Finally An Update: Sign Of Life Or Last Breath?
There’s a new reality creeping in, maybe even one that has been lurking for some time and is becoming more and more present now. Releasing Trance music from a label perspective isn’t sustainable anymore and in order to have a future, drastic decisions are needed to keep your head above the water.
Let’s be honest, it’s not a real surprise. The last time I posted about assessing the future of my label, almost 2 years ago, a lot of the problems currently surfacing were already there. Maybe they got bigger, or more visible, but it would be naive to say that all of this is new. Back in January 2022, I spoke about changing strategies and some have been implemented (such as cancelling Beatport Hype and use Bandcamp as Exclusive launch platform) where others (such as recouping mastering fees) have not. Either way, the decline of income continued, the decisions mainly helped to slash some expenses.
Due to both personal circumstances and lack of motivation, the label hasn’t released frequently. With new releases on hold for the past few months completely. This obviously didn’t help with gaining visibility or to increase income and it should be left aside in any decision making at the moment. However, decisions are necessary to make and they will be expanding on the ideas I already had back in January 2022. They never have been off the table. They just became more urgent over time.
The Discount Downside
If there has been any certainty in recent uncertain times, it probably was that making money from releasing music, especially Trance music, has become harder and harder. Where costs rose on almost every occasion, life, energy, food, gasoline or even for services which hardly require any resources, both the prices and income in music kept on declining. Spotify keeps fighting court decisions about a certain mandatory threshold to be paid for streams (which already is ridiculously low). Download platforms like Beatport try to lower prices to keep sales numbers up. Their emails with a 30% discount come in monthly, often with just a week or 10 days between one discount and the next. We’ve seen this before. Mainly during the pandemic in 2021. Eventually this led to a one-sided decision from Beatport to permanently lower the prices on downloads, because, in their own words, this was a pilot to see if sales numbers would increase because of the lowered prices.
Obviously, I can see this working for big labels such as Armada or the bigger techno brands, where someone contemplating about buying one or two more tracks simply adds them to their shopping card, instead of disposing them to save some money, simply because they pay roughly the same as before, for more tracks. For small labels however, this just eats away from income. A Small label with lesser known artists often attracts loyal fans who support the label or the artist releasing there. These loyal fans pay whatever is asked (they cannot add an amount to support more, like on Bandcamp). But it’s much harder to get in more loyal fans, compared to the common Beatport Chart shopper. A small label still roughly sells the same amounts of tracks for each release, they just make less on every sale. In 2021 this lead to a lowered price of 30% and it looks like Beatport is preparing everyone, with their almost continuous discount, to do it again.
Fair Payouts
From a label perspective, we always wanted to hand out fair amounts in revenue share, compared to the effort a producer puts in a track. In all the years since our inception, we have offered a 50–50 split on originals, where both the label and artist receive 50% revenue on the track. But this means that an original, selling at a price of €1.99, gets the label hardly €0.30 in revenue these days.
Often we covered the mastering costs for a release too, but imagine the producer delivered a fully mastered track, and we only had to pay €25 for a promo campaign. It would still mean we would need to sell over 83 digital copies to break-even. In the history of the label, only 4(!) out of a few 100 tracks have been able to cross that number. Do you start to see the problem?
,,By being a sympathetic and fair label we just lose money on every release.’’
Off course, we made a switch to incorporate Bandcamp more, utilizing their platform to offer our releases for a 2 week exclusive period. The great benefits of Bandcamp are that you can set your own price, fans can pay more if they want to and Bandcamp only takes 15% from the sale. The downside was, and still is, that it’s difficult to break habits. DJ’s and fans still shop at Beatport and it’s difficult to motivate them to use another platform next to it. Sales on Bandcamp have increased since we joined, but still don’t come close to our Beatport sales. Simply put: ,,By being a sympathetic and fair label we just lose money on every release.’’
This doesn’t even take into account the amount of hours used on artwork, social media, writing promo copy, creating contracts, connecting to producers etc. It’s a lot of effort for losing twenty to a hundred quid on a release. Burning a few tenners would be easier, if money wasn’t an issue. Unfortunately, I run a label from my private funds. Money that otherwise is spent on gear, collecting vinyl, toys for my kids, family holidays, or, in worse times, to get food on the table. I do not look for any sympathy. It just indicates that ‘burning’ money is something I have an issue with.
Just Walk Away
The easiest solution would definitely be to just call it a day and end the misery. After all, I probably am just very bad in running a business if I can’t turn a profit in 4 years since I started Premier League Recordings. And to be fair, the idea has crossed my mind a few times now. Left and right I see small (Trance) labels, ran by passionate music lovers like myself, closing up shop. Labels who did a much better job even in terms of signing big Artists, streaming numbers, Beatport Chart positions, promotion and big DJ-support. Knowing some of these label owners myself, I can only imagine they must have felt defeated at some point. Despite their passion and hours of work and creativity they still decided to let something go which they absolutely love(d). I have no doubt that they stopped because their love for it was gone. It must’ve been something else.
I can also imagine the relief of the decision, now that the burden of this downdragging, time consuming, out of hand gotten hobby finally has been dropped. The more I see it happen, the more I wonder if the benefits of this regained freedom might outshine the ideal behind releasing good music, helping talented (new) artists and living the ‘dream’ of being a label owner.
Going Down Without A Fight
Does this foreshadows the inevitable doom Premier League Recordings is facing? Yes. In a way it does. If nothing changes, this is just an unfulfilling, unsustainable road to nowhere. But it would mean that going on like this would simply mean to stop all efforts and led the label bleed out before no one cares anymore. Another one bites the dust. It would mean going down without a fight. And I am not saying the other label owners did this. I don’t know how much they fought before making the decision. I am only saying that the way my label is heading currently is not the way I want it to end. I feel bruised after 3 rounds, but there’s 9 more to go, in Boxing terms.
Does this mean the label carries on? Yes. Does this mean more effort will be put into the label to increase the chances to succeed? It sure does. But it also means that if the new measurements don’t change a thing, eventually Premier League Recordings will disappear too. We have been hit, a few times even. Still, the knockout blow hasn’t been landed yet.
The Bad Approach
The approach of running the label will be done with a different mindset from now on. Until now, I ran the label from a vision of being honest, fair, offering chances to everyone, involving artists and connecting to them directly, trying to release good music that I want to hear and spin myself etc. And a person cannot simply change who he is, so, a lot of these things will still be part of the decisions I make. However, the approach I take now will be more economical, less personal and more based on facts than feeling. I will explain this a bit more, but if you are part of the PLR family already, or considered at some point to release music with us, it’s important to understand this change in approach. It means that priority will be what’s best for the label first, artist second. Until now, it often was the other way around.
I’ve seen bad things in the industry. Things I wanted to avoid. Labels offering 5% or 10% or 18% revenue share. Labels who want you to sign off your rights for eternity. Labels who send statements that start with a negative balance because they charge for stuff like promo, artwork, collecting earnings from copyright claims through YouTube or even administrating sales or streams, for example. Stuff a label is supposed to do. Labels who withhold payments on money that is not theirs by contract, because you earned it. Simply because they use a threshold you probably will never reach (especially combined with a negative start balance) so they can keep your part of the earnings as well.
Is this what I refer to by saying ‘label first, artist second?’ No. Even while I understand the financial reasoning behind some of it, I feel this is criminal. These labels act like they are a g**d*mn blessing to you and you basically sign off your creative work forever, for them to earn from it, with the tradeoff being that you increase exposure because you signed with them. There’s no value in it for you whatsoever, except for getting a bit more known. Or, if you are an arrogant pr***, to earn you bragging rights in some kind of Facebook producer group. Sure, if that’s your goal, by all means go for it. I can see why it could feel like a sign of approval that your work is good enough for one of the bigger labels to sign you. I won’t lie. I produce music too. It would be an honour to be signed to Armada or Black Hole. Just keep in mind that you delibirately and consciously choose to be ripped off. And it’s not just the really big labels doing this, a lot of midrange ones do it too.
(Keep On) Doing Things Different
By telling what I won’t do, you still know nothing. But I feel it’s part of the perspective needed to understand what is about to change. Will Premier League keep using Soundsystem Proton for distribution? Yes. Why? Because their default exclusive contracts only span 5 years. We feel that is a fair amount to use someone’s creative work exclusively. Artists should be entitled to receive back their rights and not by paying a ridiculous amount of money. Another thing is that Proton doesn’t use a payment threshold. Yes, they do not automatically pay out under $100 earnings, but there’s a difference. The earnings are yours already, you simply can request for an earlier pay out. The funds never expire. And in addition you can earn from any label under Proton LLC, they simply accumulate the earnings. You are not dependent on the sales of one label.
What will change is that we start to use Artist Ratings. It means that the label will estimate the amount of sales and streams on a release and put a rating on that, A,B, or C, for example. Based on the Artist Rating, we decide what split we give in the contract, what services we will and will not cover and what price we ask to increase your revenue. Simply put, we will stop offering a default 50%-50% on our contracts. They now range from 10% up until 50% depending on the rating. We also introduce label buyout options, where you can pay a certain amount upfront, to decrease the label influence on earnings, up until 90%. This will not only hand you the opportunity to increase your earnings if you have a lot of faith in your release, it is an incentive to put extra effort in promoting your release. It also gives a better idea on what a release can earn and what the risk is to invest in your own release upfront.
Based on the Artist Ratings we also decide if the label compensates things like mastering, promo or even a vinyl pressing. But, we always leave the choice with the artist. Our cheapest contract offer will still be completely free of charge, without deductions and regardless of followers or previous stream rates, available to everyone, from unknown bedroom producer to regular chartclimber. Still in spirit of being able to hand a stage, a first stepping stone, to everyone, as long as the music is good.
How does an artist know what options there are? Simple. We’ve created something called a Pre-Contract. If we want to sign your track(s) to Premier League Recordings, we send you this Pre-Contract first. In the document you’ll find the result of our assessment, the Artist Rating we assign to you, with a small explanation on the why. (Keep in mind, we do this for every release, your ratings can change and you’re not stuck with it forever.) Furthermore, the Pre-Contract lists all the options available to you and you can simply pick the ones you want. There’s always a completely free contract offer possible. Once you’ve made your choices, you send back the Pre-Contract and based on your choices we make up the official contract for release.
Does this complicate things? Maybe, but in the past negotiations often were a back and forth between me as the label owner and an artist, either through chat, call or email. Now, everything you need is in the Pre-Contract, so, it doesn’t leave any uncertainties and also helps us to create the correct official Contract immediately.
The Self-Sufficient Artist
Is there a risk no artist wants to sign with the label anymore? After all, the label has been small, it doesn’t do much for brand recognition, sales and streams do not go through the roof immediately, there’s no guaranteed spot for the label in radioshows such as A State Of Trance, the major selling point probably was the label offering a high revenue share and no additional costs for any services. If that changes, what’s left to be attractive to artists? It’s a fair question and yes, we are aware of this risk.
Artists already seem aware that there’s more available than just signing with a label. We see more and more artists starting to release their own work independently. And yes, it’s attractive. You earn everything, no label taking up a big chunk of your revenue, no negative royalty statements and you keep all your rights. Who doesn’t want that? I can probably write a whole blog about being an independent artist (and maybe I will someday) and it’s great, truly! But in short, it’s not as easy as it looks. Most successfull self-releasing artists already made a name for themselves. How? By releasing music on labels first. It’s also hard work. Everything, promo, artwork, mastering, networking, social media etc. needs to be done by yourself, or, you have to pay someone to do it for you. Getting your music on Beatport or Spotify can only be done through subscription (for example Distrokid) but they will charge money for their service. Are your tracks popular enough to make back the subscription fees? Maybe they are. if you think so, give it a try. I actually am a big fan of producers who are brave enough to try this route and I hope they succeed. But you will also face the downside of being responsible for everything. You might even appreciate the work of a label more, especially the small and fair ones.
That said, it’s okay if this happens. Why? Because I feel the new approach is our fairest assessment towards ourselves as a label and the artist. If we wouldn’t assess a release on potential success, we would eventually toss some money in a slot machine, press some random buttons and hope there’s some profit in the end. If there’s something I’ve learned in the past 4 years, it’s that it doesn’t work like that. I have to constrain the amount of money I put in a certain release and I must never overspend. That’s how the options are calculated. See? Facts over feeling. The only risk remaining for me would than be to be overly optimistic in estimating the success of an artist or release and still overspend, but that’s something you learn quickly from. I think it’s only fair to offer a contract, splits and options that are realistic and make the release worthwhile for both the label and artist.
If the eventual outcome is that artists don’t sign anymore, that means they prefer to keep their rights and take care of their own stuff, or, to be ripped off by a bigger label. It also would show that offering a contract that does justice to the efforts of a small label isn’t viable. However, running a loss-making record label isn’t either and there will be only one decision left to make at that point. But for now, I see the new strategy as a life-prolonging measure, to give the label a chance to become truly sustainable, while at the same time giving artists a freedom in decision making which they won’t find with any other label.
Thanks for reading and all the best,
Marco Svarda
Founder, Premier League Recordings
Now let’s hear some demos: talent.scout@premierleaguerecordings.com
