Janice Brooks
From:
Pleasant Gap Pa
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Posted 23 May 2004 6:50 am |
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A bumper crop of new independent labels hits Music Row
A bumper crop of new independent labels hits Music Row
By JEANNE ANNE NAUJECK
Staff Writer
Sales down, profits squeezed, tight playlists … sound like a good time to get into the record business?
Some people think so.
Corporate mergers caused Nashville's major record companies to shed staff over the past five years.
But it also spawned a spurt of entrepreneurism, with many record executives starting or joining small independent labels and making a run at the competitive music world with a different business model.
''There's a new heartbeat on Music Row,'' said Jack Purcell, vice president of promotion for Koch Records Nashville, a 5-year-old label that is pursuing the mainstream country audience.
Ed Benson, executive director of the Country Music Association, called the emergence of independents ''a necessary and exciting process that is part of the economic cycle.''
''In boom times the majors expand. In a downturn, they divest themselves of some assets, cut labels and consolidate and drop artists from the rosters.
''Talent and seasoned veterans are available (to independents). All they need is the right song for the broadcast marketplace.''
The Tennessean examined six of the recently launched independent labels — Vivaton Records, Lofton Creek Records, Broken Bow, Dualtone, Equity Records and Koch Records Nashville — and found that most said they were operating under a lower-cost model, using their old connections in the industry to promote their artists and trying to be more targeted and smarter in their strategies. One has a model that shares more revenue with artists and promises creative flexibility.
There's precedent for successful independents, which are generally defined as labels not affiliated with the majors — Universal Music Group, EMI, Warner Music Group, Sony or BMG.
Among the most successful independent labels in country music are Curb Records, founded by entrepreneur Mike Curb; DreamWorks, started by Hollywood movie moguls and now part of Universal; and Lyric Street, a Disney company.
Observers say the success of the recent startups will be determined largely by their ability to expose artists to listening audiences through radio play and to get their records out where people can buy them, whether in stores or online.
One measure, Billboard's Hot Country Singles & Tracks chart, shows the challenge. The list is determined by radio play, and it is dominated by songs produced on major labels. The new labels have seven of the top 60 songs on the list.
Spend less than you make
''I don't think there's ever been a better time as far as skilled executives being on the street, and there's probably going to be more in the next 12 months,'' said Shelia Shipley Biddy, who, starting in 1984, helped get 135 No. 1 records for MCA and Decca Records and served as Decca's general manager from 1994 to its closing in 1999.
''The people who were let go in most of these mergers were strong people. They didn't do anything wrong.''
Shipley Biddy shuttered her artist management company last fall to rejoin a label — as head of the promotion department of Vivaton Records, a January startup with country vocalists Chely Wright and Mark Chesnutt, as well as noncountry acts.
Promotion staff's goal is to get singles played on radio stations. Despite fewer new songs being added to radio playlists in recent years, radio is still the primary way people are exposed to new music and artists.
But competition to get songs played has upped labels' promotion costs — which now often include paying for an artist to play a free show in influential radio markets.
The challenge is to cut through the noise for less. Tapping people who already have reputations and relationships in the industry is a smart strategy for independents, Benson said.
''Shelia can get them on the phone,'' he said. ''Her name is still well known.''
Chesnutt had 14 No. 1's in the 1990s with Shipley Biddy.
''She was responsible for all of my hits,'' Chesnutt said. ''I probably wouldn't have been looking at Vivaton if it wasn't for Shelia. The guys and girls I've talked to at radio all know her.''
By signing acts, such as Chestnutt, who were cut from major-label rosters, Vivaton is betting it can take an artist who's already been introduced to the market by the majors and make a profit by matching spending to potential sales.
''You want to have at least one artist, if not two or three, that can sell a predictable number of units,'' Benson said. ''If the deal is set up right, people can make money on much lesser quantities of sales.''
Vivaton says such artists are viable money makers — if the bottom line is kept in line.
''If they don't sell a couple million records, the majors aren't going to waste their time, but the industry's about more than just four or five acts,'' said Vivaton founder Jeff Huskins, a member of 1990s country band Little Texas.
''If you know they can sell 100,000 records and you plan for 60,000 or 70,000, then you increase your chances of being profitable. The bottom line is, you spend less than you make.''
Building it for themselves
Mike Borchetta also wants to compete on the country charts with his new label Lofton Creek Records, but he's looking to break new acts, as he did when he signed Tim McGraw to Curb Records. Curb now boasts such major acts as Wynonna, Jo Dee Messina and LeAnn Rimes.
After years in the business as an independent promoter, then at Curb and another independent, Broken Bow, he started Lofton Creek two years ago to launch artists such as Jeffrey Steele, a country songwriter who he thinks has the goods as a performer, as well.
Steele had his own chart success as lead singer in the early 1990s for the band Boy Howdy. But his solo records on Sony/Monument didn't sell well.
''They tried to make him a rock singer. They didn't get it,'' Borchetta said. ''Jeffrey's hard-edged, but when he sings a ballad you cry.''
Now he has a radio single, Good Year for the Outlaw, off his forthcoming CD Outlaw. A second single, 20 Years Ago, just went out this week. Borchetta, who was instrumental in the early careers of the Beach Boys and Alabama, owns 20% of Lofton Creek with his wife, Martha, who also works for the label. The other 80% is owned by a Jacksonville, Fla., couple.
''I love to compete with the majors because it drives them crazy,'' Borchetta said. ''I love to build these things and make them happen. I built them for everybody else. Now this is mine.''
Indie status isn't a liability
Like Curb Records, Broken Bow is financed by a California entrepreneur. Unlike Curb, its founder doesn't have a high profile in Nashville.
Seeing radio consolidation and shrinkage at the major labels, Benny Brown sent a scout to Nashville in 1997 to see if a new label could compete in country music. The vision was to become a major, as Curb did.
Two years later, Broken Bow Records had a staff of major label refugees. Of the dozen based in Nashville, 10 have major label experience, and all except one left as a result of consolidation or closing.
''This is a major-label department. We're all veterans,'' said Jon Loba, vice president of national promotion.
While Shipley Biddy said certain radio chains won't take calls from independents, Loba said independent status is no longer a liability.
''With (country singer) Craig Morgan, radio was worried that we might not be here in six months,'' he said. But with major labels just as likely to fold, ''I told them, 'If you think you know who you'll be dealing with in six months, think again.' ''
Case in point: Morgan, who put out a debut album in 2000 on Atlantic Records, broke last year with I Love It on Broken Bow. It has sold five times more copies than his debut on Atlantic, which closed in April 2001, Loba said.
''A major label can't afford to stick with that act if it doesn't explode quickly,'' Loba said.
Controlled growth
Instead of trying for hits in mainstream radio, Dualtone is looking for ''continued growth, vs. accidental success'' with country-oriented niche acts such as Jim Lauderdale, Radney Foster and BR549, said co-president Scott Robinson, who with partner Dan Herrington was laid off from BMG's Arista Records. Dualtone launched in 2001.
''Here it is three and a half years later, and we've won three Grammys,'' he said. ''I never won a Grammy at Arista. We've sold millions of units, and we're still in business.''
The label began making money ahead of schedule because of conservative spending and not taking on new acts until there was adequate cash, Robinson said.
Major label heads frequently say they make money on one out of 10 acts they sign.
''We're not in the business of playing the odds or the stats. We're in business to have success on all the projects, or as many as possible,'' he said.
Like other independents, Dualtone is embracing the digital sales model for music.
Robinson said he expects substantial growth in online sales with the proliferation of legal, paid downloading sites such as Apple's iTunes Music Store.
Revenues from the online stores are small but growing by the month, he said.
''What's great about it is when people buy music online, it doesn't come back,'' he said, referring to CD returns from retailers. ''It's a much cleaner business.''
In the Black
Equity Records also is making money about a year ahead of schedule, mostly because of the album Spend My Time from Clint Black, who had seven million-selling albums during 14 years at RCA and who co-founded Equity last summer. The label's president is Mike Kraski, who had just been let go as general manager of Sony Music Nashville after 28 years with the company.
''We were all thinking the same thing; we just didn't know it until we sat down,'' Kraski said.
That was a system radically different from the traditional label-artist relationship. Kraski said during his time in the major labels he saw decisions being made in those areas that didn't necessarily benefit the artist.
Typically, labels spend their own money on recording, production, marketing and promotion and must recoup those costs from record sales before the artist sees money.
Equity artists are responsible for those early costs, which encourages economy, but they start making money with the first CD sold. Artists also own their master recordings, which means they can take the music they recorded for Equity elsewhere and license and distribute it as they wish without violating their contract.
Kraski said artists have ''a voice in everything that's done and will make substantially more under our model than the typical contract. If we succeed, the majors will have to change their model.''
Equity act Shannon Lawson fell through the cracks with his first major-label record deal on Universal's MCA four years ago. Two weeks after he released his second single, MCA was merged with Mercury.
''Everything was shifted and every song out there was yanked, including mine. I had program directors telling me they were told not to play it,'' Lawson said.
The album ''tanked'' after that, he said, and he left the label.
''There was a lot of money being spent. That's the biggest positive a major label has, and it can open doors. The downside is they throw money around wastefully,'' Lawson said.
Major problems
It's not all rosy at the independents. They have financial and staffing problems, too.
The newest independent, SEA Records, is the target of a lawsuit filed by its former president, alleging she was slandered after resigning in December. The company denies the allegations. After a ''false start'' fall launch, it relaunched last month with country artist Neal McCoy.
Indies also need to remember they're playing against deep pockets, said Nick Hunter, general manager of Koch Records Nashville, with a roster that includes Dwight Yoakam and re-formed country band Restless Heart.
''They're going to have to be well funded or have a hit, or they're going to go away. If you decide to go and chase mainstream country radio, that's a very expensive proposition for both indies and major labels. Overhead and expenses will kill you.''
Koch Records is aggressively pursuing the mainstream country charts, with success. The single Loco by David Lee Murphy is at No. 12 and rising on Billboard's chart this week. ''We went after that hard,'' Hunter said. ''We got the kind of reception we hoped for.''
But he also warned that a hit record can bring more problems for a startup. Several years ago, VFR Records launched with veteran leadership, great expectations and a hit single, Mrs. Steven Rudy, for artist Mark McGuinn. But the label ran out of money and went dormant.
Dualtone's Robinson sees problems for independents who try to outbid each other for the most marketable talent.
''I'm starting to see the indies trying to be like the majors were — going for market share with A-level and B-level artists. They're outpricing and outbidding competitors to gain market share. I think they're going to go away, too.''
CMA's Benson thinks all the labels have learned a lesson from the boom-and-bust of the past decade. The majors are releasing fewer albums and winnowing their artists to pay more attention to each one.
''What it costs to sell is much greater today than it was 10 or 15 years ago,'' Benson said. ''Then there was lots of money in the system. Now they want to be doggone sure they have somebody who can succeed in the marketplace.
''People will make a living. Maybe not like 10 years ago, but they'll make a living. And they'll create some music that will be meaningful and employ writers and musicians and everyone else on the food chain.''
Meet the neighbors
Some of Nashville's independent, country-oriented record labels:
Vivaton
Started: January
Ownership: Former Little Texas member Jeff Huskins, entrepreneurs Mike Nixon of Atlanta and Mike Crabtree of Knoxville.
Music Row veterans: Promotions head Shelia Shipley Biddy, former general manager of Decca Records; marketing/sales consultant Dave Weigand of MCA
Artists: Chely Wright, Mark Chesnutt, Angela Wolff, Cissy Crutcher
On the radio: Wright's Back of the Bottom Drawer
Equity Records
Started: August 2003
Ownership: Clint Black, artist manager Jim Morey, business manager Charles Sussman, Mike Kraski
Music Row veterans: President Mike Kraski spent 27 years at Sony; Chief Creative Officer Tim Wipperman headed up Warner/Chappell Music Publishing for 29 years; Promotions Vice President Rick Baumgartner worked for Warner Bros. and Atlantic Records
Artists: Clint Black, Shannon Lawson, Kevin Fowler, Carolina Rain, Little Big Town
On the radio: Black's The Boogie Man; Lawson's Smokin' Grass
Dualtone
Started: April 2001
Ownership: Co-presidents Scott Robinson and Dan Herrington, Cal Turner
Music Row veterans: Robinson and Herrington left Arista during a consolidation four years ago. Herrington also has worked for BMG Distribution.
Artists: Jim Lauderdale, Radney Foster, BR549, John Arthur Martinez, David Ball, Nitty Gritty Dirt Band
On the radio: Ball's Riding with Private Malone
Lofton Creek Records
Started: August 2002
Ownership: Mike and Martha Borchetta 20%; Harold and Vicki Shafer of Jacksonville, Fla. 80%
Music Row veterans: Borchetta co-founded and ran Curb Records for seven years.
Artists: Jeffrey Steele, Allison Paige, Daron Norwood, Shane Sellers
On the radio: Steele's Good Year for the Outlaw; Norwood's In God We Trust
Koch Records Nashville
Started: July 1999
Ownership: New York-based Koch Entertainment, the nation's largest independent music and video company
Music Row veterans: Most of the staff members are major label alumni; General Manager Nick Hunter and promotion head Jack Purcell spent 17 years at Warner Bros.
Artists: David Lee Murphy, Dwight Yoakam, Robert Earl Keen, Restless Heart, Daryle Singletary
On the radio: Murphy's Loco
Broken Bow Records
Started: August 1997
Ownership: Benny Brown, a California entrepreneur.
Music Row veterans: Ten of 12 staffers came from major labels, most as a result of consolidation.
Artists: Sherrie Austin, Craig Morgan, Joe Diffie
On the radio: Morgan's Look at Us; Diffie's Tougher Than Nails; Austin's Son of a Preacher Man
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Janice "Busgal" Brooks
ICQ 44729047
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