Loney Hutchins on the business of running an indie label

I spoke with Loney John Hutchins who runs Cleft Music and Appalachia Record Co out of his Wedgewood-Houston studio, in addition to being landlord to Julia Martin Gallery and others for the past decade. We go in-depth on his tips for curating a catalog, funding an indie label, and the state of the music industry today.

Anna: How did you end up working in music in Nashville?

Loney: I grew up around music, but I didn't have a music engineering background. I studied film sound.

I moved back home after school. I thought I was gonna move to LA for film or Chicago because of all the music coming out of Chicago in the 90s. But I started going to shows in Nashville and I learned about Lambchop and Roger Moutenot, and Silver Jews, and I thought it was exciting. I just thought, “well why move to Chicago or LA and spend a lot of money to maybe get a foot in the door when Nashville’s got so much going on.”

Growing up here, I took so much for granted about Nashville's music industry. I thought everything was either Christian rock or commercial country and I assumed there was nothing here for me. Then I realized there’s an incredible amount of history. 

Where I grew up, in Gallatin, TN, I didn't want to stick around. Anybody I knew in the arts left. But then when I lived downtown again, I met people like (filmmaker) Travis Nicholson and more people in the arts who stuck around.

If you're from here and you've been able to buy property, it's manageable. Even if your mortgage is high, you're paying into the long term. But everybody I know in their early to mid-20s is living five people to a house. It's not like when I first moved back after college. In 2002, I rented a house on 28th Avenue. I could see the Parthenon from my living room. It was $800 a month for a three bedroom house. I used the downstairs for a recording studio and I worked next door at a professional studio.

I'm curious about how one makes a life working as a creative. But to go to basics, how would you describe what you do?  

Well, I’m a landlord. To answer your question about how does one make it as creative in Nashville, it helps to own property. I could not do a third of what I do if I didn't have this property. So, that's crucial. 

Being a landlord is how I am able to pay the bills. I’m also a silent partner in my family's company. If I didn't have some passive income coming in, and a couple of investments, I don't think I'd be able to do what I do.

I often do recording projects on spec. A band will come in and I'll say, “I like what you do. I'd like to be involved.” I am more of an investor.

I run a label that has two imprints under it. For years, I’ve run one called Cleft Music. That label is pretty much alt-rock, alt-pop, whatever. It was a means for me, early on, to showcase a side of Nashville that people aren't familiar with. There was a really good scene at Springwater and I felt like people needed to hear it, “someone should put this out.”

Cleft, over the years, has been a labor of love. But, during the pandemic, I did a thing that I've been saying I would do for years, which is to start another label that just focuses on roots music. And because it's Nashville, there were a lot of opportunities coming my way.

On the production end and in the business I'm wearing multiple hats. I think I've spent more time this year chasing money and getting things paid for than actually making music. I've only personally done one recording project this year.

Selfishly, I like music. I want to put music out and I'm going to do whatever I need to do to do that. But it's a pretty awesome bonus when you're able to help people. 

Is there an example of a band you're really excited about whose career you helped? 

One of them was Jonny Corndawg. Jonny Fritz lived here for a while and we did an album around 2011. I told him, “I'll help you produce this album. I'll record it for you. We'll do it all just on spec. I'd like the label to be able to release it.” We had a handshake deal. After we recoup the costs, we just go 50/50. When he’s in town and needs records, I just sell them to him wholesale. That’s how the sausage gets made at indie labels, it really comes down to a handshake situation and “did I recoup on my costs?”

Very often I'm not getting paid for actual labor like production, mixing, recording. Maybe seven times out of 10 that has happened but that's the path I chose. I chose to work on stuff that I'm passionate about. 

I worked at a professional studio and a lot of the stuff that would come in was just like Teen Disney and Christian rock. Some gospel and some really bad country. The engineers were really great guys. I was basically a glorified intern, but it was enough to see this is not for me, and I just want to figure out a way to get by and pay for my life, but still work on things that I want to work on. 

What are the paths to making money on music nowadays, because it seems like that's changed a lot. Are you selling records? 

Yes, I am now. During the pandemic, I thought, “Alright, if I'm still going to be doing the label thing. I need to be doing a legitimate business approach to it and not just a labor of love.”

That’s why I relaunched my dad's label, Appalachia Record Company, or ARC. He started it in the 80s. Back then you could still go to radio stations and hand them your 45, Loretta Lynn style, he did that.

My dad quit putting out records by the late 80s. But they'd kept that business entity. So I decided,  “I'm gonna relaunch Appalachia Record Co. I'm going to make use of my freakin’ town.”  It’s a scene I love and I really do love traditional country, folk, and bluegrass. I'm going to do it proper. I'm going to get a distributor instead of piggybacking on others.

So, to answer your question, the way you make money as a record label is you keep your overhead way down, wear multiple hats, I literally do everything. Sometimes I've driven to Raleigh to pick up some stock to save money, and it's fun.

Part of keeping the overhead low is just plotting out your release schedule. I put out two records this year. I put out three last year.  

What records did you put out this past year?

We just came off the PR campaign of a country legend, Jessi Colter, who most people know as Waylon Jennings’ widow and longtime music partner. She's one of the original Outlaws, as they call them. That was a really big one.

The other album released this year is by an Athens artist known as Dim Watts. He's in his 50s and has been putting out records since the early aughts. He’s sort of in the Athens gumbo of like Vic Chesnutt or Neutral Milk Hotel, kind of lo-fi folk pop. This past year we did one on ARC, one on Cleft.

The Jessi Colter record came out at the end of October, but we won't see a check for that till February at the earliest. A record of that size is kind of like putting a down payment on a house.

There's some projects on the Cleft label that took 10 years before they actually got into the black. The digital downloads start slowly creeping in. And that has slowed down because of streaming.

It's hard to describe how to make money running a label because a lot of it is loss leader. You spend money on physical product. You print 500, 1000, 2000 LPs and you're only going to sell X amount of them unless you're really lucky, unless you get a hit.

With a touring artist on the label, what we usually do, is just say, “as part of your deal, we will just give you about 200 copies and you go sell that at your merch table, then if you use up all your copies, we can sell you wholesale copies.” That's always worked and seemed fair. 

If you want to be a sustainable enterprise, you need to be looking at 10 years in. 

Don't say yes to things that you don't really believe in. Don’t spend money pressing a record or promoting something you don’t believe in. There's a lot of really wonderful, nice people in this town. And I don't listen to their music, but I love them as people. People need champions.

There's this Finnish guy, The Mattoid. I spent years pressing music of his and we actually put out a new record of his last year. 

It's important to think about your enterprise as a catalog, not so much as about singular things. You need to think about the long term picture. Are you working with an artist that you have a good personal and working relationship with as far as trust for the long term? 

Are you working towards something that when people are streaming, the algorithms are going to play?

The Mattoid is somebody who now, almost 20 years later, does well on streaming. I see it in our results. If you like Jonathan Richmond, if you like The Violent Femmes or even Tom Waits, he will get thrown in with these other artists. It's funny, just this past year, Jessi Colter who's a legend, just below her stream stats is Party Time by The Mattoid.

That's the way you can build a catalog. Probably 75% of it is not making enough money to keep a business operating with a couple of people working for you. But 25% generates longevity and interest, and you can license it or maybe even sell it.

How did you end up working with a legend like Jessi?

We put out a record on the relaunched ARC label last year by Teddy and the Rough Riders, a local band that does a Flying Burrito Brothers, Byrds kind of thing. Margo Price produced that record, and was also working on Jessi's record.

The industry has changed so much that a lot of people who were on big labels a long time ago are preferring independents because the contract is less complicated. We were able to do things the big labels wouldn’t.

You have to think long term about how your catalog is shaping up. You need stuff on there that either A) are evergreen titles, things that are always bringing interest to it or B) something that's locally, got a draw or something that is interesting or attractive. 

With someone like Jessi, she really is a legend, and she's still performing. She just turned 80, remarried after Waylon 20 years later, and put out her first proper studio album since around, ‘07.

Margo shared the record while I was building my daughter's swing set, and I ended up listening to it over and over. All that week, I was putting this thing together and I was just so struck by it. It reminded me of her 70s albums. She's gotten really great reviews and we spent a lot promoting it. You need to be doing things where you're not Sisyphus, just constantly pushing the boulder up the hill. Where you're not spending all the money to make something happen that no one's heard before.

You should be doing both, breaking new music or artists. Because that does a handful of things. It's interesting to people, new is always good, and you have a better chance at having a more lucrative and rewarding business relationship with someone who's starting out because they need you too. 

If you can, have a balance of people in different places. They do different things for your label.

With Teddy and the Rough Riders, we promoted the record for about three months and that's not chump change. They got some good reviews and they're road dogs,  so that’s always a good thing. If you're an independent label, you need to be working with people that are active. Jessie’s different because her name opens doors on its own, she doesn't have to perform. But if you're signing people on, you need to know that they're either pounding the pavement or they're promoting themselves. They don't have to post on social media often because they're actually in front of people. 

Another way for independent labels to make money is to find a way to share costs. One thing we did when we launched ARC two years ago, our launch titles were my father's titles and that had a Johnny Cash association. Try to do projects where some aspect of it can be promoted where you're not doing all the work to get the attention. You can't claim something that's not true. In my father's case, we use the word “Outlaw” on our launch title for ARC. I felt hesitant to do that. But then one of the songs I uncovered from his tapes from the 70s, when he was at the House of Cash was written by the woman who literally coined the phrase, Hazel Smith. She was a music journalist and songwriter. She had this fully produced song about rural gentrification. It's one of my favorite songs on the record.

My dad had been in the business but no one had really heard of him on a practical level. I was approaching the PR as breaking a new artist. If you have things that can work for you, whether it's name association, project crossover, live touring, if you can put two bands in one van, that all helps. Do what you can to cut costs. The best way I could talk about making money or making it or whatever, as a record label is to talk about it in investment terms. Long term, what are you curating? Consider what is appealing to other artists you want to work with and what is appealing to Joe Blow at a record store. Someone that pulls the LP off the shelf and reads the hype sticker. That's part of it, too. 

I'm currently in the process of seeking out content that is archival or old or overlooked. Nashville has a lot of that, and it's different from other cities.

It's important to consider material that doesn't have upfront production costs. I am following the path a lot of other well known Indie labels have been doing for a long time, like Light in the Attic, Fat Possum. There's this label in Chicago called Numero Group. They're putting out stuff that was released in Nashville on gospel labels like 60 years ago.

What makes you different from a big label?

The big labels for years have been figuring out how not to spend money. We've been living with almost 30 years of artists on FM radio, who are on because the labels started making decisions a long time ago how not to spend money. They're no longer doing the thing they did in the 70s and 80s, where they would sign a band for five records. U2 wasn't a huge band until three or four albums in and REM was the same way. It just doesn't happen anymore.

I think as an independent, you should do the opposite of what a major label will do, of one and done. An independent should cultivate long term relationships because the only way you're going to make money in the long term is a catalog with synergy, and a catalog with name recognition, and one with people that you trust, not just on a business level, but on a personal level too. 

When you're cultivating you're not only cultivating your catalog, you're cultivating artists themselves, by giving them this extended lifeline of releases.

If you got a good thing going and you believe in it, keep doing it. And if you think it's something that will be just as interesting to people 20 years from now as it is right now, that's important. 

We are living in a time where everything that could be done musically was done by the majors and then it just sort of became a free for all somewhere in the aughts. Aesthetically and stylistically. There's a lot of genre copying going on. Vampire Weekend put out a record that sounds like The Police, 35 years after The Police were making records.

If you're an independent label, you also need to be mindful of if you are putting out content that's a fad. I've never pressed anything that at the very least, couldn't be something that someone found in the Great Escape used bin 10 years from now and say, (excitedly) “What is this?” 

Make sure that if you're curating something, that even if you don't make money off of it when you do it, that you have made art.

If you're building a catalog, if you're investing in this enterprise that is a music label, you want as many lines in the water as possible. I'm not just talking about different titles and different artists and records, but multiple points of interest that bring people to the same record. PR, social media, etc.

Another way you can generate revenue is licensing for TV or film or even an Instagram ad. 

The most important thing is, if you're creative, and you have the means to subsist financially, just keep doing it. Just don't stop because if you stop you won't have a story. 

There's always this relevance thing whether it's a publicist you're working with or you're individually pitching to a writer. With publicity and writers they want a story an editor will want to run because it's already got some legs to it, or relevance.

They need content, whether it's the New York Times or a country blog

How has streaming changed things?

The earliest days of my label were when the iPod came out. I remember being dumbfounded that it worked. I paid off all the CD pressing costs because people were doing 99 cent downloads. There was actually a tangible financial tie to some figures you can wrap your brain around. Now, even with a country legend, you kind of just throw the football and trust that you're going to recoup at some point. 

I asked the distributor, “hey, what's a comparable with legacy artists’ sales to someone like Jessi?” and my rep said, “here's what Willie Nelson's last one did. And here's Kris Kristofferson.” And it was like 5000 physical pressings worldwide, which shocked me, but everyone's getting it on Spotify, or whatever service they use. 

The whole model has changed and in a weird way. I feel like the more digital media or visual or audio media has been devalued, in terms of how people pay for it, the more tangible things have gotten more interesting to people.

William Tyler is first is the person who put it to me as a loss leader. When you press physical product, more often than not are going to break even on it after some time. Like with Jessi, physical product will be paid for, probably by the end of spring. We pressed a lot, normally we would do 500 records. Well, this time we did 2000, because it's that type of artist. We're in this weird stage where the physical product you're making is almost your advertising. 

The bulk of the money is going into the digital realm. It's almost like you're satisfying two realities. The reality you used to know of how records were, which is you go to a store, whether it's Walmart or Grimey’s, and you buy the thing, you can hold it, look at it. And the digital.

The entire business model has been, not necessarily turned on its head, it's almost like it got put on a Yahtzee cup,  shaken around, and thrown back out. There are still business structures that have always been the same. There's always that 50/50 punk rock handshake,  that hasn't changed. 

The independents, in a lot of ways, are operating how the majors ran 50-60 years ago. There were more personal relationships. There were more nurtured artists, and it was in their interest. Those majors were operating the way I described, they were thinking about their long term picture, they were thinking about is this a catalog that we can sell? Now it's rare to be for a label to be run very personally; they have to answer to a board.

In a way now, the Indies are mimicking how things were. And it would be cool to say that, “oh, you know, there's gonna be a new Motown” but the production technology has changed too. There's a whole lot of homogenization going on. That's hard to escape. no matter how hard you try, you're going to end up either listening to, or working with, or working on projects that were done on a computer that uses the same software that everyone else has, and you're not going to end up with a whole lot of regional flavor that entire labels were built on. Stax, Motown for example.

But that’s why if you're an independent musician or label, you have to be mindful of your current curation in terms of what are you putting out. Are you putting out “millennial whoop,” are you putting out something that just sounds the same as everything else? It's even more of a challenge to distinguish yourself from everything else today, because it's really hard to know sometimes.

Learn more about Cleft Music and Appalachia Record Co on their websites. Listen to the artists mentioned in this interview on this Spotify playlist, and if you find one you like, go buy the record!