Fat Freddy's Drop on the state of the music industry

Fat Freddy's Drop on the state of the music industry
Last week, eclectic Wellington band Fat Freddy’s Drop released its fourth studio album Bays. To celebrate, the band made lunch for friends, family and media at the Street Food Collective in Ponsonby.

Over the last 16 years, Fat Freddy’s Drop has grown from a side project of various Wellington dub/reggae bands (and named after tabs of LSD featuring Fat Freddy’s Cat which were popular at the time) to become something of a New Zealand music institution. Its debut album, Based on a True Story, is one of New Zealand’s highest selling local albums ever (and certainly the highest selling local independent album ever), debuting at the top of the New Zealand album charts and staying in the top 40 for over two years.

After feasting on oysters, grilled asparagus rolls, smoked kahawai, paua fritters, and fried chicken, I sat down with the band’s founder, Chris "Mu" Faiumu, and manager, Nicole Duckworth, to talk about the band’s impressive commercial success as an independent artist in an industry that’s struggling to replace revenue lost to piracy, digital downloads and streaming services.

Image: DJ Benny and MC Slave (photo: Sarah Hunter)

Why has Fat Freddy’s Drop chosen to release its own records and promote its own tours rather than take a more traditional path within the established music industry?

Nicole Duckworth: We've certainly had plenty of label deals on the table over the years and we've looked at a few of them, but at the end of the day, when you take a look at a record deal – whether it be with an independent label or a major label – it just doesn't quite stack up financially as opposed to when you look at doing it yourself, with all the money coming through to the band, even though you've got to pay all the bills yourself.

Was being independent a conscious decision at the beginning of the band or did it work at the start so you just stuck with it?

ND: We were aware right from the beginning that we were going into an industry which was crumbling under our feet. So the reality of surviving is to make it up as we go along. Because what happens this year and what will happen next year are completely different. That's the game you play in the modern music industry. And like any industry, if you're a big corporate that’s been around for a long time, you don't have a lot of flexibility to adapt to change. In our 16 years of doing business, we've gone from selling 150,000 CDs of one release in New Zealand to selling 20,000 CDs. So you’ve got to be flexible as to how you find other income streams, as traditional incomes start disappearing.

Knowing you’ve been able to sell a lot of records on your own, what have the major labels offered you?

Mu: Just economies of scale really. And money to record. But we set ourselves up to do everything ourselves. We don't require budget to record our albums. We own our own studio, we can deliver a record without requiring a whole bunch of money. So we don't need them for a lot.

ND: That's what a major label usually offers you – a big lump sum up front so you can then go and hire a flash studio to make your record. But we've always invested a lot of money back into our own recording studio, so we don't need that funding up front.

Mu: We identified quite quickly that a studio was very important. We require long periods of time in a studio, which you just couldn't afford to pay someone else for. So we had to have our own studio.

Image: Kuki Blaze (photo: Sarah Hunter)

The common narrative is that musicians need to replace income from album sales with income from live performance. Is that Fat Freddy’s Drop's business model?

Mu: That's where the income is now.

ND: In lots of ways, we’re lucky that Freddy's is a phenomenal live act. So we've been able to streamline our business down that path, whereas there's lots of artists out there who are recording artists don't have the live show so back it up.

What effect has a move from downloads to streaming had on the band’s ability to make money off its music?

ND: What streaming's done as an income stream for artists, is it's replaced illegal downloading. Freddy's is streaming about 3 million songs a month at the moment, so it's become quite a significant income for us. It’s good for bands like Freddy's with quite a substantial back catalogue. If you look at the streams happening over the entire catalogue, suddenly it all starts to add up. Streaming income has a long tail. If you have good quality music, people are going to keep coming back to it again and again and again for years, so that streaming income will always continue. Whereas, on iTunes, someone downloads that album once and that's it. You don't see any income from that customer again.

Mu: Personally, I hate it. I just think it's a bad delivery service for music. It's a really passive listen. People can be at work streaming some music all day and when I ask them what they listen to, they can't tell you.

How has the return of the vinyl record market affected album sales as CD sales continue to decline?

ND: When we started, vinyl sat under our marketing budgets rather than our sales budget, but with the renaissance of vinyl, and because Freddy's sells so much product worldwide, it really stacks up for us now. And there's really good margins on vinyl. For Bays, we've shipped 50,000 CDs and 10,000 LPs. And that's getting bigger and bigger. But actually making vinyl has become quite difficult now because they got rid of so many pressing plants 15-20 years ago. So the queues to get pressed are really long. It takes about three months to produce vinyl at the moment.

So do you schedule your release around that?

ND: That does actually drive deadlines. You have to book in an allocation in the queue. In July, we booked our place in the queue at the pressing plant, so the record was finished at the end of August, so that was the main pressure. But it got the album finished, because all of us are vinyl lovers, so it was quite a powerful whip for me to hold, saying, 'If you deliver it late, you're not going to have any vinyl on release’.

Are you dealing directly with stock?

ND:No, we have partners all over the world. We have distributors in every country we sell in, but we also have contract relationships with partners who provide label services. Label services is a new thing in the industry. When all the major labels started imploding and making a lot of people redundant, a lot of people who worked within the major labels left to freelance, offering label services to independents. So they specialise in marketing, promotion, and radio play. Obviously we're based in New Zealand, but the UK is our number one sales territory in the world, significantly larger than New Zealand now, so we have a label services team that do some of the label work for us from London. And we've got teams in the US, Australia, Germany, France.

Image: Fat Freddy's Drop's world famous paua wontons (photo: Sarah Hunter)

With declining record sales, can the band still make enough money during the album cycle through album sales and touring to provide a full time income for the band’s members in between albums?

Mu: That's why we've decided to make our album cycle shorter. This album's come out a good year quicker than we normally take. When we were touring the Blackbird album, it was more fun, we make more money, and we got this new studio in Wellington that makes it feel so easy to write music that we feel like we can just turn things around quicker.

ND:We've learnt that touring is our main income stream - that's the bulk of our business and having a new album drives ticket sales, you do so much better when you're on tour selling tickets if you've got new music in the marketplace. So that's the main reason to release new music. Well, there's all the creative reasons as well. But, for business, it just makes things easier.

Are you optimistic about the future of the music industry?

ND: One of the exciting things about the music industry at this stage is that technology is finally getting to the point that the reporting and statistics are all becoming live, so you can actually see, live, what's happening with your music on Spotify, on YouTube, on Apple Music. That gives you great power to adapt. So you can see a song is doing well in, say, Germany, you can do a little marketing campaign to support what's happening over there. Social media gives you all that feedback too. You can talk directly to your fans.

So I'm very optimistic. We went into this music industry living in the cracks. We've never wanted anything to do with the mainstream music industry. It's not in our nature. And financially, we saw very early that it doesn't stack up for the artist. You just end up with a whole lot of debt, not a whole lot of income. And we're just real make-it-up-as-you-go-along people so it suits us that the industry is changing so quickly because every time we release a new album, we have to do it with completely different tools and strategies to how we did the last album. And that suits us. Because we've got nobody telling us what to do, we can do whatever we like.