Can you tell us, is it really worth it for an artist to sign to an independent label and depend on royalty payments? I mean what kind of payments can artists expect from signing with an independent label? Isn't it better to set up your own label and get a distribution deal instead? 

*First off, let me say to any artist approaching an independent recording contract with thoughts of getting rich, “Fogettaboutit”! The reality of the recording industry is that most independent releases don’t turn over enough units in today’s product heavy environment, to achieve the types of sales that will pad the pockets of the artists. In fact, for any artist approaching an Indie deal, the only expectation worth having, is that of increased exposure--- be it via the radio, magazines, and/or live performances. Many of your readers may be surprised to hear that the most Indie artists make the majority of their money from merchandise sales and live performances, but it’s true. Most never see any real royalties from their record sales, for reasons ranging from inadequate sales to greedy labels. 

Having said this, I will add that if we assume that proper consideration has been given to certain factors such as budget allocation and overall sales goals, it is very likely that an independent artist will see some backend money. In general, most Indie contracts are far more fair to the artist than those of their major label counterparts. This means that indie artists tend to see a higher percentage of the overall revenue achieved from their album sales. This being the case, even a moderate level of success for an Independent release, should in theory allow the artists to see some money on the back-end. The truth of the matter is that most labels (given that they are not run by complete incompetents) should have a good enough handle of their target markets, to allow for profit making around most of their releases. This, in part, assumes that that they are not overspending up front, and should practice sound and targeted marketing campaigns. It is also important to keep in mind, that in general, the expenditure required to break a debut release by an artist, may be higher than otherwise expected due to the need to establish some sort of market identity. This may mean less profit sharing around an artist’s first release, but this should in no way wholly eliminate the expectation of profits. 

We must be extremely careful in equating an independent release with lack of profits. In fact, my experience has proven that this “profit myth”, is in many instances promoted by independent labels, as it affords them an excuse to delay if not forgo paying royalties altogether. We cannot believe everything we hear. In truth, if we were to believe all the independents that claim that they didn’t make money on releases, then most of them would be out of business within a year. Furthermore, in the case of larger independents or those which strike recording gold with a well received release, there should be room to make some decent profits. (On a side note, I will say that any artist pursuing an Indie deal, should push for as large an advance as will allow their project a chance of being successful. Considering everything I have already said about the reluctance of most labels to break bread with their artists, its best to get as much as you can up front, because in many cases, that’s the only money you’re going to see from your record sales.) 

With regard to the issue of artists taking more control of their careers and establishing their own labels and distribution channels, I will say that it is an issue to be considered on a very individual basis. The truth of the matter is that the expense of releasing and managing a recording, can be extremely prohibitive to most artists. It is important for any artist pursuing their own label, to consider how much time and money they have to devote to the marketing of their product. Promoting most releases is a full time job, so if you can’t devote the amount of time required to make it successful, you may want to rethink things. Can you afford to outsource elements of your promotions campaign? Can you find a distributor interested in picking up your group, or do you have to do it gorilla style? Do you have the time to devote to organizing a tour, calling stores, following up with radio stations, soliciting magazines? And if so, does it still allow you enough time to be creative and produce new music, while also maintaining a practice schedule. As daunting as all of this may sound, the truth is that money is the greatest of all the considerations any pioneering homespun label has. It costs money to press albums, take out adds, support tours, and otherwise promote an album. My experience has shown me that many artist run labels, run out of money before their releases are thoroughly exploited. A simple question for artists to ask themselves is, “Is this release worth all the hassle to me to release on my own, or am I better off finding a decent label to partner with around the release.” In fact, for most artist run labels, they will find that signing a label to label agreement with an independent, may provide them with some of the power and protection they seek in an attempt to run their own label, while allowing someone else to front the money required and more mundane day-to-day crap. 

My final comment on this subject is this…if any artist is in a position where they feel up to the challenge of running their own label, go for it! As much work as it may be, there is no better way to really learn the music game. In fact, we have more than ample proof that it can and has been done successfully. If you have a choice between waiting on some label to give you a deal or doing it yourself, always take the route of the true “West-side Rider”---Do that shit on your own.

What do you think of people's like Baby getting $100 million from Universal? Do you think people like that deserve that kind of money for the type of work they do? 

*It’s so funny that you ask that question, because when I first heard about the Cash Money (CMR) deal, I was sort of dumb founded. As a point of correction, I think their deal was more in the $30 million range, (my bad, I must have been drunk - ED) but that’s still a lot of money. Not knowing the specifics of their deal, it’s hard to really determine its true value. We don’t know how much they got up front, what the ownership rights may be with regard to the music, and also, how much equity Cash Money gave up to get the deal done? With regard to the size of the deal and whether it was deserved or not, I will simply say that Universal wouldn’t part with that type of money unless they felt Cash Money was worth it, or at least stood a good chance of recouping on the investment. Less we forget, CMR was making money and moving units way before Universal hollered at them. In fact, the only reason they were on Universal’s radar, was that they were selling 50,000 + units of their own releases without any major label help. They built themselves into a heavy hitting regional label, and capitalized on their position as one of the south’s best independent labels, which allowed them opportunity to leverage the South’s position when that region took over the mantle as the ‘hip-hop hot spot’. Universal needed Cash Money Records on their team, so as to allow them a foothold in the Southern music explosion. It was a combination of luck, timing, and an undeniable track record, that got CMR’s deal done. 

I wish nothing but success for Cash Money and other labels like them. My only hope is that they didn’t give up too much, to meet with the success they found once moving onto their deals with the major labels. One piece of advise or a critique I will give concerning CMR and the No Limits (Master P’s label) of the world, is that once they have availed themselves of major label channels, they must continue to devote themselves to pushing the creative envelope, by signing and releasing the best artists and music available. They must continue to approach their labels like real labels, and not just as a big click with a record deal. Don’t just put out albums from everyone who you role with---make sure you use some mother fucking skill with it! It is incumbent upon all artists and labels of any real merit, to constantly strive to attain what we perceive as the limits of their virtuosity.

What is the key to running a successful label? How do you satisfy yourself as a label head and your artists as well? 

*There are many keys to running what one would call a successful label, but the simplest is honesty. Be honest in your work. This means devoting quality time and effort toward any endeavor your label undertakes, be it in hiring of employees, promotion of a release, or managing the artist/label relationship. Once a label strives to achieve this simple principle, then more often than not, both the label and artist will be satisfied. In fact, it is even possible to have an unsuccessful release, but still manage to have a satisfied artist, given that they feel they had enough input with regard to the decision making process and their overall career. Artists often feel overwhelmed by the business of music, which at times makes them untrusting of record labels and those managing their affairs. The best remedy for that, is to ensure that they always know what’s going on. It will make them happier, and generally mean a better final product for the label. My thing is to deal directly with everyone (be there a manager or agent representative trying to play middleman). Its true that an artists doesn’t always need to be bothered about minute details, but when it comes to the essentials like contracts and marketing strategy, they need to be involved. Honesty and Trust are the cornerstones from which every successful label is built. 

Having said all of this, it is necessary when endeavoring to run a successful label, that it be a labor of love. You wont win all the time, but you need the resolve and sensibility to see every failure as an opportunity. The industry will make you pay your dues, but everyone goes through it, and regardless of what you think, it is in some ways necessary to separate the fakers from the players. If you can maintain your integrity and commitment to excellence, there will be a place for you. 

When talking specifically as to the things which labels just getting off the ground need to do, without getting overly involved, simply be clear as to what your intentions are with regard to your label and the music you release. Once your intention is clear, then make sure you have the best talent possible. This means that your label should be extremely discriminating when it comes to giving contracts to artists. Not every artist can put out a successful album. It’s hard enough to market good music, but it’s next to impossible to do it with sub par product. Devote the time to finding a good A&R rep, or be very secure it those people who are currently scouting talent for you. Keep yourself grounded to the streets. What’s hot? What’s the trend? Who’s killing them on the street level? What is the general mood of the average consumer? What will sell? ---These are questions to ask as you scout and exploit artists and new music. Assuming that talent is no longer an issue, the most important thing for any label getting started is to develop channels. How or who will be distributing your product? Do you have to press the release on your own, or do you have a P&D (pressing and distribution) deal? What about Street, Radio, and Retail promotions? Will they be outsourced, or can you handle that internally. How will publicity be handled? How long will the promotions campaign last? How many singles will you release off the album? Will there be an accompanying tour? What is the timetable for the various stages of your marketing campaign? And last but not least, how much will all this cost, and what is a reasonable estimate for the returns on your project?

Always plan before acting. Check your books and run the numbers before committing to a project, and always have a contingency plan. Kiss ass when necessary, but don’t beg for shit! 

Somebody once told me that setting up a record label is the easiest part, but getting the distribution deal is key. Your new label that you are setting up Hipe-22, what expectations do you have for that and do you have any distribution deals in the pipeline? 

*Someone told you right! Distribution is the key for any label. Although it’s not impossible to release records without a deal, it is highly unlikely to meet with any real success, unless you have guaranteed distribution. Not only that, but with regard to the distribution, it is important to consider the issue of what type of distribution deal you want, and what can you handle? It does you no good to have a national distribution deal, if you can’t afford to promote your releases nationally. For most Indies, the regional distribution deal is usually the best option, as the majority of your sales will come no more than 400-600 miles from your home base. This provides reasonable opportunity to promote your release and artists in your target zones. Since most distributors are weary of dealing with new labels, it may be worth finding a label with a distribution deal already in place, and then piggy backing off their deal at some nominal rate. 

With regard to my new label, Hipe-22, we plan on launching it with under an exclusive P&D deal. Some of the artists I’m working with, already have enough sales history to justify a distribution house taking a “chance” on us. Like I said before, it is necessary to be prepared for every contingency, so our plan B is to work with 3 regional distributors to assure that our releases can reach all our nationally targeted markets. Separate deals will also be struck for the European and Asian markets. I’m also looking for a good African distributor that covers the Sub-Saharan area; so let me know if you got any leads in that direction. The prospect for Hipe-22 is very good, but I’m optimistically cautious. I’m taking time with this venture to assure that we give ourselves the best opportunity to succeed. I expect our first release to be early 2004, with some possible singles out by late summer 2003. I would be remiss if I didn’t mention that one of the options we are aggressively pursuing is a possible partnership with a major label…. we’ll see how that goes!

Being involved in this music industry what is the weirdest thing you've experienced? 

*The weirdest thing I’ve experienced while working in the industry… Well, I’ve seen a lot weird stuff, but at this very moment I can’t think of one which would be take the grand prize as the weirdest thing. Its probably not really worth the “ weirdest thing I’ve experienced” heading, but to me, the one thing I’ve always tripped off of is the length to which people will go to put themselves in the middle of the “action”. Even when I was just hustling tapes at shows and not really involved in the “industry”, I always knew and respected my own boundaries. Some cats though….it’s like damn, they’ll do anything to be at the it spot, or in the right. Music is music and life is life, so don’t do anything in the pursuit of some imaginary music scene glory, that you wouldn’t do in your real life. This means, don’t be a sucker. Don’t compromise your principles--don’t be a groupie, don’t try and buy love, don’t worry about what other people think, and most of all, remember who you are. I say all of this to make the point that I’ve seen a ton of people do exactly everything I’ve just said not to do, and in all the cases, it was not the move to make. Keep it real! Not for anyone else, but for yourself!!!! 

The Internet, what are your thoughts on file sharing? If somebody were to rip a whole cd of your artist and make it available for download on the net, would you see that as a benefit or as theft? 

*My views are file sharing is simple…who fucking cares? The truth is that for most Indie artists, peer-to-peer file sharing is another form of promotion. Often times you will find that if a release is well received, the average fan, even with a digital copy of your album, will still go to the store and buy it. Major labels have a big problem with it, because it something they can’t control or make money from. After all the artists they’ve ripped off over the years, its justice that we have the option of no longer paying their exorbitant CD prices. I will admit to being somewhat facetious, but my feeling on data sharing is really that simple. What is music? Isn’t it simply information from one mind to another? Not only that, but it’s relatively free information. When an artist meets with inspiration to create music, they do it out of a necessity brought on by a longing in their heart to do so. It’s no different from a mathematician who comes up with a new equation or theory. Once the idea has been given life, it should be free for the whole world. The problem is that you have all these labels and a whole recording industry, which have been built off of milking as much money out of inspiration as possible. The real truth is that the music industry is fighting a losing battle, and instead of doing what they will inevitably have to do, which is reorganize the market structure for the recording industry, they choose to fight. Some major label artists do in fact lose money via peer to peer sharing of their releases, but the majority don’t have that as an excuse. If anything, I think file sharing has provided the consumer with an invaluable tool to make more informed purchasing decisions. I’m sick of buying CDs with only 2 good songs on them. The way I figure it, file sharing allows me to be more discriminating with my spending. 

When I consider the music industry in the long run, I can see a market structure where artists make money the way they did before the recording industry, through tours, sponsorships, and merchandising. Most of them aren’t eating from the deals they have with these labels anyway, so how do they lose? The labels are the ones who are really upset, and to make their case, they’ve convinced artists that the worldwide file sharing community is irreparably damaging them. Information is free, and so is music. The labels just have to figure out how they can stay in the game of making music. They will no doubt see smaller profits in the future, but they can still play a very major role in the distribution of music as well as participate in other related revenue streams. If they want to know how, they’re gonna have to cut me check before I tell them. 

Speaking to you has both been insightful and an inspiration. We wish you all the luck with your future projects. Do you have any last words or shout outs? 

I want to use this opportunity to say what up to all music lovers throughout the world. We really are a family yall. These so called borders, countries, and races don’t matter. The world’s been fucked up for a long time, but as crazy as things are getting, I see something beautiful in the future. Just stay aware and help wake up those around you who may be asleep. Peace and megablessings from the O!

If you missed the first part of this interview read it here.

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