Rock Ridge Music is a label operating in future mode. They’re not tied to the old ways of the music industry, in fact they’re not locked into the supposed new 360 model adopted by major labels either. Instead, they operate by fulfilling a variety of services including indie marketing, publishing, management, etc. However, not all services are provided to all artists. With some, they work in a traditional label capacity, for others, they provide specific services needed to fill a void in their clients’ business models. Rock Ridge Music is definitely not just an independent record label working in a vacuum with just upstart or obscure talent, some of their artists are hugely successful and tout significant followings. Well-known names include Sister Hazel and Reel Big Fish. In this discussion, Rock Ridge’s co-founder, Jason Spiewak, speaks with me about his thoughts on the music industry and explains a bit about his label’s approach to music in a new media era.
Tell me a little bit about the transition from your earlier days working college radio to working within new media.
The job that really started me on this path was the position that I accepted at TVT, working with a woman named Christina who was one of my bosses at Artemis Records as a marketing person. Christina hired me based on understanding the music market place from a more traditional sense, with the idea that I could apply that view of the world to new and emerging media. It was a great, great opportunity to learn that world on the fly while working with massive artists, people like Lil Jon and the Ying Yang Twins and Sevendust. It was great because people were willing to return my phone call based on the clout that the acts had, and I got to develop some relationships that way.
TVT was a significant label. It’s kind of interesting that they’ve come across some hard times. What do you think that says about the future of the music industry: one of the top independent labels coming across such difficult situations?
I think the answer to that is less about TVT specifically and more about just what the general climate of the music business is now. TVT had big label infrastructure and a big label agenda- a major label agenda. But we’re living in a indie label world and so it’s very difficult to operate that way for a long period of time, just based on what the spends need to be. You just flat out can’t sell as much product now as you used to be able to sell, so you have to react accordingly.
When Rock Ridge Music was founded…our goal was to make money on our 99-cent downloads. Not to say that we weren’t interested in making money on physical products. We definitely were and we still are. But in 2005, Rock Ridge was 50% physical product and 50% digital, which is about where the major labels are now. So in some ways we were ahead of our time. In other ways, frankly, we just couldn’t compete in the physical world. So it’s not like we weren’t trying to sell CDs; we just couldn’t sell as many as we could sell downloads.
What would you say the percentage of physical versus digital is now, today, for Rock Ridge?
For Rock Ridge, it’s closer to 60/40 digital versus physical. If we’re going to include mobile in that, then it goes even further, like 65/35.
Interesting. Obviously, I believe that your distributor is ADA which is Warner, right?
Correct.
So what would you attribute that level of success and also the skewed numbers on the digital side in an environment where the industry, from what I understand, a majority of the revenue is still derived from the sale of physical products, the CD?
We’re aggressive. In terms of our online marketing, we’re not afraid to give music away. We build partnerships and relationships wherever we can and try not to let lawyers interfere. In the end, trying to serve the consumer in a way that makes sense to us and offers value to them. It’s tough because there’s so much… There’s more music being made now and published and distributed than ever. I don’t know what the exact figures are, but it’s interesting. You could probably dig this up online. There were, I don’t know how many, tens of thousands, if not hundreds of thousands of records released last year. Of those records, only 6,000 of them sold more than 1,000 copies.
Interesting.
So there’s a ton of music being made but people are not buying all that much of it.
Is the formula about spending less overall? Obviously, one of the biggest barriers on the physical side is just getting that on store shelves.
Yeah, that’s tough. It’s very tough. I mean one of our responses to the changing record retail climate is our evolution into a management company. It’s very difficult… And the big labels are doing this, too. It’s very difficult to count on record sales as your sole revenue stream. So, if you get into the artist management, then you can view releasing an album as an impetus for touring and publishing opportunities or licensing and make more of your money that way, and not be so concerned with, “if we don’t sell 14,000 copies of this record this week, then we’re going to be out of business.”
Would you call it the 360 model?
Well, I wouldn’t… The 360 model, no. Because when we manage an artist we may or may not have that artist signed for record distribution. So we are a true management company. For example, Tony Lucca, we manage him, but we do not distribute his records.
On the record label side, however, is there a business without the other arms of monetization of the artist: music, touring, etc.?
Yes.
There is?
Yes, absolutely, there is. We do have licensing deals with our acts where the artist maintains ownership of their master. We just license the right to release that product in either a specific territory or in the world. Our deals are generally 50/50. Some skew more or less, depending on the amount of work involved or the goals of that specific artist and what their needs are.
When we set out in 2004 to do business as a record company only, the thought was that there were a number of bands in the world that could do X, Y and Z, but they couldn’t do A, B, and C. At that time it was more about distribution. Now distribution’s a bit easier to come by in terms of getting the record distributed digitally. Bands might not have had the resources to work a record to radio or press, or to promote the record online, or to do street marketing… And so to this day we still offer those label services and we’ll license a record for a share of the profit on the back end.
If you could, tell me a little bit about the success of some of your acts. For example, Sister Hazel and their approach to new media and how you approach new media, and maybe a little bit about your success stories.
The nice thing about the Hazel story is that was a band that was really built from a marketing and branding standpoint to sit very well and be rewarded very well by the online world. Sister Hazel, from the inception of the band, emphasized community and family. We saw with the proliferation of all the social networking sites, first MySpace and now FaceBook and now Twitter, people just want to be included. They want to connect with people and they want to share ideas and share opinions and find people they connect with.
Well, Sister Hazel has been all about that. So when Sister Hazel started the Rock Boat ten years ago. Their goal was to create a unique experience for their fans to connect with each other in real time. They rented at first half of a Carnival cruise ship. Now they have…the entire boat.
My point with that as it relates to new media, we tried to apply the Rock Boat ethic to our approach to marketing Sister Hazel online. So what that means is, in terms of practical applications, be really active in social networking worlds, giving added value to fans. Like there’s a 24/7 streaming widget that lives at HazelRadio.com where fans can go and just listen to a rotating selection of Sister Hazel songs for free whenever they want. There’s all sorts of good stuff in there, like there are buy links if you want to get the record or buy the mp3. But we’re not doing it for an e-commerce reason. We’re doing it basically to build that direct connection to fans. Like if someone’s willing to download the Hazel Radio widgets to their desktop, they’re allowing us to communicate with them. That’s what we’ve tried to do.
One other thing that I think is important from a Rock Ridge company philosophy standpoint with online is it sounds so simple, but this is a concept that people that don’t get new media fall into all the time. When you turn a computer on, it doesn’t automatically direct you any specific place. People are always powered by the decisions that they make and there’s a lot of value in trying to maximize people’s impulsive nature. When we think about positioning any act online, we try to figure out a way to make whatever their happenstance or specific directed path to a certain artist is, we want to make that landing point as compelling as we can. So people are like, “oh, this is dope, I’ve got to tell my friends about it.” Or, “I got a free video clip.” So, people get value when they show up at your front door instead of oftentimes walking away feeling empty or confused or whatever.
You mentioned the following that Sister Hazel has with their die-hard Hazelnut fans. Do you feel that this is part of the problem today with the bigger labels, that they’re still creating music for the masses, yet there’s not really a strong connection with the fans, so the connection is short-lived for a lot of these artists?
It’s an interesting question because it always depends what your goals are. I think that the big label system doesn’t emphasize longevity the same way an indie label like Rock Ridge does. We want the artists to have a sustainable career for a long period of time. The big label view is- “let’s go out and let’s sell one million copies of one record and let’s spend accordingly.” What Rock Ridge does is let’s sell 100,000 copies of ten records and spend accordingly. If we just take that timetable and stretch it out, the artist can build a career around that because there are all sorts of touring opportunities. There’s all sorts of chances to sell merchandise, chances to connect with their fans, without compromising the fans’ integrity or by shoving a piece of product down somebody’s throat. You give people a chance to try and live with things a bit more. In the end, you’re still selling the same amount of records but you give the artist an ability to develop a career in real time.
So a lot of it is artist development.
Yeah. That’s a term that gets maligned a bit in our industry. Artist development, especially now more than ever needs to happen organically. People didn’t latch onto Janis Joplin because she was the prettiest girl in the room. But she delivered music at a time to an audience that wanted to embrace her and her vibe and her free spirit. That’s what we’re coming back to, I think, is people connecting directly with a specific act because it speaks to them.
Talk for a moment about the sale of physical product. Do you think it’s going to taper off and turn mostly to a digital business?
There’s always going to be physical product. I believe that. People love to shop. If you think about it, clothing is a difficult example, but other than clothes, why would anyone walk into a store to buy anything at all? Because you want to go there. You want to hold it in your hands, you want to experience it, you want to read the packaging. You want to feel like you’re getting a fair price. And there’s also the sake of convenience. Like now with the big box retailers, you can go in and buy everything from a refrigerator and toilet paper to a new CD release to your toiletries to beach chairs. You can get a whole lot of shopping done.
But specifically about physical retail, I think that there was a lot of damage done to the perception of the value of the CD in recent times. And I think the format needs to change. Maybe it’s cool USB flash drives where you get a record, three videos, a whole bunch of photos and a special message from the artist. I think that the product really does need to change and evolve to change this perception of why bother buying just a CD, it’s just a tiny package. Once upon a time people bought vinyl because you had to have the cool artwork. Now there’s just no perception of that value, even though the artwork is cool. It’s just consumers don’t really get as excited.
I think that, yes, there will always be a physical product. I just think that a lot of work needs to be done to repair what the physical product is that people buy and the perception of that product.
Sister Hazel that’s been around for well over a decade, who obviously came from the major label structure. How have the sales of the physical product declined for them?
Well, Sister Hazel, over the course of their career, has sold about two million records. And the interesting thing about Hazel is they’ve always been ahead of the curve in physical versus digital. Or, more accurate to say that since 2004, since Rock Ridge began to help them evolve their online business, Hazel has been at least double digit percentage points ahead of industry standard, digital versus physical.
What’s very interesting, I think, is that their latest record which was an acoustic record where they re-recorded a bunch of newer material and the hit songs in like an intimate acoustic setting in a studio outside of Atlanta, Georgia. That record, when it hit, I believe was 48% digital, 52% hard product the first week. The band sells a ton of music online. And, again, they’ve found ways to stay ahead of that curve.
But the band sold significantly more records on Universal than they have on their own or any piece of product that’s come out through Rock Ridge. But what I don’t know, and would find interesting, I don’t know this, but I would imagine if they haven’t made more money putting the records out on their own…They may not have made more money, but I know that they’ve been able to, for lack of better words, get more value out of releasing the records on their own and touring on their own terms and doing all the things that they feel that they need to do outside of big label influence.
Of course. Different economics.
Right, totally.
And as far as splits with bands like this, is it something similar to what we’re hearing about, even though I know it’s not a 360 deal where they’re looking at a 50/50 kind of situation? Or does it just vary?
It really does vary. I think it’s less about Hazel specifically. I would say in the industry in general, the big labels are trying to edit their deal structures to meet the needs of the acts. It’s interesting. There’s like the haves and the have-nots with the big labels. Every now and then there’s still a band that’s like buzzing and exciting and big online profile and they get a bigger than it needs to be check from a big label for seven albums, and end up going down that path. But you hear about that less and less. Now it’s more established artists that are looking to do a license or a one-off relationship with a big label, so they can get that big distribution and marketing push. Or, an indie label that has the infrastructure to meet those needs of the established act and the act relies more on their own resources and less on the label to get things done.
Is part of getting that done, creating that visibility, that awareness, deals like the Sync My Ride deal with Ford?
The Sync My Ride thing is huge. But, yeah… especially now> It becomes about relationships that enable bands to deliver music to new fans in a way that feels good to those people. That good feeling is important because there’s so much noise and clutter in terms of the marketplace that if you can get a clean, earnest, direct opportunity to deliver new music to potential and new fans, that’s what Sync My Ride is all about for Sister Hazel.
Sister Hazel has sold two million records. Of those two million decisions to buy Sister Hazel music, now there’s only…let’s say 200,000 people that would be willing to buy Sister Hazel music now. What happened to those other 1.8 million people? I know there’s some overlap and some people own all the records.
My point is that there are a lot of folks that just need to know that there’s a new Sister Hazel record out and they need to hear it and see if they like it in order to know that they would want to buy it. That’s what’s so hard to do now, is to reach those people on the periphery and to reach new people that have never heard Sister Hazel music or haven’t heard it since the days of the radio hits. Sync My Ride is going to give us an ability to deliver music to those people.
Other than free downloads via the Sync My Ride campaign, what other types of activities is Ford involved in with the band? Are they involved in touring or anything else? Maybe some television outside of advertising? Anything else you might want to mention?
Well, we did this cool thing with them at Summer Fest in Milwaukee, where Sister Hazel did a full rock show and then before the show fans had an opportunity play the video game Rock Band with Sister Hazel. That was a co-branded event with Ford and their Drive One Tour. So the Ford folks were there distributing their materials. The band was there hanging out and playing the video game with fans. People got music and prizes and all sorts of good stuff. So there will be more co-branded opportunities like that for the band and Sync My Ride down the road.
How effective do you think radio is today?
It’s still extremely effective. I mean, nothing will sell a record now better than radio. I’ve worked records that had massive online buzz. It’s a lot of work to try and get four million views on YouTube to translate into sales. But if you get four million spins at radio, it’s just a different thing because those gatekeepers are very particular. And radio is driven by their own agenda of ratings and advertising and so on. So if there is a track that is going to be that reactive and radio stations want to play it, chances are you’re going to sell a lot of records.
However, there would obviously still be a very small amount of space for artists on commercial radio.
Yes.
What about college radio? Is that effective at all anymore? I know at one point it really meant something. Is there a place for building awareness on college radio today?
I think college radio has its place in each market and in some places it’s more meaningful than others. Generally speaking, you cannot count on college radio to be a driver for record sales. But the new outlets, like the new college radio, in my mind is online radio. Some of it is freestanding independent programming; some of it is just listening to the online affiliate of a terrestrial station or a great online station like WOXY.com.This is an interesting thing, too. A horse that we’ve been betting on from day one at Rock Ridge is the eventual overtaking of unfortunately satellite and local commercial stations to a certain degree, once we have Web capable cars.
Right.
As soon as we have Internet in the car, it’s over. AOL Radio is going to crush people and so will Pandora and so will Slacker. We’ve been working on and maintaining relationships with those outlets for years at this point. Aside from the fact that I listen… I love Pandora. I love Slacker. I love AOL Radio. I listen constantly.
And we’re almost there, I guess, with the apps that they have now.
Right.
It’s almost there.
Very smart for Sirius and XM to adapt and develop an iPhone app. It might be company saving on their part.
interview by Israel Vasquetelle
If you enjoyed this interview, check out our discussion with Julian Lennon about TheRevolution.
Also, read the interview with former VP for NY’s Learning Annex turned music entrepreneur.
