A logo sits as two employees work on desktops inside the office of Spotify Inc. in Berlin, Germany (Photographer: Krisztian Bosci/Bloomberg)

Coachella's Indie Acts Opt for Label Deals Even in Spotify Age

(Bloomberg) -- On stage at Coachella, Josh Conway could practically taste it. He and his compatriots in the indie band The Marias were playing the largest music festival in North America. They were on the verge of making it.

Which raised the specter of the biggest decision of their careers: Do they sign with a record label, or continue to go it alone in the Spotify economy?

“Exposure-wise, we’re doing pretty well,” said Conway, the shaggy-haired drummer of The Marias, a quintet playing psychedelic soul with pop undertones. “But there are a lot of things a label can do that we can’t do ourselves.”

In an age when Spotify, Apple Music and other streaming services amplify musicians’ reach like never before, the mighty record label still holds plenty of sway. Need cash to pay for studio-recording time? A label can foot the bill. Dream of playing late-night TV or other high-profile gigs? A label’s got the connections. And don’t even think about flashy tour buses or trendy digs without some heavy label backing.

Spotify Technology SA is the biggest force trying to blow up the music-industry status quo. The Swedish company has persuaded 71 million people to pay a monthly fee for access to a library of more than 35 million songs, spurring a three-year recovery in record industry sales and boosting its own valuation to more than $25 billion.

But while music-rights holders collect more than 70 percent of Spotify’s sales (and own equity stakes in the company), most artists still say they see very little of that money. “Streaming is nothing,” Conway said.

Artists could collect a larger sum, Spotify argues, if they bypassed labels altogether and distributed their music directly through streaming services. Spotify has begun to offer tools to help an artist more easily go it alone, including information about where to tour, advertisements and ways to monitor royalties.

Yet the company doesn’t offer the manpower or financing that major labels do, and some of the loudest advocates for signing with a big label are the rising-star musicians themselves.

Few people have tried harder to make the indie route work than Russell Vitale, a brash 25-year-old rapper from Atlanta who goes by “Russ.” He released 11 albums in less than three years before he realized nobody was listening, then changed tack and posted a song a week on the streaming service Soundcloud Ltd. for more than two years.

In his biggest hit, “What They Want,” which racked up millions of streams, he boasts of being a “DIY pioneer.” But it wasn’t enough. In 2016, he signed with Sony Corp.’s Columbia Records.

“I wanted to be on the radio,” he said the week before his set at Coachella. “That’s where my head was at.”

The music festival, staged every year in the California desert, draws about 250,000 fans to see more than 100 acts spread out across two weekends in April. This year’s event features Beyonce and Eminem, among others.

Traditionally, it’s been easier to cut out the record label later in a musician’s career rather than at the start. The Weeknd, Jack White and Jay Z all started their own labels, gaining greater control over the creation and distribution of their art.

The Marias have already passed a number of milestones on their own since they played their first show for 20 people at a Pasadena, California, pizza parlor about a year ago. They sold out tour dates and snagged airtime on National Public Radio, after releasing their songs on streaming services and working promotional tools like Facebook and Instagram.

Talent scouts have started to take note, and the band just signed its first publicist. Now, members are waiting to see what labels will offer before making a decision. Like Russ, getting a spot in the movies or on late-night TV is top on their minds.

“I’m pretty sure,” Conway said, that “late-night shows only take bands that are signed.”

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Pursuits News On BloombergQuint