Independent Label

Now what is independent label? It is a recording company that is manage independently of course! Not just management, but everything to distribution. 'Indie label' as it is mostly known, really came to fore only in the early 90's in LA. It caters for musician and talents that is considered not commercial by the Big 5. Hence, at that particular time, it caters mostly for rappers, trash bands and the like.

These recording companies really hit the market hard. Most of the well known gangsta rappers now started from indie labels. In just few years, these companies have become a threat to the Big 5. Not in the distribution line, but fans. More and more people are buying their records. And because the cost is lower, the companies profit percentage sometimes exceed the major labels.

Indie Label v Major Label

From the management point of view, Indie label is more flexible and up to date. This is because most of the owners are young [in mind of course! hehehe]. There are less 'red tape' in the management. This in effect make the artist feel more at home, in due course producing better song qualities. There is also more interaction between the artist and top management, making the artist feel secure and easy to express themselves.

Even so most of the music produced is not commercial, but the market is strong and firm. Unlike fans of commercial songs, fans of these music [trash, hardcore, grind, rap ect] is damn loyal. Their quantity may be small, but you can be sure if there is 20,000 fans of hardcore out there, it means 20,000 albums will be sold! And the fan base kept growing! These is the qualities unique in indie labels.

Most indie labels tend to use latest equipment for their recording. Contrary to public opinion, most of these equipment is cheap! These is because, over the years, music technology have been computerised [these only applies to the indie labels form after 1998]. Therefor, instead of the normal RM40,000 mixer, you can have the same equipment on a software worth just a few hundred. And the sound quality is the same, if not better!

The recording session is also more flexible. The artist can give their suggestion on the recording techniques or the like to the sound engineer. Unlike major labels, where the mixing room is sometimes considered a 'no entry zone' to the artist. This flexibility normally drive the creativity of the artist and engineers to such optimum level, heard only in the times of 'Sgt. Pepper' album made by the Beatles.

So what went wrong?

But to say that all indie labels is like above, would be wrong. The successful ones, yes it is. The unlucky ones, well they just close shop! Music business is tricky. And surely, like any other business, there are few 'politics' involved.

Even so indie labels makes quite a profit, their turnover is still low compared to major labels. This is because they have lower distribution capability. The capital needed to distribute worldwide is just too expensive. And that is only for distribution! What about publicity? Yes, in short, indie labels would make quite a profit. But still, it could only be your normal 'downtown' recording company.

After a while, a company may become stagnant. This means their profit will stay at just one particular amount. But the cost kept getting higher because of the rise in maintainace ect. The only option open is either to diversify or expend the market. For a recording company, expending their market is the favourite and easier choice. For a company to expend, it needs growth. For a recording company, growth means more fans. But because of capital restraint, they cannot expend? How come they cannot get more capital? Surely thay can get a bank loan or something, right? WRONG! Why? Lets see...

The major labels control distribution. Besides having branches in nearly every country, they also own stakes in most retail shops. That means, your favouriterecord shop may in a way own by the Big 5 themselves. Thats why its hard to get an indie label artist from these retailers shelf.

To get a bank loan, you need to show profit on your yearly financial statement and forecast [If i'm not mistaken, financial forecast is needed if the business runs a high risk. So correct me if i'm wrong]. But without the help from these famous retailers, how could they prove profit for the forecast? Make a deal with a small record shop in Central Market?[some local indie labels really did this!] Hmmm.

Anyway, a bank loan itself is not enough to go worldwide. Remember that the Big 5 have been around for decades. It is just impossible to fight them in distribution.

At first, the major labels try to entice the artist to jump to their company. However, most refuse. Reason being, most of these artist were previously rejected by these major labels. Second, they are well taken care off by the indie labels and were given more artistic freedom to express themselves. They know, if they were to shift to major labels, such treatment will not be given.

So, the major labels did what is stated on the Marlboro ciggie pack! Vini Vidi Vici. I came, i saw, i conquer! Yes, they bought over the indie labels. You must remember, this is business. A company that is stagnant for so long, may end up generating losses rather than profit. So to some people of indie labels, it is more like a bailout rather than a takeover. But for people in the loop, it was just a force takeover. [wink]

Is this takeover bad?

Yes and no. Yes it is bad, because some major labels force their policy decision on these indie labels, in consequence making some of the top management in the indie labels to resign. They replace this guys with their own guys, in doing so, causing discomfort to the artist that have been so close to the previous management. This is what i personally call, 'management culture clash!'

Yes it is bad, because profit wise, all goes to the major labels. This created red tapes in finance management that was previously not there. It also created a lot of song publishing problems and confusion about the artist royalty payment.

No it is not bad, because most major labels let the management run as usual. They only took care of the distribution. This usually happens to semi-indie labels or quasi-indie labels, meaning that it is an indie label, but distribution wise, they have a joint venture agreement with the major labels. Something like our own local Positive Tone.

The future of Indie Labels

Since 1998, with the booming internet industry and music softwares, indie labels have in a way make a comeback via the net. Even so most musicians and artist nowdays tend to be 'bedroom musicians', nothing beats recording in a proper studio with the mixer [a computer mouse just does not have the same feel as the dialer and buttons on a mixer do].

Internet business may 'pull the plug' from the Big 5 in distribution and publicity. With MP3.com and other internet base music distributor leading the way for a total virtual and cheap way of distributing music, anything is possible now. Whether it is in MP3, MP4, wave file or whatever, digital or analog music can now travel as fast as a blink of the eye to end users. I can definitely say that, when all cars is fitted with an MP3 or multimedia player, the end of the Big 5 in distribution is just around the corner. Lets just hope Telekom and Jaring upgrade their bandwith and internet services when that day comes.

I leave all of you for now, with a quote;

"And the truth is, if you love something and excel at it, eventually you will succeed financially."

Dave Kaplan
President Of SurfDog

One of the most successful Indie Label in US

bluesyworms