Industry Rule #4085: S.H. Fernando Jr. on Running An Independent Label

“Industry Rule #4080 / Record company people are shady,” is a line from New York hip hop legends A Tribe Called Quest. Which immediately begs the question: What are the other 4079? The Industry Rule series talks to artists about the rules that they’ve learned throughout their time in the business. Record deals, booking agents, getting your publishing sorted and more. Our latest edition features Wordsound owner Skiz Fernando.

The music industry (and the world for that matter) was a much different place when we started WordSound back in 1994. The internet was in its infancy, print media and the music press were still flourishing, and major labels predominantly controlled what people were listening to and buying. Compact discs were the preferred format, and digital downloading – legal or otherwise – had yet to cut into artists’ revenue streams. As a vinyl geek who grew up under the sway of such legendary independents as Dischord, early Def Jam, and On-U Sound, I had always dreamed of starting my own label, though I had no idea how to make this a reality. But several factors – including my own stubborn will and perseverance, a little bit of luck, and the people around me – paved the way for WordSound and allowed us to pump out records without the benefits of any outside investment. Though the times, and, indeed, the game itself, have changed, the same lessons apply when starting and running a label or any independent enterprise.

Nothing beats passion with a capital “P”

You don’t just decide to start an independent label one day: It is an idea that has been burning inside you for quite some time. But when you take the plunge, you don’t think about it too much. Since there’s no manual, you just do it, and somehow find your way. In my case, I had just penned my first book, The New Beats: Exploring The Music, Culture, & Attitudes of Hip-Hop (1994), which began as my Master’s thesis at Columbia Journalism School. At this point I was poised for a career as a writer, but music, which seemed so much sexier, beckoned. It was, after all, what I loved.

In the era in which I came up, the basic template for breaking into the industry was to record a demo, and shop it to the majors for a deal. But I had heard too many horror stories – especially among rap artists – of the manipulation, exploitation, and artistic hijacking that was part of the business. Except for the select few artists who were able to jump through all the hoops, few made it, and fewer still were able to create a viable career with any kind of longevity.

Working on an album with friends at the time, I felt confident that we could release it on our own. I started doing some research, and talking to people I knew. I learned the intricacies of CD and vinyl manufacturing as well as how to get your product into a store via a distributor. Since college radio was the main supporter of independent music at the time, I acquired a database of stations that I would service with promos. As a journalist, I already knew about the important music magazines, so I started forging a relationship with them as well.

All of this required time, money, patience, determination, and a laser-like focus, but my love of music ultimately made it all possible. Everything I earned from my paltry income as a freelance writer went into establishing the label. I even borrowed money from friends like producer Bill Laswell. Even though I was broke I felt incredibly blessed to be turning my dream into a reality. Looking back I can fully acknowledge passion as a driving force powerful enough to overcome any obstacles.

Creativity is a must

The whole reason I started making music was because I felt like I had something to add to the conversation. I wasn’t hearing what I wanted to hear so I decided to make it myself. I was greatly influenced by other producer-run labels like Adrian Sherwood’s On-U Sound and Bill Laswell’s Axiom. I appreciated the experimental subtext of On-U Sound, and how Axiom blurred the lines between genres, creating different musical hybrids. I was also inspired by the hip hop coming out in the late ’80s and early ’90s, because each group had its own character and identity, and “biting,” or copying off of someone else, was a bad word.

I loved dub, too, a largely unexplored and underappreciated genre, which was ripe for reinvention. The dub being made in the ’90s was largely digital dub, a retro movement that borrowed heavily from the Jamaican music it copied. When we released Crooklyn Dub Consortium, Certified Dope Volume 1 (1995), it was the first WordSound release to gain traction and garner international attention because it was something different that stood out from the crowd. The media even came up with a new classification for what we were doing, calling it “illbient.” Though we despised the term, it ultimately worked to our advantage as we were trying to carve out our own niche.

As an indie, we also had a propensity for taking risks. Once I asked Prince Paul, De La Soul’s producer, to do an album for us, and he returned with an album of zany skits and short instrumentals. Today instrumental hip-hop is huge, but in 1996 when Psychoanalysis: What Is It? came out it was something new and different. We were rewarded for taking such a chance when popular rap label Tommy Boy bought the album off us. So, as far as independents go, it pays to blaze your own trail instead of following the crowd.

Promotion is paramount

I must admit my naiveté when I first started putting out records because I assumed that the cream always rises to the top – that is, if you put out something good, it would always be acknowledged and appreciated. What was I thinking!?! A lot of amazing WordSound releases slipped through the cracks precisely because they were not properly promoted. On a major label, an artist had access to marketing budgets, press, and publicists, all of which are key to promoting a new release.

While I would argue that a label is not as necessary because an artist has direct access to his/her audience through social media and the internet, promotion remains as important as ever. Whether it is a YouTube presence, which is virtually essential today, or coverage in popular blogs and online magazines, it is important to know that the record exists. A viral video on YouTube can do more to launch an artist these days than a well-paid publicist, but the fact remains – it’s all about promotion. Some things never change.

Business and friendship rarely mix

When I started WordSound, I was releasing music made by my friends and myself. After all manufacturing and distribution costs were recouped, I split everything 50/50 with the artists because that seemed like the fairest deal possible. I would imagine that most independent labels operate along similar lines. Through experience I discovered that the majority of sales occurred during the first 6-8 months after a release hit the market, so I would do an accounting every six months.

Unfortunately, I also found out that distributors shipped unsold copies, known as “returns,” back to the label up to a year later (and sometimes longer). Therefore, while calculating royalties I often did not factor in returns, thus paying artists more than they were due. These artists were friends, after all, so I would rather err in their favor than withhold money that was due – in the same manner that major labels withheld a portion of royalties against future returns. Years later an artist might come looking for more royalties only to find out that their release was in the red due to returns. This situation has happened more than a few times, and it inevitably leads to a falling out because many artists do not understand the business.

It has also been my experience that when you enter into a business relationship with friends they think that you work for them all of a sudden. They might leave the whole job of promotion to you – thinking you have the reach and resources of a Sony Records – and then get angry when their record does not sell. Needless to say, being an indie label boss is a thankless job, and I have lost a lot of friends over the years.

Nothing lasts forever

In this fickle world of music, you’re up one day and down the next. The landscape is constantly changing as new artists and emerging technologies and trends create a dynamic and unpredictable environment. With a constant turnover of people and ideas, sounds and styles, nothing lasts forever – though The Rolling Stones have come pretty close.

Musicians were among the first to be affected by the digital age, and while we have adapted to a certain degree, there is still no model that replaces the former paradigm. It is only clear that we as musicians cannot live by record sales alone, so we have had to find other means of generating an income via touring, licensing, and merchandising, etc. Some, like myself, are even moonlighting at other gigs – writer, chef, filmmaker – still involved in the craft, but not the business, of music. These days, I release music purely for the love and not for any expected returns.

When I look around at my contemporaries who are successful in the game today, I see people who were able to reinvent themselves or their music, and that, to me, is the key to longevity. Artists must constantly engage their audience because the audience, too, is always changing. Some get older and lose interest while younger listeners gravitate towards newer sounds. So one can never really rest on their laurels, and the only solution is to keep putting in work.

At the end of the day, an independent label is a labor of love, and while you might be constantly swinging for the fences, you learn to settle for the small victories. In my case, WordSound had an amazing run, creating an eclectic and original catalog, which would never have seen the light of day otherwise. For someone who always dreamed of making records, that’s already more than I could ask.

By S.H. Fernando Jr. on June 24, 2014

On a different note