Record Labels

How the Plight of Beleaguered Label Tiny Engines Could Bring New Solutions to Indie Rock

Tiny Engines
Courtesy Photo

                

Could innovations in financial transparency rejuvenate cash-strapped indies?

On Nov. 9, Adult Mom bandleader Stevie Knipe took to Twitter to accuse their indie record label, Tiny Engines, of breach of contract, alleging delayed payment and accounting on some $8,000 in royalties dating back to 2015.

“It took them until December of 2018 to pay out that royalty statement," Knipe wrote, adding that the band was pushing to get their masters back from the label. “I am certain and it has been confirmed that there are at LEAST 10 other bands on this label that have experienced this or something similar. It is an abuse of power. It is an epidemic. It is a diseased label. These artists deserve so much more respect.”

Following Knipe’s tweets, other artists, such as Mannequin Pussy, Thelma and The Hotelier’s Christian Holden, among others, also tweeted alleging similar circumstances or alluding to other nonpayment issues they’ve had with Tiny Engines.

Ultimately, Knipe tweeted that Tiny Engines agreed to return the masters to the two studio albums the band released on the label. (Adult Mom did not respond to multiple interview requests for this story.) And in an interview with Billboard, Chuck Daley, co-founder of the Carolina-based company, admits to years of delayed payments and accounting statements. "This stuff about accounting and statements -- I definitely can't deny it," he says.

Now, with no future releases on its schedule and an unstable roster, the once-esteemed record label's challenges go beyond reclaiming goodwill in the punk and DIY community. "The plan is to move forward as a label and repair any relationships with bands that may have felt slighted," Daley says.

Daley founded Tiny Engines in 2008 alongside Will Miller, who remains its only other full-time employee. Through its first half-decade, Daley describes Tiny Engines as a "DIY hobby label," working off "handshakes, punk rock-types of deals.” By the mid-2010s, successful releases like Adult Mom’s 2015 debut, Momentary Lapse of Happily, and the Hotelier's Home, Like Noplace Is There (2014) and Goodness (2016) raised the label's profile, and revenue, significantly. Around 2014, Tiny Engines became the full-time job and main source of income for Daley and Miller.

"All of a sudden we had this thing that looked like a business, but we realized we weren't accountants," Daley says. And around 2015, late statements and delayed payments like those in Adult Mom's situation started to become common. Disorganized and understaffed, the label began paying artists in piecemeal installments. Yet Tiny Engines continued to take on new acts, putting out more releases in 2016 than in any previous year. “[We were] always shifting things around to make things work,” Daley explains. “Sometimes you’ve got to wait for the next distro check.”

Still, the label maintained a steady façade, earning acclaim for standout releases like Wild Pink’s Yolk in the Fur and Illuminati HottiesKiss Yr Frenemies in 2018. Meanwhile, Daley and Miller went on a signing spree, snapping up artists like Summer Cannibals, Museum Mouth and Truth Club in 2019. By the middle of the year, Tiny Engines’ roster had ballooned to 32 artists.

Daley admits that his own lateness in providing accounting statements was to blame for the delay in payments to Adult Mom. However, Knipe's statement went further, alleging deeper issues: "The business model of Tiny Engines appears to be this: Use the money that the more successful bands make on funding small releases and signings. Never pay the successful band for as long as humanly possible."

Daley declined to speak on most of the specifics of Knipe’s account, though he promised the following: "Adult Mom has been paid in full on the last accounting statement [covering the first half of 2019]. The new statement is due March 31, at which point we'll reevaluate and hopefully come up with something amicable that works for everyone."

Daley describes the business model differently. According to him, ownership of masters helped offset the financial risk of signing relatively unknown artists. For a typical pressing of 1,000 CDs, 500 LPs and 300 cassettes for one release, he estimates a cost between $7,000 and $9,000, a figure which also would cover the recording budget, mastering, plating, physical manufacturing, bios, artwork, design and layout. Tiny Engines typically handles PR in-house and covers additional marketing expenses such as digital advertising.

Tiny Engines’ reliance on physical sales was often costly. While much of the record industry gained a larger share of its profits through streaming as the 2010s progressed, Tiny Engines still relied on physical for approximately half its business in 2017 and 2018 and remained largely dependent on vinyl sales. Daley says touring bands would often be given merch to sell on the road without requiring up-front payment. If money was recouped, he says subsequent profits were split 50/50, though the aftermath of a project’s release often put a strain on finances. "In many cases we’re in debt over $10,000 months before a record is released and we don’t actually get any distribution income until months after the release," he says.

Pendant, the Oakland-based shoegaze outfit led by Christopher Adams, released its debut album, Through A Coil, on Nov. 8 through Tiny Engines, the day before Knipe’s comments on Twitter. "I felt like I had been left to carry this record into the world on my own, when I was hoping for help from this formidable indie label," Adams tells Billboard. Through A Coil still received positive press from outlets like Stereogum and since the fledgling band had never achieved much financial success, Adams admits it's difficult to tell how much the label's exile hurt his album's profits. "Pendant will be like any other upcoming release, where we'll continue to promote these bands," maintains Daley.

When Adams signed a two-album deal with Tiny Engines in 2019, the label initially requested ownership of Pendant's masters; Adams balked and negotiated a deal in which he retained his masters and instead licensed them to Tiny Engines for five years and forfeited a $1,000 cash bonus.

Knipe, on the other hand, ceded Adult Mom's masters to Tiny Engines prior to releasing Momentary Lapse of Happily. "I was deeply self-conscious and depressed about the security of my records," Knipe tweeted. "The contract I signed detailed that Tiny Engines owned my masters for the rest of my life. Clearly, my work was not in safe or responsible hands."

Adams expressed support for Adult Mom's cause and believes Knipe's testimony helped his fortunes and those of his Tiny Engines peers. He says Daley gave him the option to break Pendant’s contract as he decides what role music will play in his life while he returns to school. "Because we decided not to make tapes and I didn't take any cash in my deal, there was almost no overheard to recover," Adams says. However, he says not everyone has been so fortunate. “I know some of the bigger Tiny Engines bands are having trouble getting out of their contracts.”

Now, the beginning of a potential exodus from the label has begun. On Jan. 28, two of Tiny Engines’ most recognizable bands, the Hotelier and Emperor X, launched a new artist-managed cooperative record label called Dreams of Field Recordings, effectively ending their relationship with Tiny Engines. The new imprint promises to reinvest 100% of profits into artists and their releases with financial statements made public on its website. Major decisions, such as new artist signings, will be made via consensus of the existing roster. The Hotelier maintained ownership of its masters throughout its relationship with Tiny Engines and has made its catalog available for purchase via Bandcamp on the new Dreams of Field website. Emperor X’s discography has also been made available, though its 2017 LP Oversleepers International remains part of the Tiny Engines catalog.

The same day, indie rock band Long Neck announced it had negotiated its release from Tiny Engines, which issued its debut album Will This Do? in 2018 and, prior to the Adult Mom incident, planned to release its follow-up, World’s Strongest Dog, this spring. The new agreement called for the New Jersey group to repay Tiny Engines approximately $3,800 for 500 vinyl copies of World’s Strongest Dog that had already been pressed. Long Neck set up an Indiegogo campaign to cover costs of self-releasing the album, set for April 10.

Tiny Engines isn't shuttering, though its future is murky. Redeye will remain the label's distributor, but other artists with releases scheduled for 2020 are being allowed to seek alternate labels. Asked if he currently has any forthcoming releases planned, Daley says, "It feels like a good time to review Tiny Engines in a different light and figure out what the future might look like for the label.... Everything we do is a relatively big risk; that’s just the nature of indie rock and working with bands that aren’t necessarily mass-appealing. What it boils down to is the fact that I’m not ready to take any risks right now. I don’t know when that will change, but the next time Tiny Engines releases a new record, it will be because we are in a good place, both personally and as a business."

For now, Daley says he is focused on ensuring all Tiny Engines artists are issued payment statements on time, working with the royalty consultant firm Infinite Aggregate. In recent years, the New York-based company has carved out a niche in processing sprawling expense data for often-overwhelmed clients, primarily small- and mid-sized indie labels like Father/Daughter and Don Giovanni. "Tiny Engines came to us [in 2017] and said please help us pay our bands accurately and in a timely manner and here’s money out of our pockets to do that," says co-owner/operator Hunter Giles, who has been deciphering royalties for indie bands since 2008, when he was employed by the Brooklyn imprint Ba Da Bing! Infinite Aggregate's fees are non-recoupable against artists or releases, meaning labels paying for its services have little incentive besides wanting to pay artists fairly. “The criticisms [from Adult Mom and others] are valid,” Giles says. “From our perspective, it really seems like a communication issue.”

Since 2019, Infinite Aggregate has been building software with the goal of creating a database -- dubbed Infinite Catalog -- which will process royalties much more efficiently than its current spreadsheet model. Giles says he is still in the process of moving Tiny Engines -- along with many of his other 30 or so existing clients -- to Infinite Catalog, but once a label is added, musicians will have transparent access to data which previously was often mishandled. "Artists get a login and can see their statements whenever they want, slice and dice the data, and see the raw data we're using," he says. Giles plans to have all current clients transferred by the start of the second quarter 2020 and will then begin to take on new catalogs.

The oversights that overwhelmed Daley and Miller and shortchanged artists like Adult Mom are by no means unique, with artists often bearing the greatest burden. In 2016, K Records -- the legendary Olympia, Washington, label that had helped launch artists like Beck and Modest Mouse along with much of indie rock culture itself since 1982 -- was accused by the Moldy PeachesKimya Dawson and numerous other artists of negligent royalty accounting totaling well over $100,000. Label owner Calvin Johnson, himself a veteran of several seminal indie bands, confessed he did not have the money to repay his artists and proceeded to sell off assets, including the label headquarters, in an effort to make ends meet.

Whether Tiny Engines can reverse course remains to be seen, though it has a long road ahead in mending its reputation. "It's about having a much more transparent, forthcoming conversation with bands about what to expect on a logistical level,” Adams says. “There's no two ways about it: They have to put in the work."

Giles knows all too well where the bulk of that work lies. "When most people start a record label, they don't realize that they're starting a marketing and accounting firm that specializes in music,” he says. “But that’s what a record label is.”