Tom Silverman's Libera Acceptance Speech: From Artists Against Counterfeit Tapes To 'The Big Six' To A2IM

(Kyle Reinford)

One of highlights from last week's second annual Libera Awards was Tom Silverman's Lifetime Achievement Award acceptance speech. Part personal history (he co-founded Artists Against Counterfeit Tapes), thank you note (gave gratitude to mentors Seymour Stein, Chris Blackwell, Mo Ostin, Ahmet Ertegun, Morris Levy) and indie history lesson (a list of major label execs who once headed indie label), the speech was filled with keen insights only someone with 35 years in the business could have. Biz reached-out to Silverman after the awards for the full text of his speech, which follows.

Dualtone, Alabama Shakes, Tom Silverman Take Honors at 2013 Libera Awards

Lifetime Achievement Award?

Lifetime seems so final. After working for nine months on the NMS finishing last Tuesday, the Sound Exchange board meeting last Thursday, the Merlin board meeting this Monday, A2IM Independent Week and the board meeting last night and the WIN board meeting tomorrow morning. It feels like it’s time for the “Get a Life Time Award.”

Big Thanks to A2IM -- Rich, Jim and the team. I want to thank Rosie Lopez and the TommY BoY team who have been quietly building an exciting new TommY BoY label while I have been off studying, schmoozing and serving.

I would like to thank Donna D’Cruz for her love and belief.

I want to thank my mentors, Seymour Stein, Chris Blackwell, Mo Ostin, Ahmet Ertegun and Morris Levy who influenced me more than even I realize.

I want to thank my daughters Ella and Zoë for lending me to the music business and the independent movement and understanding that just because I was not there as much as they would have liked, I love them as much as a father can love his children. Ella and Zoë, please stand.

When they were born the music business was twice as big as it is now. We must leave our children a better business than we found it. They are a reminder to me that I still have a lot of work to do to fulfill that promise. After all, today’s music business has the same value as it did in 1967 after inflation so all of us have our work cut out.

I want to thank my parents for their belief, support and the $5,000 loan to get me started 35 years ago, when I left graduate school in environmental earth sciences to start a newsletter for DJs. And again in 1981, they supported my crazy idea to start TommY BoY. I was enthusiastic and naïve. Those two qualities tend to be important to entrepreneurial success because no one with experience and knowledge would be crazy enough to start a record company.

In 1983, after Chrysalis, Arista, Motown and A&M were bought by the majors in the first big wave of consolidation, many of my distributors went out of business.

I began to sell the biggest accounts directly rather than replace some of the distributors.  Eventually, I sold the top 30 accounts directly and reached the others through a few distributors. This was a radical idea at the time and our company was still pretty small.

In the mid-'80s there was a loose group of independent label owners in New York, including Cory Robbins from Profile, Fred Munao from Select, Eddie O’Loughlin from Next Plateau, and Will Sokolof from Sleeping Bag. We used to get together to compare notes about distribution and promotion and eventually created a group called ACT -- Artists Against Counterfeit Tapes -- because piracy was even a problem back then.

It was really helpful to have our little support group as we were growing our labels. Later I created the Independent Label Coalition to invite more labels to join with the idea of sharing a knowledge base in a very opaque industry and maybe achieving some benefits of scale.

Shortly after the formation of the ILC, I was approached by Bruce Iglauer to join NAIRD. NAIRD began back in 1972 as the first independent label and distributors group. There were over 50 regional distributors back then and no national distributors except the majors. NAIRD served as a forum for independent labels and their distributors to get together once a year and give each other awards. I thought it could do more than that. Bruce maneuvered me onto the board by sacrificing his board seat for me against the wishes of many of the distributor board members. I merged ILC into NAIRD and remained on the board for a decade.

NAIRD grew and changed its name to AFIM. We achieved some benefits for our members and helped expand the association and the convention. As a member of the NARM manufacturers advisory board, I helped form a coalition of independent labels to create an Independent product presentation at the NARM convention. Previously the presentations were limited to the six majors.

For those of you who don’t remember a time when there were six, they were: RCA, CBS, MCA, Polygram, WEA, and EMI. Each major got to present its coming releases to the retailers, but the indies were left out. It was at these NARM presentations where we began to see the real benefits of a coalition and began to build independent solidarity.

From left: Tommy Boy Records' Tommy Silverman, Warner Music Group's Seymour Stein, and Martin Mills of Beggars Group mingle at the Libera Music Awards at the Highline Ballroom (Kyle Reinford)

Around 15 years ago, Martin Mills met with me and we discussed some sort of independent group that could consolidate scale and achieve better pricing and market access. His idea was to form a cooperative, like True Value Hardware, that consolidates distribution, operations, and promotion costs in one organization. The idea was to achieve scale advantages with the collective but maintain our individuality and remain independent companies. In 1999, Martin and some UK Indies launched AIM in the UK with Alison Wenham. It was in the later days of AFIM that Alison Wenham came to a NARM conference to meet with the board to see about starting something more like AIM in the US. 

She concluded that AFIM would not be the right vehicle for launching this, and I began working with Alison and Martin on building something like AIM in the US. We got buy-in from some of the most important independents at the time and, 8 years ago on Independence Day, the American Association of Independent Music was formed.

Independent labels have been fighting for a level playing field since the beginning. It was our dream back then and it is now becoming a reality. It is time to go beyond the level playing field. Independents' biggest problem is that we suffer from the same self-worth problems as individuals do. We believe we are not good enough and majors are better.  Independents are not inferior to majors, and we have acted that way for too long.  Today I would like to announce that independent labels are equal to majors and on the way to being better.

Independents have the advantage in so many areas. We have more job security.  Independent label owners do not get fired every three or four years like the major label execs. Major label heads have to react to board pressure for profits and are slaves to quarterly results. This makes it impossible for them to take a long view of the music business and forces them to sacrifice long-term sustainability and growth for short-term cash. These major label handicaps have nearly bankrupted the music business by selling out the long-term benefits of diversity at radio, retail and even A&R for the short-term cash benefits of consolidation.

Independent labels represent diversity. Right here in this room there are labels that stand for blues, hard rock, alternative, hip hop, R&B, country, dance music, singer songwriter, EDM, jazz, children’s music, classical, audiophile, Latin, Christian, Americana and I am sure I have forgotten at least 10 other genres represented here today. We define diversity, and diversity defines a strong, resilient, sustainable music ecosystem.

Independents stand for something. Independent labels are brands. Major labels are not. The major’s mission is to maximize revenues and market share. The independent’s mission is to expose and monetize music they love, nurture artists, and build artist brands.

Independents nurture music in their country. Majors sign artists for the world and only work them in the signing territory, giving those artists no chance of breaking anywhere else unless they first break in their home territory.

Majors are home run hitters. Home run hitters strike out the most. Indies play to get on base and score runs and win games. We bunt, walk, and steal to win. We play money ball.

Majors now want to be indies. Warner is now run by New West Records founder Cameron Strang, Elektra by Dangerbird founder Jeff Castelaz and Atlantic by Big Beat founder Craig Kallman. Interscope has just been taken over by Fueled By Ramen founder John Janick, and Universal East Coast is headed by Barry Weiss, Old Town Records’ Hy Weiss’s son who launched Jive’s US independent label back in 1982.

Meanwhile, some of the most successful major label heads are jealous of the independents. If they could get a serious investor, they would leave to start their own independent label in two seconds.

What’s left to for indies to achieve?

Scale advantages, many of which Merlin has addressed and some others that Martin’s original plan could address.

Access to radio in the US. Ten years will level that playing field as people move to digital radio, [which is] already 20% of listening. A cooperative independent radio promotion team for the exclusive use of A2IM labels could increase our access until terrestrial radio loses its power.

Access to capital. Non-major label investment capital at attractive rates, and non-major label equity investment, will need to be established to help independents achieve parity.

But the important point is [that], in the digital age, smaller, creative vision-lead music companies are more competitive, vibrant and exciting than bulky bureaucratic majors. Indies will get more synch, more digital radio spins, more subscription listens and collectively more video views and ad revenue share.

Not only do we own 32.8% market share of the U.S. music business, we engage a disproportionate share of music’s early adopters, who are also technology’s early adopters. Our 32.8% of overall music sales is probably over 50% of early adopter share.

New business models entering the music space must understand that not launching with the independent community is a crucial and strategic error. The small amount they try to save by screwing the independents always costs them vital image and momentum in a new product launch. The world network of independent label organizations will insure that startups that shun the independents will do so at their own peril and pay the price.

Independents are the most important part of the music ecosystem. Because of groups like A2IM, AIM and Merlin, we have turned the corner. We must lead the charge for a better music business future instead of drafting behind the majors. It is time to take responsibility for the health of the music business and stop blaming others. 

The next ten years will be the best most exciting in music business history. We will work with the majors and the new music technologies as equals to build the $100 billion music business that music creators deserve.

Thank you all for this honor. It is the greatest one I could receive.

We are the independents. We are proud. We are strong. We are the best.