The vinyl frontier

News that Amato, a UK-based vinyl distributor, had gone out of business, was greeted at the start of this week with the usual, simplistic ‘vinyl is dead’ catcall. Rather than argue the toss about which format is superior or which will sink or swim in what is becoming a tiresome, techno twist on social Darwinist debate, it is perhaps more constructive to look at the reasons for Amato’s collapse and consider the implications that it will have on this area of the music industry and, crucially, what lessons can be learnt for the future.

Amato’s demise is hardly setting a precedent: at the start of this decade, Prime, another UK-based vinyl distributor, which focused mainly on vinyl, closed down. However, the reason for this was not poor sales – some releases going through Prime were selling upwards of 20,000 units, ironically at a time when insightful commentators in UK broadsheets were declaring this style to be in the final throes of an ignominious death – but mismanagement. There was considerable demand for the product (much as that term is abhorrent to me when describing music), but it seemed that the people behind Prime simply did not know how to run their business properly, had no real grasp of ordering, selling, stock inventories, and consequently could not meet that demand. Prime was the first but by no means the last casualty: it was followed by Integrale and more recently Intergroove UK, but the parallels between Prime and what has happened to Amato and the consequences for the labels they represented are most striking. In both instances, some of the most popular electronic labels were represented: in the case of the former, it included nearly all of the leading loop techno outlets and in the case of the latter, UK house/techno stalwarts like 20/20 Vision, Freerange and Crosstown Rebels. The similarities don’t end there: the story that is emerging about Amato - although it is wise at this early stage to stress that an official response/statement from the company outlining its version of events would be welcomed - is that again, poor management rather than poor sales was to blame for the company’s closure. Unfortunately, some of the labels Amato represented were locked into exclusive distribution deals and while others had the foresight to have a number of arrangements with other distributors, it will be difficult for any of the imprints affiliated with Amato to recover stock held at its warehouse.This places extra pressure on small labels that are already operating in an environment where vinyl sales are falling and where legal downloads are not making up the shortfall. It may well spell the end of some of the labels Amato represented - but it’s not all bad news. There are still distribution options for vinyl labels in the UK, Veto and Blackhole being two of the most notable, while some small labels are still doing well from vinyl sales – Will Saul’s Simple/Aus imprints are a good example of a grassroots success story. Meanwhile, Berlin shop Hardwax, now in its fifteenth year, has had its most successful 12 months to date. While Amato closing will lead to a shake-up, this is not necessarily a bad thing: there is still a shockingly high level of sub-standard music making its way onto all formats, which Amato’s demise may address, while the other players in vinyl distribution, including Word & Sound and Intergroove Germany, will do well to cherry pick up the best of Amato’s roster, further sorting the wheat from the chaff.

Most importantly, the news sends out a clear signal for a need for fundamental change in the way that independent labels do business. Like the newspaper and magazine industry, which has to face down the erosion of sales due to a rise in broadband usage, it is time to adapt. Maybe now is the time to stop relying on third-party distributors to promote and sell releases and to deal with online and real life shops directly, to sell releases from their own websites, or for a group of small labels to form collectives along the lines of Holland’s Clone or Spain’s Net28, linked to a store with an online presence. The future might be full of uncertainties for electronic music’s availability in all formats, maybe more so now that Amato has gone, but the most important lesson to learn from this episode is that it’s time for independent labels to take control.

Comments

[goldstein]

It seems that many of the bigger companies (Amato-uk, Watts-US, Prime-UK) suffer from their big system and large staff and could not adjust quickly enough to the lower sales on vinyl and cd releases, and at the same time more releases then ever before.
So more work, less profit?
maybe its just a labour of love?

I know for a fact that there are several companies have had the best sales in their history (Hardwax, Word and Sound,Clone, most likely Rushhour aswell) so its not all bad news. And same for several online store who sell better then ever before!

[Brophy]

It certainly seemed that Prime had taken on way too many labels and had no effective system in place to manage this increased volume. I'm not sure if the same thing happened in the case of Amato.

I totally forgot to mention Rush Hour in the piece - they do a great job too.

[tom/pipecock]

i think the days of distros doing p&d deals is probably over (i dont think these were common in the US anyway, i dont know any label that had that setup here...). i know of distros back in the day telling p&d'd labels they needed to have a specific number of records out in a certain amount of time, essentially forcing the oversaturation of the market. now, the labels should be financing their own shit, and the distros should be the middle point. i think we will see more specialist distros that pop up to handle different subgenres, and i think that might be a good thing. they are better able to understand the ins and outs of that subgenre than some random buyer at distro X. i think this will end up being a case of the weak bloated distros going under and things getting more underground.

[GeorgeBLOC]

To my mind, the small distros in the UK, specifically black hole and veto are comparable to the collectives you mention (like clone in the netherlands)... a solid group of like-minded quality underground labels held together by small, efficient teams that are realistic about what they are selling and keep things going on a properly managed, small scale.

all power to them!

[Z]

also, I think ELP Medien recently closed too. That was started by Corrado Izzo and Marco Carola. Marco left the business after Corrado picked up a lot of the cannon fodder labels from Prime's fallout.

[Ronan]

Amato was a joke, you never ordered anything from them, ever, except Border Community which I reckon they had an exclusive on.

I agree with your post, people make a big deal of some distros closing (or labels, or artists not making any cash) and it's as if it's part of some lamentable process when actually in some cases you just think "hang on, maybe nobody liked what you did".

[sestis]

Amato was a joke? - what a ten million pound turnover a year joke? Cmon Z, you tell us what a serious business does?
Let me tell you the market is very near collapsing, all this crap about labels doing it for themselves direct with shops....How will they even get them to the shops? - Then when they figure out how they will discover it wont be cost effective, and the shops will spend all of their time doin admin and none sellin. The basic fact is less people are buying music and practically none buying vinyl...in 5 years time none of us on here will be buying vinyl and we wont even be on this site!! - Face up.....its had its time, your the stragglers, the rest of us have moved on......

[Kenny]

@ Sestis. Then why did Clone, Hardwax and Word And Sound have their most succesfull years?

[Ronan]

"Amato was a joke? - what a ten million pound turnover a year joke? Cmon Z, you tell us what a serious business does?"

I don't know how much they made selling Tom Middleton Comps of "Crazy Covers" (of which we sold about a zillion) but my point was their demise doesn't say much about house/techno since those labels seemed to mostly be available from other places too.

Mind you I did notice that Rekids have taken a financial hit cos of that, they were also exclusively Amato I think.

The problem about all of this is that nobody has any real idea how much dance music is selling or what the breakdown is. Nobody has any hard facts.

That's a complete joke, the industry needs to start collaborating to sort this out.

[harvey lane]

thanks for the big-ups anyway.....much
appreciated

Harvey (VETO)

[hum3]

Slightly off-topic, but regarding vinyl actually being listened to and bought in a SHOP: that's under serious pressure over here for sure. This last half of the year, 2 decent (dance) recordshops have already closed - and that's in the best street for vinyl in Holland! I'm afraid more will follow suit in the year to come.

Triple Vision (renowned for their drum 'n bass selection) has cut opening times almost in half and Demon Fuzz (great shop for vintage) has limited the shop to make room for their stock/archive.

Maybe different reasons and maybe online orders will make up for this, but steady visits are diminishing for sure. And that's a shame... I'm missing the old days already.

Exit 'old-school' Rant.

[Hamed Elbarki]

Great article, thanks for sharing!

[labelowner]

I'm a small label owner and have been at the receiving end of distributors closing- including recently ELP. I strongly believe that at the root of ELP closing and Prime previously, was dishonesty from the distributors themselves. The management make sure that they take sizeable bonuses from the company and run it into the ground. The labels don't get paid, but told that the business is bankrupt. If the vinyl situation was so bad and bankruptcy so inevitable- why would somebody like Jeremy Ford be first an employee of Prime, then a director of ELP (both now bankrupt) and then set up his own distribution company Splinter? He would only do this if it was financially worth it for himself. All the calls of 'vinyl is dead' is rubbish. Its just that there are a certain number of distributors out there taking advantage of small labels.