With "PROFIT" or "loss" all-important words, along with "bottom-line," in the music business where chart success is the all important factor of survival, it is not surprising that many of the independent record companies spawned in the U.K. during the 1960s and early 1970s have long since gone under.
To this high mortality rate, add the fact that the established majors have all, at some time or other, tightened corporate belts, laid off staff, cut budgets and production just to keep afloat in a business which becomes tougher and more competitive each year.
Without a doubt the two most successful of the 1960s indies are Chrysalis and Island, both originally formed as "shoestring" operations, working out of one-room offices.
Since the early days, both companies have grown in size through careful management and a great deal of luck. Chrysalis, for instance, has grown so substantially that its Group of Companies has added acquisitions (Wessex Studios and AIR London) and has established itself as a major force in the U.S. record industry.
While Island Records has not been without its problems over the past couple of years, the company is still very much in business to propagate the independent philosophy.
Hardly a week goes by without some new label being introduced on the U.K. market. In many cases, they are gone inside a few months. The reason is simple: money, or the lack of it.
It is virtually impossible to track the number of labels which have been launched and subsequently failed. Many were launched with lavish parties, costly promotional campaigns, huge artist advances – and have then gone under in the first year of actual operation.
Distribution of product is always a major problem for the small label. It's fine going into the studios and creating product at a relatively low cost, but not if there is no suitable distribution available.
EMI Records decided to split its U.K. record operation into Group Repertoire and Licensed Repertoire and this latter division, headed by Alan Kaupe as managing director, is solely responsible for acquiring labels under license.
"We get two or three approaches a week from labels wanting us to handle product, but we don't actively seek new deals," he says. "The advantages of the small indies is that they can use all their money on the creative aspects of the industry and then the labels we handle can depend on us for distribution."
To this end, the Licensed Repertoire operation bears all stock costs and problems regarding distribution and in most cases handles advertising, press and promotion, usually a costly area in the selling of a record.
"We pay an annual advance against royalty payments to our licensed labels who can then get on with the business of finding and developing new talent," says Kaupe.
An example of the help a major like EMI can give is that of the small Chiswick label. Towards the end of 1978, Chiswick, formed in 1975 by Ted Carroll, a former manager of Thin Lizzy, and fellow Irishman Roger Armstrong, signed a deal with EMI Licensed Repertoire division.
Chiswick currently has a small roster of artists including Rocky Sharpe and the Replays, who scored a U.K. hit with the Mike Vernon-produced "Rama Lama Ding Dong" single, the Bishops, Radio Stars, Whirlwind, Sniff & the Tears, Disguise and Dan Kelleher.
Kaupe reveals it was through EMI's experience and contracts that Rocky Sharpe and the Replays appeared on BBC's influential Top Of The Pops television show, thus picking up valuable sales and exposure and insuring a high chart position for the Chiswick label.
Chiswick started life with an EP by the Count Bishops (now just the Bishops). The band went into the then relatively unknown Pathway studios and laid down 12 tracks, four of which were issued as the "Speedball" EP, at an overall cost of $300.
"Having a drink one night at Dingwalls, I saw an act called the 101'ers and cut some sides with them. Judge Drummer later left the band and joined Clash and another member, Dan Kelleher, is still with Chiswick," says Carroll.
During the early days, the Rock On shop financed the record label. After a spell with President, Chiswick then licensed its product to CBS through a deal with Anchor Records U.K. Carroll admits he had to have a deal with a major because "we didn't have the muscle to cope with hits. At the end of the Anchor deal, we shopped around and came up with the current EMI deal which has obviously been very beneficial to us. "Now Chiswick has a good catalog of singles and albums – some 54 singles and 20 albums.
Chiswick has also built in the field of golden oldie re-issues, put out on the Ace label. The company now has the rights to the U.S. Ace catalog for the U.K. only, plus the extensive Starday catalog for the world outside the U.S. But this aspect of Chiswick activities does not fall under the EMI contract and Carroll negotiated a distribution deal with Pinnacle Records early this year.
Now he is constantly on the look-out for labels with catalogs from the 1950s and 1960s.
Carroll reports Chiswick turnover from September 1977 until the end of last year at around $1 million worth of records at U.K. dealer price. And his label now employs a full-time accountant, a promotion man, three people hired on a semi-independent basis handling press, and Trevor Churchill, a former manager at EMI. It was Churchill who registered Swift Records Ltd, which now trades as Chiswick.
Says Carroll: "He had a ready-made company and was ideal for our operation, having all the contacts. Our main advantages are that we are more in control of our product and can make our own decisions, as well as our own mistakes. The main disadvantage is that I don't get paid a salary. All the money is spent on promotion and the signing of new talent.
Another small label fighting the establishment is Charly, set up late 1975 by a former EMI Records executive Joop Visser, with Frenchman Jean Luc Young. The label soon scored with a relatively obscure U.S. disk from the King catalog, "Jungle Rock" by Hank Mizell, and since then it has re-issued product from the Sun label, and launched an associate label Affinity, which has put out avant-garde jazz product recorded for the French Byg label by such names as Wes Montgomery, Archie Shepp and John Coltrane.
In recent months, Charly has started signing acts direct, and the roster includes Steppin' Out, a jazz-rock group called National Health; new-wave band the Softies and the group Here and Now. It has a staff of 12 in the U.K. and pays a great deal of attention to promotion, especially in the servicing of discos and clubs throughout the U.K.
After a spell with President, Visser and Luc-Young turned to Pye for distribution and the partnership has proved highly successful.
Distribution remains one of the main problems facing the independents, though Paul Lynton had a ready-made network available to him when he joined as managing director of the Pinnacle Records' operation in mid-1978. A former general manager of Hansa Records U.K., and partner with Paul Grade is his own production and publishing company, he was given the task of building the four-year-old label, set up by Pinnacle Electronics, claimed to be the second largest distributors of accessories in the U.K.
Pinnacle was formed by Ted Scully, chairman, and apart from a hit with the band Flintlock and some spoken word cassettes in the "Storyteller" series, had not achieved the success hoped for by the parent company. Since Lynton joined, Pinnacle has scored with several chart entries including Mankind's disco version of "Dr. Who", licensed from Motor Records of Slough; Flintlock's "Hey You You're Like A Magnet"; and Colorado's "California Dreamin'," licensed from the Italian Durium label.
Stiff Records is another independent which has found prominence over the past couple of years. The label was started "as a laugh" by the two founders and even the label name and U.K. catalog prefix clearly indicated the company's attitude to the industry itself, a "stiff" being an Americanism for a failed record.
Stiff was set up in July 1976 by Dave Robinson, who had managed Brinsley Schwarz and a then up and coming Graham Parker, with Jake Riviera, formerly manager of Dr Feelgood, one of the few bands to make real progress after emerging from the "pub rock" scene of the early 1970s.
On borrowed money, Robinson and Riviera launched Stiff Records with "So It Goes" by former Brinsley Schwarz member Nick Lowe, who was managed by Riviera. The single sold enough units to at least break even. As with other small labels, Stiff did not go through normal retail outlets but through a network of specialist record shops and mail order companies which were springing up to cater for the influx of new wave product - product more often than not rejected by the establishment major producers/manufacturers.
Stiff soon established itself in the U.K. industry with its products and clever advertising slogans, generally the brainchild of Riviera. So it was not surprising that many predicted the death of Stiff when Riviera decided to quit the company, taking two of its major acts, Elvis Costello and Nick Lowe.
This trio ended up with another "mini" major, Radar Records, set up by Martin Daws, former managing director of United Artists Records U.K., and fellow music executive Andrew Lauder.
Meanwhile Robinson won through on his own, by the second year, handling the successful launch of Ian Dury, a U.K. chart artist.
Stiff stands out in the U.K. way above its rivals in terms of chart success, advertising ploys and gimmicks and no matter how large or successful if gets Stiff takes the same industry attitude. From the start, it has believed in its product, believed it to be the best in every aspect from content to launch campaigns, regardless of money in the bank, and this attitude has paid big dividends.
Stiff is handled in the U.K. by EMI through a contract originally signed through Island's licensing deal and general manager Alan Cowderoy sees no reason for a change. "Island and EMI have been good to us and we have no problems in that area. That means we can devote more time promotion and our product, key factors in the Stiff operation.
Certainly Stiff has had an enviable ratio of single and album chart successes but it was the controversial Stiff tour of the U.K. at the end of last year which put the company up there with the majors in terms of impact and national debate.
That tour revolved around the hiring of a British Rail train ferry Stiff acts to and from gigs throughout the country. The sheer expense of it all led to industry critics being convinced that it would mean the financial death of Stiff.
"But we live on," says Cowderoy, "We found the money from various sources. And all the gigs made money, while some companies took advertising space in our exhibition coach. But the important thing was the promotional value as it took Stiff acts the length and breadth of the country. And, of course, we followed up by taking the roadshow over to the U.S. for the Bottom Line dates.
Stiff shies away from signing overall blanket deals for its product around the world, preferring to sign individual deals in each territory. "That's another major advantage of our operation," says Cowderory. "We can get good royalties for the artists and they can all get individual attention from the various companies concerned. We're a good-time company, and it's fun, and that's what it is all about."
That attitude might shock some more staid record companies but there can be no argument that Stiff and its contemporaries are here to stay. A healthy number of successful independents can give the major records companies a run for their money and provide strong competition.
"There will always be independent labels," says one leading company executive. "We majors have to live with them. They help make us aware of the every-changing trends in musical tastes. They deal at street level and that's where the music comes from."
A summary of advice from the majors to the "minors"; "Keep overheads down, don't run before you can walk, don't flood the market with releases, get proper distribution and most important, make sure you have product which can be confidently sold in the marketplace."