The economics of indiepop

There is no money in indiepop. The reality of the situation, that breaking even on a record is cause for celebration, will have swiftly disabused any idealistic young pup with dreams of a very big house in the country and a guitar-shaped swimming pool.

There are only two organisations that really make money out of indiepop:

the US Postal Service

paypal

Indiepop – actually, name your underground genre, it’s the same story, I’m using indiepop here because it’s the scene I know best – is a cottage industry that survives on enthusiasm and many labours of love.

It’s one of many music genres that rely on word of mouth and on the goodwill of fans, bands and labels to survive. It’s made up of many small-scale (tiny, in a lot of cases) operations whose paying audience is both geographically disparate and, obviously, underserved by local record shops, who depend on mail order. As, of course, do the labels themselves.

The way above-inflation rise in UK postage rates last year was bad enough, but in comparison to the US Postal Service’s near-100% hike this week it was a trivial inconvenience. Make no mistake, this rise is going to strangle the life out of a lot of small businesses, including record labels whose business sense is often no greater than ‘I love these songs so much I have to tell the world about them; how much can I afford to lose releasing them?’

Jimmy of US indie Matinee told me today: “I’ve shipped 350 copies of the September Girls 7" so there are more than 100 left. I don't imagine they will be flying off the shelves now that the US Postal Service makes it $13 to ship one 7" single overseas. Ugh... this really could be the death of indie labels. I sold more than 300 copies of the new Northern Portrait 10" in the first week and exactly zero since the rates increased on Saturday. Postage is now twice as expensive as the record itself!”

(Matinée has countered the US Postal Service rate increase by launching a sale in the label's online shop with releases discounted 10-50% to help offset the higher postage rates.)

UK record buyers might have been puzzled at why records at gigs or events like the Independent Label Market are often more expensive than they are in shops. I certainly have. So I asked one UK indie label about this.

They gave me these figures:

300 7" singles, black vinyl, 5 test pressings, white inner sleeve, full colour sleeve and label: Manufacturing costs £730 (unit cost £2.43)

500 7" singles, black vinyl, 5 test pressings, white inner sleeve, full colour sleeve and label: Manufacturing costs £870 (unit cost £1.74)

1000 7" singles, black vinyl, 5 test pressings, white inner sleeve, full colour sleeve and label: Manufacturing costs £1296 (unit cost £1.30)

Cargo [the main UK indie distributor] give you roughly £2.30 for a each sold less a distribution fee of 20%. - so that comes in at roughly £2.07 for each one sold. This is for a 7" single that should retail at £4.

I'm upping my prices in future so shops will be selling the 7" singles at £5 or £6 - which should lead to me breaking even with Cargo. But I've not tested the water on that theory yet.

Unless you're Fortuna Pop and/or can hire press/PR you won't shift more than 300 copies of any 7" these days. I used to be able to sell 500 fairly easily. Not any more. I've never pressed a 1000 7" singles. [I should point out here that Fortuna Pop claims to have lost £100,000 – I’m sure Sean of Fortuna Pop would never let the truth get in way of a good story, but I’ve no doubt that he has lost many tens of thousands of pounds.]

Cargo take on a sale or return basis. I seem to get charged warehousing etc for ones they can't sell, too. But I don't fully understand how that works. My last statement had me owing Cargo money for returned stock (from shops). I've tried to get this explained to me but I don't think I've ever got to the bottom of it. [disclaimer: this is one label’s experience; I am not a hard-nosed investigative journalist and didn’t ask Cargo for comment. Should they read this, I’d be delighted to publish their response.]

The only way to break even that I can see is selling at gigs and people buying direct from my website.

Trouble is, for a lot of labels now, especially in the US, their mail order market has shrunk to just the domestic market thanks to postage price increases.

One solution for desperate import buyers is to use small online distributors like Pebble and Soft Power. You’ll find, of course, that sometimes no online distributor has picked up the record you want. So if you really want that new record, you’re going to have to pay a fortune for it. God help us if there’s a recession. Oh, wait…

Bek from Soft Power very kindly answered some questions about the finances of distribution, and running a record and tape label.

How much does it cost to get tapes dubbed?
It doesn’t cost us anything but time to get tapes dubbed as we do that ourselves, I think the going rate is around £75 for a hundred, but that’s cheating isn’t it? We really like actually making the tapes, which is done in real time, and after the initial outlay for materials – tapes, cases, card, ink, stamps etc. there aren’t any additional costs which allows us to keep the unit price as low as possible, which we can then pass on to wholesale customers, it tends to be the price of postage that’s more of an issue, so we always try and keep that as close to actual price as possible.

Has the expense (and low demand) of 7" singles deterred you from releasing more?
A friend of ours once said that you have to sell a lot of tapes to put out a vinyl, and that’s very true. We would like to release a lot more records, but yes the costs are restrictive, it’s a lot easier putting out vinyl too, you just send it away and it comes back done. Making tapes is much more labour intensive. I’ve heard there’s a bit of a dip in sales of 7”s but we haven’t felt that, our last 7” sold out pretty quickly and we’d done a run of 500, whereas previously we’d only put out 300, frustratingly/obviously enough – the more you press the lower you can wholesale / retail for but getting the initial amount of money up is a bit more of a slog.

If vinyl pressing was cheaper, would you release everything on vinyl or is the tape format close to your heart?
We definitely have plans for more vinyl, but I think that we have such a fondness for making the tapes now that, we’ll probably do each future vinyl with a limited tape release as well. If it was cheaper then yes, we would have a lot more things coming out.

It’s very frustrating sometimes, hearing great bands that we’d put out in a second if money was no option – but, as it is – we just have to live with that, our only (monetary) intention when we put a release out, is to recoup the costs, if that’s done and there’s a bit of profit, it just gets put straight back into the pot for the next release.

Does selling other labels' merch help defray your label costs, or is it all a labour of love?
It did for a while but we’re actually in the process of closing our shop /mail-order, but yes any profits made through that were ploughed straight into the label, which worked fine initially for us, as we’d split the money between buying new stock for the shop and the label, as the label grew, it began to take up a lot more of the resources, so we weren’t able to take as much new stock as we’d have liked, and that pretty much slowed up the shop so much, it wasn’t worth doing anymore. But it was good working with other small labels and our customers were generally really nice as well.

When it comes down to it, I suppose you have to call it a labour of love, the things you end up doing for either a loss or to end up breaking even, are basically ludicrous – I don’t think that can be helped though, as it’s also one of the most satisfying / addictive things we’ve ever attempted.

I think that Bek’s last paragraph sums it up: records are an addiction for both labels and fans. It’s a vicious circle, though: we’re going to see records pressed in even more limited quantities, making the unit price higher still. Don’t be surprised if labels start pressing 7” singles in runs of 200 or even 100. The basic break-even price on that is about £6. Plus postage. And if they ever get distributed to shops, they’ll be around £12. You have been warned.

We’ll be seeing more tapes released; perhaps they’ll overtake the 7” as the underground’s dominant format. They are a lot cheaper to make, yes, but crucially they’re a hell of a lot cheaper to post.

The decline of second-hand record shops

The recent collapse of HMV presented an inconvenience for buyers of headphones, games and chart CDs; music fans whose tastes venture outside of the top 10, generic compilation CDs and budget classic rock reissues can have their needs met by an independent shop. If you want to buy second-hand records from a shop, though, your choices are increasingly limited and more expensive than ever.

The great romance of going to a different town used to be seeking out its second-hand record shop. Journeys end in lovers meeting. Now? You’ll be lucky to find a second-hand record shop in most towns.

Second-hand record shops started closing in large numbers in the late 90s for two main reasons: CDs and the dominance of chain stores like HMV.

Every retail market needs the next generation to buy, or at least aspire to buy, its product. In the late 90s, the new generation largely bought CDs and had no interest in ever buying vinyl. They could buy CDs cheaply from high street outlets like HMV, who stocked reissues of hitherto unavailable albums.

London’s Hanway Street used to be legendary for its second-hand record shops. There are still some there. Its most famous shop was probably Vinyl Experience. I knew some people who worked there in 1997 when it closed down. They told me the main reason they were closing was because of the massive Virgin Megastore 50 yards away.

The other reason they were closing was because nearby Berwick Street was usurping Hanway Street as central London’s second-hand record mecca. Vinyl Experience was ridiculously overpriced, so was obvious prey to competition.

I’ve worked in second-hand record shops; some of my friends still do. They tell me that in the past 5 years the current young generation of music buyers buy vinyl almost exclusively. A big chunk of the second-hand shops’ market was promos. As these are on CD, they’re now hard to sell.

Potential purchasers can often download the songs before release or buy a new copy from Amazon (without the sticker or sleeve cut-out) close to the price offered in a second-hand shop. This has mostly been bad news for underpaid music journalists who relied on promos to supplement their income.

The young generation aren’t buying the vinyl rarities, though. I’m not surprised – they’re way overpriced. The sky-high prices are justified as sellers ‘know what the records are worth because they’ve seen them online, so we have to buy them for a higher price’. I call bullshit here. Everyone who’s ever worked in a second-hand record shop screams inside whenever The Book is mentioned.

The Book is the Rare Record Price Guide. It lists the price of 100,000 records. Their prices are regarded as at least 10% too high by shops. What sellers never understand is that the prices are for mint copies. One shop owner, now retired from the game, told me that anyone who tried the old ‘but The Book says…’ got the response: “if you see my name in that book then I’ll pay that price”.

The internet is the new Book. It’s even more misleading than The Book. The highest price paid for a record on ebay is indicative of how much two people wanted it. Once those two people have a copy, the price will settle at its true value.

I know that you need a lot of knowledge to buy second-hand records. It’s even more difficult for young staff to become buyers because they need to know about the past 50 years of releases.

That retired owner I mentioned? He’s 55. He started working in record shops in the mid-70s. Born in 1957, he got most of his music knowledge as it happened. Someone born in the mid-90s has got a hell of a lot of catching up to do.

So I’m not surprised that younger staff use the internet as a resource. I was surprised that the owner was letting them get away with their high prices until I found out that the shop gets about a quarter of its sales online.

Without online sales, the shop would have an uncertain future. However, many of their rare records sit on the walls for a long time and are seldom bought by customers in the shop itself. I concede that having such a fine display of rare records makes the shop look good; it’s less attractive for buyers who go hunting for second-hand records without the dizzying online premium.

I had this conversation with a second-hand record shop proprietor in Melbourne last year. He agreed with it all. Then I tried to buy a record from him. It was from a new collection of 7” singles he’d just got so wasn’t priced up. He checked on his computer and came up with the absurd figure of $40. I declined.

Back in my hotel, I looked at discogs. There was one copy for $40. What the record shop owner hadn’t done was check the sales history: average of $7. I bought one last week from discogs for $8. The $40 copy is still not sold on discogs; it never will at that price. I have no doubt that the copy I saw in the Melbourne shop is still sitting there at $40.

Even if that shop gets a website, he’ll have to slash the price to sell it. His shop will probably be alright, though, because Australia’s enjoying good economic times.

In the UK, recessions have always meant boom time for second-hand record shops in so far as getting great stock in. Selling it on was always a problem until the economy picked up. Now, though, buyers worldwide ensure the stock ticks over nicely online.

That second-hand record shop is also doing well because there’s little competition in London as so many second-hand record shops have gone to the wall. It’s still a good place to shop – much of its stock is reasonably priced and you can pick up some bargains (no matter how good your staff, they’ll always miss something valuable, or just not know about it, when pricing up hundreds of records). The prices on pretty standard second-hand stuff you see on ebay that I can only euphemistically describe as “optimistic” aren’t often replicated in shops, simply because they never sell at those prices.

Despite a resurgence of interest in vinyl and the rude health of a few second-hand record shops, I don’t think there’s any room in the market for more shops. Not unless they have a strong collection of high-priced rarities for the overseas market.

Oh, and if you’re dreaming of working in a second-hand record shop, remember this: you’ll spend most of your day pulling out records for bedroom DJs to check out for unused breakbeats. And then re-filing them. They never buy anything.

Buying 7" singles in HMV

This was the haul one afternoon, August 5, 1987 (how do I know? Because I was still young enough to catalogue everything I bought) from HMV in Oxford Street.

In 1987 I had four main ways of buying records:

ordering new releases from the local Our Price

sending a 50 pence piece and a SAE for a fanzine with flexi disc

buying journalists' unwanted promos from the local second-hand shop

making a very rare foray uptown to the big HMV

I could have bought all those singles pictured by ordering them from Our Price, but nothing beat seeing them in the racks. I hadn't heard some of them, but I'd certainly read glowing reviews of them in fanzines.

Some of them were old - Albino by The Dragsters I'd heard a few times the previous year on Janice Long's radio show, for example. I probably didn't have enough money to buy it at the time and there was always something new each week I'd set my heart on to buy. Seeing records in the flesh, you have to buy them there and then,

I have no idea why HMV stocked The Wildhouse's Groovy Me ep with its hand-painted sleeve and labels, but I'm glad they did because I only knew it from fanzines. It's worth knowing that none of these records had barcodes.

I'm not suggesting that HMV would have survived if it had continued to stock a wide selection of underground records. It was, as people have often complained, too expensive. It was the only place I saw Eric B & Rakim's Paid In Full album on import. There was no album I wanted more. But at £14.99 it was well out of my price bracket.

The next summer in a different HMV I tried to buy Felt's Pictorial Jackson Review. The sleeve states that the UK price is £4.99; HMV refused to heed that so I looked elsewhere. Serendipitously, I stumbled across an independent record shop half an hour later and bought it for £4.99.

After that, I had no reason to go to HMV again. It had served its purpose. I don't know if there is a demographic in 2013 that's too young to be able to order online (the equivalent to not having a chequebook in 1987) and doesn't know about, or has regular access to, an independent shop. If there is, it definitely wasn't being served by HMV.

The Mandells

“We emulated everything they [The Impressions] did.” The Mandells, from Chicago’s west side, were the tightest band in town. They backed up Jackie Ross, Garland Green, Tyrone Davis and Jackie Wilson, among others, on stage. That’s them you can hear on The Unknowns’ classic Please Don’t Go.

Their own singles sound like the songs Curtis Mayfield forgot to write. They really are that good. A compilation of their singles is well overdue. They never make a bad record; in fact, they only made superb ones.

Most of The Mandells’ catalogue sits in the Chicago soul sweet spot. When they upped the tempo and switched the funk dial to 10, they really went for it. They really jam it out on There Will Be Tears Part 2; here’s the funk gold of There Will Be Tears Part 1 on the a-side.

Lady - Money

First prize in the classic soul revival goes to Lady for Money. Lyrically it's a sister to The Voices Of East Harlem's Cashing In. Musically, it's got that early 70s Stax strut and the Scandinavian snap of modern gems (Hey Girl! by Jo Stance or any of those astonishing Myron & E with the Soul Investigators 45s).

If Lady's self-titled album on Truth and Soul released in March is as good as this, then everyone else is going to have to fight for second place when 2013's best records are compiled.

The Spook School

May I jump on The Spook School bandwagon? Yes? Thanks. They're creating such excitement not because they do anything blindingly original, you understand, but because they do the basics so much better than most. They remind me of This Poison! and those Pastels singles in the early 90s when they really had the pep in their step.

There's not just buzzsaw riffs, mind, there are see-saw guitar solos and neat switch vocals primed with a shedload of brio and enough panache to melt the coldest of hearts. "I know all your favourite records, but I don't expect you to really care," they sing on You Don't Know, right after the cheeky line about "going to bed with Sticky Fingers". This is pop music that's fun, direct and immediate.

They've even got a song called Can You Ever Trust A Man Who Thinks Matt Damon's Really Cool? What's not to love?

Charles Bradley & The Menahan Street Band: I'll Slip Away

Oh, Rodriguez, man, you just got owned. Charles Bradley's cover of Rodriguez's 1967 debut takes the hippy ballad and makes it plead for its soul. The Menahan Street Band really catch fire here: they introduce I'll Slip Away with a fanfare of horns and don't let go.

If 2012 was Rodriguez's year with the Searching for Sugar Man documentary, then 2011 was definitely Bradley's - No Time For Dreaming stands stall amongst all that year's records. 2013 surely must, again, be Bradley's. Just last month Bradley guested - scratch that, he made - the key cut on DJ Nu-Mark's excellent Broken Sunlight album.



Can someone bring the Bradley documentary to the UK? Another album wouldn't hurt, either.