In the past week HMV has received a lifeline through US investment firm Hilco and will continue trading in the UK, while beleaguered movie and game rental chain Blockbusters has announced it will start stocking music in its 264 high street stores. Here, Cherry Red Managing Director Adam Velasco examines our ongoing love affair with LPs and CDs…
You can’t move in the music industry without hearing people herald the demise of physical product. And, while laments to the ‘death of CDs and vinyl LPs’ certainly don’t constitute breaking news anymore, these headlines have come to define an industry in flux.
Here at Cherry Red, it’s a very different story. Business as usual for us involves producing lots of records; on average we release around 40 to 50 physical albums a month across our 20 active labels. Sure, we’ve evolved over the years since Iain McNay first formed the company in the height of punk 35 years ago. We no longer break new acts, and only five percent of our releases are new studio albums. Catalogue may be the bulk of our output, but our business is thriving in the face of the negative headlines.
We’ve come to learn that it’s not all about breaking acts and hitting the top 10. Fifteen years ago we were finding it extremely tough to launch new acts — the prohibitive costs and inherent risks weren’t sustainable. By that point we owned a great stock of master recordings and looked to license as much catalogue as we could from other labels and artists themselves. Over the years, we have built up solid contacts — especially with the majors. They increasingly license us to release catalogues because they are producing less physical product themselves.
It’s imperative we work with artists to tap into their fan bases. In this day and age, it’s never been easier to get to people. We use social media and work off our mailing lists; we encourage as many people as possible to sign up. We also offer our own mail order service so we see when someone has bought a certain artist and we recommend related releases to them.
No one can deny the music industry is a different beast than it was even five years ago, but for us it’s very much about choices. Many people want to download music but there is still a vast swathe of people who want to buy physical product. We are aware that we probably deal with an older fan base; most people who buy our records are 30 plus. But luckily, they still feel that music has a price and are willing to pay for music. They like their albums in a physical format, they appreciate the art aspect, they still like reading sleeve notes and they like having CDs and vinyl on their walls.
From where we’re standing, physical is still very much in demand. America, Japan, Germany, Benelux and the UK make up our five biggest territories and our physical sales went up last year in all of those countries. Music fans and collectors like limited edition releases with signed copies, exclusive prints, postcards, books or other memorabilia — it’s got to be good value and special.
It’s very sad to see HMV go but it was hardly a shock. I hope they can come back in some form and keep as many shops as possible open. It’d be terrible not to have any entertainment stores on the high street. But the majority of our sales were online already — we’ve noticed a very dramatic change over the years. People are buying through Amazon or us directly.
Inevitably, physical sales will go down, I’m not sitting here saying they won’t, but for a number of years I fully believe there will still be a worthwhile business on the physical side. Maybe Cherry Red will be the last one standing? But if people still want to buy physical copies of their favourite music, we’ll do our best to provide it for them.
Adam Velasco is Managing Director of West London-based independent record company Cherry Red. He joined in 1992 as an office junior and now oversees more than 20 imprints, managing a monthly release schedule of 40-plus albums.
Cherry Red started life as a press company in 1971 but sealed its fate as a record label when, in 1978, owner and founder Iain McNay released the first single by punk band The Tights. The company went on to champion a clutch of underground bands from the era, including The Runaways and Destroy All Monsters.
By the time the eighties arrived, the label had diversified into post-punk, new wave and more to become one of the key indie labels of the era. It issued a budget compilation in late 1982 called Pillows & Prayers, which was an instant success and stayed atop the UK indie chart for 19 weeks. The now-hallowed LP featured tracks by Tracey Thorn, Ben Watt, Felt and the Monochrome Set.
This year Cherry Red, now home to more than 20 specialist imprints, celebrates its 35th anniversary. Bosses are planning a big party in June followed by some very special reissues and possibly a new edition of Pillows & Prayers.