problem because there is no interest.

“FUCK that person and everything he’s about. They can come up with a 100 ways to Sunday to justify their behavior in their own mind, but the bottom line is they’re doing a huge disservice to the music and the artists. It’s essentially taking money straight out of working musicians’ pockets.” – Kevin Calabro on those who leak albums

HT: Frank, since you just hosted a CMJ panel on the topic; what are some keys to running an efficient label in the modern age of digital music?

FW: Regardless of the age its about creating something quality, and giving people a reason to care about the music. Try everything. No one knows what the next trend will be so you want to be positioned when something worthwhile takes hold of the populace.

Also, you want to keep your marketing budgets low and use the Internet’s ease of distribution to your advantage rather than just a detriment. The same technology that lets people listen to whatever song they desire, also allows artist and labels to reach millions of people at a very low cost. This is why Ad agencies newspapers, and magazines are all about to go through changes much like the music business.

HT: How has your typical deal structure changed in the past five years?

KC: The structure has changed a great deal. I’m basically doing joint ventures across the board at this point. We’ll recoup the expenses for the money we fronted for promotion and manufacturing, but once that’s recouped the artist is getting paid on every sale. Everything is transparent.

Most of the deals are licenses too, so the artists retain ownership of their masters. The only time that might not be the case is if the label is paying for all the costs in recording the album, but those situations are few and far between these days.

FW: It depends on the company and the level of the artist, but overall there is no typical deal anymore. Ninety percent of the time major labels will not do a deal with a developing artist that does not include multiple revenue streams (commonly referred to as a 360 deal).

Many established artists are creating their own companies and going without a label at all through platforms like Topspin and Tunecore. There are also companies who are only making deals for the master synch rights, and foregoing the selling of music to focus only on licensing.

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HT: Kevin, assuming you do a good job with A&R and publicity, what would you classify as the best case scenario for a label these days?

KC: The best case scenario for a label these days is to release a record that reaches a wide enough critical mass that it pays for itself and maybe even becomes profitable. My goal has always been to put out great records and try to expose them to as many people as possible, plain and simple. My primary objective in A&R is to curate an assemblage of artists and albums that speak for themselves, but also compliment one another.

Ultimately this will draw the attention of a wide assortment of passionate music fans; the ones who do buy music. Somebody who’s buying a Nathan Moore record will subsequently discover a record by Utah Green and somebody buying Garage A Trois will then be led to Marco Benevento. I personally think labels are still really important in that way. And I think any of my artists will agree.

When done right, the label also plays an important role in allowing the artist to go about his job of being an artist. As far as I’m concerned, artists should have their antenna up there in space pulling down inspiration and vision to speak through their music.

The label’s job is to help them find their audience and build a sustainable career. I’d be disappointed to find out that any of my heroes like Jerry Garcia, Chris Robinson, Townes Van Zandt and John Coltrane were spending more time strategizing profitability than exploring the muse. Marco’s gift is to play the piano, John Ellis’ gift is to play saxophone, Mike Dillon’s gift is to play vibraphone, those guys shouldn’t be and thankfully aren’t spending crazy amounts of time developing their Facebook pages or stressing over market share. They’re creating and honing their craft.

HT: Guys, one could make a contrarian argument that now is the time to get into the music business, because it’s at a bottom. Eventually, do you think via legislation or innovation, the industry can turn around and regain its footing as a viable business?

KC: Here’s how I see it. And I can only talk from my own personal perspective. I didn’t get into the music business because it’s a viable business. So, I can’t speak for people who might do it for those reasons. I got into it because I wanted to somehow be a conduit to the transcendence that music offers people.

From as early as I can remember I was infatuated with music and the artists who made it. There was never any choice for me. When I had to get a job that was the only thing I could even imagine doing for a living. And the business is really tough right now. Sometimes it feels like I’m holding on by a literal thread to my livelihood, but I have to persevere.

All that being said, it is also a fun time in the business to be independent and to be in control of your own situation. Everything is wide open. It’s like the Wild West. And the artists I work with like Marco Benevento, Grayson Capps, Surprise Me Mr. Davis, Living Colour, Jacob Fred Jazz Odyssey, and so on, they’ve played on the edges their entire careers so they have an advantage in that regard because they’re in it for all the right reasons. If there’s one good thing to come from all of this, it’s that the trolls and vultures doing it solely to make money or hang out with celebrities or whatever other stupid reasons, are getting spit out. Can the industry regain its footing? I imagine it will, because if history teaches us anything it’s that things move in cycles. I guess we’ll just have to wait and see.

FW: The Music business is not at a bottom, only the recorded music business, and there is still a long way to go before we hit bottom, but it should come fast and soon. If the recorded music business is to survive there has to respect for copyright by the consumer, and a fair exchange of value by rights holders. Right now both sides are nowhere near what it would take.

HT: Well, thank you both so much for contributing. This has been really informative and a lot of fun.  Hopefully, we’ll help reach a few people who might in turn reach a few people and help change a few minds about stealing music.

KC: If I could say one more thing in closing; I urge people to pay for music, especially for those artists on an indie level. It’s important. The narrative is that artists don’t see any money from record labels or album sales, but the truth is that fans buying their albums helps them make new records, it helps the artists get the promotion they need, and often times with those CDs sold at the merch table, it pays for a good meal and $60 bucks to fill the gas tank. Plus, it filters down to help talented photographers, graphic designers, recording engineers, video directors, etc.

In a capitalist society, money speaks loudest whether we like it or not, and as fans of music we need to speak out on the artists behalf by supporting them. By and large that most fans are totally on board and down for the cause, but for anyone on the fence about stealing an album, think of it this way — if the artist wanted that record to be free, it’d be up right now on their website for you to download straight from them. If you’re having to grab it from a file share spot or a torrent, the artist didn’t want you to obtain it that way. Therefore it’s stealing.

Is $9.99 really too much to ask for what often times represents an entire year of an artist’s creative output? Damn, living here in NYC, we pay $10 for a vodka and soda. I’ll buy Magnolia Electric Co., Iron & Wine, and Dan Auerbach for that cost first without even thinking twice.

Of the various new forms of online distribution for album sales, such as subscription download services like emusic, subscription streaming services like Rhapsody, or straight up online sales like iTunes, which do you think makes the most sense long term?

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16 Responses

  1. Dude, subway looks out for it’s customers. Five dollar footlongs!

    JK, awesome article. Love the business panel idea and both interviewees had some interesting comments.

  2. Interesting stuff here. There definitely seems to be an entitlement issue with a lot of music fans these days like somehow it’s their right to get music for free. Which isn’t fair at all.

  3. From reading this article I must say I admire the passion and conviction of Kevin Calabro. He seems to be a knowledgeable advocate for true musicians everywhere!

  4. Here’s a view from the artist’s perspective that got a bit of publicity a few months ago.
    http://www.toomuchjoy.com/?p=1397

    and an interesting quote from him about Rhapsody vs Warner Brothers

    Here’s the thing: I work at Rhapsody. I know what we pay Warner Bros. for every stream and download, and I can look up exactly how many plays and downloads we’ve paid them for each TMJ tune that Warner controls. Moreover, Warner Bros. knows this, as my gig at Rhapsody is the only reason I was able to get them to add my digital royalties to my statement in the first place. For years I’d been pestering the label, but I hadn’t gotten anywhere till I was on a panel with a reasonably big wig in Warner Music Group’s business affairs team about a year ago

    The panel took place at a legal conference, and focused on digital music and the crisis facing the record industry**. As you do at these things, the other panelists and I gathered for breakfast a couple hours before our session began, to discuss what topics we should address. Peter Jenner, who manages Billy Bragg and has been a needed gadfly for many years at events like these, wanted to discuss the little-understood fact that digital music services frequently pay labels advances in the tens of millions of dollars for access to their catalogs, and it’s unclear how (or if) that money is ever shared with artists.

  5. this is an insightful article. wish there were more people in the music business with the candor and passion that kevin seems to have. well said all around, great read!

  6. I don’t have perfect logic on this…but it might have something to do with the simplicity of duplication.

    If you make a song that can then be duplicated so easily and everyone buys it for a dollar over and over again, some may feel that that one song wasn’t worth it, and they should probably just get it for free to even things out.

    On the other hand, the subway sandwich is unique. It can only be eaten once so everyone knows its value and end value. The sandwich can only be divided and eaten in so many ways will a digital music file seems to have no end.

    No solution…just my thoughts.

    Daniel

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