Cooking Vinyl was a mistake.
It’s weird to say that about a label that’s been responsible for some of the independent music sector’s biggest successes over the past 30 years.
But it’s a phrase straight from the horse’s mouth: the boss of the UK indie, Martin Goldschmidt, admits he never actually intended to create a record company
Goldschmidt just found a band he loved – Akimbo, we believe – and, having shopped them around the music business to no avail in the early Eighties, decided to put out their music himself.
This experience led to the official creation of Cooking Vinyl in 1986, co-founded by Goldschmidt with Pete Lawrence.
Over the past three decades, CV has released big-time albums from acts including The Prodigy, Marilyn Manson, The Cowboy Junkies, Michelle Shocked, Amanda Palmer and Billy Bragg.
Bragg, in particular, is woven into the fabric of the place: he’s been signed to Cooking Vinyl for an unbroken 23 years, partly thanks to a pioneering ‘artist services’ contract – a setup CV has repeated with many artists since.
Yet things haven’t always run smoothly for Goldschmidt and his team: a few years into its gestation, Cooking Vinyl nearly went under.
The British exec took sole control of the business, paid off the company’s debts and built it into a label with international standing and platinum hits – but it wasn’t an easy journey.
He revealed the most important lessons he’s learned along the way – and here are five of the biggest.
They involve mad accountants, very strong joints and – typically – the all-encompassing importance of artists.
Absorb the wisdom.
1) Put something away for a rainy day.
We didn’t have a clue what we were doing when we started a record label… I didn’t even understand what the concept of profit was. We were so naive.
We never got the accounting right, which is really, really important in any business – especially a record label.
There’s two words in ‘music business’. Music’s the most important bit, but if you don’t get the business right, you’re fucked.
We did really well [at the start]; we’d made all this money but we’d put nothing aside for a rainy day. We had no business plan. We got into very big trouble.
“There’s two words in ‘music business’. Music’s the most important bit, but if you don’t get the business right, you’re fucked'”
We never actually declared bankruptcy, we kept on trading… but I remember a time when me and my partner said: “We can’t do this anymore, it’s too tough, Let’s both throw it in.” Then after a few days I said: “You know what? I’m going to try to turn this around.”
We came to an arrangement, I bought my partner out and kept going. It was really tough. We had to downsize, let go of staff. Every month I had to duck and dive creditors.
It took five years to repay all of the debts. We had this mad accountant who, when people would ring up for money, would talk about cricket on the phone for half an hour until they gave up.
Eventually we paid off every debt and traded out of it – I’m very proud of that.
2) Know when to shut up. And when to say yes to drugs.
My favourite negotiation was up against a very respected lawyer in the UK music industry. This was a long time before he was so successful.
He was representing our label and doing all the legal work for us, [but] he’d been sent down by his partner to try and increase the fees that we were paying.
We had no money. We were paying him far too little and his partner had kicked his arse.
He came down, and we started off the meeting with him rolling a big joint. We smoked it, and then he said: ‘Martin, I’ve really got to talk to you about the fees. We’re losing money on this. Could you look at doing it for [X per month]?’
“I was very stoned. I wanted to say yes, but I couldn’t speak.”
I was very stoned. I wanted to say yes, but I couldn’t speak. [In response to Martin’s silence] he said: ‘Okay, if you can’t afford that, we can come down to this.’
Then I really wanted to say yes, but still couldn’t speak. He came down and down… and ended up agreeing to do it for less than before.
In hindsight, I learned a lot from that experience.
Rule one of negotiation is: don’t be in a hurry to say anything. Don’t be in a hurry to fill the space.
Listen, and let other people talk. And never be too quick to say yes.
3) Artists matter much more to the outside world than your label.
The music industry is all about, ‘What’s new?’
Cooking Vinyl got into the business of working with artists with fanbases – not the newest, hip thing, but really great artists with great music; working out how to sell their music to their fanbase first, and then if we get lucky expanding beyond that.
Quite early on we realised [this model meant] Cooking Vinyl wasn’t sexy, or the talk of the town. And we realised we weren’t a consumer brand.
“It’s stupid if you think the public cares about your label’s brand.”
There are exceptions to this, but so many labels are obsessed with branding. And what you’ve got to understand is that [typically] you’re not a consumer brand – you’re a business brand.
It’s great to have a good business brand, to be seen in the industry as honest, reliable and trustworthy.
But what’s stupid is if you think the public care, or if you’re spending a lot of money trying to get [your label] profile with consumers.
No-one in the world is going to buy a record because it’s on Cooking Vinyl or Sony. People buy records because of the artists.
4) Don’t be afraid of cutting your artists a generous deal. They might just reward you for it.
The deal we did with Billy was very ahead of its time.
It wasn’t my idea at all, it was his manager, Pete Jenner – he said why don’t you do what’s now called an ‘artist services’ deal.
That was the the first – that I know of – artist services deal in 1993 and we started releasing Billy’s back catalogue.
“Our artist services deal with Billy has made him a lot of money – and that’s good at motivating any artist.”
The thing about that deal is that the artist takes all the financial responsibility and pays all the costs, but they’ve got a big upside [of royalties] – and as the label we’ve got a far smaller margin.
Rather than artists saying to us: ‘Why haven’t you spent this?’ Suddenly [those on a services deal] say: ‘Why have you spent that?’
You’re partners rather than being oppositional. Rather than artists trying to guilt trip you to spend more, it really aligns your interests.
It’s made Billy a lot of money, and that’s good at motivating any artist – when they keep getting decent royalty cheques.
5) Know when to sell… and how to sell.
We hit a ceiling with Essential [the label services business CV sold to Sony Music UK earlier this year, to create Red Essential].
The company couldn’t expand, we might well have had to downsize. We couldn’t take it any further.
By selling it, we got a lot of money – which was great – but far more importantly the staff all kept their jobs.
Sony’s team plus our team has really energized what’s happening in [Red Essential].
“We got a lot of money, which was great, but more importantly the staff all kept their jobs.”
The deal was a big win for us financially, a big win because all the staff are still sitting on their chairs – and all Red Essential’s clients, including us, have much better access to market.
We ended up in a place where both sides are really pleased and we have a long-term relationship to work at together.
I’m very proud of that deal. Rather than be a used car salesman, it’s good in this industry if you can come up with something that’s win-win for both parties.
Music Business Worldwide