"They sell actual vinyl at Urban Outfitters now," he said. "Trendy people I know own a record player and an iPod, and that's it. As for the death of CDs, I'm not going to shed a tear."
Scrappy DIY imprints like Brown's typically don't deal in CDs, the medium hit the hardest by illegal downloads. Instead, experimental or punk labels like Not Not Fun or Post Present Medium, founded by No Age drummer Dean Spunt and responsible for releases by, among others, Wavves, Silk Flowers and High Places, have long specialized in limited artifacts such as vinyl or cassettes.
They also don't incur the same costs as larger labels. Brown said he spends an average of $1,500 per full-length release — for 500 copies that the label sells for $12 apiece — with 20% of the profit going to the band. He'll put out as many as 20 such releases in a year from artists like Pocahaunted and Sun Araw, who are never signed to contracts.
By contrast, Stones Throw's baseline for an average release from one of its 15 or so active artists is $50,000, with net gains split equally between label and client. Getting an album into the iTunes Store is only about $10 per title, which means access to wider audiences and a bang-up profit margin on stock that never runs out.
"The one key advantage major labels had this entire time was distribution," said Alpha Pup's Moo. "Your average chain music store could hold, max, 4,000 titles at once. Half of those were new releases, [90%] of which were major, with every indie label on Earth fighting for those remaining 400 slots."
Moo's business, which also includes handling worldwide digital distribution of older indie labels, such as Westbound (Funkadelic, Ohio Players), is capable of sustaining releases that sell as few as 200 units via iTunes. Alpha Pup's setup is a modest empire of artist-run imprints too: seven digital sub-labels founded by cachet-carrying local names like Flying Lotus and Daedelus.
One of Alpha Pup's most profitable avenues is licensing songs for film, television and commercial Web use. Label and artist alike see a payday when one of their tracks is synced to video, whether via a blockbuster movie like Universal's "Repo Men" or a real estate clip made for YouTube. But the mother lode, Moo said, is in one of electronic music's biggest licensees, CBS' "CSI" franchise.
"We love 'CSI,'" he said. "They licensed seven tracks from Nosaj Thing's 'Drift,' practically every song on the album." Legally, he couldn't reveal a dollar figure but said that, generally speaking, "one license can pay the rent for a year. You can keep the lights on, literally."
Stones Throw label manager Eothen "Egon" Alapatt told a similar story. Placement of an instrumental rap beat by producer Oh No in a recent Mountain Dew commercial beat CD sales 10 to 1 in terms of profit. Better still was the "dream deal" the label struck on behalf of rising R&B artist Aloe Blacc, whose "I Need a Dollar" is the theme song of HBO's "How to Make It in America." On top of the significant cash boon, "his record will actually sell," said Alapatt. "The writing's on the wall."
The success of Moo's low-overhead digital system has a brick-and-mortar benefactor as well. The Alpha Pup boss also runs Low End Theory, the weekly Lincoln Heights club night that's been hailed here and abroad as providing electronic music with its next big evolutionary step. Along with all-ages punk venue the Smell — which helped vault such artists as No Age, Mika Miko and Abe Vigoda into the limelight — this Eastside hub has come to represent something of a renaissance for independent artists in L.A.
Fans of emerging music are accustomed to discovering new acts online, helping to drive business to these labels. And it doesn't hurt that there seems to be an abundance of great music in those same labels' backyard. To wit: Stones Throw's tandem 2009 signings of local soul sensation Mayer Hawthorne and Leimert Park funk astronaut Dâm-Funk; the blog-heralded rise of psych-pop acts like Echo Park's Nite Jewel and Eagle Rock's Best Coast; and, of course, that the biggest band in Silver Lake, Silversun Pickups, made it onto the biggest music award show in the world.
"I don't think we would've had any chance of success if we weren't on a label like Dangerbird," said SSPU singer Brian Aubert. "They believe in careers, and the long haul — something that majors used to believe in. They stuck with us when most people wouldn't have."
That the traditional recording industry is rooted in L.A. has undoubtedly contributed to the local indie uprising. Both Moo, who worked for Sony until 2007, and Castelaz, a longtime music manager, said they had the opportunity to witness firsthand what not to do when it came time to launch their labels. The main lesson: to keep the operation at a reasonable scale, employing, say, a staff of 10 instead of thousands.
"There are going to be far fewer skyscrapers in the music business," said Castelaz, "and many, many more squat buildings that are filled with purpose."