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Indie Label Turns Profit!

Capital Idea/Chris Swanson, Darius Van Arman, Jonathan Cargill

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Secretly Canadian started out like most indie-rock labels: some "record-collecting nerds," in this case a trio of them attending Indiana University in 1996, wanted to be involved with music in some greater way than simply buying it. The imprint, then as now based in Bloomington, Indiana, got off to a running start, releasing two dozen albums and singles in two years, but soon the owners hit the wall. They'd fallen in love with the act of putting out records--but they were still losing their shirts. "We realized we all wanted it to be a long-term thing," says Jonathan Cargill, now 30. "To make it long-term we had to find a way to reduce expenses and to make money."

That's a tough prescription to fill in the independent-music business, but in early 1999 Cargill and his partners, brothers Chris and Ben Swanson, found a way. At that time Secretly Canadian, like nearly every other small label in the country, was using brokers to get its CDs manufactured. All major pressing plants insist on minimum annual production figures of between 100,000 and 500,000 units--well beyond most indies' capacities. Brokers consolidate orders from a number of smaller businesses to meet those minimums--or better yet to exceed them, bringing the price per unit down for everyone. So Cargill and the Swansons--along with Darius Van Arman, who'd just moved to Bloomington from Charlottesville, Virginia, with his own label, Jagjaguwar--decided to form their own CD brokerage, called Bellwether Manufacturing, to bring in extra income and lower their own pressing costs. Since then, all four have made a modest living making records.

Cargill and Chris Swanson, now 26, met in an IU dorm cafeteria, where both of them worked. "There was a big container with all of the clean silverware, and we often had the job to sort it all," says Cargill. "It's a monotonous job, sitting there with our hair nets and our gloves on, putting forks with forks and spoons with spoons. We always had conversations about music, and a lot of them were not about bands, but about the labels that were putting them out, that all of these bands had come out on a handful of labels." Although neither of them knew anything about running a label (or even had an artist in mind), they spent the summer planning to start one. Secretly Canadian's first signing, June Panic, was suggested by Chris's little brother, Ben, now 23, who had arrived in Bloomington that August to start his freshman year. Like the Swansons, Panic was from Fargo, North Dakota, and Cargill remembers thinking that since the singer had already released seven full-length cassettes, he might have some additional insight into the biz. In September they pressed 1,000 copies of his album Glory Hole only to find they had no way of getting it into stores: none of the national distributors that worked with independent labels at the time was interested. "That was a big old slap of reality," says Cargill. "Making CDs was real easy, but getting them out of your basement was a whole 'nother thing."

Nonetheless they moved on, releasing a seven-inch by Songs: Ohia, who'd already released a single on Will Oldham's Palace label. The Oldham connection generated demand; suddenly there were willing distributors for the single, some of which picked up the June Panic disc as well. Cargill and the Swansons had learned an important lesson: when you have a record distributors already want, you can get them to take records they don't want. Over the next two years Secretly Canadian released about two dozen more albums and singles, becoming associated with quirky and introspective singer-songwriters like Songs: Ohia's Jason Molina, Panic, and Dave Fischoff but never turning a profit. Until Cargill quit his cafeteria job in 1998 to work full-time at the label, he estimates he was putting about 30 percent of his income into it.

By then, in perpetual search of the lowest price, Secretly Canadian had used six different CD brokers. They had also begun to subdistribute indie labels they felt an affinity with, including Jagjaguwar; expanding their offerings gave them yet more leverage with distributors, who were forced to pay outstanding bills in order to get the latest releases. But when one of their main distributors, the U.S. arm of Cargo Records, folded in 1998, they had to write off approximately $10,000 in merchandise that hadn't been paid for. That's when they decided to start Bellwether.

"Bloomington is a small town, but it's got a really active music scene, and we had been sitting here watching our friends getting ripped off making their CDs," says Cargill. They started small, pulling together the labels they were subdistributing and others they had developed friendships with and assessing a low per-piece fee on their orders. Immediately manufacturing costs for Secretly Canadian and Jagjaguwar dropped by about 10 percent. The company now oversees the manufacturing of more than a million CDs per year. Secretly Canadian also made manufacturing and distribution package deals (akin to what Chicago's Touch and Go does for labels like Merge, Estrus, and Kill Rock Stars) with a handful of labels; last year venerable Olympia indie K, home to everyone from Beat Happening to Chicks on Speed, and Atlanta's Table of the Elements, whose catalog includes releases by John Fahey and Tony Conrad, signed on.

In March 2001 the three businesses rented a 5,000-square-foot space; they now share a staff of five. Both Secretly Canadian and Jagjaguwar began to turn a modest profit separately from Bellwether--though Cargill says he still pays himself the same meager salary he did in 1998. Both labels have accelerated their release schedules and bolstered their rosters with some impressive contemporary talent and reissue programs: Secretly Canadian now puts out records by Damien Jurado, the Danielson Famile, and Scout Niblett, and it's in the midst of an extensive Nikki Sudden reissue campaign. Jagjaguwar's lineup includes British experimentalist Richard Youngs, Japanese folk rockers Nagisa Ni Te, and critically acclaimed New York art rockers Oneida, and has reissued a pair of collaborations between Jad Fair and Daniel Johnston.

But Bellwether has also afforded them the flexibility to take risks on lesser-known artists--like Chicago guitarist Nad Navillus and the art-metal band Racebannon. "We're always trying to achieve a balance of professionalism with our aesthetics," says Chris Swanson, who dismisses the suggestion that the demands of the brokerage business might eventually affect Secretly Canadian and Jagjaguwar. "We want things to be comfortable and we want to remain in control," adds Cargill. "Our future concern is getting the labels to do better."

Art accompanying story in printed newspaper (not available in this archive): photo/Yvette Marie Dostani.

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