As the 1990s came to a close and the dawn of the new millennium was approaching, a then-unknown service called Napster flipped the music industry upside-down, changing the way consumers received and listened to music via the Internet. This disruption was met with polarizing views; consumers had unprecedented access to new music both domestic and foreign, while the major labels, citing free peer-to-peer file sharing and piracy issues, heralded the end of the music industry.
Since then, technology has added more cards to the game; online ‘a la carte’ music stores such as iTunes and Beatport, social media sites like Facebook and YouTube, and streaming services Pandora and Spotify have given more power to the music consumer. However, overall declining record sales and a shrinking industry have forced music retail outlets like Tower Records to shut down and major labels to sell off assets, merge with other labels, or even declare bankruptcy altogether. Despite this bleak outlook, independent labels have risen to the occasion, hoping to pioneer the Wild, Wild West of the new music industry, with Canadian-based dance label Monstercat being one of the cowboys of this digital age.
Founded in 2011 as a YouTube channel, the burgeoning label would later expand to sign non-exclusive, per-track deals with up-and-coming producers, DJs, and artists. Three years and over two million YouTube subscribers later, Monstercat has grown to be one of the largest independent EDM record labels with a storied roster including artists such as VARIEN, KREWELLA, and SPLITBREED, to name a few.
We had the opportunity to sit down with Mike Darlington, CEO and co-founder of Monstercat, to talk about the label’s origins, insights into the digital music industry and the EDM scene, and some of the opportunities and challenges they face amidst the growing popularity of streaming music.
TDL: Thank you for sitting down with us at the DJ List. So how did you start the Monstercat Label?
MC: It originally wasn’t meant to be a label in a traditional sense. It was more of a promotional platform for the artists, but we ended up providing them tools and resources, which turned out to be what labels did. So we were saying to artists, ‘if you need help selling your music, we’ll help distribute it,’ or ‘if you need help with promotion and press, we can do that for you’. In the end, we were just doing what a label was supposed to do but we were risk-averse with wanting to affiliate ourselves with the term ‘label’.
TDL: In a way, the word ‘label’ has negative connotations, associated with what people think is a brick wall between the artists and their audience. Back in the day, the record stores were the only places you can get music. Now it’s all online and direct. From what I read too is that Monstercat was originally a YouTube channel. So it is really innovative with what you are doing, bridging the gap between artists and the fans with more transparency than traditional labels.
MC: For one thing, people are still buying records, but for us, the job of the record label should be just to get good music out there to as many people as possible. There’s no one specific way to do that. Some labels originally started out as a YouTube channel or an event company, while others began as clothing brands or energy drink companies. As long as you’re getting the music heard you are doing the job. Right now, our focus is further expanding our label through streaming. We’re not going to stop selling music, but the prioritization is now on YouTube, Spotify, Soundcloud, and so on. No one can argue that the future of music is streaming; you see that with Netflix for one. We’re preparing for it and being ahead of the game before everyone starts to switch over.
TDL: However, there have been problems trying to monetize streaming music. The National Academy of Recording Arts and Sciences, the organization behind the Grammys, has been fighting a battle on Capitol Hill on how to provide streaming royalties and fair compensation to artists for their works.
MC: At the same time it’s also about how to provide fair compensation and not bankrupt the company behind it. You hear people complaining about Spotify royalties when the company is still cash-negative, spending investor’s money. It’s difficult to beg for more money when there is no money to give. And if anything, it’s bankrupting a technology that could be our future. Personally, I don’t think companies like Spotify or Pandora are sitting there trying to scam the artist; they’re trying to find a happy medium where they can create a long term business model platform while still making money for the artist. And I guess the thing about being a modern artist is that you have to build as many revenue streams as you can. It’s not about only selling records, only streaming, or only touring & merchandise. It’s a little bit of everything. With, for example, Soundcloud launching monetization and YouTube creating a user content ID claims for revenue, there are many little ways you can generate revenue from views and hits. And what I also like about streaming is that it is a brilliant, no bull game; nobody goes to Spotify and listens to a track they hate ten times. The charts show which songs are being listened to the most. Even with Shazam, it shows what tracks people are searching. It’s all about what good music is out there and not what people or companies are doing to manipulate consumers through sales and marketing to make you think that a track is bigger than it is.
TDL: Looks like that’s what the Internet has been doing, giving more power to the consumers and changing the way older companies operate while creating opportunities for relatively new companies, like yours. So in what ways have you used it to help make Monstercat build its name?
MC: Basically, it’s everything we do. We wouldn’t be here at all if it wasn’t for the Internet. Whether it is our A&R, marketing, or even just our internal team platforms for our discussions - they are all based off of the Internet. It’s so ingrained in our name and our brand; we started as an Internet-only label where we made an impact there and only now we are starting to see a ground level impact.
TDL: And if I may make a comparison to how the music industry as been within the past decade or so. The big labels are like the old dinosaurs. And when the comet, being the Internet, hits, the dinosaurs will die off but the smaller and leaner animals will survive and take over what the dinosaurs once had.
MC: In a way that is true. I don’t believe the major labels will truly go away. I think they are too ingrained into everything. And they are not dumb; parts of Spotify are owned by the major labels. They control the playlists and recommendations on Spotify as well. They are figuring out how to be a part of the Internet. Their bigger challenges are wanting to react too quickly and, given their large overhead costs from the subsidiaries and distribution chains they’ve created, being patient enough to see streaming catch up to where they were making their money in terms of music sales. Some will die off but a lot of them won’t because they are bringing in young, talented people and buying off smaller niche labels. Big money is on the table for the majors to pick up indie labels and learn from them.
TDL: That’s also something indie labels don’t have: the network and distribution. That is a huge factor, as record stores still receive physical products from Warner Music and Universal Music. And speaking of physical products, a recent trend in music consumption is the rise of vinyl. Do you see Monstercat possibly releasing vinyl singles albeit to a niche market?
MC: Yes, a hundred percent. We pick and choose our releases for it. We already have a couple of people in mind, not for distribution to physical stores but for the actual manufacturing of the vinyl. It is a bit limited due to the fact that you can only do a couple of tracks on each side. So if you want to do a full album you will need to have two or more vinyls, which can get costly. But at the same time, I want to do it for the fans and make it truly feel that they are a part of something. We even did a physical CD for HAYWYRE’s EP. It gave people something that they can say that they contributed to a release. We are going to try to have some physical sense to our releases, just for our fans to be a part of it.
TDL: Speaking of fan contribution, the Uncaged Tour was kicked off this past July featuring PEGBOARD NERDS, STEPHEN WALKING, and Varien. The tour cities were determined by fan votes. Do you believe that the fans help to create Monstercat in terms of being fan-driven?
MC: One hundred percent. It’s the only reason we’re here and we’ve grown; it’s because of the fans. We’ve developed a community that know they are a part of this. We go to them with questions and give them opportunities to be a part of what we’re doing. It’s part of our mentality from day one. That’s why the campaign makes sense. Why should we guess where the tour should go when we have all these people willing to make it happen for themselves?
TDL: It does makes sense. The electronic dance music scene as always been that: community-oriented. From the underground to what it is right now, it’s been about people connecting with other people, rooted in their love of dance music. But music does evolve. Do you see Monstercat changing with music trends and possibly branching out to other genres?
MC: We’re seeing new trends, genres, artists, and styles in dance music. If we do our job right at Monstercat, we’re going to continue to evolve with the music and marketing. EDM itself won’t die, just different sounds and styles will emerge. If anything, what you may see transition into one day is more commercial-friendly music that is still based off of dance music. Overall though we love dance music; we couldn’t see ourselves doing rock or hip hop.
TDL: It’s always good to stick to your guns and not stray from what you originally are. You can always do sister labels to experiment with other music.
MC: The other thing too is that dance music has been around forever. I just got back from Ibiza, and it opened my eyes up to how massive the market is out there. DJs are getting paid to play Techno and other genres. I’m sure there are other markets around the world that I don’t know about. It’s hard to say EDM is going to disappear when there are so many things going on; for one we’ve been dancing since the beginning of time.
TDL: Speaking of other markets around the world, there is the emerging Asia-Pacific region, especially in places like China, Korea, the Philippines, and so on. It’s possible to look to expand there.
MC: It would be foolish to ignore the potential in India, China, Japan, Korea, etc. It’s about finding music that can cross over since it is a different, more pop-oriented sound there. EDM is emerging there now since we’re seeing more progressive house artists and other DJs starting to tour in Asian cities. I’d love to one day develop a team to focus on the Asian market. It’s just difficult with the language barriers and not knowing how social networking works out there since they use other platforms. I really have to find guys that can speak five different languages, which is hard enough on its own. Add that with finding dance music enthusiasts and it becomes a real challenge.
TDL: And also with China, there is the scrutiny with online censorship as well as illegal piracy, which are other major barriers to break through.
MC: You probably have to go on the live side there. The ability to get things for free there is ingrained into their culture. I had one of our developers log me in to one of their social networks, where I saw every track we’ve ever done available for free in various sites. It becomes a losing battle to fight it so we’ve learned to accept it and try to maybe develop the live side or something we never considered over there. I learned that people are buying online goods, such as stickers and badges in Asia. I never thought that could be a thing.
TDL: And it goes back to what you said about thinking outside the box. As an independent label, you are given more leeway and freedom compared to a major.
MC: It’s about being flexible and doing things more quickly as well. I don’t really report to anybody. I’m going to try different things, whether it works or not. I think in a major label you have to get approval for everything. And when we tried to work with ideas that way it becomes slow and tedious that in the end it may not be worth doing since it takes a long time to get ideas into fruition.
TDL: Going to your artist roster, one of the acts you signed was Krewella, whose track “Killin’ It” was their first original signed to a label. In what ways do you feel you were instrumental to helping them get to the level of success they are enjoying?
MC: With Krewella, we were a stepping stone. We helped get their music out to a different audience. But overall, their music, marketing, and strategizing were what broke them through as an act. We definitely assisted in the early days but they are who they are because they, along with their team, are the hardest workers I know. We definitely helped but by no means do I ever try to take credit for their success. However it is a testament to our A&R and our ability to find talent, and in turn they were instrumental from a learning perspective. I learned so much from their career. It turned out perfectly and I’m so happy it worked out.
TDL: And one last question, is there anything you want to say to your fans?
MC: The only thing that is to be said is that we’re still a developing company; we’re open to learning and wanting people to send feedback, recommendations, critiques, ideas, and anything and everything to help us move forward. We’re not set in stone with our ways; we’ve found out things that worked best for us and other things that haven’t. I just want to maintain that open communication with our community so that it isn’t so unidirectional. I want to feel like we’re talking with people and our fans because without them, Monstercat wouldn’t exist.