Running An Independent Label: A Year In Review

The label

More than a year and a half ago we started Heroic Recordings, our label slash artist agency.

It started as a way to release the music we loved and artists we worked with. I was managing a few acts back then, all of whom were experimental in sound and yet unestablished. We experienced a hard time getting them signed to bigger labels, specifically majors. They wanted them to conform their sound to what they saw as the commercially acceptable format – whereas we had signed these acts with the conviction that their unique sound and style was exactly what could make them successful. Launching our own label to prove this point was the logical step, and so Heroic Recordings was born.

From the launch till now, it’s progressed from being a side-project while finishing our studies, to a full-time endeavor. We’ve put out music of over 15 artists, issued over 30 releases (including singles and EPs), are doing management for a selected few that we truly believe in, and have just launched a division called Heroic Audio, where we source our creative talents to create audio for films, advertisements and other commercial purposes. Also, we’ve just acquired our first sublabel - Rockforce Records - to become our outlet for bass heavy music.

In the last few months, our growth has gone from steady to exponential. The cumulative effect of our latest successful releases by San Holo and Ducked Ape have resulted in a snowball effect of social growth. It’s been a thrill to experience, and beautiful to see how momentum converts into sales and fans, allowing one strong release to support another. The growth we’ve realized in the past two months would have literally taken us over a year when we just started out.

 

The stats

Our Soundcloud has just hit 10.000 followers, Facebook is approaching 3.000 and Twitter just surpassed the 1.000. These aren’t huge numbers, but are built fully organically, and with it is coming strong fan-interaction. We’re seeing bigger responses to our releases, more fan submissions, more demos and more brand recognition than ever, particularly locally. To give you some insight into these statistics, look at the graphs below.

Running An Independent Label: A Year In Review
ToneDen.IO extract of our social statistics over the past 12 months. Notice how our Soundcloud following has grown over 4.000 followers in this past months, almost doubling the size of our total. Twitter follower growth of the past month nearly over 15% of our total followers.
Running An Independent Label: A Year In Review
Facebook insights extract from our label page, from it’s inception to now. Notice the peaks of growth in the top graph, which coincide with events such as releases and remix competitions. Total page likes growing at increasing rate.

 

Running An Independent Label: A Year In Review

Soundcloud extract of our label page, covering the last 12 months. Notice the 60k plays in September, accounting for over 35% of the plays in the total year.

We are fully aware that these numbers bleak in comparison to what the superstar DJs and artists have. But this growth is convincing enough to solidify our belief that we can build this out into something that can last. A platform to establish artists, create opportunities and someday rank amongst the likes of Mad Decent, Fool’s Gold, Inspected, Soulection and the other indies we look up to.

I didn’t put these numbers here to brag, but rather as a segue into the core of this article. As over the course of bringing this label to life, we have discovered lessons and strategies that really worked in our favor. We took a moment to reflect upon these with our crew, and have distilled the essential ones out for you. Some are universal truths, others very specific findings, but the majority are insights that can be beneficial to not just label owners, artists and industry professionals – but almost everyone in a creative field.

 

Quality attracts quality

When listening to our earliest releases there is a huge difference to what we are putting out today. The quality is uncomparable. The tracks have improved, the mix has improved, the masters sound better – but most importantly, our artists are on a whole new level.

This transition is the result of a gradual process.

“How do we find great artists and music… and get them to release with us?

That was the question we were asking ourselves at launch, like most start-up labels. We begun with a single act, Ducked Ape. Everyone that later joined us, we had discovered on the net – browsing on Soundcloud and YouTube for music that stood out to us. Getting new quality acts was tough… almost impossible. So we started building a roster of talented but unestablished acts – that made great music.

For every release we set out to raise the bar. Both for ourselves and our artists, on a musical and strategical level. We are very involved in the artistic process, as early as during the creation of tracks; we feedback compositions, arrangements and mixes. All of our mastering is done in-house, by our engineer Tim. In turn, we involve our artists in the creation of marketing strategies and outreach – communicating with them to figure out exactly which tastemakers, DJs, promoters and blogs they want their release to get out to.

This leads to a stronger catalog, which provides a stronger pitch to new talents we want to bring aboard. Quality attracts quality. Yet what we considered quality a year ago, isn’t even close to what we consider quality today.

 

The best is taken, not given

With the exposure of our latest releases, comes an influx of demo submissions.

We have an email address and demo form on our website, and we check everything that comes in. Sure – not every track gets an attentive four minute listen, but we flip through it all in the search for something that stands out.

On an average week about 30 demos come in, yet:

We have never released an original that was received by demo submission.

Not a single one. The only submissions we’ve accepted have been the winners of remix competitions that we hosted.

Every original that we put out, every artist that we do management for, we are involved with because we reached out to them ourselves. Only recently have we received a demo submission that was up to our standards, but up till then every artist that we worked with, we found by prowling the web, looking in our close environment or via friend recommendation.

The universal lesson here is that until you reach a certain threshold, you will have to actively reach out and fight to work with the people you want to work with. If you’re starting out, the best aren’t going to come to you – no, you need to be eager, show them you want to do business, whether those are labels, artists, or whomever else. Then once that threshold is reached – you’ll see that better qualified parties start coming to you out of their own initiative.

 

Working with artists that have a clear vision

Our business model goes beyond that of a regular record label. We release music, but then exceed that by offering management, booking and publishing services to the artists that stand out to us.

I have been managing artists for four years, some of whom I still work with, like Ducked Ape, however other relationships have failed. For a plethora of reasons, such as a disconnect between their goals as artists and mine as a manager, developing different musical tastes, and levels of ambition just not matching up. I have worked with big egos, small egos, the talented but lazy and the talented and driven. Ducked Ape, my initial act, are the reason i got started in the music industry. They, just like myself, have gone from loving music – but being clueless about the business, to driven and goal oriented individuals.

Finding the right artists to work with has been quite the journey.

Three years ago, I was happy to expand, bringing artists under my umbrella that stood out to me musically. I was eager to learn, eager to work, and eager to lose the dependency on my then only act – Ducked Ape. Those were the conditions on which I signed and work with acts… of course, screening for a fit in personalities, but never in the way that I do now. Four acts that I worked with turned out to not be the right match. All of these people have become good friends of mine, many still are, and I owe a lot to them – yet in retrospect, I would not have signed them today.

What my team and I found is this:

Great artists stand out with exceptional music and work ethic, but most of all – with vision.

Our artists that are experiencing most success, but also those around me in the industry, and that friends of mine work with, all have that one thing in common: VISION.

From knowing exactly how their music has to sound, to who should play it, to which artists to remix, what parties to play, how all visuals should look, all of it – is subject to that vision. For these artists, it serves as a filter and standard of quality control, for both themselves and everyone else.

This works, because once you have figured out exactly what you want, achieving it is a matter of moving towards that goal. For me, this trait in an artist, changes my job from ‘being the bad guy that forces you to do what you don’t want to do – and takes care of business’ to ‘facilitating and creating whatever opportunity to realize that vision’. The distinction here, is that in the first scenario, as has happened in the past, I am typically the one with the vision – not the artist. And that’s no recipe for success.

Regardless of whatever you do… producing music, running a label, or whatever else… ask yourself: Do you have a clear vision of what you want, how you want to get there, and what it will take? If not – go back to the drawing board.

 

Building a team – and the art of letting go

Much of the things that we’ve created, from the visual branding to our label, to the consistency in mastering, wouldn’t have been possible without the great team that we have.

Up till half a year ago, this consisted of Tim (our engineer, and one half of Ducked Ape), Frederik (our designer) and myself. Tim taking care for how everything sounds, Fred for how everything looks, and myself for strategy and marketing. Yet between managing multiple acts, running the label, writing this blog and rounding off university – I found all of my time taxed. We needed help.

In the past my experiences with interns had been bad. In the first year, two people had come aboard. They started out driven and enthusiastically, but over time this diminished – to the point where it made no sense to have them in the team. Part of this will have come because they wanted to work with us, mostly because they thought being with a label was cool, more so than an internal drive to develop themselves in the music industry. Another part will be because of my difficulty with delegating work to people, and giving them autonomy.

I remember clearly a dinner with an entrepreneurial group I’m a part of, and expressing how the scalability of our company was limited by our time. Upon which my friends stressed that I hire an intern – a good one. As part of the start-up culture, they had all been building businesses largely reliant on legions of interns, and thought that I should do the same. They were right. Within that week we put out an ad, and to our surprised received over 15 submissions – some from abroad, some local. One of them was a great match, Yiannis, who has now become a full-time part of our team – moving out to our city to work with us.

In that time we have changed the way we collaborate. Tim and Yiannis have become crucially involved in day to day operations, with each of us focusing on a separate aspect of the business; Yiannis covering bass sublabel Rockforce, Tim overseeing production house Heroic Audio and myself doing management, strategy and marketing. For every big project, we pull together and combine efforts – particularly for releases. This division of work has allowed me to gradually become better at delegating – particularly as we’re educating Yiannis, and what better way to learn, than by having him try and experience things himself? This realization really set this process in motion for me.

Finding a group of people with aligned visions, letting go of any conception that I could better do everything myself, and transparently working together to best use each other’s strengths, has changed our game.

 

Monetized streaming is the future

I’ve said it before and I’ll say it again.

Monetized streaming is the future.

As we are largely focused on electronic music, we are likely ahead of this curve, but without any doubt, I can safely say that streaming will overtake downloading – shortly. When rounding off our latest quarter’s royalty statements, we found the following; 42% of income came in via Bandcamp, 29% via iTunes, 14% via Beatport and 13% via Spotify. This quarter, our Spotify income has already surpassed that of Beatport.

In terms of rates, with our current distribution deal, 170 Spotify streams bring in a $1 net royalty. And then there’s the YouTube monetization, which via our EdmDistrict network link amounts to 800 plays for a $1 net royalty. Soon, Soundcloud will also be added to that equation. Rates for that aren’t yet disclosed, but they’re rumored to become around that of the better YouTube networks – allowing us to both monetize the content on our channel, and use of it across the whole platform.

 

Free versus Paid

The ever lasting debate;

Whether to give music away for free, in exchange for social currency (followers and likes), or to sell it?

We’re always trying to find the right balance here.

There’s a lot to be said for exchanging free downloads for social currency, using content lockers. Tools like ToneDen.IO and Click.DJ now facilitate this for YouTube, Soundcloud, Twitter and Instagram, which in turn makes up for the loss of Facebook like-to-download apps. It helps content go viral, makes building social status easier, and expands reach.

But there’s value in music – and we have to make a living off running Heroic. As I explained in an earlier article, we typically distribute every release to all major online outlets, but also offer it for sale via our own Bandcamp. Here we don’t have to charge a ridiculous $2 for a track, but place a floor of $0,50 for every single – allowing our fans to pay more if they want.

With our latest releases, we’ve managed to find a nice equilibrium. The San Holo – COSMOS EP dropped with us two months ago, consisting of four tracks – two of which with single potential. A month before the release of the EP, we put out the single ‘Hiding (ft. The Nicholas)’ as a free download, which gathered a lot of traction and helped prime fans and targets for the upcoming EP. Later, when dropping the EP, we also gave out the remaining single ‘Fly’ as a free download. These helped spread the word about the release and were the prime drivers of it’s virality – yet the full EP was only for purchase via online retailers and our Bandcamp. In every upload description, we stated that the two singles were available for free download, but that people could support the artist by ‘paying what they wanted’ for the full EP.

The result?

Our highest grossing release to date. And simultaneously our most played.

This is a strategy we’re going to continue using in the future. People have said that the album is dead, and it’s true – but by spreading out the content, and finding a balance between free and paid, EPs and albums still make sense.

——

I hope these reflections are of use to you. For sure, they are to us.

And perhaps that’s the last thing I’ll add. Reflect, often, on whatever you do. Have a meeting? An important gig? Just put out your latest release? Reflect on what’s working, what’s not, and figure out how you can improve.

We are still amazed every day at how much there is still to learn. We’re better than yesterday, but nowhere near where we want to be.

Is monetized streaming the future?

Is monetized streaming the future?This article has been featured on DigitalMusicNews. Read it here.

Streaming is huge. Bigger than ever. And growing.

Everyone’s on Soundcloud, YouTube, Spotify, or some other source where listening to tracks is just the click of a button away.

This surge has drastically impacted the music industry, by making content easily accessible (often for free), facilitating interaction between creators and consumers, and by giving creators the freedom to share and collaborate. Yet the impact of streaming is not nearly at it’s peak.

The next level is about how to successfully monetize it. Something that if done right, will truly change lives.

This realization hit home when I was rounding off our label’s second quarter royalty payments a few weeks back. It’s the time when we look at all the revenues we generated by selling or streaming music, via sources like iTunes, Beatport, Spotify, Bandcamp and others.

To make this a clearer story, I’ll elaborate on our distribution strategy first;

Heroic Recordings pushes mostly electronic music. We believe that that music should be accessible, everywhere, for everyone. We’re actively engaged in the music blogosphere and are very fond of free downloads. Especially when in exchange for social currency, such as Facebook likes and Twitter followers. However, we also believe in the intrinsic value of music – as our artists and us have to pay the bills. So we also sell – distributing to all major online music stores; iTunes, Beatport, Spotify and so on.

Yet we have to make an active choice on where we lead our customers. On whether in a new release’s marketing efforts, we direct them to Beatport, iTunes, a free download or elsewhere.

The trade-off we have to make here is between the quick growth of social-currency via free downloads, versus extra revenue via distribution sales and streams. In a perfect world, we’d go for free downloads all the way – as growth is the quickest way to move up in the game as a starting indie. However we can’t give it all out for free – as the income, even if still relatively minor, covers costs and investments. The big hurdle to pushing our fans to buy via online stores though, are the absurd prices they charge. Beatport asks nearly $2 for an MP3 and even more for a WAV, iTunes $1 for a single.

Is monetized streaming the future?

Now don’t get me wrong, music has value, and artists and labels put in hours which make a tune, even if an MP3, valuable, but those prices simply do not reflect reality anymore. Five years ago charging $1 would have been reasonable, but with a target demographic of EDM lovers aged 15-25, mostly students, and the accessibility and variety of music via streaming (Soundcloud, YouTube, Spotify) and piracy (torrents, file aggregators), we don’t believe $1 is market value.

 

The solution we’ve found is to make all of our content available via Bandcamp, charging fans just $0,50 for a track – but allowing them to pay more if they want. And we get to keep their email addresses. It’s where we direct all our traffic, and is a platform which fans experience to be closer to the ‘source’ than when shopping from an intermediary like Beatport or iTunes. Still, we’re also distributing to all the online stores, as it’s all about being easily accessible. There is just little reason for us to send traffic there, as besides being overpriced, they’re all about chart positioning – and competing against the majors and bigger indies, whom  can much better facilitate high rankings (via big existing fanbases, marketing budgets and sometimes even illegal chart-pushing activities) is time not spent best.

Is monetized streaming the future?

To come back to the point, when rounding off our latest quarter’s royalty statements, we found the following; 42% of income came in via Bandcamp, 29% via iTunes, 14% via Beatport and 13% via Spotify. With no efforts to direct traffic to anywhere else than Bandcamp, they all generated revenue. But the most interesting here is Spotify, which made as much as Beatport did for us – while we’re a label focused on electronic music, and Beatport is the primary marketplace for DJs and electronic styles.

We ran the numbers; 170 streams on Spotify lead to a $1 net royalty, meaning $0,006 a play. Not bad at all. After a 10% administration deduction, 50% of that goes to the artist. In other words, just about 380.000 plays on a track brings in $1000 in net royalties for an artist of ours. How cool is that.

And the best thing is – this requires little effort nor expense on the user’s end. Because both subscribed and free Spotify users contribute to this revenue. While not huge, these figures will become much more significant when you include YouTube and soon Soundcloud revenues. Our label’s hooked up with a YouTube partner network, and via them, 800 plays on our channel leads to a $1 net royalty. And with Soundcloud just launching their advertising model and partner programme, on which we’re soon joining in, monetized streaming promises to become very significant.

Is monetized streaming the future?

I see the bigger picture being this; digital overtook physical, with MP3s and downloading replacing the necessities for CDs. Soon, streaming will overtake downloading. Soundcloud’s the perfect example – reporting 175 million unique users per month. Sure, there will still be people that buy CDs, vinyl or files (particularly DJs), but it’s definitely where things are headed on the grand scale. The rate will be determined by the accessibility of good internet, smartphones, how soon the music industry determines a true balance point between charging for these services and paying for use of music, and the extent to which copyright law will move to support all this.

This outlook put a big smile on our faces here. We fit perfectly in our own 15-25 year old EDM loving target demographic, and frankly, we stream all day. Soundcloud is our label’s primary medium, and we’re all running Spotify accounts – streaming from a huge catalog at 320kbps. None of us really download, perhaps incidentally for DJ sets, but that’s it. So to expect our fans to do so is absurd.

That is why those Spotify numbers are so exhilarating. With YouTube income catching up, and soon Soundcloud joining the mix, it is only a matter of time before monetized streaming becomes a real core income stream for our artists and us. Without screwing anybody in the process, or charging unreasonable prices. Bring on the future.

Guest on the Artrepreneur Podcast show

Guest on the Artrepreneur Podcast show

Heath from The Artrepreneur Now invited me to be a guest on his Artrepreneur podcast show.

He is all about spreading positive creative influence, via his podcast where he interviews artsy entrepreneurs, and through the The Artsy Now foundation, which is focused on providing children the opportunity to discover their purpose in life through music and art. A honorable cause if you ask me.

We talk about my journey in the creative field, about The Soundcloud Bible, running a label and everything in between.

Tune in to the show here:
iTunes
Soundcloud

New video tutorial: How to set up like gates

Free downloads.

We all love them, but have a hard time converting them into something valuable.

That’s where like gates come in. A method for exchanging your free content for a FB like, email address, tweet or Soundcloud follower.

As you all know, I’m a big proponent of this strategy. After all, who would prefer a few hundred dollars in sales, as opposed to thousands of downloads and email addresses? The latter is bound to get your music more exposure.

I have teamed up with Andrew Apanov of DottedMusic and WeSpin.com, and we’ve created a video tutorial this topic. A step-by-step explanation on how to set these up, and you can watch me do so whilst I run you through the process.

Check out the video here, and learn how to get more out of your existing freebies.

New video tutorial: How to set up like gates

Soundcloud is adapting… are you?

This post was written for and originally published at DigitalMusicNews. Read it here.

Anyone that’s serious about marketing music has noticed that Soundcloud has changed.

Just over a year ago they introduced their brand new user interface to the public, still largely in beta mode. It introduced a few new features whilst adapting or removing older ones. At first everybody panicked and complained; it looked too cartoony, not all old functionality was there and there were a lot of infancy bugs. Over time though, they’ve done a great job refining the platform to its current state – and most fans have grown accustomed to it.

They are upping their game; shifting course from being originally intended as a means for musicians to collaborate, to a mass-scale music platform. A mandatory change if we believe the numbers… October 2013 reports claim over 45 million registered users and over 250 million monthly listeners. They are the most shared music platform on Twitter and valued at over 700 million, with recent rumors even talking about a takeover by Twitter (recent sources already state this deal hasn’t gone through). It’s often said that they took the online space that Myspace had once occupied, and with that comes the realization that they need to continuously adapt, or face the cliff.

On May 12th they announced the official shut down of the old Soundcloud, removing the option to switch back to the older style if you so preferred. That makes the new Soundcloud, or Next Soundcloud as they call it, here to stay. And we as users, artists, industry professionals and fans, better learn how to use it properly.

Over the past few months I’ve received many emails of people asking how to cope with the new changes. The focus of the promotion within the platform has shifted, and many of the older tricks aren’t useable anymore. As many were using those with a lot of success, understandably they are upset… and want a solution.

In this article we’ll discuss the most important changes, how that has changed the game and what you can do to adapt to it. How to turn it around and make it work in your favor. Adapt, leverage, grow.

So long, private sharing trick

The issue I’ve heard most about is the removal of the ‘private sharing trick’; a great method for sending out privately uploaded tunes directly to your followers and people you followed. You could include a 140 character message, and recipients would receive a notification and often also an email. The latter was enabled on default in new accounts. One could then switch the upload to ‘public’ while retaining all the traffic. With the cap on people followed being 2000 and the email notification, it was an incredibly effective way to give new uploads an initial boost.

Besides that, they have improved the algorithms that detect spamming in comments and messages. Accounts are now automatically flagged if they place too many similar comments within the same time frame, with the punishment being a mute-period. The more you get flagged, the longer the mute period – until you get banned.

In return, the inter-user messaging system has been improved, including a new method for private content sharing, allowing you to include content that has been uploaded on your profile to private messages to other users. This also works for privately uploaded content.

Changes in content curation

Another less obvious but crucial change is made in the way content is curated to user’s streams, the personalized music discovery tab. Before, it would display content uploaded and liked by those you followed. Now, with the introduction of reposts, it shows solely their uploads and reposts (reposting allows users to post other people’s uploads to their own profile, attracting traffic from their own fans, but directing it back to the original source – the profile of the uploader).

Soundcloud did this because with the older system, streams had become terribly chaotic and crowded, to the extent that people rarely used it to discover new music. As it included content both uploaded and liked by those you’re a fan of, people that followed many active users quickly received too much content to be able to digest. Their streams got flooded and as a result they looked elsewhere for music discovery… blogs, Hype Machine and promotional channels.

With the new changes, the stream has become a much more filtered source; showing less but higher quality content. As a result they hope to make it a better resource for music discovery, which to me, is a very welcome change.

How do we adapt?

When looking at the bigger picture, you should realize that Soundcloud has forced a shift in user’s focus for promotion within the platform.

Marketing to other users has become less rewarding, with the removal of the private sharing trick and increased anti-spamming rules, whereas marketing to tastemakers and content curators has become much more interesting, with the introduction of reposting and the new content curation system. Instead of focusing on promoting to other users, you are now much better off getting through to the right DJs, labels and music promoters, whom are easier to reach and can publish your content to their audiences.

In terms of practical strategies, the above can be translated into a few strategies which allow you to work with the current set of Soundcloud features;

Email marketing

To cope with the loss of the private sharing trick, which could drive a surge of traffic to new uploads, there’s the alternative of direct email marketing. Hopefully, you were already doing this simultaneously to using the private sharing trick, but if not, this is absolutely the right time to do it. I’m actually convinced that email marketing, and building a solid email list, is the strongest form of online marketing… think about it – when posting to your fans on Facebook and Twitter, only a selection of them sees the post, and it’s also competing with the posts of others, whereas with email you pop up straight into someone’s inbox. And everyone reads their mail everywhere nowadays.

You can easily collect email addresses by offering your fans free downloads in exchange for their email address, using tools such as ‘content lockers’ or ‘pay what you want’ download systems. You often see these for likes, where people can access downloadable content by clicking ‘like’ on a Facebook page. An easy to use email gate system is offered by Bandcamp, and I explain how to set it up in this article. Also collect via adding a ‘sign up’ tab on your Facebook page and website.