The second time lightning struck for Hanni El Khatib there were 108.4 million eyewitnesses. The garage rock singer and guitarist had just wrapped recording his sophomore album, Head in the Dirt, when Nate Nelson and Jamie Strong, with whom he runs the L.A.-based record label Innovative Leisure, received a call in January from Dawn Madell at Agoraphone music supervision in New York. Two years prior, El Khatib’s first album, Will the Guns Come Out, had received a major boost from a synch placement in a Nike “Just Do It” commercial, a stroke of good fortune that had helped make the album profitable even before it was released. Nelson and Strong took Madell’s call.
“We were working on the second record, which had just gotten mastered, and she called and said ‘Please, please, please send it to me,’” Nelson recalls. “I said, ‘Well, you’re the first person that’s heard this album outside of me and Jamie, so please don’t go very far with it.’”
Madell agreed and only played the music for one client. Audi, the German car maker, was looking for a song to play in its $4 million Super Bowl commercial, the theme of which was “Bravery.” The company fell in love with a then-unheard El Khatib song titled “Can’t Win ‘Em All,” and the track wound up soundtracking all but the entirety of Audi's one-minute ad, in which a dateless high school student steals a kiss from the prom queen. In addition to instant exposure in front of the third largest audience in television history, Nelson says the synch paid “in the high five figures,” a sum that, if not enough to completely pay for the El Khatib album, placed it in a healthy position ahead of its arrival last April.
“It’s always great when a record starts out in the black before it releases,” Nelson says with a hearty laugh. “That’s the model we’re trying now at Innovative Leisure.”
Skipping Stones Throw
At barely three years old, Innovative Leisure is a prodigy among young record labels, with a roster of about a dozen artists, healthy profit margins and relationships with major brands like Urban Outfitters and American Eagle. In 2013, the label will release seven full-length albums -- up from just three last year -- including the ghostly beat music of Nosaj Thing, the frayed garage rock of Bass Drum of Death and the stylish dance pop of Classixx.
Nelson and Strong met in 2006 while working at storied L.A. independent hip-hop label Stones Throw Records in licensing and marketing, respectively. Nelson was a Colorado transplant with a background in music supervision, while Strong hailed from Wisconsin and got his start working at Ubiquity Records fresh out of college. At Stones Throw, the two bonded over shared taste in music and a passion for genres outside of the strict boundaries in which they were allowed to operate at work.
“There wasn’t really a creative outlet at Stones Throw because Stones Throw was its own unique brand with its own direction,” Nelson says.
Scratching an itch to put out records that dovetailed more closely with his own tastes, Nelson started Innovative Leisure as a singles label and “an art project” in 2010. Using credit cards and his own savings, he spent between $7,000 and $10,000 on each of a series of 12-inches from electronic artists like Nguzunguzu and Machine Drum, as well as one full-length from the production duo Lazer Sword. One day Strong passed him the debut album from El Khatib, a friend who at the time was best known as the creative director for the San Francisco-based streetwear brand HUF, to see if it would pique his interest. Like Strong, Nelson was enraptured by the album, and the two decided to join forces to release it.
After the success of Will the Guns Come Out in 2011, which received kudos from critics and netted synchs with Nissan and other brands in addition to Nike, all three men decided to quit their day jobs and focus on Innovative Leisure full-time. Nelson and Strong run day-to-day operations at the label, while El Khatib serves as art director in addition to being a full-time artist.
“Things were really starting to build and if we wanted to take it to the next level we were going to have to dedicate ourselves full-time to it,” Strong says of leaving Stones Throw. “So, we all decided to do that.”
Innovative Leisure had what would become its biggest breakthrough later in 2011 when it played an integral role in the creation of the mysterious, contemporary soul duo Rhye. Nelson and Strong were having lunch in L.A. with the Danish producer Robin Hannibal, of then little-known groups Quadron and Owusu & Hannibal, whom they both knew from work in previous positions. Hannibal mentioned that he’d recorded two songs with Mike Milosh, the Canadian singer and multi-instrumentalist, whose solo work the newly minted label owners felt had gone underappreciated.
At their behest, Hannibal agreed to preview the music for the men at his recording studio the same day. He played what would become the songs “Major Minor Love” and “The Fall,” and Nelson and Strong were instantly enthralled. They started correspondence with Hannibal and Milosh about recording more songs together.
Innovative Leisure signed the artists, then without a name, to a recording agreement and flew Milosh from his home in Berlin to L.A. to start work on an album. Though both Hannibal and Milosh had prodigious solo careers, they agreed to keep their involvement in the new project a secret, giving the group a chance to start with a clean slate.
“There’s a stigma I think people have when an artist has released a number of records in the past and their awareness is still on a low level,” Strong says. “So one thing we all kind of talked about was the idea to create a bit of mystery behind the project.”
El Khatib directed artwork for the band featuring close-ups of a woman’s body, playing off the feminine quality in Milosh’s voice. In February of 2012, Innovative Leisure released lead single “Open” on vinyl and digitally and premiered a steamy, NSFW music video, in which neither band member appeared, on The Fader.
“That week we were just flooded with emails from so many people,” Nelson recalls. “A lot of people from the major label system were like ‘Who is this? Who’s behind it? Why is it going viral?’”
After receiving persistent offers from multiple major labels based on the strength of “Open,” Innovative Leisure and the band agreed to upstream the project to Polydor, with Universal Republic handling the release in the U.S. In return for walking away from its contract with Rhye, Innovative Leisure was paid a lump sum and guaranteed a royalty on the band’s current and future releases after they have recouped. They also retained the rights to keep Innovative Leisure branding on the packaging.
“It’s hard to part with your baby at times, because you do feel attached,” Strong says. “We put a lot of work into that project. But at the same time, when there are major label presidents and vice presidents and heads of A&R approaching us -- people who we look up to -- it shows that there’s something special in the project that could cross over to a greater level; and that greater level is kind of an unknown for us.”
The sale of Rhye in July of 2012 threw fuel on the fire of the burgeoning indie label. Nelson, Strong and El Khatib used the money to lease a new office in Glassell Park, Los Angeles, hire two full-time employees, and invest in a slate of new bands. As the label has grown, so have its ambitions. This month, Innovative Leisure switched from distribution via Redeye, which Nelson initially secured in part thanks to his Stones Throw email address, to the Warner-owned ADA, home to the large indies after which the label now models itself, including Domino, Sub Pop and Beggars Group. With ADA’s backing, the next time one of the label’s bands crosses over, it may well keep it in house.
Innovative Leisure continues to reap the benefits of close relationships with brands, as well, with fully 50 percent of its revenue now coming from synch. El Khatib, the label’s biggest synching artist, has received between 30 and 40 placements in the past two years, according to Nelson. Additionally, the label has begun leveraging brand partnerships to serve more traditional promotional functions. In exchange for an original remix to go along with one of its campaigns, American Eagle financed an animated billboard in Times Square for Classixx, which was displayed for the four weeks leading up to the release date of the band’s new album Hanging Gardens. A video for Classixx’s latest single, “All You’re Waiting For,” was co-financed by Urban Outfitters and will premiere on the brand’s website this month.
“The brand element is an important one and its something we’ll continue to focus on,” says Nelson. “Both of us know a lot of music supervisors and executives at different companies, and I think creating awareness in that group and among tastemakers can be key to breaking an artist.”
In terms of physical sales, Innovative Leisure prints anywhere from 2,000-4,000 pieces of vinyl and 5,000-15,000 CDs on an initial run depending on the artist, adjusting the volume as needed depending on performance. The label aims to recoup on its albums within the first year, an aggressive timetable that Nelson and Strong say they’ve been able to meet more often than not.
In August, Innovative Leisure will release the debut full length from dream pop band Superhumanoids, with the latest from psych-rock outfit Crystal Antlers to follow. Both bands, like the vast majority of artists on the label, hail from Southern California. Nelson says the connection is neither coincidental, nor entirely deliberate.
“I think we see ourselves as an L.A. label but that’s not to say an artist has to be from L.A. to be on it,” he says. “A lot of our artists end up moving here from other places, which is nice for us because we get to grab a coffee or a beer with them instead of having to do everything over phone and email.”
Tyler Blake of Classixx agrees.
“It really feels like a family,” he says. “It’s cool to see that happening at a label and it’s a special feeling to be a part of it.”
Listen to a hand-selected mix care of Innovative Leisure below. Also, previously on Independent Study: Dead Oceans.