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Out of Our Minds
Tuesday, October 05, 2004 8:58 AM
The Music Industry's Surprise Success
Anita Sharpe on Business

What would you put your money on -- a company that carefully puts its products through rigorous tests and focus groups before releasing them to the public? Or a company that bases its product release on the idiosyncratic tastes of one person?

For decades, modern business has practiced the former. In the music business, at least, that formula is driving sales and profits off a cliff.

Now consider the Nonesuch music label, which records such people as Emmylou Harris, David Byrne, kd lang, Pat Metheny and Stephen Sondheim. According to a Sunday story in the New York Times magazine, its sales have grown to $35 million from $750,000 in the past 20 years; profits are up and 2004 appears to be its strongest year yet.

Its secret? Its chief, Robert Hurwitz. 'The remarkable thing about his approach to his business is that it's pretty much the polar opposite of what the music industry at large does,' the Times writes. 'Where the big labels are out to copy past success, he looks for originality. When he hears something he likes, he signs it. There is no consultation with a marketing department or wrestling with higher-ups in the corporation.'


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Jeffrey - 10/5/2004 1:43:37 PM
An important factor that Hurwitz stressed in the article was patience to nurture artists who would grow over time. That's a quality that many companies don't value.
Joe Taylor Jr. - 10/5/2004 12:49:06 PM
The frustration that my clients run into is that, within the mainstream recording industry, Nonesuch is considered little more than a vanity imprint with total revenues less than what's in the petty cash bin at their corporate parent's HQ. It's where major label execs can dump off artists who have stopped selling huge numbers but still have a few albums left on their deals. (Lucky for us, they're making great albums!) Thankfully, Hurwitz can keep his shop in the black. If he has one or two down quarters, Warner would probably cut this little experiment short.

Because the major labels are interested only in blockbusters these days, you're considered a failure if you can't crack 100,000 units sold. (Though the independent musicians I work with realize that 100,000 units is a big deal -- as long as you're doing it yourself.)

The industry, at its apex, was made up of hundreds of labels like Hurwitz's, helmed by tastemakers and risk-takers. Consolidation has killed that, and we're wrestling with a real Pareto crisis: 80% of the records bought in this country are pumped through the major labels and are completely disposable. The other 20% -- the culturally significant and artistically challenging 20% -- are bubbling up through corporate skunkworks like Nonesuch and through hundreds of scrappy, less-well-funded independents.

Hopefully, as artists educate their audiences about how they really make a living, we can see the balance tip back to 'curatorial' labels.


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