By Russell Brown, published in Unlimited magazine, September, 2003, copyright: Unlimited.

To say the New Zealand Music Awards, the Tuis, were a bit different this year is an understatement. In the past the Recording Industry Association of New Zealand’s (RIANZ) awards could, apart from the inevitable bad behaviour in the toilets, sometimes have passed for the standard annual knees-up of any other commercial sector. But this year, they actually looked and felt glamorous.

The new-model Tuis, which embraced a new academy-style judging system and did away with the sit-down dinner in favour of a slick two-hour live show, were the result of efforts to update the event by a group of younger senior managers at the major record labels served by RIANZ.

Pead PR, which had picked up the RIANZ account just before last year’s awards, convinced the association to give it the event management contract, and, by general agreement, made a handsome job of it. It came off like the celebration of a confident industry.

But there was another, more important, story that was largely missed outside the industry. Sixteen of the 20 awards given on the night went to artists on independent labels — known to the cognoscenti as indies. It’s not that the five global majors — Universal, Sony, Warners, EMI, and BMG — were AWOL. The industry wouldn’t exist without them. But in the developing synergy between a cluster of small indies (some of them artist-owned) and the marketing and distribution resources of the majors’ we are seeing the emerging shape of a dynamic local industry.

Nesian Mystik’s album is based on some beats the group put together on a PlayStation 2 while still at high school, and has so far sold 48,000 copies.

Locally produced music has roughly doubled its share of a stagnant music retail market in five years, to just over 11% in the last quarter. More artists, and a wider range of them, sell gold and platinum. The proportion of overall commercial radio airtime devoted to New Zealand music has reached 15%, up from 2% seven years ago, and at least one commercial station, Channel Z, tops a once unthinkable 30%. The industry is looking healthy.

“It’s the best it’s been,” affirms Arthur Baysting, project director at the New Zealand Music Commission, a slim organisation established on a promise in Labour’s cultural economy manifesto. “People talk about the 1980s being a great time for New Zealand music, but that’s nostalgia. There was very little depth in it, and what you’ve got now is a huge variety of genres and artists.”

At this point a reality check is necessary: selling gold (10,000 units) and platinum (15,000) in New Zealand will not make anyone rich, especially not the recording artists, or, in most cases, their indie labels.

So why, in a business with so many costs and such lousy cashflow, would so many artists place their faith in small organisations? Two words: copyright and control. The Datsuns (awarded Album of the Year, Best Group, Breakthrough Artist, Outstanding International Achievement at the Tuis) record for their own label, Hellsquad. They made their eponymous debut album in London, and then licensed it for a tidy sum to the British V2 label for all of Europe. Then they took bids and licensed it for the US, again to V2. Best of all, they even got an advance against the original licence fee to make the record.

The Datsuns are, in truth, an anomaly. They went from playing to a couple of hundred at Auckland’s King’s Arms to flavour of the moment in the British music press, barely touching the usual signposts on the way — and barely troubling the government’s culture-economy piggybank either.

But others are doing similar stuff. Goodshirt (Single of the Year, Best Songwriter) record for their own label, Cement. Nesian Mystik (Best Urban Album, People’s Choice Award) are with Bounce, a little label run from a house in Ponsonby. And Katchafire (Top-selling Single) are signed to Mai Music, a division of the Ngati Whatua-owned Mai Media, which runs the high-rating Auckland radio station Mai FM.

These days, the technology is such that anybody can make a record, and it will sound not only good enough for radio, but better than almost anything recorded here in the 1980s. Goodshirt, for example, records in a villa. Nesian Mystik’s album is based on some beats the group put together on a PlayStation 2 while still at high school, and was produced by their label owner, Dean Godward. It cost very little to make and it has so far sold 48,000 copies. Universal, the major label that distributes Bounce, picks up 24% of the $20 wholesale price for getting it into the shops.

“Basically, our distribution deal means that we’re taking the risk financially. Ultimately we’re paying for everything: manufacturing, marketing, all those areas,” says Godward. “But it’s put us in a much stronger position in terms of recouping [our investment]. So Universal have done very well out of it, but the boys have done incredibly well, and obviously Bounce has as well.”

How it plays
But, says music industry lawyer Chris Hocquard, Nesian Mystik were fortunate to develop early marketing momentum. It doesn’t always work out so well.

“Look at the industry as three blocks,” says Hocquard. “There’s A&R [artist and repertoire], which is finding, creating, recording, developing the artist. You’ve got marketing, which is selling it, and distribution, which is having it there in the shop when someone walks into to buy it. On a full signing, the record company will pay for the recording, market it and distribute it. On a licence deal, they won’t pay for the recording, but they’ll market and distribute it. A distribution deal, they’ll distribute it.

“If you sign a full recording deal you probably get a fifth of the income, but that first goes to pay back the advances. If you do a licence deal, you probably get a quarter. If you do a distribution deal you get three quarters. If you sell 10,000 records and you’re making three or four bucks a record if you’re lucky, that’s going to pay for you to make it, but you’re not going to make a profit.”

A point not often grasped by outsiders is that in the music industry the product is developed at the artist’s expense — and when just making a reasonable video can cost $20,000, the amount to be recouped through sales can be huge. Frequently, it isn’t recouped and a band can live and die in perpetual hock to a major label.

“Record sales are a small part of an emerging artist’s income,” says Michael Keating, the manager of Goldenhorse, whose debut album, Riverhead, has sold more than 10,000 copies for the indie label Siren, which has its own deluxe distribution deal with EMI. “The cost of good budgets for recordings is the sale of rights in those recordings. To sell records you need a few groups of people working to that end, and the trick is to give everyone enough points to make it worth their while. Then the increased exposure generated by everyone adds value and opens doors to the band’s other income streams, primarily publishing.”

Ah yes, publishing. It really does pay to be a songwriter, and, if possible, to own the recording. About 6% of the wholesale price of a CD goes to songwriters and roughly the same again to the owner of the master recording. The Australasian Performing Right Association collects fees for the use of music from broadcasters, live venues and even cafes and gyms. It distributed $548,000 to its New Zealand members (writers and publishers) in the second half of last year. Phonographic Performances, which is owned by RIANZ, distributes $500,000 annually through its RAP (Recording Artists and Producers) fund. And then there are specific licences, for example Goldenhorse’s Maybe Tomorrow was licensed by TVNZ for use in TV One’s season-launch promos, and ads, for which the fee might range from $5000 to $50,000.

The great thing about copyright, of course, is that it keeps on giving. The second Nature’s Best compilation of local classics released by Sony has sold more than 60,000 copies, delivering a good return to Sony and probably the first decent royalty cheque old rockers like Larry Morris have ever seen (Morris was so startled at the size of his payment that he called Sony to ask if there had been a mistake). After making nothing when he played in Straitjacket Fits and Bike, Andrew Brough has a house and an income because the songs he wrote for those bands are often used in Grundy soap operas, like Neighbours, that play worldwide. Dave Dobbyn still feeds his family with royalties from Slice of Heaven — although Loyal has doubtless been a good earner over the past year too.

Gaining release in a bigger territory also opens the opportunity for writers to sell their publishing — or, rather, the right to collect publishing revenues on commission, which, says Hocquard “is really all about picking up a big advance. You take an advance against the anticipated income. Bic Runga has sold her publishing and got big advances, which are yet to be recouped by the publishing company.”

But the numbers don’t make sense if you only have a local market. A publishing advance based on anticipated sales of 20,000 CDs might only run to $5000 — hardly enough to cover your lawyer’s fees.

Times, they are a’changing
Time was when artists might have been squeamish about this kind of thing. Not any more. SJD, a fine but quirky composer on the defiantly indie label Round Trip Mars (it refuses to join RIANZ and distributes through a related company, Flavor), paid the bills this year with 40 mini-jingles for Lotto ads. The rapper King Kapisi has his own clothing label, which is stocked in Farmers.

All of which adds up to a greater sense of realism and professionalism among today’s artists, and this is at least partly due to the presence of more opportunities and a greater sense of control. Yet if things now are different from when the shabby but prolific Flying Nun label dominated New Zealand music, it’s wrong to bemoan Flying Nun’s lack of business sense without acknowledging what it actually achieved. Almost for the first time, it recorded and released New Zealand music and sold it beyond Australia. Flying Nun releases sold well enough in Europe (and Germany in particular) to allow regular touring, and the Chills were playlisted on the hit-making Radio One in the UK — and came within a whisker of appearing on Top of the Pops.

The D4 have sold roughly as many copies of their dirt-cheap garage rock album 6Twenty in Japan, Europe and the US as Bic Runga has sold at home, and the band has been licensed to Hollywood Records in the US for an advance of around $1 million.

Step forward to 2003: Bic Runga’s second album, Beautiful Collision, has been all over local radio and recently broke Split Enz’s record of seven weeks at the top of the charts. In the year since its release it has sold six times platinum, or 90,000 copies for her label, Sony. Yet it hasn’t really taken off internationally — certainly not enough to recoup advances — and the focus has now turned to the European market, with Runga playing showcases in Paris.

On the other hand, the D4, an unheralded signing to Flying Nun four years ago, have sold roughly as many copies of their dirt-cheap garage rock album 6Twenty in Japan, Europe and the US as Runga has sold at home, and the band has been licensed to Hollywood Records in the US for an advance of around $1 million. They’re about to start on a follow-up.

The D4 have been a windfall for Australian label Festival Mushroom Records (Flying Nun was bought by Mushroom, which was in turn bought out by News Ltd-owned Festival). Which is not to say the D4’s success was an accident. Like the Datsuns, they took themselves to the US and UK before they got the deals. The difference now, says lead guitarist Dion Palmer, is that they don’t have to load up multiple credit cards to fund their touring.

“They’re incredibly professional,” says FMR’s managing director Mark Ashbridge. “And most bands are like that now. Most of them understand that if you have some goal you want to knock off, there’s got to be some level of organisation, particularly as ambition gets a bit greater. The general fostering of ambition amongst New Zealand bands is a lot greater than it was 10 or 15 years ago.”

Dean Godward says Nesian Mystik — one of whom, Awanui Reedy, is working on a business degree — are of similar mind: “They’re smart kids. They’re smart enough to want to know everything about the industry that they’re in, from legal issues to economics — all that sort of stuff.”

The changing shape of the music industry is also changing what it means to be an artist. P Money, who, as a DJ and producer is probably the key talent in the burgeoning New Zealand hip-hop scene, is a case in point. He and partner Callum August have just signed a long-term licensing deal with FMR for their label, Dirty. His debut album, Big Things, has sold 12,500 copies and has just been released in Australia. He’s in New York now looking to repeat his recent feat of licensing “some beats” (that is, an instrumental to rap over) to an American rap artist for $US10,000. And yet, he’s still out doing DJ gigs two or three times a week for cashflow.

Ashbridge was delighted to welcome them aboard: “Our major artists are pretty much on the New Zealand side. Our New Zealand income’s gone through the roof over the last three years. We started at about 2% of the market in New Zealand music; we’re now 18%.”

But Dirty was formed as an offshoot of the poster child for the local indie sector, Kog Transmissions. P Money says he couldn’t get the resources at Kog, and that Dirty gets a higher priority at FMR than with Kog’s major distributor, Universal. The move, he says, was amicable. Chris Chetland, co-founder of Kog, says it was simply a difference of focus. But others in the industry think that Kog has echoed the old Flying Nun — great taste and a sense of excitement, but far too big a roster of musicians to serve properly.

P Money’s move illustrates the way today’s musicians are prepared to move to a better business model to further their ambitions. And those ambitions are big. By the time you read this, Nesian Mystik will be playing showcases in Europe. And Westie nu-metal Blindspott recently got off a plane in Jakarta — where Kiwi music could easily be an unknown — to be greeted by a crowd and the news that their debut album for EMI New Zealand imprint Capitol had sold 15,000 copies in two weeks.

Yes, things have changed in the Kiwi music business. But have they changed enough? “I think there’s a genuine will on the part of [local Universal chief] Adam Holt and people like that to support the local industry,” says Chris Hocquard. “But I still believe that the fundamental structures haven’t changed significantly, and when you cut through all the bullshit and actually look at the contracts they’re sticking in front of people, the change is slow.

“And we have to find ways of keeping the money here. For all that the Datsuns did well and were in the right place at the right time, it didn’t bring anything back here.”

There’s a genuine gratitude in the industry for the government’s attention and financial support in recent years. But not everything has worked, and New Zealand On Air, having won over radio, is doing things it wasn’t really built to do — like offering grants to get artists overseas for showcases.

“The way they can develop a primary infrastructure is to really stop being star-struck by artists,” says Chetland. “The music industry is about the industry, about understanding the marketing side of things. They have to work on the industry side: managers, lawyers, accountants.”

This may emerge from the latest government initiative — the Music Industry Export Development Group, a task force that includes MTV Europe chief executive Brent Hansen and the former manager of Kiss, New Zealander Adam Vail, whose willingness to pitch in is typical of the Kiwi music diaspora.

Judith Tizard, who has long been rock ‘n’ roll’s connection to Labour, admits that the music industry has been tricky to support: too commercial for Creative New Zealand, and, until recently, a little too weird for Industry New Zealand. She expects the new group to come back with firm ideas about infrastructure.

Let’s hope it does. If we score the big one we could be looking at serious money for New Zealand — Ireland reaps $600 million annually in music exports; we currently earn about $5 million. But even if we don’t, there would be something terribly sad about living in a country that couldn’t make its own music.

Southside story
The walls of Dawn Raid Entertainment’s South Auckland office are lined with pictures of its founders with some of rap music’s prime movers: Snoop Dogg here, the legendary promoter/manager Russell Simmons there. But the picture that YDNA and Brotha D are really proud of shows the pair of them with their arms around … Stephen Tindall.

There’s nothing flashy about the office itself, upstairs in a humble breeze-block business unit near Hunter’s Corner in Papatoetoe. Yet you can’t help but notice indications of thoughtfulness: visitor parking marked with the company logo, signs directing you to the side entrance, two signs pleading for care on the precipitous staircase. The fittings inside are worn, but every thing is notably tidy. The young woman on reception is polite, friendly and quick. They like to get the details right at Dawn Raid.

YDNA (Andy Murnane) and Brotha D (Danny Leaosavai’i) like to think they have brought that same care for detail to their most important project yet: White Sunday, an album by the 21-year-old rapper Mareko for which the budget has already run well into six figures. Recorded in New York, Los Angeles and Auckland, it features collaborations with some of the best-known figures in hip-hop music.

A New Zealand indie label has never spent anything like this on a single record project, but Dawn Raid can afford its big play: last year the company turned over $1.3 million, and it will surpass that figure this year. It’s just that the money doesn’t come from music.

Back in 1999, Murnane was working as a baggage handler at the airport, and his friend Leaosavai’i was in a group called Lost Tribe and making ends meet by working at a local bar. They had the idea for a record company, and the Dawn Raid name, but no money.

“I was working in the rain and it was freezing cold,” says Murnane. “I was sick of it.”

So he arranged to use Lost Tribe’s garage screenprinting kit and ran up some t-shirts. Like the Dawn Raid name itself, the slogans were edgy. One read ‘Bungas Worldwide’, another celebrated David Tua’s “O for Awesome” blurt. They decided to sell them at the Otara market.

“And that first Saturday, I went with my wife and we turned over $400 bucks. So I quit at the airport. I took the gamble.”

That gamble paid off for Dawn Raid’s first release: a compilation of local rap artists called Southside Story. These days, Dawn Raid clothing sells from the company’s own shop 200 metres from the office. Dawn Raid’s factory in Manukau can turn out 500 shirts an hour and supplies promotional clothing to Sky Television, amongst others. The company also runs a graphic design business, a recording studio, a barbershop and a community trust that works with local kids.

“We love music, but the funny thing is, music isn’t what makes us our money — it’s what keeps us broke!” exclaims Murnane. “But then you get something like Mareko that can potentially with one album sort out everything else.”

The plan to go for the main chance existed before they’d found, as Murnane puts it “ the kid” on which they could base it. When they realised that Mareko, a burly baritone, was indeed the kid they needed, they called their connections in America and started work.

White Sunday is the most ambitious and accomplished record ever made by a local rap artist. Now, they want it to go platinum before they head back to America for showcase gigs aimed at cracking that much bigger market. Even with “one hell of a marketing plan”, they concede it’s a risk, but it’s one they have covered.

“We’re not dumb fools,” says Murnane, pointing out that both he and his partner completed business courses at Manukau Institute of Technology.

“Very few people — maybe a couple of per cent of the whole of the country — ever live their dream. We live our dream every day. Me and Brotha D are not typical New Zealand. We saw it in New York — there’s no typical day, there’s no cut-off time. I admire New York and I love the thrill of business. Music is my passion, I love that, but business is the killer for me. I love making the deals. I love achieving.”