An Indie That Believes in CDs
The waters might be choppy for the music business right now, but the Concord Music Group is happy to ride those waves.
Norman Lear, left, the longtime television producer, is the chairman of the Concord Music Group.
In April, Concord announced that it had a reached deal to distribute Paul McCartney’s post-Beatles catalog.
In April, Concord, an independent label, announced two deals, one to distribute Paul McCartney’s post-Beatles catalog and another to buy Rounder Records, the roots label from Boston whose “Raising Sand” won a Grammy for best album in 2009.
Those two additions are the latest in a years-long period of growth for Concord, which is based in Beverly Hills. And they come at a time when many other labels are shrinking or battling for survival.
The success has Glen Barros, Concord’s chief executive, singing a tune not always heard around the industry.
“The future of the music business is very bright,” Mr. Barros said. “People want to listen to great music.”
He thinks people will pay for that music, too, especially the fans he calls the adult audience. Concord has focused its attention on that group, trying to lure people less inclined to chase the latest pop sensation and more interested in music Mr. Barros describes as “timeless and authentic” — more McCartney and less Justin Bieber.
All of its deals in the last decade have tried to scratch that niche, from a partnership with Starbucks in 2004 to the purchase of Fantasy Records the same year to its most recent moves.
In the case of Rounder, Mr. Barros said, it “fit perfectly with who we are.”
Typically — and especially at the major labels — a company’s fortunes rest on a bet that a tiny number of artists will reap huge sales, supporting the rest of its roster.
Concord, however, focuses on getting steady sales from its catalog of 13,000 master recordings and releasing new albums by artists — like James Taylor and Chick Corea — who all pull their own weight.
“The majors and the classic business model have been hit hard because the hit business has been hit hard,” said Mr. Barros. “A low batting average doesn’t work.”
Mr. Barros said he expected Concord to have more than $100 million in revenue this year, 10 times more than in 2003, and said the company had a consistent operating profit. It has about 160 employees, up from about 50 in 2003.
That is a long way from where it started in 1972 as a small jazz label based in Concord, Calif., about 30 miles northeast of San Francisco. It kept a relatively low profile through 1999, when it was bought by Norman Lear, a longtime television producer; Hal Gaba, an entertainment executive; and Tailwind Capital.
Big changes arrived in 2004, when the label joined with Starbucks to release Ray Charles’s “Genius Loves Company,” a record that won eight Grammys and sold more than 3.2 million copies, according to Nielsen SoundScan.
That was the same year the company bought Fantasy, a jazz label that owned Stax Records, a soul label, for $83 million.
Those two moves “launched us to a different place,” said Mr. Barros, opening doors that had previously been locked.
One of those doors led to Paul McCartney, who has sold more than 9.4 million albums in the United States since 1991. In 2007, Concord and Starbucks released Mr. McCartney’s “Memory Almost Full,” starting a relationship that led to last month’s announcement.
Although Starbucks has since dialed back the music selection in its stores, its partnership with Concord has endured, providing the label with a smooth access point to artists.
“Their passion for jazz and music that stands the test of time is the same focus we have,” said Chris Bruzzo, a vice president at Starbucks who oversees music for the company. “They’re right in our sweet spot.”
That sweet spot — the adult market — is less inclined to illegally download music and more inclined to buy a CD. This is especially true for baby boomers. According to the NPD Group, a market research firm, people 50 and older buy 16 percent of all albums and singles but buy 28 percent of all the physical music sold.
Concord’s reliance on physical sales can be a double-edged sword, though, Mr. Barros said.
While the company has suffered less than the major labels from illegal file-sharing, fewer stores now sell CDs, and those that do often devote less shelf space and push out smaller genres.
But Mr. Barros finds solace in knowing that his company’s growing digital sales include more albums than singles, unlike much of the industry.
John Virant, the president of Rounder, said that when the label’s founders decided to sell the company — more of a succession plan than a desperation move, Mr. Virant said — Concord was the only place that he approached. The deal was for an undisclosed amount.
“What we saw in their history is that they’ve acquired other labels and been active with them in maintaining and building the brand identities,” Mr. Virant said. “The focus for the both of us has been on career artists, not on the hit-driven singles.”
While the company continues to grow, the artists and managers working with it say they still get a personal, indie-label treatment. Of course, with just 1 percent market share in the United States, it still is very much an independent.
“The first thing you notice is that everyone you deal with is a true, old-fashioned music-obsessed person,” Jon Landau, Bruce Springsteen’s longtime manager, said in an e-mail message. Mr. Landau has worked with a major label alongside Mr. Springsteen and with Concord as the manager of Alejandro Escovedo, a rock musician who has a new album coming out next month.
Sonal Gandhi, a music analyst at Forrester Research, said that the major labels have many advantages over independents, including the capital to invest in new technologies. But an independent’s ability to limit its focus can reap rewards.
“If they stick to particular genres that have music fans, those fans still tend to buy music,” especially in genres like jazz and rock, where the physical product has more value than a digital download, she said.
The company, meanwhile, says more changes lie ahead.
“I see us growing,” said Mr. Lear, who, at 87, remains Concord’s chairman. “The opportunity that was Rounder exists elsewhere, and we’ll grow.”