'Adapt or Die': Jade Tree's Darren Walters on Running a Major Indie for 15 Years

Courtesy of Darren Walters/Jade Tree

From left: label manager Mehron Moqtaderi, co-owner Tim Owen and Darren Walters

As a high schooler in the late '90s, the punk-aligned but never pigeonholed label Jade Tree loomed large in my world. So imagine my excitement last week when a report said the label had returned from a hiatus I wasn't aware of. After reaching out to the label's heads, however, I found out that that wasn't the case. At all. Here, Darren Walters explains how his artful label has weathered the beating that the new music industry paradigm gave his label.

The new millennium ushered in an era of music that changed the music economy in dramatic and exciting ways. It also issued a challenge to musicians and labels.

Adapt or die.

The emergence of digital music, with its accompanying players and rampant downloading, signaled a seismic shift in the industry that forever altered how music was consumed. It was the beginning of the end of the massive compact disc sales which had kept the music industry grossly prosperous for three decades.

My label, Jade Tree, has sold over a million copies of our records, all titles and formats combined, much of that prior to 2000. For a label the size of Jade Tree, CDs accounted for ninety-five percent of sales, and despite being lauded by fans and collectors, 12" and 7" records were outsold by compact discs on a consistent ratio of about 10 to two, depending on the artist. For example, at the time of its in release in 1998, Jets To Brazil's "Orange Rhyming Dictionary" (Jade Tree's largest release to date) had CD sales close to 100,000. LP sales were just over 4,000. As digital music became a larger priority to customers, CD sales dropped, market conditions changed, distributors and retail chains began going out of business, and an entire generation of consumers began to grow up within the digital age.

Operating in (a literal) alternative universe, Jade Tree was largely immune from many of the negative impacts from digital music's emergence... for a few years. However, as the decade progressed and iTunes and iPods became ubiquitous, it was quite clear that digital music was going to stay. By 2004, Jade Tree could feel the encroachment of downloads on our sales, in addition to a higher percentage of people hearing and sharing advances of future recordings. Overall sales were impacted and vinyl was at a near standstill for many artists. The decline in sales, albeit somewhat slower on the indie side, was a troublesome phenomenon. Labels like ours began to realize that digital music had legs. Many labels partnered with burgeoning players such as eMusic, while others, like Jade Tree, held on to our catalog despite a hefty advance offer from an emerging digital company that hovered in the six figure range. I felt that the market was in its early days and that there was no telling where this could go. My gut told me that a sizable offer, on unproven sales, meant that the label would be wise to hold on to the catalog and see what the future could offer.

Around this same time, the industry at large was feeling the effects. Large music retailers were drowning -- HMV shuttered in 2004, followed by Tower Records in 2006 -- all while iTunes sold its billionth song (in 2006). It was inevitable that Jade Tree would feel the reverberations. And so, in 2005, Jade Tree's distributor, Mordam, who the label had been with since 1992, was sold to Lumberjack Distribution, becoming Lumberjack/Mordam. Mordam had found that the advancing digital world, combined with continued loss of the physical platform, was too much to bear. During all of this I lost my mentor, Ruth Schwartz, and a staff of lovely individuals, who moved on to other prospects. Jade Tree attempted to weather the transition, but found that the new distribution group did not provide the needed assets that the label required. A decision to depart the group was made later that same year.

Changes in distribution, location, and format of sales created a new set of stubborn issues for the label. The rise in blog culture and social media meant that an artist could play a show and instantly become a buzz band. I was aghast. I relished watching an artist grow and rightfully gain an audience. This increased our internal discussion as to who could be Jade Tree artists, and when the timing was right for the label to become involved. What was once a no-brainer approach to working with artists became more premeditated as sales declined and the rise in digital economy and increased competition became more and more persistent. Thus began a cycle of releases that were essentially demos, as the label's output of EPs rose dramatically. The reasoning was twofold: one, to immediately sign an artist, and two, to keep our release schedule full. However, most of theses releases simply clogged an already bloated system of physical releases in the 2000s, adding to the growing phenomenon of too many bands, not enough fans.

Some people thought Jade Tree stopped releasing records. Some think Jade Tree is making a comeback. Neither is true.

The artists themselves were also growing noticeably different. Generally speaking, there were artists who were savvy to the web and its emerging offerings, and those who resolutely chose to stay old school. Artists slow to understand, recognize, or come to terms with the evolving industry began to be left behind. As a label, it was a difficult transition time. There was an artist, three albums in, struggling to find an audience for their record as attendance at shows remained level, gas prices rose and guarantees remained the same. On the other hand, our discussions with newer artists were markedly different from roster artists due to diverging expectations. Developing artists utilized the web and took advantage of tools such as home recording.

It was never the same with any artist ever again.
Jade Tree has always been run as a family business. Every artist that joins the label is entering a partnership that is a 50/50 net profit-split relationship. This requires an understanding that teamwork is involved and that a long-term approach is a foundation of our work. Mutual respect, friendship, and a working business relationship are key for success. Crucial to this was Jade Tree's typical artist deal, for three records. This was viewed as reasonable, due to the time and money involved in helping to build an artist's career. The initial record was utilized to help establish an artist, the second to break them and the third to reap the rewards. Recording budgets were typically higher with each record, as were the commitments to publicity, advertising, radio, video and so forth. It was fairly formulaic, but far from standard and always open for discussion.

As a whole, the label transitioned from half- and full-page print ads to digital advertising, diminished our focus on radio, and focused more attention on publishing for revenue. For artists who made their living off merch sales and the splash of ads in every magazine, this was a shortfall from the label side. For new artists, they understood and even capitalized on making their presence available. The tide was turning.

With the industry fully in flux, offers came in from physical and digital distributors of all sorts. Jade Tree was in a position in which it had never been, with promises of large advances and increased sales filling our heads. Finally, a small footnote in a conversation turned into what would be the solution to a thorn in our side. After months of meetings, Jade Tree had finally settled on the distributor ADA. Shortly after, my business partner Tim and I were informed that, due to Warner's interest in Doghouse (Lumberjack/Mordam's parent company), the label could not do a direct deal with ADA. Along the way someone asked if Jade Tree had ever considered Touch & Go. A quick call to Corey Rusk settled it: Jade Tree would switch to Touch & Go, utilizing them to go through ADA, with direct to retail accounts handled by Touch & Go. It was a perfect match that had almost been missed. Jade Tree had always maintained that Touch & Go was a touchstone for Jade Tree. Working with them would be ideal.

The reality was rather simple: the public wasn't purchasing records like they used to.

Left in a financial lurch from the previous distribution deal, Touch & Go generously offered a $100,000 advance to Jade Tree to bridge the gap. Sadly, the advance barely covered operating expenses for a few months while allowing for releases to be manufactured. The cash coming in from past sales went towards royalties. The delicate balance of financial shuffling was exhausting, though this was a productive period for us and was one of Jade Tree's most successful periods, in terms of releases. Digital sales improved for the first time. It gave hope that the future was brightening. Sadly, Jade Tree was unaware that Touch & Go's distribution was taking a hit behind the scenes.

In 2009, just four years after the Mordam/Lumberjack debacle, slower sales in the industry would affect not just Touch & Go, but all of the labels under the Touch & Go umbrella. Corey decided to shutdown Touch & Go's distribution. With Touch & Go out of business, and left on our own again, Jade Tree went back to ADA for physical and digital distribution. Once again, but for different reasons, Jade Tree had to rely on an advance from its distributor. The Mordam/Lumberjack fiasco had crippled us, and while Touch & Go and a string of successes had helped the label regain ground, repaying debt was a part-time job. In order to maintain fiscal responsibility, Jade Tree needed additional funds, which came in the form of a $40,000 advance from ADA.

Fragmented more than ever, with physical sales and digital secured in the United States, yet scattered in a hodgepodge of territories outside of the U.S., Tim and I watched our mentors and touchstones fade. We took stock of the situation. How could we avoid a similar fate? What had these significant labels and distributors done that Jade Tree should avoid? The reality was rather simple: the public wasn't purchasing records like they used to. Artists and labels were still coming to terms with the myriad changes, as many continued in a bloated reality. Towards the summer of 2007, Tim and I made a conscious decision to let Jade Tree calm down. We wanted to maintain our roots and ensure that they were firmly planted, so that the label able could withstand any storm. It was decided that this meant letting every contract run out, working only on smaller projects, reconfiguring our contracts, and rethinking every aspect of the label, regardless of the time that passed. In essence, the label would return to where it began in 1990.

During the interceding years, between 2007 and 2014, both Tim and I got married. I had children. Our focus became family as the Jade Tree family splintered. We realized: no one else was taking care of us. As we built lives outside the walls of Jade Tree, we felt harsh realities bearing down on us and allowed ourselves the pursuit of other passions.

Eventually, Tim and I made a bold decision. We would stop drawing paychecks from the label. The rationale was that this would enable us to make decisions based on artist merit only. Not that we had ever abandoned this model, but it felt necessary to preserve the ideals on which Jade Tree was established. Giving up being sustained by the label would help us work entirely on passion projects and move at a pace that would help to regain control of the label Tim and I love.

What changed? Time elapsed. Some people thought Jade Tree stopped releasing records. Some think Jade Tree is making a comeback. Neither is true. The label was always here, operating, maintaining. So what is Jade Tree's next move?  The release schedule is ramping up and the next few months will see an increased output which will dwarf the last few years.

Why? Tim and I have found artists who we love and who fit in with both our vision and the reality of the new economy. Jade Tree has never worried about anything other than the fans and artists. The label is meant to be fun, first and foremost, not a chore. You cannot stay young'till you die if you are not having fun along the way. Do what you love and the rest is easy. Jade Tree is where Tim and I want it to be.

We are back in love.