BlueT.O.M. Blueprint: A Case Study on the Creative Design of a Student-Run Record Label

Tonya D. Butler

University of Memphis

Introduction

The launch of an independent record label in today’s ever-changing music industry is an expensive, time-consuming, complicated, and risky undertaking. The viability of a new business is speculative despite the level of expertise possessed by a company’s founders. When those organizers are young adults—many fresh out of high school—with no business savvy and very little experience, achieving success becomes less of a challenge and more of a long shot.

There are several colleges and universities in the United States, however, who have managed to overcome the obstacles associated with the lack of resources, financing, staffing, departmental support, and other factors necessary to maintain a campus business.¹ The University of Memphis’ first official student-run record label, BlueT.O.M. (Tigers of Memphis) Records, is an example of one such anomaly.² By studying the strategy involved in the design, development, and implementation of BlueT.O.M. Records, music industry faculty and students nationwide will gain insight as to how to start their own record companies, effectively leverage their campus resources, and ultimately convince their administrators of the importance of having an independent, commercial, student-operated record label on campus.

Desire vs. Need

One thing that independent commercial labels and student-run labels have in common is that they are both small businesses. They are governed by many of the same rules of engagement required to own and operate a music company in today’s marketplace. They each require a high level of commitment on the part of the staff (the students), as well as a business plan, an operating budget, and someone to lead the charge (the professor or faculty advisor).

When producers, musicians, or other entrepreneurs form a record company it is generally due to their desire to separate themselves from the control of the major labels, make and keep more of their own money, or transition from artist to businessman. They start their companies in order to fulfill their desire for fame, fortune, and independence. Student-run music companies are often created out of the students’ desire to have their own record companies as well. Unfortunately, desire can be a four letter word in academia. Wanting something is seldom enough incentive to make a change. The powers that be must come to learn that the need for such a company is considerable and that the company’s purpose is one other than that of notoriety or profit. Music industry program faculty, students, and entrepreneurs must make a case for necessity. Administrators have to be convinced that the implementation of a student-run record label will meet the needs of the students, the university, and perhaps even the community as a whole.³ In addition, due to our nation’s ever changing economy, rising tuition rates, and often-shrinking university budgets, college deans and directors have to be shown that the department will be taking part in the formation of a business venture as opposed to a mere extra-curricular activity and that the establishment of a record label will have little or no impact on the department’s bottom line.

NEED #1: The students need practical work experience in order to be competitive in the job market.

The job market for college graduates is significantly more difficult today than it was twenty years ago. Once upon a time, an English, science, or math major was almost guaranteed some type of employment immediately upon graduation. Nowadays that is no longer the case, and in the music industry the dilemma is only amplified. Mergers, takeovers, and plain old-fashioned shut-downs, combined with internet technology, downloading, and iPods have made the prospect of a job a challenging goal for the average music industry student. After being a victim of downsizing myself (about three times in ten years) I, more than anyone, have an acute understanding of the need to leave college with more than just a degree.⁴ Without practical, hands-on experience in the music business, the average student, especially those in smaller cities, does not have a fighting chance to succeed.

In the spring of 2004, shortly after joining the faculty of the University of Memphis, I submitted a proposal to the director of the Rudi E. Scheidt School of Music (RESSOM)⁵ outlining not only the desire to start a stu-dent-run record label, but the inherent need for such an endeavor. I presented a short list of reasons why our department needed to have a record company organized and operated by students:

A student-run record label will give music industry students the opportunity to greatly enhance their education by allowing them the opportunity to apply what they learn in the classroom to a real-life setting and will make them more competitive in the job market, dramatically improving graduation rates. More specifically, the label will provide:

• Practical, hands-on experience working for a fully operational, in-house record company

• Enhancement of leadership skills by allowing the students to take on management and supervisory positions

• On-the-job training and work experience that students may include on their resumes

• The ability to make contacts and to facilitate relationships between the students and industry professionals.

• Develop entrepreneurial and business skills⁶

The administration agreed that practical experience will increase students’ chances for employment, thus giving them an incentive to do well and graduate sooner, which will in turn strengthen recognition and support for the department and eventually contribute to an increase in the number of students interested in attending the School of Music. In a nutshell, the needs of the students are great, but the needs of the administration are tantamount. If a faculty member or other advocate can convince management that a record label will meet the university’s needs as well as those of the students, the first steps towards implementation will have been taken.

NEED #2: The School of Music needs an in-house record company that can provide students with the type of learning opportunities otherwise unavailable in the city of Memphis.

All music majors enrolled in the Music Industry Program (MUID)⁷ at the University of Memphis are required to enroll in a minimum of three internship hours in the senior year. Formerly, students had to find their own placements, which would not have been an issue had there been companies in the students’ areas of interest. Although Memphis is the “Home of the Blues” and the “Birthplace of Rock ’n’ Roll,” there is a significant deficiency in the city’s music business infrastructure. Only a handful of recording studios and independent labels operate in Memphis. Most managers, publicist, attorneys, accountants, and other professionals are freelance and part-time. In Memphis, like other areas of the country away from centers of music commerce like New York, Los Angeles, and Nashville, students are often unable to obtain high quality music business internships.

Therefore, my pitch to administrators also included the following:

An in-house, student-run record label will provide students with access to resources that the University and the city of Memphis cannot provide for the following reasons:

• There are no major labels located in the city of Memphis

• There are very few fully operational independent record labels in the city of Memphis

• There are insufficient industry resources available within a 300 miles radius to accommodate a majority of the music industry student body or to meet the needs of their areas of concentration.⁸

In other words, there are few if any opportunities for students to learn the ins and outs of the record business because there are very few music companies operating in the vicinity of the University.⁹ The only way for the students to gain the type of knowledge they need to become successful in the music industry at the administrative, management, or executive level is for them to either leave the city (which many of them do) or have the university take the lead in rebuilding the Memphis music infrastructure by launching its own record label and allowing the MUID students to run it. The administration agreed.

NEED #3: The Music Industry degree program needs an on-campus record company in order for students to develop the kind of management and supervisory skills listed in the university’s undergraduate catalog course description.

Another case for necessity arose from a course description in the undergraduate catalog. The MUID program requires a course in record company operations. The catalog description for the course is as follows:

MUID 4850. Record Company Operations. (4). (CMUS). Students participate in actual administration and operation of the University of Memphis record label. Assignments include searching for, signing, and developing a new artist; preparation of marketing plans and budgets; supervision of the graphic design and manufacturing process; retail relations; and distribution. PREREQUISITE: MUID 2201, 3602, 4603, senior standing, and permission of instructor¹⁰

The catalog describes how the student will be engaged in “actual administration and operation” of a record label. Although the Record Company Operations class existed at the program’s inception, the corresponding record label did not. Therefore, the most practical rationale for starting a student-run label was that it would fulfill the conditions outlined in the undergraduate course catalog. The administration weighed the possibility of starting a label against the prospect of obtaining faculty, college, and provostial permission to change the catalog description and possibly the curriculum, and decided to go with the simpler of the two. We were given the green light to launch the label.

Mission Statement And Purpose

The case for necessity means very little without a blueprint or road map to explain the various ways in which the need will be met. The best way to describe such a blueprint is to outline the strategy in the form of a simple business plan which, at a minimum, addresses the following issues: 1) What is the mission and purpose of the label?

2) What is the label’s business and legal structure?

3) Who will staff and operate the label?

4) How will the label be financed?

BlueT.O.M.’s business plan was written by me in conjunction with the Record Company Operations class of 2005.¹¹ Each student was required to submit his or her own mission statement and vision for the label. At the end of the semester the students reviewed and voted on which concepts they felt best represented their desires and needs for an in-house entity. I then compiled, formulated, enhanced, and edited a collection of their ideas into one comprehensive, cohesive document.

MISSION STATEMENT – BlueT.O.M. Records is an independent student-run record label operated and maintained by the Record Company Operations class of the Music Industry Program at the University of Memphis.

The purpose of a student-run record label is to provide a realistic, as opposed to makeshift, work environment for students to learn the ins and outs of running an independent record label. The percentage of students who will graduate and find employment with indies is far greater than those who will end up at major labels. Therefore, practical, hands-on experience in the operation of an independent company prior to entering the job force is imperative.

BlueT.O.M. Records is designed to supplement what students learn in the Music Industry Division classes at the University of Memphis with “real world” experience. The label will also serve as a marketing tool to attract prospective students, sponsorships, and attention to our program and to raise money for student organizations.

Our objectives are to record, produce, design, package, distribute, promote, and sell music performed by University of Memphis students, alumni, and Memphis area musicians, in the form of CDs and new media. As the production process nears completion, plans for live concert pro-duction will begin, both on and off of campus. In the beginning, we will support a wide variety of music as we test our market. In the future, the music genres that generate the most positive responses will receive the most focus. With access to professional recording facilities, business knowledge of the music industry and young thriving minds, we plan to execute two compilation CDs per year, with multiple live performances that will expose new artists to the Memphis music scene and well as expose Memphis to the incredible talent within its own boundaries while creating income needed to continue producing great music.

The students and I also placed a significant emphasis on what contributions the label would make, and what opportunities the label would afford, the University of Memphis student body and the university as a whole.

BENEFITS TO STUDENTS – BlueT.O.M. Records gives University of Memphis students and alumni the opportunity to gain exposure they would not ordinarily be able to obtain on their own. The label will use its growing knowledge of the music industry, its resources, and its network of contacts to provide first-rate artist development and promotional services to support the artists featured on the label. For the students working as BlueT.O.M. Records staff, the label will afford them a behind-the-scenes look at politics and procedures of producing and releasing a recorded project, as well as hands-on work experience and an inside look at the vast number of career opportunities available in the music industry.

BENEFITS TO THE UNIVERSITY – BlueT.O.M. Records will increase the morale and school spirit of everyone on campus. The label enables students campus-wide to showcase their vocal and musical skills. It also brings awareness of music industry issues to students who might not otherwise have access to information. BlueT.O.M. Records will expose the Memphis community at large to the amount of talent, ingenuity, and opportunity available at the Uni-versity of Memphis, as well as act as publicity and recruiting tool nationwide.

When the staff of Record Company Operations and I developed the mission and purpose of the label, we grew to learn that by structuring the purpose of the label in a way that would meet the needs of the students, school, and community, we would consequently end up providing ancillary benefits which could satisfy many of the underlying desires of those same students, school, and community. With the label’s purpose on track, the next step was for the students to take a step back and allow me, as the music business area coordinator and faculty advisor, the opportunity to step towards turning the label into a legal entity sufficient enough to remain intact in an environment where the students inevitably come and go.

Business and Legal Structure

There are some aspects of starting a student-run label in which the students cannot participate. Most of these issues involve the legal and financial structure which can only be determined by the university’s administrative and legal staff if the label is to be legally associated with the university.

Fortunately, the University of Memphis is no stranger to the music business. In particular, the Dean of the College of Communication and Fine Arts, Dr. Richard Ranta, has significant music industry credentials as well as experience with the operation of a record label on campus.¹² It was only a matter of determining how a student label would fit into an already existing structure.

In 1980, Dr. Ranta and Dr. David Evans, Grammy Award winning musician¹³ and Professor of Ethnomusicology (Regional Studies) at then Memphis State University, founded the High Water Recording Company.¹⁴ Highwater Records, a division of Memphis State, produced and sold down-home blues and gospel recordings from living black musicians of Memphis and the mid-south.¹⁵ The 45s and LPs produced by Highwater were recorded mostly in the university’s 24-track recording studio in a cooperative between the university’s Ethnomusicology and Commercial Music degree programs.¹⁶ Dr. Evans was primarily responsible for the day-to-day operations of the label, including A&R and marketing. The Commercial Music faculty, aided by student interns, was responsible for much of the recording and production of the artists. Highwater Records is also home to two pub-lishing companies: Mississippi River Publishing (ASCAP) and Music River Publishing (BMI).

The first issue was to determine whether BlueT.O.M. would be a division of Highwater or its own separate entity. Highwater, although inactive for several years, retained its reputation as a distributor of traditional blues and gospel music. Since BlueT.O.M. was interested in genres such as rap, indie rock, hip-hop, and pop, it was decided to maintain Highwater’s traditional integrity and create a separate label just for students.

The university’s legal department took on the challenge of researching the paper trail which lead to the formation of Highwater Records and its subsequent approval by the university’s governing body, the Tennessee Board of Regents. It also demanded that all contracts used by the label meet university standards and include boilerplate language required by the State of Tennessee.

There were some existing intellectual property policies in effect at the university that the label and its legal structure had to comply with as well.

INTELLECTUAL PROPERTY – The University of Memphis Intellectual Property Policy (UM1607) applies to all faculty, staff, student employees, graduate students, and post doctoral students. The policy does Not apply to undergraduate students in their normal course of study. In regards to Master Recordings – Copyright will remain with the creator unless the work is supported by a direct allocation of funds through the University for the pursuit of a specific project or was made or created with significant use of University resources. Regarding Compositions – The University does not claim ownership to artistic works, such as musical compositions or works created by students during the course of their education, unless the work is supported by a direct allocation of funds through the University for the pursuit of a specific project or was made or created with significant use of University resources.

Under this policy, the University may claim ownership of any sound recording made at the RESSOM recording facilities, or any sound recording funded by the college or student government co-sponsorship. However, in regards to compositions, students will maintain ownership to musical works created on their own time, using their own resources, or for works created during the normal course of study.

The effect of this policy on BlueT.O.M. is that any recording made in the university’s recording studios would be owned by the university. This includes the master recording of the finished album as well as any individual artist tracks recorded on campus. On the label’s inaugural outing, Volume I: Orientation, only two songs fell within the category of university ownership. The remaining tracks were licensed directly from the students as the owners of the master recordings.¹⁷ I made the decision early on that in the interest of simplicity the A&R staff would avoid the submission and consideration of masters owned by entities other than students directly involved in the project. The rights granted under the BlueT.O.M. license were for the non-exclusive use of the work for the life of the copyright in the master. Artists license their works to BlueT.O.M. on a gratis basis, including a waiver of mechanical royalties on all compositions.¹⁸ The stu-dent-run label is first and foremost a classroom project, therefore record label work falls within the student’s normal course of study. Since university policy establishes student ownership of original musical compositions created during the normal course of study, BlueT.O.M. Records claims no ownership of these works.¹⁹ Consequently, the BlueT.O.M. Artist Agreement includes the following provision regarding copyright ownership:

GRANT of RIGHTS:

a.

ARTIST hereby grants to BLUET.O.M. the nonexclusive mechanical right and the nonexclusive master use right, as well as the privilege, license, and authority, during the term of the copyright of the composition and the sound recording, to record, reproduce, publicly perform, market, and sell the musical composition and the sound recording in the form of compact discs, digital downloads, MP3s, and other formats, throughout the world via traditional retail and online means of distribution now known and hereinafter devised.

b.

The musical compositions and recordings licensed to this agreement shall not be distributed or exploited sepa-

rately or independently of Compilation Album, except for digital downloads and promotional purposes only. ARTIST reserves and will retain all rights and copyrights to their songs/music/lyrics and sound recording where applicable, as this agreement is a nonexclusive license and not a transfer of copyright.

c. The right to use ARTIST name, likeness and biography in connection with the marketing, promotion, advertising, publicity, sale and, distribution of compilation throughout the term and territory of this agreement.

The students took great pains to design a company they would be proud of. Students were opposed to any contract language or restriction which would put the interest of the label above the interest of the students. BlueT.O.M.’s primary mission is to provide experience and opportunities to students, and to introduce new works into the rich musical heritage of the city of Memphis. The majority of students, after evaluating the viability of the marketplace, decided that BlueT.O.M. had a better chance of success as a non-profit teaching tool, than a profit-making machine.

Operations and Staffing

Each spring semester, fifteen to twenty juniors and seniors enroll in the Record Company Operations class and automatically become record company executives on the very first day of class. Students are assigned positions based first on their areas of expertise, their areas of interest, and the needs of the label. The students and faculty collaborate on the implementation of a production and release schedule that places the bulk of the operations during scheduled class times.

Since the class meets only in the spring, once a year the staff initiates the production of a project which will be released in the spring semester of the following year. Concurrently they will market, promote, and prepare for the release of the previous year’s album project to be released no more than 45 days from the start of the spring semester. For example, an album produced and recorded during the spring of 2006, will be released within 45 days of the start of spring 2007. While promoting the 2006 CD, students will begin the production and recording of the 2007 project (which will be released during the spring semester of 2008). This schedule provides the maximum amount of interaction and experience by mirroring the production schedule of a typical independent record label. The students must market and distribute an already active album project initiated the year before, while at the same time record and produce an entirely new project with a completely different set of artists of their choosing.

The production and recording process, as well as the job descriptions for the staff, directly correlate with those of the average independent record label. The class is divided into committees, some of which may overlap. Each committee, under the supervision of the president and CEO (faculty advisor), embarks upon the following tasks:

• A&R – artist and song solicitation, submission, assess- ment, and selection;

• Marketing, Promotion, and Publicity – marketing plan, tools, budget, and schedule;

• Radio – song selection and solicitation by genre; creation of promotional and ad campaigns;

• Creative Services – design album logo and concept, album cover, and marketing materials;

• Internet and New Media – design and maintain label web site; create online marketing and retail opportunities;

• Manufacturing – determine timing and location of press- ing plus number of units ordered;

• Distribution – determine where and how project will be sold, including cost per unit;

• Business and Legal – draft and review artist agreements; financial and budget management;

• Executive VP – seniors only; assistant to president; liaison and support to student committees.

Staffing can be a significant issue in the operation of a student-run label. The most obvious problem is that of consistency. Student turnover is every student organization’s biggest obstacle. Students occasionally drop the class, do not participate to the fullest (i.e., fail the class), or graduate before they can see the project through to its fruition. To compensate, BlueT.O.M. became a Registered Student Organization (RSO) so that students outside the School of Music may volunteer to join the label’s staff in exchange for the experience and album credit. RSOs registered with the university’s Student Activities Council (SAC) receive several benefits including complimentary or discounted use of university venues and facilities, mailboxes, email access, access to incoming freshman at orientation activities, and bi-annual operational assistance to be used at the campus bookstore, newspaper, and print shop.

Initiated in the spring of 2007, BlueT.O.M. the RSO has a core of four to six officers and a handful of street team volunteers. For this reason, BlueT.O.M. must rely heavily upon its sister student organization MEISA (Music and Entertainment Industry Students Association) to assist the label staff in picking up the slack during the summer and fall semesters when the Record Company Operations class in not in session.

Memphis MEISA, in existence since the spring of 2004, is about thirty members strong. Along with BlueT.O.M., both RSOs function as extracurricular activities for the same pool of MUID students, but BlueT.O.M.’s focus is much more narrow so conflict and competition is minimal. One way in which MEISA contributes to the label is by holding an annual cam-pus-wide talent competition, Idol Search. The competition is a showcase for musical talent open to all University of Memphis students. It is designed for aspiring songwriters, producers, singers, and musicians. All songs must be original and performed live on stage in front of a audience and a panel of local industry judges. The judges critique each performance based on the quality and originality of the song and the performance. They select the top three acts, and each receives a spot on a forthcoming BlueT.O.M. Records album compilation. The event not only promotes BlueT.O.M. and MEISA, it also gives the upcoming Record Company Operations class a head start in the A&R process.

The BlueT.O.M. staff, although primarily students, would not be able to function without the support of the music business faculty advisor and the entire MUID faculty and staff. Recording technology majors play a large part in the recording and production of the individual artists who do not have their own recordings, as well as the sequencing, mixing, and mastering of the final project. Every album is usually assigned a recording major to serve as album producer, while the faculty advisor is typically the project’s executive producer. University of Memphis alumni and local artists seeking exposure, or just looking to support the label, also play a significant role in the A&R process. Support is also received from local businesses and organizations who lend their time and resources to BlueT.O.M.’s efforts.

Financing

Once the need for the label has been established, the purpose and mission of the label has been outlined, and the legal structure, staff, and operations policies have been put in place, the only thing left to do is to find the money to pay for it.

Early on, BlueT.O.M. entered into negotiations with RESSOM administration to acquire three years’ worth of seed money in order to put the label in a position where it could eventually finance itself. The issue of funding, for a state institution in particular, is not often a pleasant subject. Every music, fine arts, and business school can find hundreds of ways in which it would rather spend money, and regardless of the established need, a student-run record label usually falls somewhere near the bottom of the list.

In private colleges and universities, where the music industry program is the school’s major draw (and therefore a top priority), the possibility of funding is much more of a reality—unless the school is in a major city with strong and ample major label internship opportunities. At colleges with a focus on performance, education, or some other discipline, student-run labels may have to search for alternative funding until their respective administrations recognize the value a student business can add to the program and the college. As for BlueT.O.M., the possibility of RESSOM support is “on the table but not yet in the bowl,” therefore BlueT.O.M. looked further up the administrative chain for a source of interim financial support and found its own student government to be the most accessible and supportive resource of all.

As an RSO, BlueT.O.M. is entitled to apply for co-sponsorship funds from the Student Event Allocation Fund (SEA), a division of the Student Activities Council (also know as student government). Each semester, student organizations request funds to put on an event that will benefit the University of Memphis student body. For the first two years of its existence, MEISA requested assistance in production of its annual Idol Search talent competition. In addition to the marketing funds necessary to execute the event, the Idol Search budget included a portion of the costs involved in the recording and manufacture of the BlueT.O.M. album project, since a spot on the album was the Idol Search grand prize.

The funds received from SEA are greatly appreciated and more than adequate, but at the same time, just barely cover the cost to produce and market both the showcase and the album, not to mention the cost of manu-facturing. Unfortunately, SEA funding is not guaranteed and must be applied for each year. So long as the event meets the necessary criteria and the money is available, the project has a strong, but not absolute, probability of being funded. MEISA received SEA funds for Idol Search 2005 and 2006. They intend to apply for enough funds to cover the cost of the 2007 CD and showcase as well.

The album artwork, pressing, and mastering was done by local Memphis manufacturer Audiographic Masterworks, owned and operated by University of Memphis graduate Mark Yoshida. Mark and his graphic designer Brandon Seavers provided much needed support and financial accommodations to help the label succeed on its limited budget. In 2006 RESSOM began providing a small marketing budget to supplement the label’s other funding sources. In the event the students are unable to generate sufficient funds from sales, and are unable to qualify for SEA sponsorship, RESSOM is willing to return to the table to address the issue of full, partial, or matched funding.

Additionally, while forming the mission and purpose of the label, the founding students from the class of 2005 were adamant that BlueT.O.M. eventually offer a nominal licensing fee and a mechanical royalty at the statutory rate to all owners of masters and compositions as minimum compensation for the use of their works. The students understood that in light of the uncertainty involved in financing the label, generating enough to cover royalties, while not feasible at the start, was still considered one of their long-term goals.

Fundraising from private companies and community organizations was at the top of the list when it came to capital contributions; however RESSOM has a strict policy against individual faculty and student fundraising. This is likely the policy at many state institutions, but it does not preclude the organization from obtaining sponsorship and donations of products and services. The Record Company Operations classes of years past have not had enough time to seek and secure sponsorships. In light of SEA funding the need was not as urgent. However, now that BlueT.O.M. is an RSO, the officers and volunteers who operate the label during the summer and fall have made sponsorship by local companies their primary objective.

Conclusion

Every student-run record label (just as every independent commercial label) is different. Many student labels are non-profit whereas others have major distribution deals and seek to generate profit. Some labels are fully funded by their departments while others are completely self sufficient relying mostly on sales and donations. The mission and purpose of the company, as well as how it is staffed, operated, and financed is purely a matter of taste and intentions. The outcome depends heavily upon the institution supporting it, the students running it, and the faculty overseeing it.

BlueT.O.M. Records did not set out to make money, although making money in order to gain true independence is a part of the overall vision. Instead, the label sought to provide a much needed service to the city of Memphis and the University of Memphis music communities, as well as to continue the legacy of Memphis music by introducing the original music of young people into the city’s historical archives. BlueT.O.M. also chose to focus its efforts in the areas of educating and providing career opportunities and resources to its student staff and its artists. Providing an outlet for talent under the concept of fair treatment and sound business practices will be BlueT.O.M.’s ultimate contribution.

As of fall 2007, the label is in the process of mixing and mastering its sophomore album project entitled Volume II: School’s in Session. The Record Company Operations class of spring 2008 will take on the task of marketing and selling the album while simultaneously planning and producing the 2009 CD. More local musicians and university students will have the chance to participate, and more attention will be drawn to the RESSOM’s Music Industry Program and the University of Memphis as a whole. Blue Tigers of Memphis Records has more than met the needs of its community and looks forward to continuing to do so in the spirit of true independent music.