Indies look to supplant static giants

Two UCLA alums co-found indie record companies

David Greenwald
Andrew Lee
Published: Monday, August 30, 2004

The music industry as we know it may well be a sinking ship. Worldwide music sales were down 7.6 percent last year, the fourth consecutive year they’ve dropped since 2000. The Recording Industry Association of America has saddled illegal file-sharing with much of the blame. Since the rise of the Napster file-sharing software in 1999, digital music has become as familiar and commonplace as the family dog. Be it illegal copies from Kazaa and Soulseek software or the legal 99-cent tracks sold through Apple’s iTunes music store, one only has to walk across campus to notice that iPods and Walkmans proliferate in near-equal numbers.

In recent years, the business model of major labels – including the musical arms of corporations like NBC Universal, Warner Bros., BMG, Sony and EMI – has centered on turning artists into million-selling superstars. To fuel hits big enough to provide most of the industry’s profit margin, the rapidly dwindling “Big Five” (now a “Big Four” with the recent Sony-BMG merger) have focused their energies on the multimedia promotional sweep required to spawn such a top single. With the ease of illegal file-sharing and digital music in general, that strategy has backfired. Consumers who once bought albums for that one great song now simply download it, leaving relatively high-priced compact discs festering on the shelf. Other problems plague the industry, as well, including widespread accusations of overpricing CDs and underpaying artists. Popular music seems to be at a crossroads.

While the monolithic old dogs try to learn new tricks or bury themselves in their old ones, perhaps younger, smaller operations can find success. Such is the belief of people like Eric Holden, Phillip Golden, Conor Oberst and Nate Krenkel. Holden and Golden are UCLA alumni from the Class of 1991 and co-founders of the recently formed Stereotype Records. Oberst and Krenkel are behind the brand-new Team Love. Both companies are approaching the changing seas of the music business with different backgrounds and ideals but with many of the same hopes and goals.

“I think there’s a good opportunity to be a small, independent label,” said Holden. “(The major labels) have inertia that will keep them in business for a long time, but I don’t think that their models make sense. The profit’s too much; the way they distribute is poor. They make a commodity out of the artist.”

Holden’s plan is to stay small, focusing on a few bands and allowing them to develop without expecting a platinum hit right out of the gate. As much work as possible is done by the employees of Stereotype, whose leadership includes Rick Stone, an engineer who has produced the critically acclaimed Creeper Lagoon.

Similarly, Team Love is a two-man operation. The label was founded essentially for its first signing, Tilly and the Wall. Oberst and Krenkel wanted to sign Tilly to Oberst’s label, Saddle Creek Records, which has become a very successful indie label itself, thanks to the efforts of bands like Oberst’s Bright Eyes, Cursive, and the Faint.

“Those three bands especially have grown to the point where, when a new record is coming out, (Saddle Creek) needs to put a lot of time and energy into that to maintain its level and see it through,” said Krenkel. “Their commitments lie with the bands they’ve already committed to then spending a lot of time looking for new acts.”

With no room for Tilly on Saddle Creek’s release schedule, Oberst and Krenkel decided to take the idea they’d be playing around with and make it a reality.

But Stereotype and Team Love have taken a different approach to marketing. Stereotype Records began in November and now has four bands on its roster and several albums in its online store. One of the signings, Every Move a Picture, has had an unreleased song played on radio station KROQ’s “Rodney on the Roq” program.

“We are relying on guerilla marketing tactics,” Holden said, which include going around to local record stores to buy displays, putting up posters, and sending out 20,000 person e-mails telling prospective fans where they can go to request Stereotype Records songs on the radio. The company’s Web site, www.stereotyperecords.com, is an online store and news outlet that also features listenable tracks from each album. Team Love takes this concept to another level, offering the entirety of Tilly and the Wall’s debut, “Wild Like Children,” up for download at www.team-love.com.

“Having the record online for free, we see it as a way to promote the band,” said Krenkel. “We hope exponentially the more people who do download it will buy the record or see the band live. We never thought it made sense when someone said, ‘Oh. The record’s been downloaded 100,000 times, and it’s only sold 5,000 records. That means 95,000 lost sales.’ We think that line of thinking is innately flawed. It actually means you sold 5,000 records you wouldn’t have sold if it hadn’t been spread out among 100,000 people.”

Stereotype Records has secured independent distribution, as Team Love is distributed through Saddle Creek. There’s never a guarantee of success when starting from such humble beginnings, and the labels are hoping to earn enough to be able to maintain themselves and continue to be a venue to support bands and give them an opportunity at the “minor leagues” that the hit-hungry major labels have long since abandoned.

“It seems like the (major) labels move really quickly to capitalize on a current trend, but when that trend passes … very few can transcend it and grow as a band,” said Krenkel.

One only has to look to MTV’s play lists for the last several years to see quick progressions from boy band pop to nu-metal to pop-punk rotating on a yearly basis. This lack of longevity puts pressure on everyone to deliver a chart-topping single that will provide the profits necessary to market the new fad and erode the consumer’s loyalty, a problem the RIAA often blames for the current downloading trend. The founders of Stereotype hope to avoid those pitfalls by focusing on a leaner business model. By keeping artists in-house and avoiding outside studio engineers or mixers, the company won’t spend the money that major labels do on a flavor-of-the-month producer.

“We have a business plan that we’ll make a living on 10,000 units,” said Holden. “We want to help bands develop, whether they’re 40-year-old world artists or 15-year-old Echo and the Bunnymen rip-offs, as long as they’re true to their art.”

Beyond the financial aspect, Team Love has eased the pressure on its artists by making every record a one-off, meaning there are no long-term contracts involved. Though the hope is to maintain a consistent roster, none of the pressure of a multimillion-dollar six-album deal exists for either the artist or the label. With only a few bands to market and develop and the creative freedom involved in owning your own label, it seems that if indies can get the word out on their bands, consumers fed up with recent Justice Department/RIAA attacks and years of imitation music will look to the alternatives.

“If the indies can stay in control of their labels, then you could see something happen similar to what happened in the ’60s and ’70s with Elektra and A&M and Island, labels that were essentially independent when they started and were very artist-focused and put out a tremendous amount of good music,” said Krenkel.

In the end, this is where all independent labels find a common ground. Holden most certainly agrees.

“I love good music, and I want to share it with people,” he said.