Live from The Great Escape: labels on trial

To follow is a blow by blow account of the Music Ally ‘labels in the dock’ session at the Great Escape festival in Brighton. Played out to a packed house it’s an interesting insight to the debate around whether artists really need labels in the digital age.

Presiding judge: Paul Brindley, Music Ally.

For the prosecution (anti-labels)

Scott Cohen – The Orchard

Denzyl Feigelson – AWAL

Ian Grenfell – MD drowned in Sound, Simply Red Manager

For the defence

Fred Bolza – VP strategic Development, Sony Music

Tom Frederikse – partner Clintons

Korda Marshall – MD of indie label Infectious

Scott Cohen opens with a direct statement that labels are “guilty of being irrelevant.” A bit contentious this since most of his clients are labels.

The distribution and marketing and promotions are the labels’ key strengths. “They have lost that power.” He says.

Tom Frederikse, making the case for the defence, opens with a quote from U2 guitarist the Edge

“My instinct is to stick with the record guys.” Says The Edge “They have to sell your records or sell the downloads, whatever it ends up being. To do that, first of all, you’ve got to love and understand the music, and right now I’m not seeing any group that rivals the record labels. “

That’s the Edge of U2, who signed over their merch and touring to Live Nation recently.

Anyway Tom goes on. “It would be hard to find a higher passion for music than within the record labels.” He says.

Scott now invites up Denzyl Feigelson– from AWAL which stands for Artists WITHOUT a label.

He’s reeling off the case studies. First it’s Ingrid Michaelson who was signed by an exec from MySpace on a synch deal. Which led to a Grey’s Anatomy synch following which Ingrid has sold 1.5m downloads. 350,000 albums – both her new one and increased sales of back catalogue.

AWAL offered her a contract (she turned down a label deal) which consisted of one page, with 20 day notice termination, plus the artist retains all of their rights. The contract is available at AWAL.com.

Second example: Ari Hest. He was signed for 4 years and didn’t make any money. Post contract he started a project called 52 where he’d write one song a week; and subsequently made more money in that year than he did on the 4 whilst at a major.

Now it’s Tom Frederikse’s turn to cross examine Denzyl. He says “I put it to you that AWAL is itself a label.”

Denzyl responds with political dexterity. “It brings up the question of what is a label?” He says that 3,500 artists have signed his one page agreements with AWAL. “It’s a distribution vehicle.” He says. “I call it a new form of distribution.”

It’s the label guys’ turn now.

Tom Frederikse asks Fred Bolza from Sony whether labels are best positioned to be the funders of artists.

Fred says that because labels fund new artists from already-established artists income that labels are therefore recession proof. Interesting argument that.

He says: “we speak music. … The whole notion of suits – ask the guys at EMI – that isn’t necessarily the best thing for artists.” Bolza also says that labels are not passive but active investors. Interestingly he says the whole 360 concept is “a busted flush.” But above all, he says: “we’ve got something to offer and it’s not just money.”

“We asked labels and management – what’s good about what we do and what’s shit about what we do.” Says Bolza “The most interesting response was Tom from Kasabian. He said ‘well I don’t fucking do it.’”

The story basically means that Kasabian know there’s a whole building full of people – and they’re all working for Tom and his band.

“Music is not like film or sports where all the rights are in one place.,” says Bolza “There’s the label, the publisher, the image rights … a one page contract is something to aspire to but the reality is that there are lots of people who have to work together to make a band work.“

Often all of these interested parties don’t pull together, concedes Bolza “We spend most of our time trying to steal each others’ lunch rather than try to cook a big lunch together.“

So what about the myth that labels don’t understand digital? Asks Tom Frederikse.

The problem is that digital has blown apart the way that labels used to work, contends Bolza. “We now live in a world where the album is not what people buy – they buy songs. Also the promotional channels are now the retail channels too. Which works back to the way we sign contracts. So for things to change – everything must change.” So ‘not getting digital’ is less and less of a problem. There’s now lots more intelligence in a label and they are changing aspects of the business model. “Are we relevant? Yes. Can we do more? Yes.” Says Bolza.

Scott cross examines now. “Ok so majors now ‘get’ digital,” he says. “But you often use outside PR and pluggers. Can’t an artist employ these tools themselves? Do they need a label to set up a MySpace page or Facebook page? Can’t they do it themselves?”

Fred says that artists can but it doesn’t mean they want to or will. “And if we can prove that we can do a good job then they will do it with us.“

Now Scott brings up Ian Grenfell – manager of Simply Red and MD of Drowned in Sound. He says that they set up the capability to do everything a label does around Simply Red. The first self released album, Home, sold – gosh – 3m albums worldwide. Ian mentions the latest U2 album (referencing the Edge quote from earlier) which only sold 270,000 albums in the UK. Ouch

“I think you can put together a better team by cherrypicking individually than by signing one deal,” says Grenfell.

“Is it necessary to have a label?” asks Scott. “No it is not necessary,” says Ian.

Tom Frederikse’s turn to cross examine. Could Simply Red have had the same success if they hadn’t had a major behind them from the start? “Yes” says Ian. Obviously.

Mick could have had a hit with ‘holding back the years’ without a label, argues Grenfell.

But then he backtracks slightly. “Having an established career gave us a huge head start … it was a massive help.”

Did Simply Red sell any of the 3m albums through licensing deals with labels? Asks Frederikse. A good point. Yes – in South America and France, is the answer. “But we had to threaten to sue Universal in France because they didn’t pay us.”

“Simplyred.com is a label,” says Grenfell. “But in the smaller markets having a label behind them was very very useful.“

In America Simply Red sold 250,000 records. “But it took as much effort in the US as the rest of the world combined.” The records were sold through a distribution deal with Red and also by hiring external PR and radio people.

Frederikse now questions Korda Marshall, ex MD or Warner and head of indie Infectious. “Are majors just bean counters?” asks Tom. “Beans need to be counted” says Marshall. “They’re not necessarily the best people to exploit the artists,” (he’s on the side of the labels by the way) “But in the history of the creative process you need to have financiers.“

“Part of the major issue is what is the definition of a label. It’s financing – especially in the digital age. Going forward we’ll get to the point of transparency. Major labels have to change and they’re in the process of that. Now there’s a huge demand for the creative process to be brought forward more. “

So what about the marketing expertise of labels? Asks Frederikse. “In the age of digital everyone’s becoming an expert.,” says Marshall. “Experience in marketing is important. But sometimes the blind stupidity of youth is important.” Taking risks is easier within a major because as an indie you might not lose your house.

Marshall goes on. Accessibility in Iceland or Colombia or Camden is important. Labels have the means and access to the market – and while the digital age opens up access, the bigger retailers still rely on big partners. Which is why the labels are important.

Scott Cohen cross examines:

“I don’t believe that DIY means Do It Alone.” Says Cohen. “Do they always have to be labels?” “It’s the definition of a label” says Marshall, in what seems to be fast becoming an old chestnut here. “Ok so the definition might be an artist who pays for their own recording – are they a label?” Asks Cohen.

“If they put it out themselves – then yes.”

“So are we saying that artists are irrelevant (if labels are irrelevant) says Fred. It’s a good point at which to hand questions to the floor.

“The main role of a label is as financier … without a label how do you raise finance?” Asks someone.

Scott takes this one. The recording setup you can now create in your bedroom is better than anything the Beatles ever used. Anyone can make better sounding music now than ever before. So now it’s about time and effort and making great songs but you can no longer pay your way to the top.

Denzyl Feigelson says that when they worked with the Arctic Monkeys in 2006 the band toured incessantly but only had 4 songs. “It’s the magic with the songs but also about creating a buzz from a very small amount of creativity.” Says Feigelson.

Another question: “Majors work in cycles, constantly moving onto the next artist. So how do the non label people work on campaigns. Are they longer and more continuous.?”

“With Simply Red it’s continuous says Grenfell. “When you’re out of the cycle with the major it’s a deep and dark place” adds Feigelson. “We don’t have a campaign cycle – we have a life cycle.” A nice slogan, and probably quite easy to peddle.

Two more questions: “What we’re really talking about are rights. I was manager of the Gotan Project and we control our rights. I’ve never met an artist who wants to do it themselves…” (Sally Gross) “We need partnerships and we need knowledge and record labels provide that. It’s very very had starting something new if you don’t have money and you don’t have knowledge. “

More of a statement than a question, that one.

So final question. “Labels didn’t get digital when record labels sued Napster. They should have embraced them. If you want credibility then you buy smaller companies. Why didn’t you foresee that with Napster?”

Bolza fields this. “You’re right. At a moment in time we failed to see an opportunity. But if you’re accusing us of not having a crystal ball…”

“Bertelsmann did buy Napster. They sued first and then bought it – maybe that was the wrong way round.”

Concluding remarks. Scott Cohen brings up Madonna and Radiohead – people who have left the major label system and gone out to do it on their own. Also Nine Inch Nails. Or Pitbulll who put out a digital only release which went gold and has now sold 800,000 downloads. “The label was no longer necessary. I’m not saying a team was no longer necessary – you need distributors, managers, press … but you don’t need the label. You may use the label but you don’t need the label. It was all about control but now that control is squarely in the hands of the artist.“

Finally Tom Frederikse. “Digital has led to a concentration of power rather than a dissipation of power.” Frederikse says that also many sources of funding – including VCs have dried up. And they’re not intelligent funders – they have the money but don’t know how to use it. Also the knowledge within labels and the reach they can bring are crucial. And whatever digital expertise is on offer it only makes a difference when the artist is established. The labels are still the main party.

It’s now time for the all important vote. Paul Brindley gives his summary to the audience – you can go it alone but more often that not those that go it alone are already established he says.

So who thinks labels are irrelevant? And who doesn’t? Show of hands time …

And it’s conclusive: Labels are still relevant. They win hands down, or hands up. Either way they win.

http://musically.com/blog/2009/05/15/live-from-the-great-escape-labels-on-trial/

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