[Distribution for Independent Labels] Time 4:18

Initially we sold it, you know, the band Les Savy Fav went on tour and just sold the record, and that’s how we made money. It was easy and CDs had just come out; it was relatively cheap to manufacture them. At this time seven inches and vinyl were sort of going away of the dodo. I told them the argument which I never think they will go away. But it became so expensive to manufacture, and that CDs were so cheap it was nice to sell CDs and T-Shirts and you could survive. But that sort of became the way, you go out and tour and you bust your butt and that was it.

But focusing on the label, as the label grew and licensing and distribution came into play, it was really hard. I didn’t really know the distribution game and a lot of the small distributors would pick up our records on consignment. So, you’d send out 100 CDs or 300 CDs or a1000 CDs and then you’d have to wait until those were sold and if not then they were returned. So, you didn’t know when your money was coming in.

So, as you get bigger, the bigger distributors wouldn’t pay attention to you unless you had the catalog. So if you had one or two records, there were a million record labels that had one or two records, so why should they pick you up? It costs a bunch of money and a lot credit card debt to go into putting out a lot of records just so I could approach a bigger distributor and say “Listen I have 10 records or 20 records” or whatever it was, and they sort of took you more seriously. Then you got bigger distributors and you moved up the chain so to speak.

But the distribution game is, the bigger you go the more of a head ache it is; but it is also incredibly necessary. They then go and sell your product to retail stores and then they try to sell your record. But the retail game is a racket, I think. Most record stores are real estate, so you’re buying where your record is placed, so to speak. Right when you walk into a record store and it says “This store’s favorite records or the best records,” right when you walk in, that costs a lot of money. Listening stations costs a lot of money and a lot of people don’t realize that. So, a lot of bands are like, “How come we don’t have a listening station or how come we don’t have that?” “It’s because it costs $10,000 and you guys have only sold 1,000 records. I’m not going to spend all this money”

It is sort of this catch 22. So, sometimes I question why record stores go out of business because they are making all this money and they also have the right to return all the records. So, after six-months if the record hadn’t sold, they can return it back to the distributor, then the distributor charges you and sends it back to you and you have a dead product. So it’s a total hustle, constantly. So, if a band doesn’t tour and the record sits in the bin and then no once cares. Why should you get in your car and drive to the record store and buy the record, when the band hasn’t gotten in their van and played a show?

[Interviewer]
So, you’re taking advantage of digital distribution?

[Syd Butler]
Yeah, you know, it’s funny, we signed up with this service called eMusic and they have been great to us. More and more every month you get a statement; more and more people are downloading and are happy to pay for music, which is nice, because there is so much thievery out there.

It is definitely a trend of the future; there is no question…and how to be creative and market yourself to that generation of people who know how to use computers so well. I think the New York Times called them the “Millennials” or something, there is some sort of Gen X new name for them, people that were born with CD players, grew up with DVD players that are now freshmen in high school or seniors in high school about to go to college. They have their own language; they know everything about the sort of technology. It is scaring the hell out of them, these older dinosaurs that are so used to doing a different approach to selling things. They don’t know how to advertise to them because it is all word of mouth. So how do you advertise to someone, creatively, so that they get excited about the word of mouth and pass it own to their friends?