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Published: Wednesday, 7/11/2007

Lawrence learns the business of music

BY BRIAN DUGGER
BLADE STAFF WRITER

It was back in August, more than two years since his last studio album, that Tracy Lawrence began pulling himself out of bed at 4:45 each morning. He'd drive to his office in downtown Nashville, prop a phone to his ear, and tell anyone who would listen that he was back, that his new single, "Find Out Who Your Friends Are," was something they had to listen to.

"I spent all week on the phone with every radio station, satellite media, live interviews with syndication, to get that spin count up," Lawrence says.

The strategy worked. Last month, the single, after more than 10 months on the charts, hit No. 1, becoming the 17th No. 1 single of his 16-year career. Lawrence also became the first country artist to go to No. 1 with a debut single off of his own label.

The going-it-alone approach wasn't the plan, of course. Lawrence had always been with a major label, first Atlantic Records, then Warner Brothers, then DreamWorks, then Mercury.

But Lawrence knew the big-label model wasn't going to work for him any longer when he lined up a possible deal with Sony. Days before the deal could be completed, the label was bought by BMG in August, 2004. Nashville's label consolidation was wreaking havoc on his career.

"That's the one thing that was holding me back. I'd get in a situation where I'd start having success, then they'd merge me with someone else, then I've got to start reconnecting with a new staff. You fall way down on someone's priority list because you go to a new label and suddenly you're the low man on the totem pole," Lawrence says.

By the time the Sony deal fell apart, there was a major trend developing in Nashville. Artists were throwing their clout, and in some cases their money, behind their own labels. Clint Black helped start Equity Records, Toby Keith began Show Dog Nashville, Neal McCoy's 903 Music opened its doors in 2004.

Independents give artists complete control of their careers, but another factor in the emergence of independents was a payola investigation originating in New York. For years, big labels would offer disc jockeys financial incentives to play their music. The more spins a record got, the higher it moved on the charts. As a result, it took a lot of money to have a hit. In July, 2005, then-New York Attorney General Elliott Spitzer ordered the major labels to end the practice.

"That really helped guys like me, someone who's had a track record and a good relationship with radio. It gave us the opportunity to compete without having to have such deep pockets," Lawrence says.

Lawrence started calling around to his buddies, like McCoy and Tracy Byrd, who had a distribution deal with Artist to Market Distribution. In June, 2006, Lawrence and his brother, Laney, took a leap of faith and opened Rocky Comfort Records.

Their business model differs from some of the other independent labels that have traditionally put sales and marketing teams in place before starting up with funds secured from private investors. Tracy and Laney knew they couldn't be saddled with the exorbitant start-up costs other independents were taking on. For now, Rocky Comfort consists of Tracy, Laney, and an assistant.Laney handles the business side, Tracy the artistic side. All other work is outsourced.

And in another ground-breaking move, the Lawrence brothers are on the cusp of owning a publicly traded company. They have lined up individual investors, and they are finishing up the paperwork to begin selling stock.

"The documents are almost ready. It could be two weeks or two months. We have the investors waiting, and I'm thinking it's going to happen sooner rather than later," Lawrence says.

He firmly believes that the public route is the way to go. McCoy was backed by private investors, and his label declared bankruptcy earlier this year.

"When you have outside investors throwing $3[million to] $4 million at you and they don't see a return, they get squirrely and bail on you. It takes a while to make money. You start signing acts, you've got to have that promotion staff, and if they know what they're doing, they're going to be $100,000 a pop. There's going to be heavy salary, building overhead, 401(k)s, health insurance. "The cost of infrastructure is half a million a year, then you've got $100,000 to produce an album, plus producing fees, publishing licenses, video, advertising costs. If you get two or three acts, you have all those start-up costs before you even have an album in stores to sell. It might take two or three singles before you start getting any sales. By that time, there might be $2 [million to] $3 million laid out there."

By eliminating a lot of the start-up costs through outsourcing and dispersing the cost between a number of investors, and because of the success of "Find Out Who Your Friends Are," which is on the album "For the Love," Rocky Comfort has already turned a profit.

"We haven't quite sold 200,000 pieces of product yet, but we're already in the black. Everybody who is included in this venture has already made money," Lawrence says.

That is far and away faster than an artist is going to make money on a major label. A little-known fact about the music business is that artists make little if any money off their early records. They're lucky if they get $1 for each album, then they have to repay the label for production costs and promotion and video expenses.

"Right now I'm on the same selling pace as my first album, 'Sticks and Stones,' which went platinum. I feel very strong that we're going to get at least a gold record [500,000 copies] out of this. A gold record for me, with the money I'm making from the distribution deal is worth more than a multiplatinum album because instead of making a buck an album, I'm making five."

The possible impact his label's success could have on the industry isn't lost on Lawrence.

"If we can achieve a platinum album through the four singles off this album, what's that going to say to some of these big acts established on the big labels? They are going to look around and go, 'If this type of distribution deal is out there, why aren't I making $5 an album?' "

For now, though, he's not focused on reshaping the industry. He's interested in getting his talent in place. He's putting together an album for Chad Brock, the label's first signee. He also wants to secure a female act, a duo, and a group. And, of course, he wants to continue to build on the success of "Find Out Who Your Friends Are."

"We never truly dreamed that we'd be able to have this kind of success this early with a new label. We thought a Top 10 would be the best we could do. We would have been satisfied with that, to build some momentum for our label. We never dreamed we'd come out of the chute like this."

Contact Brian Dugger at:

bdugger@theblade.com.



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