There are a lot of misconceptions floating around these days about the future of record labels.
You've got people like Erin McKeown suggesting that rising artists don't need labels at all, saying you can promote yourself just fine. You've got people who say that everybody will be enslaved in a 360 deal one day, that labels are little more than a credibility stamp, that they will eventually be folded into publishers or the marketing departments of gigantic corporations.
All of this is nonsense, of course, and to Steve Savoca, the head of digital at Domino Records, there's only one story that's really exciting him. “Suddenly indies are playing on the same field as the majors," he says. “Merge had a number one record [this year], Beggars had a number one record, there's been a few of ours in the top five. I mean, game on. It's pretty exciting."
Savoca will be on a panel on Wednesday entitled “Labels in the Black," so I grabbed him on the phone to discuss Domino, and where he sees the industry going.
You're appearing on a panel called “Labels in the Black," and its description talks about labels that have “changed their games." What's the biggest change in how Domino's done business in the last five years?
I think that's going to be the toughest part of the panel, to be honset with you. Because I don't think we've changed our game at all, it's everything around us that's changed.
“Everything around us," meaning sales?
Well certainly the attitude toward consuming music is as good as it's ever been, but the accessibility of music is the best it's ever been, and the access to the artists that we work on is not dependent upon any of the old gatekeepers anymore, so people can get to what we're putting out, and I think that's the most critical piece.
Well, you guys have a long history of pushing your music out through your own channels, too. You have your own show on East Village Radio, you have a Last.fm channel, you've partnered with companies like Uniqlo on t-shirts and music. Are those things the icing on the cake, or part of the batter as far as what a label should do to get its artists' music out there?
To use a harsh marketing phrase, that's more about brand extension. The more access we have as a label, the more avenues we have to expose our artists. But I think the core customer of Domino remains the same, and solidly in the middle of the marketing and promotion that we've always done. So I think, like you say, those are extras.
Getting back to how things have changed, sales are down, there's more money coming from different areas—licensing, syncing, digital streams, etc—and that's impacted budgets for everything from artist development to promotion. And then you hear independent artists saying all the time now that they don't need labels anymore. What is it that you see labels providing today and moving forward?
We certainly bump into this arrogance, that artists don't need labels, but there's several things that we provide, and if you think about it, the analogy I always use is that the music business is a guild. Almost everybody in this office started in college radio or sales, and came up through internships at the bottom and worked their way up. Collectively, we have over 100 years of experience in this office, and that's just this office, and you imagine that that collective knowledge is from people that have seen every different kind of scenario, in countless genres of music, and bumped into every potential problem. We provide expertise and experience and also manpower. I mean, sometimes it just comes down to sheer manpower to cover all of the things that need to be done. I think every smart artist or manager, when they start going down this path, they realize how much work there is to do. And then they start to recognize what a label brings.
But at the same time, because of how technologically driven things are at the moment, we tend to know much sooner than our artists what's coming and how to adapt to it, and we can bring expertise in the new areas of marketing that are completely foreign to them and help them adapt to new technology and ways of doing things. And a lot of what we do is build and provide tools, so that we can empower our artists to help themselves. It is a bit of that spirit of, “Yes I can do this myself." At the end of the day, people want to hear from the artists, they don't want to hear from the label, and that helps with that as well. The most important thing we can do is close that gap between the artist and the fan, so they can build those one to one relationships, which really are the future.
It sounds, then, like you share Tom Silverman's opinion that record labels are essentially services companies. They're less like incubators now, and more like marketing and promotion service providers. Do you feel that's accurate?
I'd say a couple things to that. The first is about relationships, which ties into what you're saying. Imagine a few people in this office have been in this business 15+ years, and their relationships run really deep, and that really matters when you're trying to get folks' attention and get them to listen to what you're working on. But if this was a ladder, and I'm terrible with analogies, but if this was a ladder, all of this stuff is like the bottom, the third rung from the bottom, and the top rung is A&R. And that, at the end of the day, is the only thing that matters. And Laurence Bell at Domino has done a really good job with A&R and that's the reason we exist and thrive as a label. And it's identifying good artists, but it's also knowing how to market those artists, and massage their careers.
So, hypothetically, if you were to start a label, what would someone need to have in place before they got started. Do you need to have a sense of your customers? Do you need to think of yourself as a specialty shop?
I don't think that the urge for anyone to put out a record has changed at all. If someone sees a band and falls in love, and they feel strongly enough that they want to release their material because they believe people will feel as passionately about that artist as they do. And if they get it right, it works, and if they get it wrong, they lose a lot of money. And it's really black and white, I don't see anything changing. But if you wanna give that band a fighting chance, you better understand how to navigate releasing records. It's amazing to me how much press I read every day, every week, about people pontificating about what's wrong with the music business, and what could be done differently, and it's amazing how few of those people have ever actually released a record and tried to get it to succeed in the market.
So what are those outlets—the Wall Street Journals, or the media bloggers—missing?
It seems like most of the talking heads ignore, or they'll mention it in passing—"And of course you need great music"—but it's like I'm saying: that's the first point. Because great records tend to find an audience.
I want to change gears and talk about 360 deals. A couple years ago, a lot of people were really excited about them as a possible savior of the major label system. But today, a lot of artists are very wary of them, because they often involve record companies taking charge of things like merch or touring or licensing that fall outside their core competencies. Do you think that 360 deals are a bad idea, or just an idea that isn't often executed very well?
I haven't been close to enough of them to really comment. I've heard of instances where it works. What I have read about in a positive light is Paramore's relationship with Atlantic. That really helped them break through. But would they do it today? Probably not. Allegedly, it worked for them.
But Domino's not interested in doing them?
The way we work with our artists is in partnership, there's no formal approach to doing that. We don't participate in or share an artist's touring income, but at the same time we do provide tour support to our artists. And we do that in the belief that getting them on the road will help sell records, but I think that if we do do it, and to some extent we do—maybe it's 270, maybe it's 180—we're willing to do whatever it takes to support our artists. We like to think our second strength is publishing, because that's something we've had a lot of success with, but we don't do merch, we build artists shops to help sell merchandise. It's not as formal and rigid as a 360 deal. ANd I agree with you, it's not a label's core competency, but major labels have gone out and bought merch companies, so they are now experts in merchandising. Selling tickets? I mean, hot bands sell tickets. I don't see promoters doing anything all that spectacular that labels couldn't do.
So what's the logic for not taking a piece of that touring when you're helping promote them?
I guess because there just aren't that many examples of us supporting a band early on and them breaking through and then going on to sell tickets. I mean, our bigger artists, Arctic Monkeys, I don't know for certain but could probably say Franz Ferdinand, Animal Collective, Dirty Projectors, could all sell tickets before we did any projects with them. So how could we justify taking revenue in that respect? But again, I think that if that situation came up, where we were funding tour after tour to get a band going, I think we'd be open to having that discussion.
But here's something I always talk about which you might find interesting. I used to work with really big teen pop bands; I worked at Jive Records during that heyday. And a lot of my coworkers would work with these bands from day one, so they broke, say, Britney Spears. My wife used to take her to malls in her Honda Accord, and she was as green as could be, just a 'tween. And Jive Records broke her, literally mapped out a plan and broke her. And by the time I got there, every day the phone would ring and it would be a movie company, a fragrance company, there were so many partnerships where she was making millions of dollars and the only thing we were collecting revenue on was the records. So we built the brand, and then the brand went on and sold itself! There were so many verticals they created that we didn't participate in. Is that fair to a record company? And so when you look at things from that perspective, it starts to look like a stupid business. Why shouldn't they participate? Why shouldn't they get a piece of those revenues?
So let's talk about band-brand partnerships. How central are they to Domino's strategy of promoting artists?
Well we certainly like our artists to sign onto our publishing as well. We feel there are synergies there. A lot of people work with Domino's roster for music placement, because they know they can get sign off on both pieces quite easily. When you have to go to Universal for one piece, and EMI Publishing for the other piece, it gets quite complicated. We're a lot more nimble, and it tends to work well.
Finally, let's talk about the showcase side of CMJ. Are your A&R men going to be out in full force?
[laughs] Chances are, if a band's playing CMJ, our guys are already aware of it.
Well, right. But your guys don't show up to see how they look or sound when they're playing their sixth show in four days at 2PM in the basement of the Cake Shop? Is that kind of information valuable? Can an A&R guy glean some valuable information from seeing a band play in those conditions? I've always thought it was such a strange environment to see a band for the first time in.
True. But we all agree that coming out of CMJ, SXSW, there always tends to be a handful of bands that everybody's talking about, and there's value in that. And so, at the end of the week, the band that's got stuff going on is the one that everyone wants to book, and so that band will then do five or six, or more than six, more things, and by the end of all of those different shows, the word is out. Does it bear out? I think about the Soft Pack from a couple years ago, and that all went quiet after CMJ. Or the Black Kids, from a couple years back. Where are they now? So I don't think that process always gets it right.
You've got people like Erin McKeown suggesting that rising artists don't need labels at all, saying you can promote yourself just fine. You've got people who say that everybody will be enslaved in a 360 deal one day, that labels are little more than a credibility stamp, that they will eventually be folded into publishers or the marketing departments of gigantic corporations.
All of this is nonsense, of course, and to Steve Savoca, the head of digital at Domino Records, there's only one story that's really exciting him. “Suddenly indies are playing on the same field as the majors," he says. “Merge had a number one record [this year], Beggars had a number one record, there's been a few of ours in the top five. I mean, game on. It's pretty exciting."
Savoca will be on a panel on Wednesday entitled “Labels in the Black," so I grabbed him on the phone to discuss Domino, and where he sees the industry going.
You're appearing on a panel called “Labels in the Black," and its description talks about labels that have “changed their games." What's the biggest change in how Domino's done business in the last five years?
I think that's going to be the toughest part of the panel, to be honset with you. Because I don't think we've changed our game at all, it's everything around us that's changed.
“Everything around us," meaning sales?
Well certainly the attitude toward consuming music is as good as it's ever been, but the accessibility of music is the best it's ever been, and the access to the artists that we work on is not dependent upon any of the old gatekeepers anymore, so people can get to what we're putting out, and I think that's the most critical piece.
Well, you guys have a long history of pushing your music out through your own channels, too. You have your own show on East Village Radio, you have a Last.fm channel, you've partnered with companies like Uniqlo on t-shirts and music. Are those things the icing on the cake, or part of the batter as far as what a label should do to get its artists' music out there?
To use a harsh marketing phrase, that's more about brand extension. The more access we have as a label, the more avenues we have to expose our artists. But I think the core customer of Domino remains the same, and solidly in the middle of the marketing and promotion that we've always done. So I think, like you say, those are extras.
Getting back to how things have changed, sales are down, there's more money coming from different areas—licensing, syncing, digital streams, etc—and that's impacted budgets for everything from artist development to promotion. And then you hear independent artists saying all the time now that they don't need labels anymore. What is it that you see labels providing today and moving forward?
We certainly bump into this arrogance, that artists don't need labels, but there's several things that we provide, and if you think about it, the analogy I always use is that the music business is a guild. Almost everybody in this office started in college radio or sales, and came up through internships at the bottom and worked their way up. Collectively, we have over 100 years of experience in this office, and that's just this office, and you imagine that that collective knowledge is from people that have seen every different kind of scenario, in countless genres of music, and bumped into every potential problem. We provide expertise and experience and also manpower. I mean, sometimes it just comes down to sheer manpower to cover all of the things that need to be done. I think every smart artist or manager, when they start going down this path, they realize how much work there is to do. And then they start to recognize what a label brings.
But at the same time, because of how technologically driven things are at the moment, we tend to know much sooner than our artists what's coming and how to adapt to it, and we can bring expertise in the new areas of marketing that are completely foreign to them and help them adapt to new technology and ways of doing things. And a lot of what we do is build and provide tools, so that we can empower our artists to help themselves. It is a bit of that spirit of, “Yes I can do this myself." At the end of the day, people want to hear from the artists, they don't want to hear from the label, and that helps with that as well. The most important thing we can do is close that gap between the artist and the fan, so they can build those one to one relationships, which really are the future.
It sounds, then, like you share Tom Silverman's opinion that record labels are essentially services companies. They're less like incubators now, and more like marketing and promotion service providers. Do you feel that's accurate?
I'd say a couple things to that. The first is about relationships, which ties into what you're saying. Imagine a few people in this office have been in this business 15+ years, and their relationships run really deep, and that really matters when you're trying to get folks' attention and get them to listen to what you're working on. But if this was a ladder, and I'm terrible with analogies, but if this was a ladder, all of this stuff is like the bottom, the third rung from the bottom, and the top rung is A&R. And that, at the end of the day, is the only thing that matters. And Laurence Bell at Domino has done a really good job with A&R and that's the reason we exist and thrive as a label. And it's identifying good artists, but it's also knowing how to market those artists, and massage their careers.
So, hypothetically, if you were to start a label, what would someone need to have in place before they got started. Do you need to have a sense of your customers? Do you need to think of yourself as a specialty shop?
I don't think that the urge for anyone to put out a record has changed at all. If someone sees a band and falls in love, and they feel strongly enough that they want to release their material because they believe people will feel as passionately about that artist as they do. And if they get it right, it works, and if they get it wrong, they lose a lot of money. And it's really black and white, I don't see anything changing. But if you wanna give that band a fighting chance, you better understand how to navigate releasing records. It's amazing to me how much press I read every day, every week, about people pontificating about what's wrong with the music business, and what could be done differently, and it's amazing how few of those people have ever actually released a record and tried to get it to succeed in the market.
So what are those outlets—the Wall Street Journals, or the media bloggers—missing?
It seems like most of the talking heads ignore, or they'll mention it in passing—"And of course you need great music"—but it's like I'm saying: that's the first point. Because great records tend to find an audience.
I want to change gears and talk about 360 deals. A couple years ago, a lot of people were really excited about them as a possible savior of the major label system. But today, a lot of artists are very wary of them, because they often involve record companies taking charge of things like merch or touring or licensing that fall outside their core competencies. Do you think that 360 deals are a bad idea, or just an idea that isn't often executed very well?
I haven't been close to enough of them to really comment. I've heard of instances where it works. What I have read about in a positive light is Paramore's relationship with Atlantic. That really helped them break through. But would they do it today? Probably not. Allegedly, it worked for them.
But Domino's not interested in doing them?
The way we work with our artists is in partnership, there's no formal approach to doing that. We don't participate in or share an artist's touring income, but at the same time we do provide tour support to our artists. And we do that in the belief that getting them on the road will help sell records, but I think that if we do do it, and to some extent we do—maybe it's 270, maybe it's 180—we're willing to do whatever it takes to support our artists. We like to think our second strength is publishing, because that's something we've had a lot of success with, but we don't do merch, we build artists shops to help sell merchandise. It's not as formal and rigid as a 360 deal. ANd I agree with you, it's not a label's core competency, but major labels have gone out and bought merch companies, so they are now experts in merchandising. Selling tickets? I mean, hot bands sell tickets. I don't see promoters doing anything all that spectacular that labels couldn't do.
So what's the logic for not taking a piece of that touring when you're helping promote them?
I guess because there just aren't that many examples of us supporting a band early on and them breaking through and then going on to sell tickets. I mean, our bigger artists, Arctic Monkeys, I don't know for certain but could probably say Franz Ferdinand, Animal Collective, Dirty Projectors, could all sell tickets before we did any projects with them. So how could we justify taking revenue in that respect? But again, I think that if that situation came up, where we were funding tour after tour to get a band going, I think we'd be open to having that discussion.
But here's something I always talk about which you might find interesting. I used to work with really big teen pop bands; I worked at Jive Records during that heyday. And a lot of my coworkers would work with these bands from day one, so they broke, say, Britney Spears. My wife used to take her to malls in her Honda Accord, and she was as green as could be, just a 'tween. And Jive Records broke her, literally mapped out a plan and broke her. And by the time I got there, every day the phone would ring and it would be a movie company, a fragrance company, there were so many partnerships where she was making millions of dollars and the only thing we were collecting revenue on was the records. So we built the brand, and then the brand went on and sold itself! There were so many verticals they created that we didn't participate in. Is that fair to a record company? And so when you look at things from that perspective, it starts to look like a stupid business. Why shouldn't they participate? Why shouldn't they get a piece of those revenues?
So let's talk about band-brand partnerships. How central are they to Domino's strategy of promoting artists?
Well we certainly like our artists to sign onto our publishing as well. We feel there are synergies there. A lot of people work with Domino's roster for music placement, because they know they can get sign off on both pieces quite easily. When you have to go to Universal for one piece, and EMI Publishing for the other piece, it gets quite complicated. We're a lot more nimble, and it tends to work well.
Finally, let's talk about the showcase side of CMJ. Are your A&R men going to be out in full force?
[laughs] Chances are, if a band's playing CMJ, our guys are already aware of it.
Well, right. But your guys don't show up to see how they look or sound when they're playing their sixth show in four days at 2PM in the basement of the Cake Shop? Is that kind of information valuable? Can an A&R guy glean some valuable information from seeing a band play in those conditions? I've always thought it was such a strange environment to see a band for the first time in.
True. But we all agree that coming out of CMJ, SXSW, there always tends to be a handful of bands that everybody's talking about, and there's value in that. And so, at the end of the week, the band that's got stuff going on is the one that everyone wants to book, and so that band will then do five or six, or more than six, more things, and by the end of all of those different shows, the word is out. Does it bear out? I think about the Soft Pack from a couple years ago, and that all went quiet after CMJ. Or the Black Kids, from a couple years back. Where are they now? So I don't think that process always gets it right.
