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There are few equivalents in the business world to the independent record company. Most are labors of love rather than profit. To music lovers first, business people second, indie-label owners perform a valuable service in releasing music by artists that the big, corporate imprints can't, won't or don't know about yet.
Whatever the motivation, indie labels (so called because they are "independent" of the Big Five record distributors, Warner Bros./Elektra/Atlantic, EMI Music, Universal, Bertelsmann and Sony) are more than farm leagues for big companies to pluck bands from. They are havens for musicians who care more about art in a business that is increasingly concerned with pleasing stockholders.
Operating on smaller budgets and selling fewer records than the big boys allows for more creativity and flexibility. Artists may not even have contracts at indies, as handshake deals are commonplace. But instead of the 10 to 15 percent royalty rate, common at major labels, indies and artists usually split the money closer to 50-50. For a band that can sell 100,000 records, there is three times as much profit on a small label as on, say, Warner Bros., Interscope or Capitol.
And indie labels exist on a scale in which 10,000 sales turn a good profit. Majors, with their field staffs, radio consultants and other overhead, make it impossible for most bands to break even unless they sell 500,000 copies. Of course, because indies aren't focused on the bottom line, they can also be volatile, short of cash, ad hoc and out of business, sometimes even before the pressing plant gets paid.
Two durable American indie labels, Merge and Matador, are each celebrating 10 years of operation this year, and they're doing it by releasing compilation records (Oh, Merge and Music Is Nice, respectively). In the early '90s, the kinds of bands that Merge and Matador had on their rosters fit right in with the popularity of alternative rock. One of the unexpected bonuses of platinum records from Nirvana, et al., was that these companies sold more records. Matador did jump into bed with the majors, signing a distribution deal with Atlantic Records (part of the WEA family) in 1993 and then selling 49 percent of the label to Capitol (EMD) in 1996 for, reportedly, between $8 million and $12 million. Neither deal produced hits. Matador bought itself back from Capitol at the end of last May.
Beyond caring more for artistry than dollars, indie labels have personality. Matador, based in New York City, has a snarky, slightly hip attitude, evidenced in its 10-year anniversary campaign, "Matador Is Nice." This cheekiness extends to the staff, headed by co-owners Chris Lombardi and Gerard Cosloy, leading some Atlantic staffers to refer to the label as "Matitude." For inquiring minds, yes, Matador is bigger than Merge. Matador released 300-plus records in the past decade, and it has a larger staff. Artists who have recorded for the label include Liz Phair, Yo La Tengo, Pavement, and Guided by Voices.
Lombardi and Cosloy worked together at another indie label, Dutch East India Trading Company/Homestead, in the '80s, and Lombardi started Matador without his partner, who eventually came aboard in 1990. Cosloy probably best exemplifies the attitude of the company. His responses to email questions came like under-the-breath comments from the back of the room, illustrating the label's demeanor much better than serious answers could have.
NT: What are some of the mistakes you've made?
Cosloy: We should've handed out that sexual harassment policy letter much earlier. Sponsoring the amputee softball team was a questionable decision. And of course, some of our more litigious former employees will not let us forget "Go to Work Blindfolded Day" (which kicked ass over Casual Friday, I thought).
NT: How do you and Lombardi work together?
Cosloy: In a very careful, considerate manner, not unlike Madison/Unger, Nixon/Agnew, Cagney/Lacey, etc.
Funny, but not very helpful. Cosloy's partner is more serious in discussing the label, lending some credence to the Odd Couple joke. Chris Lombardi started the label soon after leaving Dutch East India. Being plugged into the New York music scene and having connections in the retail world put him in the right position to start a company.
He signed a few bands right away, and things took off more quickly than he expected, though it would be four years before Atlantic would step in with big money. Cosloy was brought on to help with the workload a few months after the label started in earnest. Today, Cosloy is in England overseeing Matador Europe (opened in 1996), and the company has 36 people on payroll.
"There wasn't any grand scheme to create a full-fledged record label," says Lombardi. "It was an experiment. 'Let's see what happens.' It just grew from there, basically. Friends ended up working for us for very little money. When we had some money to pay them, we paid them. We paid ourselves whenever we had a little bit. The idea that we could keep the lights on, continue to put out records and have money for pizza, we were doing good. If we could pay our rent, that was even better. And we were able to do that. We kept growing."