Delbert McClinton, the Flatlanders, and John Hiatt
Delbert McClinton, the Flatlanders, and John Hiatt
April 11, 2003
Independent label has doubled its business for the past three years.
New West Records is the home of Delbert McClinton, the Flatlanders, and John Hiatt and it's projecting a $10 million income in 2003.
"While executives at big media labels wail about the industry's imminent collapse, indie labels and artists are singing a much happier tune. Profits are up - in some cases by 50 to 100 percent. That's in contrast to overall album sales, which dropped about 11 percent in 2002.
"We don't do too much crying over here," Cameron Strang, founder of New West Records, admits proudly. The home of artists like Delbert McClinton, the Flatlanders, and John Hiatt has doubled its business for the past three years and is projecting a $10 million income in 2003.
Paul Foley, general manager of the biggest independent label, Rounder Records of Cambridge, Mass., happily brags, "2002 was actually Rounder's best year in history. We were up 50 percent over 2001."
You won't hear many of these labels' artists on pop radio - and ironically, that's one of the secrets to their success. By avoiding the major expenses associated with getting a tune on the air - which can cost upwards of $400,000 or $500,000 per song - independent labels are able to turn a profit far more quickly, and share more of those profits with their artists. Another secret of their success is that the labels target consumers - namely, adults - who are still willing to pay for their music, rather than download it for free.
Other artists, such as Aimee Mann and Michelle Shocked, are going even further - forming their own labels so they don't have to answer to anybody (see "Artists Sing Their Own Notes," at right).
At a major label, most artists are unlikely to earn anything unless they sell at least 1 million albums, and even then, they could wind up in debt. Everything from studio time to limo rides are charged against their royalties, which might be only $1 per disc sold. That compares with an indie artist, who can sell a disc for $15 at a concert. If they make $5 profit a disc on 5,000 discs, they pocket $25,000.
"That's the difference between us and them," Mr. Strang says. "Artists on our label who sell 200,000 copies make a very good living."
Independents also pay profits only after recouping expenses, but they keep those down by curbing marketing and overhead costs. They also have more equitable arrangements with artists, often sharing profits 50-50.
But perhaps the biggest difference is that they let artists keep the rights to their work. Michael Hausman, who manages Mann, says once the large labels get those rights, they may choose not to release a note of music but won't let the artist work for anyone else - essentially bringing career momentum to a halt."
