By Jeremy Hallock
By James Khubiar
By Observer Staff
By Kelly Dearmore
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
As you probably already know, the record industry is, to put it as mildly as possible, struggling.
Other things you may already know: In the wake of Universal Music Group's purchase of V2, which just purchased EMI, only three major labels remain: Universal, Sony and Warner Bros. CD stores are becoming a thing of the past as fewer and fewer people buy discs in favor of downloading; some people still bother to pay for the music they download.
While things look gloomy for the majors, local independent labels are eager to take the big bullies down as they weaken. Quite a few people behind those indies make no secret of their desire to someday, figuratively speaking at least, piss on the major labels' graves. Most of the people I talked to for this story view the big labels as a bunch of backward-thinking, soulless, money-sucking assholes whose slick-talking A&R guys pushing unfavorable and deceptive contracts prove they care nothing about music or musicians.
Erv Karwelis, owner of Dallas-based Idol Records, says his overall sales have increased every year since he started the label. Idol is home to national acts that include The Fags and Sponge, as well as locals including Black Tie Dynasty, [DARYL] and Flickerstick.
Karwelis is a veteran of the music industry, with experience on both sides of the major/indie divide. He started Idol as a hobby label while he worked in artist development, marketing and sales for Sony Music.
"My situation's way different than them, fortunately, but that can end any time," Karwelis says.
Karwelis will be the first to tell you that CD sales are declining. Idol's growth is mostly due to the label's expansion; more artists means more sales, even if individual artists aren't selling as well as they might have years ago. Owning the back catalog of steady sellers such as Centro-matic and Old 97's helps too.
Karwelis has long recognized the importance of revenue other than CD sales, such as licensing songs for television. In fact, he says, "record" sales—"record" meaning vinyl or CD—make up the smallest source of revenue for his label.
"I've always done [licensing], from day one," he says. "First of all, licensing to labels in other territories: Australia, Japan, Europe. And television, movies, ringtones, downloads, streaming audio, that kind of stuff. It's been part of the plan since day one. We've had digital distribution deals as far back as '96."
Idol has made its music available on iTunes since the service began in 2001.
In Karwelis' eyes, musicians who want to drop their day jobs need to drop their expectations of becoming millionaires by signing a record contract with any label, major or indie. He says he's been approached by several successful bands interested in signing with Idol, but he turned them down because of their unrealistic expectations.
"They still think it's 1993 and want an insane amount of money up front," he says. "It's really a blue-collar job if you want to have longevity and a real career." He names Centro-matic as an example of a band willing to work hard and play a couple hundred shows a year, as well as put thousands of miles on their van.
But while Karwelis is a smart businessman and an innovative thinker, he is among those who—like the RIAA—put some of the blame for the industry woes on file swappers and other non-paying downloaders, going so far as to call downloading music without paying "stealing." He foresees the worst for the industry and wonders if the era of the superstar recording artist is coming to an end. Karwelis thinks "a nation of garage bands" is quite possible.
"It's very difficult to make a living in this industry today," he says. "It would be just about impossible to start a record label today and have any kind of real success if you didn't have a catalog to help you out."
Don't tell Scotty Tecce that. Tecce, president of Crow Records, started his label about three years ago, largely to promote his own bands, including Boys Named Sue and doo-wop revivalist quartet the Fabulous Harmonaires. He's well aware that digital distribution will be the future of the recorded-music industry, if it has a future at all. Twenty-five percent of his sales are from the Internet, but that percentage is shooting upward. Though he's sorry to see independent record stores go out of business, he sheds no tears for the industry. The fact of the matter is, kids aren't finding out about cool new bands from hip record-store clerks, thanks to MySpace and other online networking and music distribution, he says.
"The big labels are going down, and I think it's definitely a good thing," he says.
Scott Porter, of Record Hop and Spitfire Tumbleweeds fame, and several Denton musician friends are trying to get another upstart label off the ground. Porter hopes to turn TXMF into—well, maybe not a hugely successful label, but at least something more than a logo for stickers and beer koozies. Other TXMFers include former Current Leaves singer Aaron White, Spitfire Tumbleweeds guitarist Kody Jackson, Pinebox Serenade singer Chris Welch, Justin "J.C." Collins of Burntsienna Trio and former Little Grizzly singer George Neal.