Who needs a record label? Not Kendall Schmidt and here's why
Who needs a record label? Not Kendall Schmidt and here's why: http://t.co/pXTqAVHTYx @UpstartTeresa @HeffronDrive @ktothe5th @TheSchmidtIndo
- Upstart Business (@upstartbusiness) April 25, 2014
The UpTake: Kendall Schmidt, who rose to fame as a member of Nickelodeon’s Big Time Rush, is moving from his network boy band days into entrepreneurship. In doing so, he is using a Brooklyn company called TuneCore and flexing his own social media muscles to sell songs. Is this where music is headed?
Kendall Schmidt, who shot to fame as the boy bandleader in Nickelodeon's Big Time Rush, learned many things in his five years of doing the show. Among them: he didn’t enjoy being with a record label.
If you didn't watch it, Big Time Rush was a series about a group of Minnesota hockey that formed a boy band. The band, also called Big Time Rush, quickly took off, and the young men in it found themselves with one sneaker in Hollywood and the other in the music business as signed artists with Sony Music’s Columbia Records. After four seasons of comic misadventures, the show aired its finale last summer, capping off a real music industry business lesson for Schmidt, now 23.
“There were hundreds of decisions being made every day and from the start we wanted to be directly involved with those decisions,” Schmidt told me via an email Q and A about his record label deal. “The problem was, there were all kinds of things slipping through the cracks due to a lack of communication between all parties.”
When he formed his new band Heffron Drive with backup guitarist and fellow Big Time Rush player Dustin Belt, he weighed a record label deal but decided to go the independent route instead. That led him to Brooklyn, N.Y.-based company TuneCore, a nine-year-old firm that places the work of independent musicians on platforms such as iTunes, Spotify and Rhapsody and leaves the marketing and 100 percent of the music revenues to the artists. Heffron Drive's first song, titled “Parallel,” was released on iTunes on March 25.
“I get to be as creative as I want to be and activate all the knowledge and relationships I've been able to gather along the way,” Schmidt said.
The musician as upstart entrepreneur seems to be on the rise, even among big stars. Beyonce went straight to her fans with a new visual album on Facebook in December, and although it was released via a partnership with Columbia Records, her arrangement is suspected to be a joint venture versus a standard 20 percent royalty deal. She also very vocally manages herself and has her own company Parkwood Entertainment. Then there is renegade musician Amanda Palmer, who raised $1.2 million Kickstarter for her new album a few years ago after getting dumped by her label.
This maverick trend sits fine with Scott Ackerman, TuneCore’s chief operating officer, who said Schmidt’s team came to him. “He and his manager were shopping around, and Kendall really liked what he heard. We worked really hard for him to get the placements on iTunes, and he’s done extremely well in the social media world,” he said.
TuneCore is a software platform used mostly by independent artists who pay an annual fee that ranges from $9.99 for a single track to $49.99 for an entire album (it’s $29.99 for first-time artists). TuneCore collects and delivers all music revenues straight to artists, who get to keep all but 30 percent cut that the online music stores typically take. TuneCore makes money through those annual fees.
“The principal of it is enabling artists to be entrepreneurs and letting them be in charge of their own music,” said Ackerman. “Traditionally, the (music) publishing business has been a brick and mortar, paper business, and we’ve brought that online.”
TuneCore distributes music to streaming services such as Spotify and tracks down the royalties that writers are entitled to when their music is played in bars, retailers or restaurants, and royalties are collected by societies around the world, such as ASCAP, BMI, SESAC and SOCAN. Few independent artists even know these entities exist, let alone know how to get money from them, which is what labels would normally do, Ackerman says. It also recently launched a YouTube business to help artists monetize any music that gets played on the video platform.
In 2013, TuneCore collected $121.3 million on behalf of its artists, up 19 percent from 2012. The company, which two years ago expanded from its headquarters in Brooklyn to an office in Burbank, California, and operates international versions of its service, with TuneCore Japan its No. 2 market. Last week it announced that it brought in $34.1 million for its artists in the first quarter of 2014 alone via nearly 1.3 billion downloads and streams, a 75 percent increase over the same period in 2013.
The catch of going with TuneCore? Without a label, artists must work hard to promote the music themselves, and Ackerman acknowledges that “some artists feel that they need the label, but many of our artists feel that they can that themselves through social media.”
In its history, it has worked with half a million mostly independent artists including Fleetwood Mac, Lindsay Stirling, and Ron Pope who in a piece he wrote for the Huffington Post about Spotify revealed that he collected $334,646 from Spotify (via TuneCore’s platform) between the time he launched on the service in September 2010 and November 2013 with more than 57 million plays.
For Schmidt, he’s confident in his social media footprint which includes 2.2 million followers on Twitter. Among the newer ones, he has discovered are Instagram (@kendallschmidt) and a new event discovery app called OverNear.
“For the last few years Twitter and Facebook have really been a great tool for promotion and overall communication with fans,” he says. “Recently, there are great new ways to stay in touch and inform people of events and concerts nearby them.”