WEBVTT - Bill Hein 0:00:08.600 --> 0:00:12.640 Welcome, Welcome, Welcome back to the Bob Lefts That's podcast. 0:00:13.039 --> 0:00:17.360 My guest today is Bill High. Bill, tell me about 0:00:17.400 --> 0:00:18.360 your vinyl business. 0:00:19.960 --> 0:00:26.200 We have a vinyl factory in Poland. Although you know 0:00:26.239 --> 0:00:29.120 we are a US company, we have a Polish subsidiary. 0:00:30.160 --> 0:00:32.760 We work with a Polish company that was already in 0:00:32.800 --> 0:00:39.839 the media business, primarily optical media, CD, DVD. When they 0:00:39.880 --> 0:00:44.839 expanded into vinyl some years ago, they invited US and 0:00:44.920 --> 0:00:48.520 a few other parties to buy vinyl presses and work 0:00:48.560 --> 0:00:52.440 with them, and that's how we got going. We're now 0:00:52.479 --> 0:00:55.360 up to fourteen vinyl presses. We can run up to 0:00:55.400 --> 0:00:57.360 about a million vinyl discs a month. 0:00:57.840 --> 0:01:01.880 Okay, a little bit slower. This company in Poland before 0:01:01.920 --> 0:01:05.360 they call you they're making media. Were they making vinyl 0:01:05.440 --> 0:01:06.039 at the time? 0:01:07.720 --> 0:01:09.920 They had just well, they had been doing it for 0:01:09.959 --> 0:01:15.520 a few years. They started in the mid twenty tens. 0:01:16.120 --> 0:01:17.920 I don't know what we call decades anymore. 0:01:18.080 --> 0:01:19.240 I know, it's sort of amazing. 0:01:19.319 --> 0:01:25.600 Yeah, the twenty teams, so that the decade before this one. 0:01:26.400 --> 0:01:30.559 And it's interesting how they got started. They started getting 0:01:30.600 --> 0:01:34.440 calls from their CD and DVD customers wanted to know 0:01:34.480 --> 0:01:37.400 if they could do vinyl. This was a time when 0:01:37.480 --> 0:01:41.880 vinyl was coming back, but most of the vinyl factories 0:01:41.880 --> 0:01:45.840 had closed down, machines had been scrapped. No one was 0:01:45.840 --> 0:01:49.760 making new vinyl presses, so you couldn't just you know, 0:01:49.840 --> 0:01:53.480 google vinyl press manufacturer by a few presses and go 0:01:53.480 --> 0:01:56.520 into business. There were none to be had. They found 0:01:56.760 --> 0:02:04.760 someone in Zimbabwe selling some Swedish Swedish made TOOLIXELFA presses, 0:02:05.720 --> 0:02:11.320 electroplating baths and annoyment cutting lathe all very valuable, highly 0:02:11.360 --> 0:02:20.000 regarded equipment on eBay. So one of the executives there, Andre, 0:02:20.120 --> 0:02:23.040 who is the first guy I met at this company, 0:02:24.080 --> 0:02:26.720 he went to Zimbabwe. He verified it was all for real. 0:02:26.840 --> 0:02:32.640 They negotiated a deal. They bought essentially an entire turnkey 0:02:33.000 --> 0:02:36.800 vinyl pressing plant that had been mothballed for a long time, 0:02:38.040 --> 0:02:41.840 put it in shipping container, sent it to Poland. The 0:02:41.960 --> 0:02:45.440 factory engineers got the equipment going and they were in 0:02:45.480 --> 0:02:50.000 the vinyl business. Now. These were old manual machines that 0:02:50.120 --> 0:02:53.840 have relatively low output. But nice thing about the vinyl 0:02:53.840 --> 0:02:59.400 presses is they're eternal. I know, vinyl plants using machines 0:03:01.040 --> 0:03:04.160 that were made in the fifties still working just fine. 0:03:05.280 --> 0:03:08.360 So that was probably ten years ago. We got in 0:03:08.400 --> 0:03:10.240 business with them about five years ago. 0:03:10.600 --> 0:03:13.959 And okay, so tell the difference between a manual and 0:03:14.000 --> 0:03:15.320 an automatic machine. 0:03:15.840 --> 0:03:22.720 Well, manual machine, someone has to stand there form the 0:03:23.760 --> 0:03:26.560 well what the Europeans call it cake and what North 0:03:26.600 --> 0:03:31.920 Americans call a puck, but just a glob of PBC. 0:03:33.520 --> 0:03:36.360 Take it out of the extruder. It's warm, it's melted, 0:03:36.440 --> 0:03:41.120 stick it in the press, manually hit a button. The 0:03:41.200 --> 0:03:46.480 vinyl record is pressed. After approximately twenty five to thirty seconds, 0:03:47.560 --> 0:03:50.800 the pressing is done, you manually remove the disc. You 0:03:50.840 --> 0:03:54.120 put it in a trimmer that trims the excess vinyl, 0:03:54.240 --> 0:03:56.840 and then you set it aside on a spindle to cool. 0:03:57.680 --> 0:04:00.920 That's a manual machine. And also the disc labels for 0:04:01.040 --> 0:04:05.080 the A and B side are manually put into the press. 0:04:05.520 --> 0:04:10.840 Automatic machine automates most of that. One operator can look 0:04:10.880 --> 0:04:15.640 after several automatic machines, just make sure they're up and running, 0:04:16.279 --> 0:04:21.920 and everything I just described is essentially automatic. You do 0:04:22.000 --> 0:04:23.960 have to have a human in the room though, because 0:04:24.560 --> 0:04:28.359 things go wrong you want to monitor the quality. But 0:04:28.760 --> 0:04:33.160 generally the output is oh at least double with an 0:04:33.200 --> 0:04:34.280 automatic machine. 0:04:34.880 --> 0:04:37.839 Okay, they go to Zimbabwe, they buy one machine. 0:04:38.680 --> 0:04:42.200 Now they bought I don't know, I think seven or eight, 0:04:42.680 --> 0:04:44.560 one of which I think ended up getting used for 0:04:45.279 --> 0:04:47.680 parts and so that. 0:04:47.800 --> 0:04:49.039 How did they get to fourteen? 0:04:50.080 --> 0:04:56.120 Well, we have fourteen, so we bought myself, my two partners, 0:04:57.160 --> 0:05:01.360 we bought fourteen presses. By this time you can buy 0:05:01.400 --> 0:05:05.960 new presses, although the waiting was eighteen months two years 0:05:06.440 --> 0:05:09.719 to actually get a machine, to get brand new machines, 0:05:10.880 --> 0:05:14.919 we ordered fourteen. We took delivery of them starting around 0:05:15.200 --> 0:05:19.320 three years ago. Slightly before that, we found some used 0:05:20.360 --> 0:05:24.800 automatic machines in Salina, Kansas and we went out and 0:05:24.800 --> 0:05:28.440 bought four of them. That was in the middle of COVID. 0:05:28.520 --> 0:05:33.680 It was an interesting road trip. We packed those up, 0:05:33.920 --> 0:05:38.400 ship those to Poland. We kept too, and our Polish 0:05:38.400 --> 0:05:41.159 partner took too. So those were the first presses we 0:05:41.200 --> 0:05:46.640 actually owned. Also two Alex Alpha machines originally from Sweden. 0:05:47.360 --> 0:05:50.920 Best we can tell, those machines originally were installed in 0:05:50.920 --> 0:05:54.240 the UK, then went to Brazil. From Brazil they went 0:05:54.279 --> 0:05:59.320 to Salina, Kansas. Now they're in Poland. Vinyl presses all 0:05:59.360 --> 0:06:01.960 have a history. They're very interesting machines. 0:06:02.720 --> 0:06:05.360 So let's say I decide to go into the vinyl 0:06:05.440 --> 0:06:11.120 business today? Are there old machines available? Two? Can I 0:06:11.160 --> 0:06:14.240 get a new machine? Three? How long would I have 0:06:14.279 --> 0:06:16.000 to wait for? What would be the cost? 0:06:17.480 --> 0:06:21.320 You can't get new presses now there's I think four 0:06:21.360 --> 0:06:26.960 companies making new presses. The cost you just say ballpark 0:06:27.040 --> 0:06:30.680 two hundred thousand dollars, but probably this same amount of 0:06:30.720 --> 0:06:35.159 money again to build the infrastructure. You don't just plug 0:06:35.160 --> 0:06:39.039 them into the wall. You need cold water, you need steam, 0:06:39.400 --> 0:06:42.160 you need a lot of electricity, and you need a 0:06:42.279 --> 0:06:46.600 very stable environment. You need the factory to be a 0:06:46.640 --> 0:06:49.560 stable temperature and at stable humidity. 0:06:51.200 --> 0:06:55.800 Okay, the company in Poland, ghost is Zimbabwe buys machine. 0:06:57.080 --> 0:07:01.760 Did they contact you about up on their machines before 0:07:01.800 --> 0:07:04.280 you purchased dr own machines? How did you make the 0:07:04.320 --> 0:07:05.280 connection originally? 0:07:06.880 --> 0:07:10.160 Well, that's kind of a funny story. I have a 0:07:10.160 --> 0:07:15.400 good friend who runs a record label called Moonjune Records. 0:07:15.560 --> 0:07:23.280 It's jazz, progressive world music. Label was in New York. 0:07:23.360 --> 0:07:27.960 He's now in Spain. He had been making his CDs 0:07:28.040 --> 0:07:32.800 at this plant in Poland. He contacted me one day 0:07:32.840 --> 0:07:37.120 he said, Bill, I have a friend in Poland. His 0:07:37.200 --> 0:07:41.040 name is Andre. You and him you both love King Crimson. 0:07:41.080 --> 0:07:44.120 You'll get along great. Maybe you can help him build 0:07:44.120 --> 0:07:49.560 his business. And I thought, okay, that sounds interesting. I 0:07:49.760 --> 0:07:52.560 was not doing a whole lot in music at the time. 0:07:52.640 --> 0:07:55.040 I'd stepped away from music business for a couple of years, 0:07:55.760 --> 0:07:58.320 and that just sounded like fun. And I had been 0:07:58.400 --> 0:08:02.520 following the growth of vinyl and thought, this will be 0:08:02.600 --> 0:08:07.400 interesting if nothing else. And originally we were just going 0:08:07.440 --> 0:08:12.080 to help I drafted my business partner Andy. It was 0:08:12.120 --> 0:08:19.600 a local you know, has a radio show here in Boulder, 0:08:21.560 --> 0:08:27.480 plays punk rock where Gems and he and I were 0:08:28.080 --> 0:08:30.480 working on a company called Amazing Radio. So I'm kind 0:08:30.480 --> 0:08:34.480 of going off on a tangent, but I invited him in. 0:08:34.800 --> 0:08:37.679 He said, help me put together a vinyl business. Originally 0:08:38.120 --> 0:08:39.880 we were just going to help them find customers in 0:08:39.880 --> 0:08:42.440 the US. But then when he said it, we need 0:08:42.440 --> 0:08:44.560 more presses. We have more demand than we know what 0:08:44.600 --> 0:08:47.800 to do with, we stepped up and said, well, we'll 0:08:47.800 --> 0:08:51.760 buy some presses. And that's how we got into the business. 0:08:52.679 --> 0:08:55.800 Is this self funded or did you raise money? How 0:08:55.840 --> 0:08:57.880 did you pay for the presses? 0:08:59.280 --> 0:09:02.720 Right now, it's entirely well, I would say it's ninety 0:09:02.720 --> 0:09:08.360 percent self funded. We've got a handful of investors, but 0:09:08.600 --> 0:09:10.719 most of the money has come from the principles and 0:09:10.800 --> 0:09:11.480 the business. 0:09:11.920 --> 0:09:13.280 And how many principles are there? 0:09:14.240 --> 0:09:19.440 Three of us Andy Zicklin, myself and Fred Goldring who 0:09:19.720 --> 0:09:20.240 joined us. 0:09:21.440 --> 0:09:26.640 Okay, so in Poland now they still have their manual presses. 0:09:27.000 --> 0:09:31.320 They have your fourteen presses. Are there any other vinyl 0:09:31.360 --> 0:09:35.679 presses there? Or is that the totality of their footprint there? 0:09:36.200 --> 0:09:41.400 I think there's forty three presses. There are three other 0:09:41.480 --> 0:09:45.520 companies that have similar arrangements to ours where they own 0:09:46.320 --> 0:09:50.079 a couple of presses there. Those companies tend to have 0:09:51.080 --> 0:09:56.040 three or four presses each. So we're the largest owner 0:09:56.040 --> 0:09:59.560 of presses there. But we've got some company. It's kind 0:09:59.559 --> 0:10:02.800 of like a dominium, I guess, or co op of sorts. 0:10:03.280 --> 0:10:08.040 Okay, so at this point in time, what are you pressing? 0:10:10.280 --> 0:10:13.720 Well, lots of vinyl records. 0:10:15.080 --> 0:10:18.640 You have your own company. Are they for the majors? 0:10:18.679 --> 0:10:22.479 Are they for indie's? Are they domestic or are they international? 0:10:22.920 --> 0:10:25.680 Is it everything? If I call you and I say 0:10:25.840 --> 0:10:28.600 I want to produce twenty thousand of X, so you're 0:10:28.640 --> 0:10:30.720 going to say, yeah, here's what it costs. 0:10:31.160 --> 0:10:34.000 Well, that's exactly what we would do. We've got a 0:10:34.000 --> 0:10:37.839 full sales team here in the US. You know, our 0:10:37.880 --> 0:10:41.000 focus right now is building up our US business. We 0:10:41.040 --> 0:10:44.240 have customers all over the world. We do work for 0:10:44.320 --> 0:10:47.800 major labels, we do work for independent labels, we do 0:10:47.880 --> 0:10:52.920 work for independent artists. We've run jobs as small as 0:10:52.960 --> 0:10:56.600 one hundred discs and we've done it. We had a 0:10:56.679 --> 0:11:00.000 one po last year for a million discs, half million 0:11:00.040 --> 0:11:00.880 in double albums. 0:11:02.280 --> 0:11:08.040 Okay, we heard for years that there wasn't enough capacity. 0:11:08.120 --> 0:11:11.600 What's the status of capacity today in the vinyl production world. 0:11:12.480 --> 0:11:13.839 There's plenty of capacity. 0:11:15.440 --> 0:11:18.800 So let's just say I want to get the records 0:11:18.840 --> 0:11:22.120 in the store for Thanksgiving. When am I going to 0:11:22.200 --> 0:11:24.199 have to get you masters? When am I going to 0:11:24.280 --> 0:11:28.240 have to make the commitment? Not this Thanksgiving but a 0:11:28.320 --> 0:11:29.000 year from now? 0:11:30.080 --> 0:11:36.560 Well it depends, you know. Are you selling through band 0:11:36.600 --> 0:11:42.280 camp yourself? Are you working with a distributor. What's the 0:11:42.320 --> 0:11:47.120 distributor's lead time? We like to work on a nineteen 0:11:47.160 --> 0:11:56.000 week lead which provides lots of contingencies, but generally four 0:11:56.040 --> 0:11:59.120 weeks to make a test pressing is a good role thumb. 0:11:59.120 --> 0:12:02.240 We can go fast uster and four weeks once the 0:12:02.320 --> 0:12:07.199 test pressing is approved to final goods being ready. Now 0:12:07.920 --> 0:12:12.680 the factory in Poland does print in house, can cut 0:12:12.760 --> 0:12:15.760 lacquers in house, can do all the electroplating in house, 0:12:16.679 --> 0:12:22.440 which is unusual. I think there's two hundred vinyl pressing 0:12:22.480 --> 0:12:26.280 plants in the world. The amount that can do everything 0:12:26.360 --> 0:12:31.160 vertically integrated as a single digit number. So that helps 0:12:31.240 --> 0:12:34.520 us with logistics. Everything's under one roof. 0:12:35.840 --> 0:12:41.720 What are the toxes, etc. Financial advantages and disadvantages of 0:12:41.800 --> 0:12:43.480 it being in Poland. 0:12:45.360 --> 0:12:52.199 Well, a couple answers to that. Poland is a very 0:12:52.240 --> 0:12:56.559 good place to run a business. In general, any kind 0:12:56.559 --> 0:13:03.600 of business. Workforce is motivated, hard working, very well educated. 0:13:04.679 --> 0:13:08.840 It is a very good business environment. I think Poland, 0:13:09.800 --> 0:13:13.080 since communism fell, I think is the second fastest growing 0:13:13.120 --> 0:13:17.040 economy in the world. You know, it's very impressive. I 0:13:17.160 --> 0:13:20.520 was there in the nineties visiting a friend who had 0:13:21.160 --> 0:13:23.920 started up a record label in the mid nineties, and 0:13:23.920 --> 0:13:28.840 then I didn't go there again until we started pressing business, 0:13:29.800 --> 0:13:33.040 and I was astonished at the difference in the country. 0:13:34.600 --> 0:13:38.120 But it really comes down to I think we're able 0:13:38.160 --> 0:13:42.319 to get a really excellent workforce from factory workers all 0:13:42.360 --> 0:13:46.720 the way through executive ranks, and the general cost of 0:13:46.760 --> 0:13:52.199 doing business is very attractive and a lot of things. 0:13:52.400 --> 0:13:56.319 Poland is very well located in Central Europe. If you're 0:13:56.320 --> 0:13:58.600 going to ship goods to the US by a sea freight, 0:13:58.679 --> 0:14:03.880 you've got a lot of options nearby. Almost everything in 0:14:03.920 --> 0:14:08.520 Europe is one day trucking. So there's a lot of 0:14:09.120 --> 0:14:13.320 positives about doing business in Poland, But the biggest one 0:14:13.440 --> 0:14:14.320 is Polish people. 0:14:15.320 --> 0:14:19.440 Okay, you've been to Poland how often? You know. We 0:14:19.480 --> 0:14:22.200 live in a country in America, the United States where 0:14:22.520 --> 0:14:25.920 so many people don't even have passports. You talked about 0:14:25.920 --> 0:14:28.400 a little bit about Poland. But what do people not 0:14:28.600 --> 0:14:30.440 understand about Poland today? 0:14:32.080 --> 0:14:36.360 Well, what I just said pretty much, it's a very modern, 0:14:36.520 --> 0:14:39.080 very European country. I think a lot of Americans have 0:14:39.200 --> 0:14:43.200 this notion that it's still kind of very bunch in 0:14:43.320 --> 0:14:49.840 Eastern European backwater. That's very much not true. And again, 0:14:50.040 --> 0:14:55.040 people are very well educated. They're very cosmopolitan. You know, 0:14:55.080 --> 0:14:58.520 they watch the same TV shows we do. The show 0:14:58.600 --> 0:15:01.960 Yellowstone is very popu you're there. A lot of my 0:15:02.080 --> 0:15:06.160 Polish friends would ask me, Bill, is is Montana really 0:15:06.280 --> 0:15:10.880 like it is in Yellowstone? Is it pretty much little 0:15:10.960 --> 0:15:16.040 less killing, but otherwise it's pretty accurate. You know, they're 0:15:16.120 --> 0:15:20.240 very aware of American pop culture, they're very aware of 0:15:20.320 --> 0:15:25.400 world events. Hy it's a nice place. I live there 0:15:25.480 --> 0:15:35.880 mostly the last two years. I came back in January. 0:15:37.280 --> 0:15:42.040 Okay, let's talk about the economics of vinyl forgetting your 0:15:42.160 --> 0:15:45.280 you know, sun costs with presses and people, et cetera. 0:15:46.480 --> 0:15:49.160 How much does it cost to make a record? How 0:15:49.240 --> 0:15:53.080 much you charge people, because ultimately this point a vinyl 0:15:53.160 --> 0:15:56.120 record goes for retail thirty plus dollars. 0:15:58.360 --> 0:16:02.120 Well, I don't I think that's changed much from you know, 0:16:02.160 --> 0:16:06.640 the sixties or seventies. Cost of goods for manufacturing has 0:16:06.720 --> 0:16:14.640 always been, from my experience, runs fifteen twenty percent, between 0:16:14.680 --> 0:16:19.880 ten and twenty percent of your retail price. So you're 0:16:19.880 --> 0:16:22.680 looking at three to six dollars to make a vinyl record. 0:16:23.400 --> 0:16:25.720 There's lots of variables. How fancy is it is an 0:16:25.800 --> 0:16:29.520 unsplatter vinyl? Is it a gatefold? Do you have embossing 0:16:29.600 --> 0:16:35.200 or debossing? You know, you can make a record, you know, 0:16:35.280 --> 0:16:38.720 you can press a record jacket for a little bit 0:16:38.760 --> 0:16:42.280 over two bucks, or you can do something that's very deluxe, 0:16:42.920 --> 0:16:45.920 that's you know, approaches ten dollars. 0:16:46.760 --> 0:16:50.600 So, okay, is this a competitive market? Is someone going 0:16:50.680 --> 0:16:53.080 to call you for a quote and say, I spoke 0:16:53.080 --> 0:16:55.240 to your competitor it was cheaper, and you have to 0:16:55.240 --> 0:16:57.760 convince them your company is better or make a cheaper price. 0:16:58.200 --> 0:17:00.760 Because in the old days, just getting capacity it was difficult. 0:17:00.800 --> 0:17:01.640 What's it like now? 0:17:02.440 --> 0:17:04.359 Yeah, I mean that used to be the sales pitch. 0:17:05.119 --> 0:17:07.000 Do you have any capacity? And if you said yes, 0:17:07.040 --> 0:17:09.879 you've got the po I'm exaggerating, but only a little. 0:17:12.200 --> 0:17:17.240 Quality matters. Customer service matters, especially with the independent labels. 0:17:17.880 --> 0:17:23.840 They want to work with someone who will be, you know, 0:17:23.840 --> 0:17:26.200 what's the best way to describe it, you know, culturally 0:17:26.200 --> 0:17:29.919 attuned to what they're doing. You know the fact that 0:17:29.960 --> 0:17:33.640 I've spent much my life at independent labels, I think 0:17:34.040 --> 0:17:39.200 doesn't hurt. I understand what an independent label needs as 0:17:39.200 --> 0:17:44.480 far as service, quality and so on. I think that helps. 0:17:47.320 --> 0:17:52.120 You know, everyone cares about. I would say quality tops pricing. 0:17:52.240 --> 0:17:56.600 Pricing matters. If we were a dollar more expensive than 0:17:56.640 --> 0:18:00.640 everyone else, that would not help us. But I don't 0:18:00.680 --> 0:18:04.960 really see people changing manufacturers to save a dime. 0:18:05.400 --> 0:18:08.880 You know, a disk Okay, In the old days, when 0:18:08.960 --> 0:18:13.160 Vinyl was king sixties and seventies. The records were warped, 0:18:13.160 --> 0:18:17.840 the records had surface noise, sometimes skipped. Then, of course, 0:18:17.880 --> 0:18:21.479 in the seventies we started to have Japanese vinyl, we 0:18:21.520 --> 0:18:25.080 had half speed Master, We get all this stuff. It's 0:18:25.080 --> 0:18:29.000 one hundred percent virgin. As opposed to regrind, What is 0:18:29.040 --> 0:18:33.600 the status of manufacturing a record today? To what degree 0:18:33.760 --> 0:18:36.480 are there rejects or problems? To what degree is a 0:18:36.680 --> 0:18:38.000 higher quality component? 0:18:39.880 --> 0:18:44.760 Well, I would say in general the quality of vinyl 0:18:44.800 --> 0:18:48.359 records is better today than it was let's say, forty 0:18:48.400 --> 0:18:55.560 fifty years ago. More discerning consumer. Consumer now has lots 0:18:55.560 --> 0:18:58.760 of choices about it listen to music. Vinyl is one 0:18:58.800 --> 0:19:03.480 of them. So, you know, when in the seventies, when 0:19:03.520 --> 0:19:05.920 I start, you know, in the late sixties, early seventies, 0:19:06.200 --> 0:19:10.879 I started buying records. When you buy records or eight tracks, 0:19:10.960 --> 0:19:14.520 and it wasn't really a much of a choice. If 0:19:14.520 --> 0:19:19.159 you cared about sound quality, you bought vinyl records. I 0:19:19.240 --> 0:19:22.600 think the quality across the board generally is very, very good. 0:19:24.920 --> 0:19:29.800 We do very you know, what I consider fairly extreme QC. 0:19:32.240 --> 0:19:37.119 You know, we probably reject between three to twelve percent 0:19:37.600 --> 0:19:39.920 of the pressings. They don't even go out the door. 0:19:40.160 --> 0:19:47.560 They're going to recycling. We're constantly pulling records randomly out 0:19:47.560 --> 0:19:51.920 of manufacturing runs and listening to them in a QC room. Yes, 0:19:51.920 --> 0:19:54.280 there are people whose jobs it is to sit around 0:19:54.760 --> 0:19:59.320 with headphones and listen to vinyl records all day. And 0:20:01.960 --> 0:20:08.040 there's also a visual check because we've manually assembled the discs. 0:20:08.040 --> 0:20:10.000 The disc going in our slave, the inner sleep goes 0:20:10.000 --> 0:20:13.159 in a jacket. That person putting the disc in the 0:20:13.200 --> 0:20:17.600 inner sleeve is flipping the record over and visually inspecting 0:20:18.240 --> 0:20:23.919 both sides before it goes into package. So yeah, I'm 0:20:24.880 --> 0:20:28.440 it's very unusual for us to get a complaint for quality, 0:20:29.080 --> 0:20:35.239 and you know it's I would say, sometimes weeks go 0:20:35.320 --> 0:20:38.600 by where I don't hear about a QC issue. When 0:20:38.640 --> 0:20:41.000 I was working in record stores in the seventies, that 0:20:41.119 --> 0:20:44.520 was not the case. People were returning records every day, 0:20:46.440 --> 0:20:49.159 So I would have to say quality today is very 0:20:49.240 --> 0:20:49.640 very good. 0:20:50.760 --> 0:20:54.360 Okay, you have these two partners in this pressing business. 0:20:55.240 --> 0:20:59.080 Is that the only business of these three people, because 0:20:59.080 --> 0:21:00.720 you also have a record label. I don't know if 0:21:00.760 --> 0:21:03.840 it's the same people, but are these three people we 0:21:03.960 --> 0:21:06.080 got a business? We're pressing or are they are going 0:21:06.160 --> 0:21:09.359 to go into other or have gone into other areas well. 0:21:09.960 --> 0:21:12.760 Yeah, Andy and Fred Andy Zeckl and Fred gold Ring 0:21:12.840 --> 0:21:17.200 are also business partners in our two record labels, which 0:21:17.359 --> 0:21:21.240 are run by the same people but two different label identities, 0:21:23.200 --> 0:21:27.640 And we started that about early last year, so we're 0:21:27.640 --> 0:21:31.560 about coming up on our second anniversary of the record labels. 0:21:31.720 --> 0:21:36.720 So same people, but separate company, okay, and nothing beyond 0:21:36.720 --> 0:21:40.639 the record pressing in the record labels envisioned at this point. 0:21:41.760 --> 0:21:49.480 Music publishing, Okay, So why two labels as opposed to one. 0:21:49.720 --> 0:21:52.280 I've always liked labels that seem to have kind of 0:21:52.320 --> 0:21:58.960 an identity musically, and the initial batch of artists we're 0:21:58.960 --> 0:22:02.840 looking to work with didn't seem to fit into one 0:22:03.240 --> 0:22:05.560 sort of and I don't want to say genre be 0:22:05.560 --> 0:22:09.720 could both labels span several genres. But the idea is 0:22:10.119 --> 0:22:13.240 whether the labels is called label fifty one. If you 0:22:13.400 --> 0:22:15.879 like one thing on label fifty one, we hope you 0:22:16.000 --> 0:22:18.840 notice what label is on and are curious about other 0:22:18.920 --> 0:22:24.480 things on label fifty one. I got into this business 0:22:24.520 --> 0:22:27.720 as a record collector, and I was always very conscious 0:22:27.720 --> 0:22:32.200 of labels. I remember the Charisma label. I would pick 0:22:32.280 --> 0:22:36.240 up anything on the Charisma label. The early years of Virgin, 0:22:36.280 --> 0:22:39.840 I would buy anything that was on Virgin, the Vertigo label, 0:22:40.040 --> 0:22:42.840 the stuff that was on Vertigo out of the UK 0:22:43.080 --> 0:22:50.040 I was very keenly interested in. So it's just we've 0:22:50.080 --> 0:22:53.160 just decided to sort the artists into two labels. And 0:22:53.440 --> 0:22:56.440 sometimes we'll ask a signees which label do you think 0:22:56.520 --> 0:22:59.399 is more suitable for you? Let them choose. 0:23:00.119 --> 0:23:03.879 Okay, So you came up in the old days of 0:23:03.960 --> 0:23:07.359 physical distribution. So what do we have. We have the 0:23:07.400 --> 0:23:13.639 three major companies minting cash based on catalog. Okay, what 0:23:13.760 --> 0:23:18.040 are the economics of an independent label today? Are they 0:23:18.040 --> 0:23:20.399 as good or worse than they used to be in 0:23:20.440 --> 0:23:23.199 the old days when you started with Enigma, Is it 0:23:23.320 --> 0:23:25.800 something like, well, we love this, We're going to do this, 0:23:25.960 --> 0:23:28.160 or are there real financial opportunities here? 0:23:29.320 --> 0:23:31.640 Well, it's just different. I don't know if it's better 0:23:31.760 --> 0:23:36.560 or worse. I think that's a matter of perspective, but 0:23:36.640 --> 0:23:40.720 it is different. On one hand, the cost to record music 0:23:40.800 --> 0:23:45.960 now is very low. I mean, you can build a 0:23:46.040 --> 0:23:48.960 very nice studio in your bedroom and make very high 0:23:49.040 --> 0:23:57.240 quality recordings. That's new access, you know, the way to 0:23:57.640 --> 0:24:03.600 connect with fans potential fans is very inexpensive now compared 0:24:03.640 --> 0:24:06.640 to what it used to be. You know that has 0:24:06.680 --> 0:24:12.280 been oh what's the word. You know, all the direct 0:24:12.760 --> 0:24:16.479 the fan tools, pretty much the internet, everything the Internet 0:24:16.480 --> 0:24:21.000 has brought. But the other side of that is there's 0:24:21.040 --> 0:24:25.480 so much music out there, just you know, separating yourself 0:24:25.920 --> 0:24:30.679 from the herd is a significant challenge these days. But 0:24:31.520 --> 0:24:34.760 I enjoy it now. I think there's great opportunities now. 0:24:34.800 --> 0:24:38.840 There were opportunities when Enigma started. There were opportunities in 0:24:38.880 --> 0:24:44.400 the nineties when I was had a label Restless, there 0:24:44.400 --> 0:24:48.919 were opportunities even in the whatever the first decade of 0:24:48.920 --> 0:24:53.479 this century was called the oughts, even though the business 0:24:53.560 --> 0:24:57.120 was shrinking ten percent a year. There's always opportunities if 0:24:57.760 --> 0:25:00.359 you have great music and you're willing to work card 0:25:00.400 --> 0:25:02.280 and you know, have a little luck. 0:25:03.000 --> 0:25:08.720 We hear from the independent artists complaining about how much 0:25:08.800 --> 0:25:13.320 money they're not making on streaming services. You are the 0:25:13.440 --> 0:25:17.600 label selling independent artists. Is that where most of the 0:25:17.640 --> 0:25:20.479 money comes from streaming? Do you have a piece of 0:25:20.520 --> 0:25:23.720 other revenue streams from these acts and what is your 0:25:23.800 --> 0:25:26.240 viewpoint in terms of the share of streaming you're getting. 0:25:27.280 --> 0:25:36.320 Well, I like streaming I'm listening to My favorite is Cobas. 0:25:36.800 --> 0:25:41.000 I'm listening to Koba's every day, listening to Apple Music 0:25:41.040 --> 0:25:46.680 every day. I check Spotify a lot. I really enjoy streaming. 0:25:46.760 --> 0:25:50.080 It's amazing to, you know, pick up a new Mojo magazine, 0:25:50.160 --> 0:25:53.359 see review something and instantly pull it up and listen 0:25:53.400 --> 0:25:56.240 to it. I do tend to follow up, and if 0:25:56.280 --> 0:26:01.080 I really like something, I'll buy the vinyl. But I 0:26:01.240 --> 0:26:04.480 think it's a phenomenal tool for our labels. The majority 0:26:04.480 --> 0:26:08.280 of our revenue is physical product, and I think that's 0:26:08.320 --> 0:26:11.560 probably the kind of artists we're working with, as artists 0:26:11.840 --> 0:26:16.439 who overweight in physical product. We work very hard to 0:26:16.480 --> 0:26:21.119 grow our digital revenue. We take it very seriously, but 0:26:21.200 --> 0:26:24.000 we also view it as a way almost like free 0:26:24.040 --> 0:26:27.000 advertising or advertising, where we get paid a few pennies 0:26:27.560 --> 0:26:33.040 here and there. And you know, our digital revenue is growing, 0:26:33.119 --> 0:26:35.880 but if that's all we had, we wouldn't have much 0:26:35.920 --> 0:26:37.120 of a business. 0:26:37.600 --> 0:26:40.920 And are you happy with the way the revenue is 0:26:40.960 --> 0:26:43.840 split or do you think it needs to be reconstructed. 0:26:45.440 --> 0:26:47.560 I'm going to let other people worry about that. I mean, 0:26:48.200 --> 0:26:51.119 the business is the way it is, and my attitude 0:26:51.160 --> 0:26:56.159 on whether we're getting fair payment from Spotify, whatever, just 0:26:56.200 --> 0:27:01.040 doesn't matter. So I just put my energy into getting 0:27:01.040 --> 0:27:03.119 the music out to as many people as possible. And 0:27:03.840 --> 0:27:05.440 you know, the royalties are what they are. 0:27:06.400 --> 0:27:09.680 Okay, So you sign an act. The majority of revenue 0:27:09.800 --> 0:27:14.479 comes from physical product. Let's assume the act doesn't have 0:27:14.520 --> 0:27:19.040 any significant history. Where do you sell the product? How 0:27:19.080 --> 0:27:22.000 hard is it to get into retail stores. It's more 0:27:22.080 --> 0:27:23.480 sold at gigs. 0:27:24.680 --> 0:27:30.240 Well, depends on the artist. We've just released an EP 0:27:30.400 --> 0:27:35.320 by ban sixpence None the Richard. They're out on first 0:27:35.320 --> 0:27:37.879 big tour. They've been on a long time. They were 0:27:37.880 --> 0:27:43.840 more or less inactive for almost two decades, had a 0:27:43.880 --> 0:27:47.119 big hit the end of the nineties. Their big hit 0:27:47.840 --> 0:27:52.960 still streams a million streams a day on Spotify alone, 0:27:54.000 --> 0:27:56.120 So there's an audience for that song, and the band 0:27:56.119 --> 0:28:01.080 doesn't have fans. We're selling good quantity of CDs and 0:28:01.160 --> 0:28:05.000 vinyl on the road. We're streaming pretty well with the 0:28:05.040 --> 0:28:10.200