Thousands of independent record labels are started each year, some more successful than others. Over the past decade, as major label profits have declined thanks to file sharing and even legal downloading, independent labels have been searching for a new, more effective method to turn a profit.
The Valley's Mike Zimmerlich hopes he found the solution. He's signed his first two artists to his record label, 80/20 Records, including My Lost Remedy and Tempe's Dry River Yacht Club.
The twist is the small cut of overall record sales Zimmerlich will take. True to its name, 80/20 records works on a model of 80 percent of profits going to the artist and 20 percent going to the label. Even independent record labels have been known to take up to 40 to 50 % of artist recording and touring profit.
We talked to Zimmerlich about snagging one of Arizona's most sought after bands and the changing record label model.
Up on the Sun: What made you want to start 80/20 Records?
I wanted to start 80/20 Records because I was tired of witnessing the decline in the music industry while very little was being done to innovate and adapt. Record labels were desperately trying to hold on to a business model that has become obsolete, so I decided to try something completely different and re-invent what a record label means and how it relates to how we consume music.
What's the history behind 80/20?
Actually it started when developing a music social networking website back in 2006, after it was released we received great feedback and had over 4,000 visitors per month. However, during that time, other sites such as Pandora and Last.FM became very popular and our project was lost in the mix. So we decided to take our knowledge and experience to focus on a record label, but I didn't want it to be like other labels out there. I wanted to create something different that would prove that the music business model can change for the better.
Why do you want to give 80 percent profits to the artist, when major labels, and even indie labels, give considerably less than that? Is that sort of model sustainable?
I feel that the artists are putting so much of themselves into their music and working so hard to create these works that they deserve the majority it reaps. The reason why we can sustain giving 80 percent royalties to our artists is being efficient within the label. When you are able to record a quality album using equipment for a few thousand dollars and release it to the world with numerous channels at your fingertips you don't need to spend as much as you had in the past. From the very beginning we decided not to release CDs initially and offer our albums as download only. If the album sells, well then we can determine if physical mediums are necessary. We don't have to risk fronting money for an album that may or may not sell. I find it ironic that years later, the major labels have decided no longer to distribute CDs by the end of 2012. This is just one of many examples. It's all about being smart with what you invest in and how to utilize the tools available to you at the fullest.
What plans do you have for Dry River Yacht Club in the future, as far as 80/20 goes?
We have a lot of exciting plans with DRYC but nothing I can discuss at the moment.
How does it benefit an artist to sign with a label like 80/20, rather than working the DIY method? Especially local artists.
There are many great musicians but many of them aren't great when it comes to business, and they don't have to be. We can advise artists on how to promote themselves and distribute their music, and then help them implement our suggestions such as marketing campaigns. We also help artists determine based upon their fan demographic what type of merchandise to sell, at what prices, and where to sell them. When all musicians have the ability to put their music on iTunes and promote themselves on Facebook and twitter you have to find ways to make yourself stand out. Even the musicians who are business-savvy it takes a lot of time and effort to take care of these tasks. Essentially we become a "helping hand" for artists that assist with the business side of things.
Do you plan to keep 80/20 focused on local music, or do you have plans to expand?
Ideally we prefer to stay local however I'm always open to listen to any artist in any region. I've spoken to artists from California to Israel. In fact one of the bands on my label, My Lost Remedy, is located in New York. However, we have a strong connection to the Phoenix music scene as it has supported 80/20 Records over the years and there are many gems in the desert.
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