Published Mar 20, 2009As party-rockin' festivalgoers fill up on rock'n'roll and PBR at this week's SXSW, record execs are painting a rather grim picture of what lies ahead for the independent music sector.
In a SXSW conference called "Indie Labels Keep the Faith," label reps shared horror stories regarding independent labels' current economic states, relaying to the audience that many are now grappling with the same problems that have been plaguing their corporate counterparts, such as declining album sales, online piracy and rampant layoffs.
"Everything you've heard [about the troubles of major labels], it's probably worse," the L.A. Times quotes Nan Warshaw, co-owner of Chicago's Bloodshot Records, as saying. "The decline in indie retail has continued in a free-fall."
Warshaw went on to explain that getting an album into the shops is more difficult than ever, with many independent shops giving up the ghost in recent years and most chains wanting assurances that a title will sell at least 5,000 units, the newspaper reports. "If your record can't do that, there's no point," she said.
In the conference, also featuring representatives from Rounder Records, Kill Rock Stars and Barsuk, the audience heard from Howard Greynolds, who until recently worked at the troubled Chicago imprint Touch and Go. He pointed out that there is an increasing divide between labels' needs and those of retailers, saying that the economics for indie labels has shifted, the Times reports.
While indies used to be able to prosper by selling 20,000 to 30,000 copies of an album, "what has happened is that it is now 5,000 [sales] or less, or 50,000 or more. The middle is gone," said Greynolds, whose former employer recently laid off 21 of its 23 employees and closed its Touch and Go distribution wing. He added that the revenues earned from downloads are too low to make up for declining CD sales, much less "maintain a staff of ten."