Things are still changing with the industry. Where do you go from here? Where do you see yourselves in five years’ time?
We’ve got a five year plan as a label. We’ve got a ten year plan for what we want to do. For us it’s about moving out to become a bit more of a lifestyle brand. You get to a point with a record label where you can’t just live off record sales alone. I wish you could, but you can’t. There just isn’t enough margin in it.
We have the events side of things, we have a publishing company as well, and the big thing for me that’s the emerging side of it is the new media: the YouTube, Facebook, Twitter, Google Music, all these kind of things that are coming through. That’s going to be how the younger generation want to ingest music. They want it so quick that you’ve got to be in a position to deliver it. If you can’t deliver it quick enough they’ll find it and they’ll get it free and then you’re in a whole world of trouble because no one’s paying for your music.
So this is all about expanding the idea of a brand. Are they any brands that you revere and respect or even base your ideas on?
There’s lots. I think the ultimate’s got to be Apple. They get their product to be sexy without being too much in your face. They are very good at what they do but I don’t think branding’s rocket science. It’s about getting a message across very clearly and about being approachable when someone asks you about what your brand is, being able to explain it on all levels.
We’ve always looked at being a worldwide record label. With the internet there’s no point thinking about being a UK label or a European label. 78% of our music is sold in the US. The more exciting things are looking into untapped markets. China really interests me. We’re seeing more and more growth in Japan and Asia. Eastern European countries are buying a lot more music. There are still untapped markets ready to embrace dance music. The ultimate is America. It’s kicking off big time over there and they always look back to the UK to see what we’re doing. We are in some respects the originators of a lot of dance music.
Is there a danger when building a brand that you water down your ideals or your product?
Yeah. I think you have to be careful you don’t go too corporate. One of the main reasons I set up the record label was to get away from corporate life.
If someone wanted to replicate your success, where should they start?
The music is key, but then get the business ideas set up. Network and get to know people in the scene. When we set up Toolroom I’d been out of music for two years and Mark was still DJing and producing. I didn’t know where to start so he told me to get all his records off the shelf and read them. Everything from the sleeve notes to where the record was produced, who engineered it, what studio it was made in…
I started to join the dots and it was actually quite a small diagram in the end. Everyone was linked to everyone. It made me realise it’s actually quite a small community of people. The key to it is having an understanding of the market you’re trying to get into, and living and breathing it.
Get that business model right. If there’s a group of you, decide who’s doing the press and PR, who’s doing the accounting. I wish we’d had a bit more of that thought before we put music out. Those things are the foundation.
Also, now, look at the other revenue streams you have with music. Can it appear on an advert? Can I monetise it on YouTube? Look at all the ways you can make that track or album work for you. Do your homework before you go, ‘I’ve finished a record. How do I get it on iTunes?’
What’s the biggest challenge to your label now?
I want to make our music as easily accessible as possible, but I have to charge you somewhere down the line. What I’m up against at the moment is people expecting to have music for nothing. Not because I want to be a multimillionaire but because I have to pay the artist. If I pay the artist they’ll give me their next track.
One of my biggest bugbears is Radio 1. At the end of a track they’ll say it’s available to download tomorrow. I think you have to be very careful with the word download. My kids associate it with ‘free’. If Radio 1 switched the word ‘download’ with ‘buy’, a lot of ten and eleven year-old kids wouldn’t be going on the net and getting that track for free. It’s an education thing and it has to start from a very early age.
This interview is an edited and abridged transcript of Stuart Knight’s seminar on branding at London Electronic Music Event 2012.