Few would disagree that a thriving independent scene is essential to the health of the music industry. Buoyed up with enthusiasm, belief and commitment, and unencumbered by the bureaucracy of the majors, independent record companies are a fertile breeding ground for new talent in its many and varied forms - from house to hip hop, grunge to garage, acid to ambient. Launching a new series in celebration of the independent record label, MT takes a look at young hopefuls Riff Raff Records and traces the downfall of pioneering independent dance label FON Records.

In At The Beginning

As they prepare to release their first single, new label Riff Raff Records explain their gameplan to Simon Trask.

When Steve Smith was made redundant after six years working for British Aerospace, he decided it was time to realise his dream of running his own record label. Steve is no stranger to the machinations of the music business, having had a charting single on Living Beat Records and a couple of tracks included on a dance compilation album, Freedom To Party II - Ultimate Rave, which sold in excess of 80,000 copies in the UK. He also had a thousand 12" white labels pressed up a couple of years ago, and then trekked round the specialist dance shops "to find out what it was like trying to sell a thousand records". In the event he sold around 600 over the counter, and subsequently another 200 through a distributor.

"We just went into record stores saying 'Do you want to buy this record?'," he recalls. "They'd put it on, listen to it and say 'Yeah, we'll have 10, 20 of those.' They paid upfront, cash over the counter, as well. I think the most we sold in one go was 25. We were getting about £2.30 for each single, whereas going through a distributor it was about £1.75. You're not going to make masses of money on a thousand singles, but if you can buy a bit of gear for your studio it's worth it."

Today, Steve looks back on his early encounters with the music biz as a valuable learning experience.

"I think you have to go through an apprenticeship, really," he says. "See how it all works, and then either knock it on the head because you don't like how it works or pursue it further."

Having chosen the latter route, Steve has spent the past six months doing all the groundwork of establishing his own record label, Riff Raff Records, with girlfriend and business partner Helen Maher - setting up a promotions mailing list, advertising for demo tapes to be submitted, getting the record company logo designed, registering the publishing company, sorting out a solicitor and an accountant, putting together a business plan and, of course, paying the bank a visit. Steve also attended some government-funded business courses to learn the basics of running a company.

"They're open to anyone," he says. "You just find your nearest office, phone them up and go along. I think a lot of people don't realise these courses are available. You learn about book-keeping, business management, invoicing, notifying the income tax people, registering for VAT, marketing... everything you need to know to set yourself up in business. If you're going to run a label you have to have the business side sorted out, otherwise it's not going to work. People think 'We'll just press up these records and we'll sell 'em and make loads of money.', but it's not like that. You have to sort out a business plan.

"Our plan got a good reaction, the banks were really into it, so we had no problems getting money from them. But there was lot of work involved to get that. Especially with a record company, it took a lot of explaining - it's not like you're setting up a plumbing service! You do your cashflow, and how many sales are you going to base it on? We based on a minimum of 3,800 record sales; obviously we'd like to sell 80,000, but you've got to start from a realistic figure."

Tho single which Steve and Helen hope will get Riff Raff off to a flying start is a pop dance cover of the Steve Miller track 'Abracadabra', featuring veteran session singer Angie Giles on vocals. A track with strong crossover potential, it was recorded and produced by Steve and session player/programmer Martin Lister under the name Dreams 2 Reality.

With the exception of the vocals, which were laid down at Westar Studios in Southall, 'Abracadabra' was recorded and mixed entirely in Martin's home studio, allowing the recording costs to be kept to a minimum. The pair have completed several mixes of the track, all of which are set to appear on the single along with with another, self-penned, track, 'Let's Do It'.

With the recordings in the can, Steve was preparing to do the rounds of the distributors when MT spoke to him.

"I'll be going to five or six, the major ones," he says. "I've spoken before to Pinnacle, Revolver, APT, Sony... Sony are actually distributing a lot of independent dance stuff, now. We want to get our records into the main chain stores as well as the specialist dance stores, so we want to use one of the major independent distributors."

Tho plan in the first instance is to press up a thousand copies of the single.

"It'll go out on promotion for two-to-three weeks before the full release date," Steve explains. "We're looking to get it into the pre-release charts in Record Mirror, DJ and Mixmag and get a bit of a buzz on it. We'll set aside 200, 250 of the initial pressing to mail out to press, TV, and club DJs. Then from the reaction to it we'll judge how many further copies to press up."

But what if the single takes off? There's obviously a limit to how many copies a small label just starting out can afford to get pressed up (Steve reckons they can go up to five or six thousand initially). One option is to go for a manufacturing and distribution deal with the distributor, which means that the distributor takes on all the manufacturing costs upfront — but the label sees less return on sales further down the line.

Another practical issue which Steve and Helen are aware of from previous experience is the amount of time it can take to get paid. "Some of the distributors, although they say they'll pay you after 30 days, sometimes you're actually waiting quite a long time," Steve observes. "If you're starting a a label and you're having to wait for your money, it can be a major cashflow problem. That's something we've got to watch out for. Obviously there's a risk involved in all this, but then if there wasn't any risk we'd all be millionaires!"

With millionaire status still some way off, Steve and Helen have their sights set modestly but, perhaps, realistically.

"In the first year the aim is for Helen to come on board and work full-time for the company, and for us to get a little rented office space instead of working from home," says Steve. "Then for the future, maybe in the next three years, the plan is to build a studio and get Martin more closely involved."

In these economically challenged times, starting up a record label might not seem like the wisest of moves. For Steve, however, the time feels right.

"This just feels like the natural thing to do," he says. "I don't want to work for anyone else again, I just want to do my own thing. We aren't under any illusions that this is going to be a get-rich-quick scheme, 'cos it ain't, but we're going to be doing something that we enjoy."

"'Abracadabra' by Dreams 2 Reality is set far release in mid. October"

FON's Fallout

Sheffield independent FON Records played a key role in propelling UK dance music into the charts during the late '80s with Krush and Funky Worm and then self-destructed. Former FON partner Dave Taylor tells Simon Trask where they went wrong.

No record label sets out to fail. Like many others before and after it, the label which Dave Taylor refers to as "this little half-baked amateur-hour operation in Sheffield" formed out of a desire to release records by unsigned bands who they felt deserved the exposure.

"It was all on the basis of 'Great track, let's put it out'," Dave recalls. "We had a facility to make records, we got a bit of a distribution deal together and off we went. Pure enthusiasm, stacks of naivety, and no real concept of what may or may not happen."

FON's early releases ranged from indie guitar to industrial funk to "Eastern ambient dancey" in style. "Probably a classic way not to start a label!" Dave laughs. "We didn't really have an identity at all, we were just doing what we wanted to do. It was all quite fun, and we decided it was worth carrying on with even though we realised 'Well, this isn't really making us any money, and it's probably actually losing a bit of money'."

But then, after about nine months they had their first taste of success with Age Of Chance, the group which pioneered the indie guitar/dance collision with their cover of the Prince song 'Kiss'.

"It was just one of those happy things," Dave recalls. "They had a good media-worthwhile idea and it worked. 'Kiss' was the biggest-selling indie single of '86 and '87, and you still hear it out in indie clubs. So that really brought attention to the label."

Unfortunately, it also showed them how bittersweet the taste of success can become, when a major came along and poached the band from them.

"We were in that classic situation of 'Well, look, they can offer us this, that and the other, what can you offer us?' We were defenceless. So they went, and that was a bit angst-ridden to say the least. Thankfully, not long after that these two guys from Nottingham walked in and gave me this tape."

The record which resulted from this encounter, Krush's 'House Arrest', took FON from indie chart success into the big league of the national charts almost overnight. 'House Arrest' came along in the wake of 'M/A/R/R/S' sample dance hit 'Pump up the Volume', and, all of a sudden, FON found themselves in the middle of a full-blown dance music invasion of the national charts. Recalls Dave:

"Literally within a month of 'House Arrest' going in the charts you saw Bomb The Bass, S'Express, Coldcut with 'Doctorin' The House' and what they did with Yazz, and all of a sudden it was 'Hey, what's going on here?!"'

Further Top 40 chart placings came FON's way with Funky Worm's 'Hustle (to the Music)'. However, along with with this newfound success came changes in attitudes and priorities.

"You start thinking about follow-ups and worrying about losing the momentum that you've created with the first track," Dave explains. "The band are thinking 'Oh my God, this one's got to sell as many copies as the last one or it's a failure', the producers are under pressure to make sure it's a bigger hit than the first one, the record label's starting to think 'Oh my God, we've got to make sure we don't miss out here'... The scale, the parameters you're aiming at, suddenly change. Whereas one minute you're happy with 3000 copies and getting into the dance charts, the next minute it's 'Well, we need pre-sales to get it into the Top 40 first week, that means we need radio play before, which means it needs to be serviced before, therefore we probably need to have the video made upfront so that maybe The Chart Show will show it.' So you end up getting caught into quite serious strategising and marketing campaigns that you probably didn't think one minute about before. And that's when you start spending money.

"On top of that, everyone starts accusing you of ripping them off, and all these new bands who'd been saying to us 'Look, we just want a chance to make a record' are going 'We want £25,000 before we do this, we want to see video commitment, we want to see tour support.' Everyone looks at you differently, and you have to react differently to how people are approaching you."

Of course, all this could be seen as the growing pains rather than the death pangs of a still young label. But there were other problems which combined to set the seal on FON's fate. For a start, there was Krush's failure to release a follow-up to 'House Arrest'.

"Krush were a classic case of huge potential that got imploded straight away with bickering, politics, money, change of attitudes," says Dave. "It didn't work as well as it should have. I think if they had got together some follow-ups they could have sold a fair number of albums, and they could have been the first British pop/dance act."

Yet not all the blame could be laid at Krush's door. FON had licensed 'House Arrest' to Phonogram as soon as its mainstream potential had become apparent, fearing that their own resources wouldn't be enough to see it into the national charts. Yet when it came to putting out a follow-up, Phonogram kept vetoing the tracks Krush gave them, and crucial time was lost.

"January, February of '88, Krush were riding the charts in Britain and all round Europe, and doing very well in the club charts in America," Dave recalls. "The next thing we knew it was May, June and we hadn't agreed on a follow-up, and in the meantime Yazz had appeared, Coldcut were having hits, S'Express, Bomb The Bass... and Krush were beginning to look like a one-hit wonder - which is exactly what they became."

Dave also identifies FON's inability to turn singles success into album success as a crucial failure.

"If we'd been able to do that then we could have survived," he maintains. "That is why I think labels like Mute, 4AD and Creation have been able to continue, because they've had at least one or two bands from very early on who've been selling albums, and they've had the sustained cashflow turnover of that to keep them going. We were dealing with situations where we had one great piece of music and people didn't think about follow-ups till we were already in the charts. There was no long-term strategy really worked out, which was a total mistake from our point of view."

Dave also feels that FON got "too caught up with the attitude 'We've got to have hit singles' and with trying to turn what was basically a studio project into an act", and as a result lost sight of the underground. While they were releasing the third Funky Worm single, 'You And Me', Warp Records were starting out with singles by The Forgemasters and Sweet Exorcist which epitomised the underground scene in Leeds and Sheffield at the time. For Dave, the contrast "about summed it up: we were out of sync."

'You Plus Me' got to number 41 in the national charts - which by this time made it a failure in the label's eyes. In fact, it turned out to be the last record they released.

"I think if that record had been a Top 40 hit FON might have carried on, but basically that was the nail in the coffin," Dave says. "By then there was just so much bad vibes going on. All the expectations and hopes were getting shattered." By this time the label were also losing money, which of course brought further pressures to bear. In the end, FON simply "imploded."

"There was a lot of stress," Dave recalls. "A lot of personal friendships suffered and broke down, and everybody just ended up thinking 'Oh my God, this is a nightmare, there's no fun in it any more.' Krush hadn't been able to release a follow-up, Funky Worm were falling to pieces, and FON was in major internal argument - all because there had been this mass of expectations, and supposedly massive amounts of money being generated. Most of the money we'd made ended up in the hands of lawyers. Watch out for lawyers. Well, watch out for yourselves first. Be really clear about what you're trying to do."

So, knowing what he knows now, would Dave want to get involved in a record label again?

"I think if I was five, ten years younger then definitely," he replies. "But it does take a hell of a lot of time and effort, it's not a 9 to 5 job. If you think it's going to work like that then you're in for a nasty surprise."