Nettwork Encourages Acts To Ditch Labels

(CelebrityAccess MediaWire) — Nettwerk Music Group CEO Terry McBride has advised his company’s clients to take note of the indies and the DIY-scene, telling the major stars they no longer need to sign with a record label.

McBride feels the benefits for today’s artists of keeping control over their musical output far outweighs those of being signed to a label.

“We’re focused on setting up our artists as their own record label,” the Vancouver-based McBride told Billboard. “I’m advocating for artists we manage not to sign- or re-sign-with a label unless it’s a pressing-and-distribution deal to work back catalog with new projects.”

Nettwerk Management’s 42-act roster includes stars like Avril Lavigne and Dido, who are both signed to Sony BMG, as well as several lesser-known acts. The company also operates a label, Nettwerk Productions, and a publishing company.

McBride told the magazine that within three years, “probably 80%” of releases from his management clients will be through their own labels.

During the past three years, Nettwerk has set up an infrastructure across North America to support projects of its management clients, including marketing teams spread across offices in Vancouver, Los Angeles, Nashville, Boston and New York. McBride plans to open a marketing office in Europe, to work with Nettwerk Management’s London and Hamburg offices.

Billboard’s Larry LeBlanc reports that Nettwerk’s first test of their plan came in 2004 with the Barenaked Ladies’ release “Barenaked for the Holidays” on their own Desperation Records, distributed in North America by Warner Music.

According to Nielsen SoundScan, the album has sold over 350,000 units in North America. McBride claims the band, formerly a Warner Music act, earned more than $3 million in royalties from the album, which is more than any of the group’s other releases, except its 1998 career best seller “Stunt,” on Reprise Records.

“We’re pleased with the money per unit we made, [compared] to being within the traditional label system,” Barenaked Ladies vocalist Steven Page told the magazine. “It’s like selling a million records.”

Many labels warn that McBride’s advice may not work for all.

“A number of artists have ‘gone it alone’ with their own imprint, funding their own investment and marketing costs in return for keeping a larger margin,” Sony BMG Music Canada president Lisa Zbitnew told Billboard. “Many of the failures in this regard actually underscore the value added by a music company.”

McBride sees the logic differently, noting that while physical sales will likely remain a significant business for some, such major label strengths as manufacturing and physical distribution are losing importance in the digital age.

The Internet offers artists access to ancillary revenue, McBride told the magazine, through selling exclusive downloads and streaming audio and videos. However, he laments that the music industry is still “locked into a per-unit mentality.”

According to McBride,” We should be locked into a per-dollar mentality – how much income we can create from downloads, streaming, TV placements, movie placements, selling physical discs [and] selling the live and acoustic versions.” –by CelebrityAccess Staff Writers

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