"There keeps being this question lately of, 'Do we need record labels?' I think people don't recognize what we do and the value of our work," says the Superchunk bassist.
"When we started, we had no expectations," says Laura Ballance, co-founder of the North Carolina-based independent record label Merge Records and bassist for the scrappy indie rock band Superchunk. "It was a punk rock hobby. We didn't think it was going to be a successful business."
Ballance, who grew up in Goldsboro, N.C. -- "a tiny little town with lots of tornadoes," she says -- started Merge with co-founder and Superchunk guitarist-vocalist Mac McCaughan in 1989, originally to release music from local bands whose life cycle would otherwise last a few DIY shows. Thirty years later, their "hobby" is an indie powerhouse that has released critically acclaimed albums from such acts as Arcade Fire, Neutral Milk Hotel, Spoon and She & Him.
Merge celebrates its success every five years with a multiday festival in Durham, N.C. This year's milestone observance, called MRG30, will take place July 24-27 and features headliners Fucked Up, Destroyer, Waxahatchee and more. Attendance is capped at 750 so that everyone can fit inside Cat's Cradle, the Carrboro, N.C. venue where most of the sets are located. (Some shows have taken place outdoors or, this year, at the 1,300-capacity Carolina Theater.) "It's kind of like going to summer camp for a week," says Ballance. "You see the same people over and over again, every day."
Ballance and McCaughan's business partnership is the "yin and yang" behind Merge, which they founded after meeting at a Durham pizza shop where they both worked in college. Later on, Ballance ran Merge out of her bedroom while McCaughan was at Columbia University. Their roles at the label have remained almost the same since its early days, which suits Ballance, 51, who stopped touring with Superchunk in 2013 due to a hearing condition. "I'm a nuts-and-bolts person, and he's an ideas person," she says. "I'm taking care of the details, and he's throwing out more stuff for everyone to get done."
Superchunk -- which generated enough earnings for McCaughan and Ballance to live on until around 2000 -- put out its first three albums on Matador Records, leaving once Merge had grown to the point where the band felt it could release its fourth LP, Foolish, on the label. "At first, Superchunk definitely took up a lot more time than Merge," says Ballance. "But in a lot of ways, the band helped to grow the label."
Billboard spoke with Ballance about the perils of launching and running an indie label today, navigating the transition from sales to streaming and how artist-friendly deals can backfire.
Knowing what you do now about running a label, would you give your younger self any advice?
We started the label at an ideal time. I don't think I would change anything, nor would I want to start a label now. The first few years, we would call Cargo [distribution] in Chicago, and they would order 50 7-inches. Then, in '92, Corey Rusk from Touch and Go Records called us, and Touch and Go was distributed by [Alternative Distribution Alliance]. Eventually we started doing [distribution] ourselves once we had more knowledge and the capital to do it, and in 2009, we decided to go direct with ADA.
Why wouldn't you start a label now?
When we started Merge, we thought it was a fun thing to do in order to help preserve and document what was going on in our local scene. Nowadays, when people start stuff like that, they think they're going to become millionaires or it's going to be a startup. There are these complicated emotions around record labels right now -- we're often made out to be the bad guys. There keeps being this question lately of, "Do we need record labels?" I think people don't recognize what we do and the value of our work, and how hard it is to do all the things it takes to curate, manufacture, distribute and promote records. It would be OK for someone to start a label now as long as they didn't have expectations that it was going to be their bread and butter.
When did you reach the point where you realized that it could be?
Mac and I mainly lived off Superchunk until 2000 and then started paying ourselves a salary. In the late '90s we put out 69 Love Songs, the Magnetic Fields box set, and that did much better than we had anticipated. Nixon, the Lambchop record, wasn't a runaway success but was one of the first records we put out that NPR started paying attention to. It felt like that was a real breakthrough to reach those people. That made me think about how people my age who have similar interests were moving into these positions in the media where they can go, "We ought to review this Lambchop record." That was an exciting time.
What has been the most challenging time for Merge?
Right now. We had the good fortune to start when you would still put out a record in three formats, and then we would just put out CDs and only do vinyl for bands that were bigger. CDs are relatively easy to manufacture. You can do it quickly and pretty cheap. Then Apple started selling downloads, and it was like free money. A lot of people were complaining about how there was piracy and people were stealing music, but it turned out that people would rather buy a download from a legitimate source, for the most part.
As we gradually move away from downloads and toward streaming, we are going back to the '80s in a lot of ways financially. A lot of us got really spoiled by how great and easy it was to make money. For a while there, artists were actually able to make a living after putting out a record, and that's much harder right now, but that expectation is still there that they should be able to. If bands feel like their income is compressing, they blame us.
You have picked up some acts, like Spoon and Torres, that other labels had dropped. What do you look for in signing bands?
We are always willing to invest and take time to develop an artist and support them, even if records don't do well right away. Something I'm struggling with recently is, we've always done these really artist-friendly deals -- with an expiration date -- and most other indie labels at this point are doing perpetuity deals. As an artist myself, I never felt like that was an ethical thing to do. But now, because of the nature of the business, there are all the opportunities for bands to get their stuff on [digital service providers] without a label. We're struggling with some of our artists taking their catalog away and going direct with the DSPs or through an aggregator of some kind. I think there's this desperation, like, "We have to take advantage of every dime we can get our hands on, even if it means damaging our relationship that we've cultivated over the last however many years." Money comes before relationships a lot of times in this business, unfortunately.
Have your recent signings been doing this?
It's more likely to be ones that we've been successful with, because those are the ones that are used to a certain level of income, and that compression is freaking them out. They're more likely to have managers because they're successful, and then they have this problem that they have someone taking 15% or 20% of their income, so they need even more money, so then the manager starts looking for ways for the band to have more income, and that is cutting out one more person.
North Carolina has been a battleground for issues of social and racial justice. How do you navigate that political climate?
Shortly after [President] Trump was elected, some people pulled down a Confederate statue outside the courthouse, and a few weeks later there was a rumor that white supremacist groups were going to demonstrate. People started massing downtown to counterprotest, and businesses and schools were shutting down because they were scared. Our office is in downtown Durham, and I did feel, "Maybe it's not safe for us to be down here." But Durham is pretty liberal, so it doesn't usually affect our day-to-day lives.