From the April 1999 issue of Startups

Falling off an escalator, Brian Herb says, was the best thing that ever happened to him. "It was a freak accident," explains Herb, 26. At 1:30 a.m., May 31, 1996, Herb, the designated driver, was sober as he and his friends left a club and took the escalator to a third-story parking lot. Herb only dimly recalls leaning over the railing. Falling, he remembers more vividly. He plunged 30 feet, landing on a layer of tile-covered cement. During the 11 months of physical therapy that followed, as his broken knee and arms healed, Herb quit smoking, stopped drinking and started his own record label.

The escalator-plunge-to-near-death was the easy part. Creating your own record label means finding a band, a recording studio, an engineer, a producer and a distributor. It also means investing your money or searching for somebody else crazy--er, insightful--enough to believe in your band's music. It means long hours, sleepless nights and sketchy profits.

Iara Lee knows this well. She's a 33-year-old filmmaker and music-label entrepreneur in New York City who has produced 22 CDs, with more to come, including a series of CDs featuring music inspired by works of architecture.

So what if there isn't a demand for architectural albums? "I'm not swimming in profits," admits Lee, shrugging off the suggestion that she's an impoverished entrepreneur. "Success should be monitored not just by profit, [but by] the cultural relevance and impact that you have." And there's good reason to go into the record industry for more than a burning desire to make a buck, says Lee. She observes that her business is "1 percent glamour and 99 percent hassle, bureaucracy and things that are pretty nonrelated to what you were expecting. One has to understand that in order to be cool and interesting, one has to work very hard behind the scenes."

But is it possible to be cool, interesting and rich? Sure. Just talk to Owen Sloane, an entertainment attorney whose client list over the years has included everyone from Elton John to Olivia Newton-John: "If you're trying to compete with the Sonys, Capitols and Warner Bros. of the world, you can pretty much forget about it--unless you have multimillions of dollars of capitalization and distribution through one of them. Even then, it's a crapshoot as to whether you find the right talent."

This is supposed to be uplifting?

Well, yes, because the major labels now resemble "major league baseball," says Sloane, who likens the independents to farm teams. "The majors are not much into artist development or to selling to niche markets, because the expenses are too high. They have to go in for the big kill."

But you don't. You can go for the niche markets, says Sloane, who recommends starting a label with no less than $50,000 in the bank--and preferably $100,000. If you're still trying to pay off that JC Penny charge card, take heart: Pat Bradley, executive director of the Association for Independent Music (http://www.afim.org), says it's possible to start with as little as $5,000.

Mother of All Music began its humble existence in Minneapolis in October 1997, and while Herb's one-man/two-unpaid-intern-operation hasn't exactly made Virgin Record executives tremble, he isn't eating Alpo out of a can, either. "I'm certainly not a wealthy man, in terms of money," admits Herb, who toils 70 hours a week and won't disclose profits. "But I'm extremely lucky because I do what I love, I do it every day, and I actually manage to make a living from it." And, of course, he's very cool.


Geoff Williams (gwilli2181@aol.com) is a freelance writer and a self-proclaimed music connoisseur. But since his personal CD collection includes The Beverly Hillbillies movie soundtrack, we seriously doubt that.

Making A Living

The first order of business has nothing to do with business: You need music. And while that was easy enough for Herb--he's the guitarist for his own band, Housebreaker--Taylor Clyne can't even play the triangle, so when opportunity knocked, he opened the door. In 1996, Clyne was doing an agent-training program at William Morris when two college buddies of his brother's had an idea Clyne thought was worth something. The idea was that the world was clamoring for an album of punk-rock musicians singing old TV theme songs.

They dubbed the label Which? Records (http://www.whichsight.com) and the CD Show & Tell: A Stormy Remembrance of TV Theme Songs. Clyne, now 28, left the agent-training program; he and his brother, Andrew, 23, forked over most of the feed (between $30,000 and $35,000); and their friends,
Scott Pollack and Jake Szufnarowski, both 24, logged most of the hours. Apparently at least one of the Diff'rent Strokes cast members was out on parole, because Todd Bridges and the "Whatcha Talkin' 'Bout" Willis Experience became Show & Tell's premier band.

In 1997, Which? Records had sales of $80,000.

What Went Right

There was low overhead; everybody worked out of their apartments. Having a concept album with a recognizable performer (and, even better, one with some notoriety, says Clyne) helped them score press from outlets including Playboy, Vibe and MTV News. "It's really hard to start a record label with a band nobody's ever heard of," warns Clyne, who admits it didn't help that Which? Records was equally unknown.

"I would drive down the coast, from Sacramento to San Diego, going to all the stores to make sure they had the CD, posters and promo copies," recalls Clyne. When a store didn't have Show & Tell, Clyne borrowed a lesson from the name of his album and would tell the managers to reorder or show them that he had a few dozen CDs in his car, which he could sell to them on the spot. Meanwhile, Pollack and Szufnarowski spent a summer following the tour of punk group Warp, selling CDs to concert-goers. They were feeling quite confident when they tackled their second CD, The Shining Path.

In 1998, Which? Records had sales of only $26,000.

What Went Wrong

They had only one follow-up CD, and when it tanked, they had no other bands to back them up. "We were too picky," admits Clyne. "We really overlooked the fact that we should have been working on a steady stream of records." Meanwhile, based on misguided 1998 projections, they rented cushy offices in New York City. Compounding problems, The Shining Path didn't want to tour. "Make sure your band will go on the road to promote their record," Clyne insists. "A kid in Nebraska won't buy a record from a band from New York if they don't get to see and hear that band live." They sold fewer than 500 Shining Path CDs in the stores, another 2,600 on tour, and made $5,000 by selling a song from the album to a TV show.

In 1999, Which? Records expects $150,000 in sales, based on a line of CDs in the works, including a jazz band performing Grateful Dead songs.

Don't Label A Label

Last year, Rolling Stone Keith Richards told the New York Daily News that someday, record companies will no longer exist--gleefully implying distribution on the Internet would destroy them. Right, just like television killed the movies. But record labels are evolving. Mother of All Music also serves as a studio for bands and a workshop for aspiring record label execs; Iara Lee's Caipirinha Music is a spinoff of her film company; and Volatile Music (see "Music For The Masses") isn't a record label, but it looks like one.

Some things never change. Nickie Lum reports that the industry is still full of Neanderthals. The 23-year-old founder of Tiger Records in North Hollywood, Lum graduated from Princeton and has been profiled in such magazines as Today's Black Woman. Her urban music label, less than 2 years old and with a staff of six, expects to rake in $3.5 million this year. Yet during meetings, executives tune out Lum and tune in her male record consultant. "They literally do not even look at me, and I'm the president," says an incredulous Lum.

Meanwhile, there are still long hours, no matter what your gender. "You'll work your butt off," promises Herb. "It takes a strange kind of person to get yourself into this industry. Most people aren't doing it because they want to make a million dollars. They're doing it because it's something they have to do." And, of course, because it's cool.

How Much Is This Going To Cost Me?

We asked a New Yorker (Taylor Clyne) and an Angeleno (Nickie Lum) to estimate how much it might cost to put out a typical CD. Here's a likely breakdown of your expenses:

  • Renting a studio: $75 per hour
  • Hiring an engineer who isn't a friend of your uncle's: $20 to $40 an hour
  • Hiring a producer who doesn't have a "name": $500
  • Hiring a producer who does have a "name": $80,000
  • Mixing the track: This can take several days, so if you're going for an eight-hour day, estimate three days: $2,400.
  • Having your track mastered (with finishing touches like ensuring the levels are cued up right and there's proper spacing between the songs): $400 per song
  • Cover art: "There's no set price," says Clyne, "but you probably want the cheapest possible."
  • Pressing plant, where CDs are actually created: $0.80 to $1.25 per CD
  • Standard bottle of Maalox: $3.99

Music For The Masses

You've got your recording; what to do now? You could read. There are books, such as How to Make and Sell Your Own Recording by Diane Sward Rapaport (Jerome Headlands Press, $24.95, 800-771-7223); if you want to learn more about the industry, there are music newspapers and magazines, from Billboard to Bluegrass Breakdown. (Hint: You should probably start with Billboard.) Or you could try Volatile Music's Web site, http://www.ezcd.com.

In 1997, Jeremy Kagan, a Columbia University grad with an MBA, caught a late-night TV commercial. "I saw a `Hits of the '80s' collection, but I only liked about half the songs, so I said to myself, `Why can't I just get the ones I want?' "

Kagan, 29, and his two partners--also in their 20s--reached into their deep pockets, which had MasterCards and VISAs in them, and now have a highly profitable company. For free, EZCD.Com will put your band's song in their music library, where consumers can listen to a snippet. If they're interested, they can include your tune on the custom CD they're creating. When consumers pick your song out of the blue, you see green.

Add It Up

Question: If Which? Records sells CDs to their distributor, Caroline, for $6 each, and Caroline sells their CDs to the retailer for $4 each, and the retailer adds $2 to arrive at the retail price of the CD, what's the name of the 27,614th customer who buys the album?

Answer: Who cares? If you've sold 27,614 $12 CDs, receiving $6 per CD, you're making some serious bucks. Just remember, you don't actually receive the $6 from your distributor until after your CD sells, if it sells. If it doesn't, see "How Much Is This Going To Cost Me?" for the price of Maalox. (For comparison, Which? Records sold 15,000 Show & Tell albums.)

Contact Sources

Association for Independent Music, pat@afim.org

Caipirinha Music, caipirinha@caipirinha.com, http://www.caipirinha.com

Mother of All Music, (612) 874-9529, motherland@sprynet.com

Tiger Records, 4605 Lankershim Blvd., #815, North Hollywood, CA 91602, (818) 623-6828

Volatile Music, info@volatilemedia.com., http://www.ezcd.com

Which? Records, which@cosmoweb.net