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 Are
You a Record Label?
Copyright August
2006 by Keith Holzman,
Keith
Holzman Solutions Unlimited.
All rights
reserved.
Back to The
Academy
What
Makes a Record Label?
A colleague and I recently had a discussion about whether selling
exclusively downloadable music constituted being a record label.
Which got me to thinking about the subject.
For example, say you've signed an artist or group and are selling
individual tracks, or groups of tracks, from your web site, or
perhaps additional music sites such as iTunes, eMusic, Rhapsody,
Napster, etc. Can you really call yourself a record label if there's
no actual physical product such as a CD available? Is it the selling
of CDs that nowadays legitimizes your existence?
In the many years before downloading capability became possible, the
only music you could sell was actual, physical product -- 78s, LPs,
45s,
4-tracks, 8-tracks, cassettes, and CDs, and in the case of
songwriters and composers -- printed sheet music or scores.
The advent of the Internet has changed the situation in various ways.
Not only has it given us many new techniques to inform the public
about new music and new artists, but it has also provided lots of
methods to market and sell music. Who a few years ago would have
thought how helpful and meaningful a site such as MySpace might be
for promoting music of heretofore unknown acts? Who would have
thought that you could buy just about any book or record in print
from an Amazon.com at just the click of a mouse. Who would have
thought you could market your music to fans by merely putting up a
really good web site in what's essentially a non-existent, or at
least, non-physical space?
You
Are What You Think You Are
I, for one, think that if you've got two or more artists whose music
is available for purchase -- either as bits (downloads) or atoms
(CDs), then you're probably a record label. Or, if you're an artist
with more than just a handful or tracks available for sale, why then
you, too, are probably a record label -- especially if you think you
are.
Part of this is mind-set. You're a record label if you think you are.
On the other hand, there's no real question that if you have physical
product available, if only at performances, then you're a record
label, or very close to it. And if you offer CDs for sale from your
website, or CD Baby, or Amazon.com, then I would think you're a
record label.
The time has come when making CDs or other physical product available
for sale at retail outlets such as Tower (what's left of it,)
Borders, BestBuy, or local mom and pop record stores no longer
determines the status of being a label.
To a great extent, what constitutes a record label is very much in
the mind of the begetter, and/or beholder.
The
Function of a Record Label
In short, I believe the function and responsibility of a record label
is to promote and foster the music and careers of its artists. If a
company is actively getting its music disseminated -- either online,
or at retail, but ideally both -- and is bringing attention to its
artists on, at minimum, a regional if not national or international
basis, then it's probably doing at least a part of its job, and can
rightly be called a record label. Furthermore, if both you and the
artist are making money through your efforts, there's no question
you're a record label.
A sidebar to the above: is it the owning of recorded masters that
defines a record label? I don't think so. Owning masters and
establishing a deep catalog is certainly desirable and beneficial to
a label's financial status. (See my comments on "The Long Tail"
<http://www.holzmansolutions.com/articles/59-mar06.html>, and
<http://www.holzmansolutions.com/articles/63-july06.html>.)
But I've known of labels that owned few if any masters, preferring to
license tracks or releases from others. That's not a notion to
subscribe to for long-range health, but it is legitimate and can help
fill out an otherwise sparse release schedule.
It's becoming a frequent occurrence that artists prefer to own their
masters outright (a lesson learned perhaps from Ray Charles) and
either license them for specified terms to a label, or create their
own label and finance their recordings, and then pay to promote and
market them, allying themselves with another label -- usually one of
the majors -- for distribution purposes only.
In fact, an article by Devin Leonard in the current Fortune describes
varying approaches to this subject.
He sites Ice Cube's management, The Firm, doing just that with his
recent "Laugh Now, Cry Later" album. The rapper paid for the
recording and marketing, and got Virgin (EMI) to distribute it. It
sold over 500,000 copies worldwide, and the artist got to reap the
profits, plus income from ring-tones and film and TV licensing.
Virgin merely got distribution fees and overseas licensing rights.
Another major artist, Garth Brooks, went even further, making his CDs
available exclusively in Wal-Mart stores and on the retailer's
website, totally bypassing record labels and traditional music
retailers.
Mr. Leonard writes about Jeff Kwatinetz, CEO of The Firm, the talent
management company that represents Ice Cube. "Kwatinetz argues that
now these same companies are so focused on making their quarterly
results from album sales that they can no longer build long-term
careers for their artists. 'They are in a death spiral,' Kwatinetz
says. 'The record business will shortly be extinct. But the music
business, the business of creating music, will not be -- because
people love music.'
That's certainly provocative, and food for thought, and might make
you think more about what you, if you call yourself a record label,
might do about it.
Until next month,
Keith Holzman -- Solutions Unlimited
Helping Record Labels Manage for Success.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Copyright 2006 by Keith Holzman, Solutions Unlimited. All rights
reserved. Adapted from "Manage for Success," Newsletter #64,
August 2006.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Keith Holzman is the principal of Solutions Unlimited, a management
consultant specializing in the recording industry. A trusted advisor
and troubleshooter, he is a seasoned music business senior executive
with extensive experience in all aspects of running a label. He was
President of ROM Records, Managing Director of Discovery Records,
Senior Vice President of Elektra, and Director of Nonesuch Records.
He publishes "Manage for Success," a free monthly email newsletter
devoted to solving problems of the record industry. You can subscribe
at his website <http://www.holzmansolutions.com>. Keith is a member
of the Institute of Management Consultants and has served as a
panelist for the National Endowment for the Arts, and as a board
member of many arts organizations. He can be reached at
mailto:keith@holzmansolutions.com.
Keith is also the author of the recently published "The Complete
Guide to Starting a Record Company" available both as a 235-page,
printed spiral-bound book, as well as a downloadable E-Book.
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