Domino RecordsAn independent label case study

One of Britain’s most successful independent labels

Founded 1993 by Laurence Bell, who still runs the label

Based in London with a US branch Roster includes Franz Ferdinand and Arctic

Monkeys but mostly made up of unusual, less well-known artists

Began by licensing US bands to release in the UK – now releases both UK and US artists.

Key facts

“A passion for music, a back to basics approach… something home-made that’s put together with love.”

Laurence Bell

What are the advantages and disadvantages of this vision for a business?

Domino’s vision

http://www.youtube.com/watch?v=n9I8khSLf4o

Interview with Laurence Bell

http://www.xfm.co.uk/news/2008/the-domino-documentary

When was Domino formed? What is the ideology behind the label? Why

did Lawrence Bell set up the label? How is their attitude towards artists

different from major labels? Why don’t/can’t majors behave like this? How does Domino find new artists?

Documentary feature

Geographic Double Six

Domino cannot afford to sign an artist if they estimate that they will sell fewer than 5000 albums. Their two imprints (subsidiary labels) were set up to cater for minority interest artists who are likely to sell to a smaller, niche audience.

Domino imprints

To understand how an Independent Record Label

makes money

To gather case study material for the exam

Learning Objective

Where does a record label’s money come from?

Revenue

A record label’s revenue will come from various sources including:

- Record sales including downloads- Broadcast income (payment from radio/TV broadcast)

- Licensing - to other labels for compilations etc.

- Secondary licensing – films/TV/adverts etc.- International sales and licensing

The success of groups like Franz Ferdinand means that Domino can invest in more new artists with less mainstream appeal

Revenue

Horizontally integrated company= uses other companies to handle different

aspects of the production, marketing, promotion and distribution as it does not own these facilities itself.

This is a very traditional structure

For instance:[PIAS] UK Distribution handles the physical manufacture of

the music (CDs and vinyl) and the distribution to retailers.

Domino: Company Structure

Epic (subsidiary of Sony BMG) releases the group’s music in the USA.

In 2006, Sony issued a limited edition MP3 player with the band’s logo

Franz Ferdinand international

Major labels operate a newer vertically integrated business model, where the owner has acquired companies which play different roles in the process of creating, promoting and selling music.

How do the majors differ?

Recording

Promotion & marketing

Distribution e.g. Vivendi

Distribution

Retail/exhibitione.g. Virgin radio

Song writing and publishing

Licensing (to film/TV/mobile) e.g. Universal

Pictures

Hardware e.g. Sony DVD players

Mitigate = mimimise

Record labels exist essentially to make money.

How does this affect the choices they make in selecting artists and music?

How do labels mitigate risk?

Domino has to make an effort to exploit the opportunities provided by the internet:

http://www.dominorecordco.com/

- Downloads- Dominocast- Domino Mart- Domino Player- Video and promotional content- Mailing list

Web presence

Domino has developed a website which allows audiences excellent access to

VideosNewsInformation about new releases and tour

datesA monthly podcast – DominocastA sales area – DominoMart – fans can buy

music on vinyl, CD or MP3

Web presence

Domino has also made use of Web 2:0

The site is constantly updated and linked to the label’s presence on social networking sites:

FacebookMySpaceYouTubeTwitter

This makes it easier to find, sample and buy the music.

Web presence: Domino is actively moving with its target audience

Case Studies (30 marks)

Archie Bronson OutfitFranz FerdinandArctic Monkeys

Archie Bronson Outfit

“Coconut, the new Archie Bronson Outfit album, is a record full of deep riffs, spaced loops and the sound of a band revelling in both their individuality and intensity.”

Promotion for Coconut: Free single download New video on website each day leading up to

releaseMyspace/Facebook pagesUK and European tour

Case Study: Archie Bronson Outfit

Production: Working with Xenomania on new releases Collaboration with a number of producers

Promotion and licensing: Alice in Wonderland soundtrack Lady Dior advertising campaign International festivals/itunes festival Guitar Hero/NHL 05 video game UK, USA and international tours Airplay on national/international radio/MTV

Case Study: Franz Ferdinand

Marketing the Music Someone close to the band released unfinished

versions of their songs onto social networking sites like MySpace.

Fans were already familiar with the group's work when they released their debut single, I Bet You Look Good on the Dancefloor, and album Whatever People Say I Am, That's What I'm Not.

The album and single went straight to number one, again released on an independent label, Domino.

Case study: Arctic Monkeys

Definition:Viral marketing and viral advertising refer to

marketing techniques that use social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales)

It can be word-of-mouth delivered or enhanced by the network effects of the Internet.

Viral Marketing

Viral promotions may take the form of:- video clips- interactive Flash games- Advertgames- Ebooks- Images- text messages. The basic form of viral marketing is not

infinitely sustainable.

Viral Marketing

The goal of marketers interested in creating successful viral marketing programs is to:

- identify individuals with high Social Networking Potential (SNP) - create Viral Messages that appeal to this segment of the population - to gain the interest of an audience that have a high probability of being taken by another competitor.

What are the advantages?

How does vertical integration help major labels to maximise their revenue from artists?

How might independent labels with a horizontally integrated approach be at a disadvantage?

Maximising revenue

RADIO BROADCASTING

Independent Labels like Domino rely on Radio Stations such as BBC 6 to distribute their artist’s music.

So what happens when these types of radio stations close down?

Distribution of Music

Domino Recording Co. Ltd press release March 2010

We would like to make it clear that we are extremely concerned by BBC plans to cut BBC 6 Music from its schedule.  BBC 6 Music is an extremely important and rare outlet for much of the music that we release on Domino.  For many of us who grew up listening to, and learning about music from John Peel, we've come to appreciate this station of mostly free playlists, diversity, new things, old things, the unexpected.  Indeed we'd argue that the BBC should be making this fantastic station more readily available via the masses of unused FM bandwidth.

Domino and BBC 6 Music:

Why is 6 Music valuable to labels like Domino?

How might the major labels find it easier to place their artists on radio playlists?

What challenges does an independent label face when promoting its artists?

Independents & Promotion

Use the worksheet to CREATE YOUR POWERPOINT

Be ready to argue why you should represent the new artist (and why the other label should not!) next lesson.

HomeworkPost your research onto your blog for next

Tuesday. Be prepared to explain why you should represent the artist for Tuesday’s lesson.

Homework for TUESDAY

In groups of 4 you will adopt the role of a music institution. Some will be a conglomerate (Universal) and some will be an independent music company (Domino).

A new artist called ‘@ for Ampersand’ has requested that you produce and distribute the music for them. In your group you will have 5 mins to argue that you are the best institution for the job.

Step 1 Research your institution (notes in lessons)Step 2 Plan your speechStep 3 Write your speech and assign roles / sections to speak.

EVERYONE in your group must say somethingEVERYTHING you say must be true and accurate.

Task

Domino has to make an effort to exploit the opportunities provided by the internet:

http://www.dominorecordco.com/

- Downloads- Dominocast- Domino Mart- Domino Player- Video and promotional content- Mailing list

Web presence