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January 18, 2022Are record labels outdated?

Are record labels outdated? In conversation with Clouds Hill founder and producer Johann Scheerer

With the rise of social media and digital streaming platforms, it appears that the concept of a traditional record deal is outdated and no longer necessary for artists. Do you agree with that? What is your general attitude towards this progression?

Most labels are obsolete because they are no longer able to deal with music in an appropriate way. They have lost the appreciation of music. The industry has become too fast, with streaming services dictating the market. They practically force artists to release something all the time, flooding everything, and most certainly not with highest quality results. Although I run a label myself, I would advise many bands to release music without a label rather than with a record company that doesn’t care about the music. At the same time, I think it’s extremely important that artists, musicians, and bands in general should never have to do more than absolutely necessary to promote and sell their own music. And without a label, you’re on your own. You can of course buy in all the label services these days, the promo, the marketing professionals. But the financial risk lies with the band. And when it comes to their own music, they are usually the worst judges. To put it simply, a band has to be kept away away from marketing decisions. Signing with a label is worthwhile as long as the label is experienced. It only makes sense when you actually develop strategies together, when there’s a connection, when everything happens at eye level. What counts are long-term partnerships. That’s what I also tell newcomer bands: unknown bands are a build-up, you have to work together for two or three albums. You need trust for a long-term partnership. And the experience to be able to respond to bands individually. At Clouds Hill, the symbiosis of label, studio producers and musicians means that everything meshes well. We can react quickly and flexibly.

More and more artists want to remain independent as there seems to be a lack of trust and communication in the music industry. Why do you think that is happening and what is the key to a healthy relationship and productive collaboration between label and artists?

Artistic freedom should always come first. Something is fundamentally wrong when a label signs a band only to change it afterwards. That’s why, as a label, you should only work with bands you are absolutely thrilled of. Right behind that comes clear communication. It’s the only way to build trust. Everyone has to know what everyone wants at all times. That’s impossible with big labels. With them, as everywhere in capitalism, decisions are made glacially and solely for monetary reasons. With major labels, it takes weeks and months for decisions to be made. It simply paralyzes any creative process. And it’s insanely unfair that a band has to follow the label’s cycles as far as releases are concerned. An album is something that completely funds them for the next two or three years of their life. Bands are not signed because the label representatives like the music, but because the record company thinks they can make money with them. Simple as that. That’s why I always advise bands not to sign a major deal. Music is art, it’s emotion. And emotion doesn’t go well with mere numbers. Disappointment is imminent. That’s different with indie labels, of course, because they tend to sign bands that they like personally.

Moby once said that the divergence and imbalance between labels and musicians exists because record companies are “trying to justify their survival and keep their lights on”. What is the raison d’être of record labels nowadays and what is their purpose in your opinion?

This quote simply hits home. The prehistoric concept of a record label is outdated. It’s no longer just about getting records into a record store. A record company has to be more than the conduit to the outside world, a band has to be more than the cow to milk. The record label, along with management, has to be the band’s closest confidant. If that’s not the case, if the record company is not able to create a safe space for the band, then it has failed. And that’s what Clouds Hill is all about. We have this place that is just that: A safe space where you can try things out, where you can record things, and where you can talk about it with experienced staff. Still, there are certain decisions that outsiders can make better than the band itself. That’s why the relationship between the band and the label should be so trusting that the band makes an album they’re 100 percent happy with, and then gives the record company room to strategize.

You have been in the music business for over 20 years now and have seen many trends come and go. Considering the current developments in the music industry, where do you see the future of record companies?

The future of record companies is similar to the future of vinyl: there will always be record companies. If they’re done the right way. Because it makes sense to have a label in certain constellations. An artist like Omar Rodríguez-López could sign with any label in the world. Why are they with us? Because we’re more comfortable to work with. At some point you just want to be around people who are also fun to work with. And the probability that something will be better if it’s fun is very high.

With your band you were signed to a major label. Why did you decide to start an independent label and what do you see as the main difference between the two? What is the greatest challenge for (indie) labels at the moment and how can they stay relevant?

The biggest challenge for labels is that you usually don’t need them anymore. They need to they stay relevant, they need to work just as fast and just as creatively as the artists themselves. And labels are not used to that. I was always told I shouldn’t run a label because I’m actually an artist and thus can’t make financial decisions. But times have changed. For labels to work really well, artists have to work there, too. Because they can understand much better what’s happening on the other side.

When talking about “the music business”, most artists seem to set their focus on “the record” or “the label deal” without even realizing that there are two sides to copyright. How come that most artists who often write and compose their songs themselves care less about publishing?

Maybe because they don’t want to get too involved with the business side of things – which is, of course, their fair right.

So what does a publisher do?

A publisher’s sole job is making sure the idea an artis had is realized in the best possible way. It’s not about physical recordings, it’s about ideas. This is what makes it so fragile, so abstract. What is an idea, after all? An idea is nothing tangible. You have a melody in your head when you wake up, you sing it into your cell phone. Even that can be sold. Your publisher takes this idea and places it in an ad for Greenpeace or Mercedes Benz. Or he sells it to a different artist. Bands and artists usually give 40 percent of their GEMA income to a publisher. And that’s quite a lot if this publisher only does their accounting. I would venture to say that at least 50 percent of all artists sign a contract with a publisher without knowing exactly why they are doing it. Needless to say, it’s actually the solemn duty of publishers to explain very clearly what they actually do. This does not happen very often.

Is Clouds Hill Notes (Publishing sector of Clouds Hill Group) checking all those boxes?

I only founded a publishing house once I was sure that I could fulfill all of that – transparency, clarification, advice, respect, support. Anything else would keep me up at night.

And lastly, which goals are you pursuing with Clouds Hill? What are your ambitions and intentions, with not only your studio and label, but also with the artists you sign? What is your promise to them?

For me it’s always about relationships, about a safe space, about common ground. In the studio, my aspiration has always been to bring people together that I think work well together. My promise to the bands is that I’m always approachable. The goal is always to preserve the space, to have a place where the doors are always open for everyone.

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