WHEN the Mariah Carey bubble burst two years ago following her flop film Glitter, poor sales of the accompanying album and even poorer ones of the follow-up Rainbow, a seismic shudder was felt through the music business.
Carey herself had a nervous breakdown, and so probably did a few executives in the Virgin Records boardroom as they’d just forked out an estimated 100 million for a five-album deal. Instead they paid her a cool 28m to get out of the contract - a move probably cheap at the price.
But while the collapse of the Carey market might have made some record labels a little more circumspect with the cash they were handing out to artists, it didn’t stop EMI signing a former dustman from Stoke for an 80m contract. Admittedly he was Robbie Williams, and the deal made him the highest-paid British artist in recording history, but his first single from the new album Escapology has so far only made it to number four in the charts.
So if the big boys can’t seem to get it quite right no matter how much they fork out, how on earth can small record labels survive?
According to Jamie Watson, owner of Granton-based Human Condition Records, whose first release was in 1990, it’s just by the skin of their CD sleeves.
"We’re under more threat than ever before," he says. "The market’s shrinking, there are more things to become preoccupied with, so people aren’t fixated with music any more."
As a result, they have had to become more niche marketed and become smaller than ever to keep the overheads down - but they claim they are also able to develop better customer relations and build up customer loyalty.
Small Edinburgh labels such as Jamie’s, No Rewind and SL Records say the reason they survive is because of their beliefs: music before financial gain; releasing bands they like - regardless of fashion; no real contracts with bands; no desire to become famous; working alongside other labels; small release runs; and the personal touch of hand-written letters to people who buy their records by mail order.
Ed Pybus, 25, the manager of SL Records says: "We have to challenge them [the large companies] by releasing something that normally wouldn’t be released.
"But we also have to be realistic. Robbie Williams’ situation gives artists a non-realistic view of the world. If signed to Parlaphone for 500,000 you won’t get half a million in your pocket. It might take two years before making some money."
Jamie adds: "I release things I like, even if it’s a minority taste, usually on a one-off deal. I’ll work on pre-production, engineer it and produce it."
No Rewind label’s sole proprietor, Claire Grandmange, also keeps costs down by doing almost everything herself. "I started No Rewind because I wanted to help bands I know are good but would never get round to releasing anything themselves. It’s about putting out new, experimental music that’s never been heard before. I have three individual bands on a one-release deal, and do this practically all on my own working from Joppa. As long as I break even I’m happy - money isn’t my first objective."
Ed adds: "People run labels for love of music, whereas majors always want to sell."
He started his label six years ago while at university because a student band Kayha wanted to produce a ten-inch blue vinyl.
"It cost far more than even if we sold every copy. However, bands have to take time off work, and we can’t afford to give them a huge advance. We usually sign a band for one release - depending on the band - record them, press the album, distribute it and promote it. If bands on our label start selling records it’s split 50-50 between artist and label. If we sell 20,000 copies, that’s brilliant, but if you were on Parlaphone you’d probably be dropped."
The cost of launching an independent label has dropped dramatically in recent years, partly because of the wide availability of studio-recording software and cheap CD-pressing technology. But it all depends on how serious you plan on making it.
"To kick off your label you’ll need 10,000," says Jamie. "That covers sundries such as studio time, recording, tape costs, manu-facturing, artwork, CD pressing, PR, stamps, envelopes, telephone costs, etc. You need to make enough to fund the next project.
"It’s a hobby, just like golf. Add up the cost of clubs, membership, etc, and that totals to a few grand also."
But not everyone can afford to operate at that level. "As long as you have a computer, and the basics for what you would need in any normal business, it can be as cheap or as expensive as you want it to be," says Claire. "CD pressings and promotion are the most expensive thing when running a label."
Ed adds: "Student loans helped us set up, hence the SL in our name. Because we do this ourselves, with minimum overheads, we don’t have to sell back any records so we make a fair amount. Because hiring an office is expensive, we operate from home in Marchmont, where flatmates chip in packing jiffy bags."
It’s a safe bet that most people haven’t heard of the label’s bands such as Hex, Obaben and Barrichello, simply because none of them can afford to play the game that gets their artists on radio or into magazines.
"Building contacts with music journalists, radio DJs and promoters is far from easy," says Claire. "Bands need to get to the right people or they’ll get nowhere. They need to expand beyond just Scotland or else they need a minor miracle."
Both Human Condition and SL agree. "Big record shops take lots of money from big labels to ensure their music gets played inside the store so we can’t compete," says Ed. "We can’t play the fashion game with some but at least Scotland has its own press - it’s far more difficult in London. However, we’ve been lucky to have two of our bands, Degrassi and Ballboy, do sessions for John Peel. Maintaining exposure is a constant nightmare."
Jamie Watson, who had his own 15 minutes of fame with The Solos in 1977 courtesy of EMI, says: "Recently, we teamed up with several small labels to try to gain more exposure, so we released a compilation CD of bands from the labels called Handbags At Dawn. Thankfully, Radio Scotland will play songs from small labels."
While major labels concentrate on making money, it can be left to struggling, homegrown labels - operating on verve and affection - to influence the development of music. Independents act as a bridge from the rehearsal room to the majors, and already the multinationals have sub-labels which keep tabs on what underground scenes may be forming. But some independents get gobbled up by big conglomerates. Interscope, Island and Def Jam were all bought by the majors in recent years.
Which, according to Jamie, makes them lose all independence they once had. "Major labels’ sub-labels are independent in name only. Independent means freedom, and they can't give that - they’re still corporate. Bands might get treated like royalty and get a huge financial advance, but the plug could be pulled at any time. They may dismiss the artwork; tell them which studio to work in; which producer to work with, and they have little say in anything. Small labels like ours don’t operate like that. With us, the band has total artistic freedom."
And, of course, the independents don’t have to worry about some of the majors’ problems, such as internet piracy. "The internet helps small labels network a lot more, by way of news groups, message boards, mailing lists, sharing tapes and helping organise tours," enthuses Claire, 24, who has managed her label single-handedly since April last year.
"It helps us get money back of our investment," attests Ed. "It makes so much sense to download a few songs, so if you like it, send us a cheque. The internet helped Ballboy get a licensing deal in America as people found them on internet radio. It led to their first tour there."
Jamie agrees: "There’s no point charging people to download from our web page. If they download tracks from a band like Sputniks Down and like what they hear, they can follow that up and buy the whole album."
Although many independents will come and go, they are vital to the future of music. They’ve been responsible for nurturing original music for more than 70 years, helping popularise bands before the majors swoop down and pick them off. Without Sam Philips, of Sun Records, there wouldn’t have been Elvis or Roy Orbison. Nor would there have been Primal Scream or the Jesus and Mary Chain without Alan McGee’s label Creation. And without Edinburgh labels, bands such as Idlewild and Ballboy wouldn’t have taken their music to a worldwide audience.
"We do the majors’ donkey work," says Jamie. "Human Con-dition led Idlewild to move on to Food Records and international acclaim. Another band of ours, Eugenius, moved on to Atlantic. And Luke Sutherland from Long Fin Killy now has two novels and a successful band to his name."
"There’ll always be small labels," maintains Ed. "Bands that can’t get on majors will always want to release stuff. People will always want to hear something that’s a bit different.
"Without small record labels there would never have been Oasis or The Strokes."