Hey Bob,

While I certainly appreciate your thoughts and comments on the new artist label model that we here at Nettwerk are pursuing for several of our managed artists, I wanted to offer up a slightly different perspective to you and your readers, one that focuses on the ARTISTIC merits of this model in tandem with the BUSINESS opportunities that come along with it.

First, let it be said that the artist label model is definitely not for everyone, but I’ve found it to work extremely effectively, especially for artists who aren’t “superstars” based on size of their fan and sales base.  Business models aside, I think the success of an artist still comes down to the power of a song, or a body of work.  The types of songs and the types of artists we deal with will always dictate the situation that works best for them.  Some artists and songs will always thrive in the major label system, while others enjoy success of a different type at the independent level.

When I came into the Nettwerk Management team last year as they opened up an office in Nashville: I brought in an artist, Josh Rouse, who was coming out of a long term deal with Rykodisc after completing 5 full length albums, a DVD and 3 EPs in 8 years time.   Now, conventional wisdom would have pointed us in the direction of a major label route (given Josh’s history and untapped sales potential), but Josh felt compelled to grab hold of his career: looking to retain ownership of his art and control over how it was marketed.  While we had interest from some very credible labels (both major and indie), none of them could offer opportunities similar to what Terry and Nettwerk presented to us under this new artist label model they were setting up (based largely on their experiences with BNL’s Christmas album).

Feeling we had what it takes to sink our teeth into embracing the elements of releasing a record for ourselves (within the wonderfully support system that Nettwerk has pulled together, including DSP and distribution relationships) we released Josh’s 6th album, Subtitulo, in March of this year.

And I’m happy to say, Josh’s new artist label, Bedroom Classics, has NETTED him (note I said net, not gross) earnings that surpass any advance he could have hoped to receive from a major label deal at this time…and all within the first 6 months of release!!!  Plus, he retains ownership of his master and can thus participate 100% in all master revenue streams (digital, streaming, synch licenses, etc..) for perpetuity, thus creating equity in his own career.  And, that’s above and beyond the other areas of income, from publishing, PRO royalties, touring and merchandising.  And while some would argue that we’re only feeding his existing fan base and not allowing him opportunities to expand that base, we’ve been able to grow his touring business both domestically and abroad (including an upcoming run of dates supporting John Mayer, which comes 10 months into the life of this current record).

You made use of the axiom "You’ve got to GIVE a little to GET a little, if not a LOT!".  And to that I’d say that in these seas of change, it seems like the major labels are increasingly reluctant to adapt to the times and give up anything and are still asking for a LOT (if not everything) from the artist.  Digital rights in particular are a major point of contingency; given the fact that some labels still don’t account for all of their digital earnings (both downloads and streaming) in their artists royalty statements.  In the artist label model, the artist often sees that money on a MONTHLY basis (we recouped our initial investment in Josh’s current album within 2 months…based on our iTunes sales alone!!!).  No telling how long that revenue would have taken to come down stream to him under a traditional record deal.

In an era where A&Ring and true career development at major labels have become increasingly rare, the new artist model allows us to maybe not grow things by the leaps and bounds that an influx of tremendous money can bring, but in a way that ensures that the growth of an artist on a number of fronts will never cease.

What I’ve learned now, as a manager that basically runs an indie label for a select group of my managed artists, is that there are two areas that you need to balance for your artists, one being their ARTISTIC vision (and the freedom to explore that without the constraints or outside objectives that a label might bring to the table) AND the ability to secure and develop a solid BUSINESS around that vision that helps propel them along in a career which allows them to continue to hone their craft.

Thus, this vision that Terry has and that Nettwerk is exploring with many of our artists is one of ARTISTIC merit and can be applied (with great success) to a number of artists at different levels, and to an effect that is rewarding for everyone involved (first creatively, and secondary, as a business venture).  And having the opportunity to align that vision under one umbrella (as a manager) allows for us to re-envision, rethink, and adapt in ways that grow our artists into career artists.

Christopher Moon
Nettwerk Management