Original voices are a risk few mega music labels will take — so these musicians are thinking small and living large.
This next tune is ‘If You Break Down,’” says New England songwriter Ellis Paul, “and it was featured on the TV show Ed.” There’s a murmur of approval from the crowd at the Cactus Cafe, an intimate club inside the University of Texas Student Union in Austin. Getting on a television show, Paul adds, is a rare opportunity for him to reach a mass audience.

“You know it’s hard to see the credits at the end of those shows, so the next day one of my friends checked the Ed website to see if fans were talking about it,” he says.

They were. As expected, they’d missed the song credit, but a few were pretty sure they recognized the voice: David Gray, the English electro folk star.

“David Gray sold 240,000 copies of his album that week,” Paul tells the 100 or so fans in the cafe.

They laugh, understanding the irony. They know Ellis Paul has never sold 240,000 copies of an album. Not in a week. Not in a year. Not in a decade. His bestselling CD, Stories, is closing in on 30,000 copies after nearly eight years. But that doesn’t mean he’s a starving artist. Last year, Paul played 150 shows and released an album, The Speed of Trees. He grossed about $300,000, netting roughly a third of that after expenses — a better bottom line than many major label artists.

On the surface, Paul is a folkie, an old-fashioned troubadour, peddling his storytelling tunes from town to town like his hero, Woody Guthrie. But a look beyond the façade reveals that he is representative of a new breed of artist: an entrepreneur building a career without his 15 minutes in the pop culture. He’s never appeared on MTV or on the Billboard charts. If you find his CDs in a record store, they’re in a back bin, and his songs rarely are played on the radio. Yet grassroots artists like Paul connect with their fans in ways their predecessors couldn’t imagine. He has a website, a discussion group, and an e-mail list. He issues albums through his record label, Rounder/Philo. He also sells those albums and self-released projects directly from his website and at shows, cutting out the middlemen and earning far more money than he does from store sales.

It’s a business model that not only yields these grassroots artists a good living, but allows them the freedom to pursue their own creative vision. Paul had some interest from major labels a decade ago, but nothing came of it, and now he’s glad. “Songwriters don’t have to deal with the star machinery and the crash-and-burn mentality of the majors when they are on smaller labels,” he says. “Having a major label working with me now seems crazy. It would mean the sacrifice of art for commerce.”

Ellis Paul is not alone. Musicians increasingly are turning to independent record labels — or starting their own labels — bypassing the media conglomerates. They’re thinking smaller, but earning bigger.

Last year’s under-the-radar hit album, Brushfire Fairytales by Jack Johnson, originally was released on a tiny independent label. It sold only 50,000 copies the first 12 months, and then radio picked up one of the tracks. It went on to sell more than 1.5 million copies. Mary Gauthier’s bluesy storytelling on Filth and Fire for Signature Sounds ended up as one of several independent releases on a New York Times list of the best of 2002.

Gauthier, who ran a successful restaurant in Boston before turning to songwriting, paid for the recording of Filth and Fire out of her own pocket. Since she owns the recording and licenses it to Signature Sounds, she pockets money on every sale (most recording artists first pay back their record company for the recording costs before earning profits from store sales).

“I’m an entrepreneur,” she says. “I’m an owner of a small business. I never wanted a chain of restaurants and I don’t want some corporate entity telling me how to look, what to wear, and where to play. I won’t be a wildly famous household name. I never really wanted to be, so that’s no loss. I’ll sell fewer records than someone being pushed by a big, huge publicity machine, but I make more than enough to maintain a life.

“I’m in it for the long run,” she adds. “I think the big record companies are in it for a quick flash.”

Most small-label artists pay $6 or $7 for a CD from their record company and sell it for $15 at shows or on their websites. It’s a nice return. Gauthier does them one better. She pays Signature only for the manufacturing cost of the CD — about a buck.

Joe Pernice, the songwriter behind the critically acclaimed, shimmering pop band The Pernice Brothers, left an independent label to start his own record company. Pernice made 300 calls to record stores asking them to stock the band’s third album, Yours, Mine & Ours, before it was released this summer. The disc sold more copies in just five weeks than any before it.

“The only thing a record label is good for upfront is being a bank for people who might not have the money to start,” he says. “It’s like venture capital. Luckily, we didn’t need that.”

Merger after merger over the past decade has shriveled the number of major players in the music industry. Those doors closing mean openings for the little guys. By some estimates, there are now 10,000 independent record companies.

Jim Olsen, who cofounded Signature Sounds in 1995 and still runs it out of his colonial farmhouse in Massachusetts, says major record labels don’t nurture acts like they did in the 1960s and 1970s. If Bruce Springsteen were an emerging artist on a major label today, Olsen says, he wouldn’t have a chance because he didn’t get any radio play until his third album.

Today, the majors are playing the chart-topper lottery, not building careers. They dump hundreds of thousands of dollars into an act, and then hope it hits big. If it doesn’t, they drop the artist — who’s still on the hook for huge recording and touring costs. And the odds of hitting big are quite small. Of the more than 27,000 CDs released in 2002, only 404 sold more than 100,000 copies. About 25,000 sold fewer than 1,000 copies.

By contrast, a label like Signature can offer an artist the opportunity to build a following while having a hand in everything from the recording to the CD cover art. The company has a varied roster, including Richard Shindell, who has toured with Joan Baez; Amy Rigby, a critics’ darling for her rock ’n’ droll tunes about relationships; and Josh Ritter, named the “next big thing” by Details magazine earlier this year (Ritter also won ASCAP’s Sammy Cahn Award as most promising young lyricist).

What Signature spends recording an album — Olsen says you can get a good-sounding disc for $10,000 — the majors would spend on appetizers at a promotional party. A big seller for Signature is 25,000 copies. “Most of the time we’re in the black at 8,000,” Olsen says.

And it’s not just the young and hungry who sign with small labels. Established artists are turning to them as well. British pop star Nick Lowe, who spent a couple of decades on major labels, signed with Yep Roc, a blossoming North Carolina label that also features established artists such as Jason Ringenberg, the original alt-country crooner, and new artists such as Claire Holley, Caitlin Cary, and Thad Cockrell.

“At this point in Nick’s career, he doesn’t want to have anybody telling him what he has to do,” explains Glenn Dicker, cofounder of Yep Roc, a label that grew out of his record distribution company. “He wants to work with people who are not doing it purely for the business side of things, but are music people and believe in what his vision is.”

Jason Ringenberg went with Yep Roc for economic reasons as much as artistic ones. He had a couple of international hits, including “Absolutely Sweet Marie,” when he was the lead singer for Jason and the Scorchers, a band signed to major label EMI in the 1980s. But he never saw a dime. Major labels, he says, “create the illusion you are the band that’s going to be the next big thing, when in reality only one in 10,000 bands becomes the next big thing. The other 9,999 owe a whole bunch of money to somebody.”

This time around, Ringenberg kept his eye on expenses and recorded his latest solo disc, All Over Creation, himself. He licensed it to Yep Roc domestically and to other companies overseas. It’s approaching 20,000 copies sold. “I’m making more money now than I ever have,” he says. “I couldn’t be happier.”


Ellis Paul’s career shows how the grassroots life can build into a solid stream of cash. In 1994, the first year Paul played music full time, he made about $17,000. Since then, he’s amassed a loyal group of fans, and several channels for selling to them. His biggest pop-culture exposure came thanks to the Farrelly brothers, movie directors who used his songs. They chose “The World Ain’t Slowin’ Down” for Me, Myself and Irene, and “Sweet Memories” for Shallow Hal.

Touring income is the biggest number on the right side of the ledger. During Paul’s Lone Star sojourn, he played to 160 people in Houston on a Thursday, to 100 in Austin on a Friday (down about 30 percent from his usual crowd because school was not in session), and to about 100 in Lubbock on a Saturday. After the promoters took their cut, he earned about $3,500 from ticket sales. He also sold about $2,100 worth of CDs, pocketing about $1,120 after paying Rounder its share.

He also sells CDs via his website, along with T-shirts, a DVD of a live performance, and a book of his stories, lyrics, and drawings. Both the book and DVD yield higher profit margins than he earns on CDs. Altogether, web sales netted him $36,000 in 2002.

Sales of his CDs are split about equally between Paul’s direct vending and stores. Because Rounder paid for the recording of his albums, he earns only a few pennies of publishing income from store sales until he pays back his recording bill. To do that, stores would have to sell about 25,000 CDs. “Unless a record is a hit, it’s pretty much sharecropping,” he says.

Still, every year has been more profitable than the last. And the infrastructure at Rounder is solid enough that, if he is on the verge of a hit, the label can break him big as it has with Alison Krauss in the past. He hopes to get onto another soundtrack. That would help build his brand and could lead to other opportunities. A Dreamworks Studio vice president heard him on Me, Myself and Irene and suggested he cowrite some tunes with a couple of Nashville artists.

Meanwhile, Paul released a new CD in September, titled Side of the Road. It’s a series of cover duets (with old friend Vance Gilbert) of tunes by well-known songwriters such as Lucinda Williams, Neil Young, and talented unknowns. He’d like to have a hit and sell 200,000 copies of an album in a week like David Gray, but he knows the odds are against him. And he’s at peace with that.

“Every year is a step forward,” he says. “I’m happy where I’m at. It’s a good living.”


hadley hooper is an artist and illustrator whose work has been seen in a variety of publications including harper's, the new yorker, forbes, rolling stone, and the atlantic, among many others.
“i’m an entrepreneur. i’m an owner of a small business. ...
i won’t be a wildly famous household name. i never really wanted to be, so that’s no loss.”
— mary gauthier (pictured right)

big ideas, small publishers


the blockbuster mentality is alive at major publishing houses, just as it is at big record companies. and authors are turning to small publishers for relief.

“big publishers want the proven thing, the celebrity name,” says marilyn ross, the executive director of the small publishers association of north america. “smaller publishers are where a lot of newer, more cutting-edge material is coming from.”

for instance, dava sobel commanded a less-than-$25,000 advance for longitude, a bestseller published by walker & company. what he got instead of money was attention. while walker’s sales have doubled in the past decade, it has cut the number of books it publishes annually from 150 to about 50, allowing it to support each launch aggressively.

“that’s not to say big publishers don’t offer authors a good experience,” says george l. gibson, walker’s president and publisher. “but i do think that smaller publishers in general can offer authors a more personal experience. they can stay with a book longer, keep fighting for it. whereas a big publisher, if a book is not working, will just drop it.”

it was that personal touch that drew steve kemper, the author of code name ginger: the story behind segway and dean kamen’s quest to invent a new world, to harvard business school press. he had six-figure offers from major publishing houses for his narrative about the creation of the segway human transporter, but harvard’s executives promised kemper his book would be the priority, not just a priority. for the book’s summer 2003 release, they sent kemper on a promotional tour and even bought a segway for him to use during readings.

the campaign bore fruit. barnes & noble chose code name ginger as one of 24 books for its “discover great new writers” program for the fall, one of the few books of narrative nonfiction on the list. “i just don’t think i would have gotten all of this attention if i’d been at a larger place,” kemper says.