tbyfield on Wed, 3 Jun 1998 21:54:37 +0200 (MET DST)

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<nettime> indie label abandons CDs in favor of net-only distribution

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Forwarded-by: Nev Dull <nev@bostic.com>
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Twin/Tone Abandons CDs In Favor Of Net-Only Distribution

The independent label expects to distribute work of 1,000 bands over the
Internet by the end of the year.

Earlier this month, with little fanfare or tearful reminiscences,
Twin/Tone Records pressed its last new CD.

But mourning around the Minneapolis offices of the indie rock label --
best known as home to early recordings by the Replacements, Soul Asylum,
Ween, Babes In Toyland and the Jayhawks -- was nowhere to be seen.

To the contrary: Far from bowing out of the music business, Twin/Tone is
setting its sights squarely on the future. By the end of this year, in
fact, co-founder and managing director Paul Stark hopes that Twin/Tone
will be distributing the work of at least 1,000 bands -- entirely over
the Internet.

This summer will see the 21-year-old Twin/Tone make the transition from
a historically important, medium-sized imprint to the first major
independent label positioned to sell music exclusively as sound files in
cyberspace -- downloaded directly to fans over the Internet, unencumbered
by physical matter such as album covers, liner notes or jewel boxes.

Stark, of course, is looking further down the line than 1998.

"My vision 20 years from now -- which might actually be 10 years from now
or five years from now -- is all pay-per-view," he said from the Twin/Tone
headquarters. "Record labels will have sound files, and people will be
able to access them through their home entertainment systems, or their
Walkman equivalent. Those that want to pay just a couple pennies for their
songs will have it added to their phone bill or their Internet bill; those
that want it for free will put up with some commercials in it.

"I don't think there's any doubt that that's going to be the future," he
added confidently. "It's just when it will be."

For the short term, Stark has already placed samples of more than 700
songs on the Twin/Tone website. In June, the full versions of these works
will be available in CD-quality Liquid Audio format for $1.50 per song or
10 bucks an album. By autumn, Stark predicts that prolific songwriter Jack
Logan will be posting new work online via Twin/Tone every two to three
days, allowing fans to purchase individual tracks to assemble tailor-made
compilation albums with home CD-burners.

Meanwhile, back-catalog items such as the Replacements' Let It Be or Soul
Asylum's Made To Be Broken will still be available on CD, and Twin/Tone
will press limited CD copies of Internet-only releases for current bands
to sell on tour.

Ahead Of The Pack

For years now, cyberspace pundits have anticipated that indie labels would
make the leap to online distribution well before major record companies.
At this point, no imprint -- indie or major -- is jumping as boldly as

"We're certainly not moving in that direction," said Jeff Nelson, co-owner
of Washington, D.C.'s Dischord Records, which includes such bands as
Fugazi and the Make-Up on its roster.

Seattle stalwarts Sub Pop -- the label that was once home to groups such
as Nirvana and Mudhoney and that charted an early and aggressive presence
on the Net -- has begun exploring direct online distribution, although
executives have no plans to launch a venture as significant as Twin/Tone's
anytime soon.

"Back about 1994, when I started getting into the Internet and learning
about it, I was shouting from the rooftops about saying that this is the
future of the record business and that traditional methods of distribution
were going to be obsolete," said John Schuck, Sub Pop's chief operating
officer. "I still believe that, ultimately, that's going to happen, I just
believe it's going to happen a bit more slowly than I thought four years

While some are lauding Stark's forward-looking vision, others have
questioned whether consumers will swallow strictly online distribution,
which allows portability of music only for listeners with a CD-burner or
tape deck attached to their computers. Others wonder whether fans will
accept having access to artwork, lyrics and liner notes entirely through

"I think it'll be a slow transition," said Dylan Hicks, a pop and roots
musician whose albums Won (1996) and Poughkeepsie (1998) are released
through the Twin/Tone affiliate label No Alternative. "I collect records,
and the commodity of owning a record, the package, the act of buying it
- -- that's important to me. It doesn't really feel like ownership to me
when you listen to it on your computer."

Stark counters that he'll be able to make more support materials available
online than he could through physical printing. While he expects that
there might be some grumbling from listeners at first, he believes that
fans will become accustomed to the new medium just as they eventually
accepted smaller artwork with CDs than with 12-inch vinyl records.

The Financial Drive

Of course, it's money, not aesthetics, that is fueling Twin/Tone's shift
to online distribution. In 1996 (the last year for which figures are
available), major labels released 10,400 new albums, up from 5,400 the
year before, according to the Recording Industry Association of America,
an industry trade group. Stark says that sharp increase makes it more
difficult for independent labels to get their work on store shelves. By
taking his albums directly to fans through the Net, he expects to increase
Twin/Tone's distribution not only in the U.S. but throughout the world.

Stark also estimates that the label's production costs will be slashed
dramatically with online distribution. "Sixty-five to 70 percent of my
money at any given time disappears through manufacturing and distribution
costs," he said. "So I only have to do 35 percent of that business on the
Net to break even with what I'm doing right now. I don't see much problem
doing that."

As other independents look to the future, they see both pitfalls and
advantages to Stark's strategy. "I know how huge the Internet is, and how
much more huge it's going to get," Dischord's Nelson said. "But it seems
that it might be easy to get lost. You're competing for attention in a
different way."

"I think where a lot of this is going to help is in the ability to carry
everything in catalog," Sub Pop's Schuck said. "If you're printing CDs
that don't sell enough, those things go out of print. When we're
completely wired to this technology, someone will be able to get very
obscure albums from anywhere in the world that wouldn't be available on
hard CDs."

For the time being, Stark recognizes that he's ahead of the curve but
finds his position vastly superior to playing catch-up in the
lightning-quick world of technology. And he expects that other indies will
soon follow suit.

"If you have this same conversation with other labels six months from now,
you'll hear them change their opinion," he said. "A year from now you'll
probably find them online."
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