Mar 292010
 

Billboard Magazine cover story on #HangoutFest Artist, treadmill dancers, massive mousetrap makers,  OK Go, their continued creative endeavors in videomaking, rise to viral video stars, break with EMI Records, licensing and sponsoring to make money, business of rock and roll.

The full article is copied below; a few ‘highlights‘ first.  Videos, pics etc at  Billboard’s site. Enjoy /Lee Ann

Ivy Leaguer Damian Kulash and Tom Nordwind, OK Go, talk to Billboard about their EMI jump, after almost a decade. Start their own company,  Paracadute Recordings. (In a dig at what the band considers a tailspinning record industry, “paracadute” is Italian for “parachute.”)

About 20 employees at OK Go/Paracadute umbrella, including the four band members, Kitman and his assistants, two Internet consultants, two booking agents, a radio-promotion rep, a lawyer and a publicist. (For the moment, at least, the band doesn’t plan to sign outside artists to Paracadute.)

“It’s hard to describe what it’s like to sit in your backyard hitting ‘Refresh’ over and over again, trying to see whether or not you’ve hit 7 million yet.” (infamous Rube Goldberg video hit 6 million views in 6 days)

“it takes a lot fewer records sold to pay for our small operation to survive than it does to support an international distribution company.” Damian Kulash

“Our admittedly naïve business plan has always been ‘Make good stuff happen and people will give a sh!!+.’ “  Damian Kulash, OK Go

(ed. note – Here’s an interesting ‘quote’ – former label head Andrew Slater) “The key to having success with an unconventional band like OK Go is knowing when that moment is,” Slater says. In his view, the time had arrived not long after the band performed its treadmill routine at the 2006 MTV Video Music Awards. “All of this stuff had started to bring OK Go to the forefront,” he says, “and that’s right when the label underwent a change in leadership.”

(ed note — ok, you wait til the video got so much attention they played on MTV awards? By that time the treadmill video was top of new music fans’ minds, who continued to spread the word. No wonder record companies are losing money)

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OK GO The Billboard Cover Story

A graduate of Brown University who spent his time in the Ivy League studying semiotics, Damian Kulash of OK Go is one of the more articulate shaggy-haired rock frontmen you’re likely to meet.

Yet over dinner recently at a Los Angeles restaurant, the singer is experiencing an uncharacteristic case of ineloquence. He and OK Go bassist Tim Nordwind are discussing the band’s announcement earlier this month that it’s leaving EMI, its label of nearly a decade, and starting up its own company, Paracadute Recordings. (In a dig at what the band considers a tailspinning record industry, “paracadute” is Italian for “parachute.”) And though he’s talked to a few media outlets about the decision in the past week, Kulash is having trouble explaining how precisely it is that OK Go-a band less famous for its albums than for its elaborately produced, free-to-stream YouTube clips-intends to fund its future adventures.

“We just sort of figure,” the 34-year-old singer/guitarist says with a “What, me worry?” shrug, “that if we put out a big ball of creative ideas, one of them’s going to spit back some money.”

In truth, Kulash is pretty clear-eyed on the subject of Paracadute-more on that later-but in a way his sudden verbal clumsiness reflects the excitement with which he and his bandmates are thinking about their new endeavor.

“What we’re doing may fall outside the bounds of what people traditionally want to call ‘rock’n’roll,’ ” Kulash says in reference to the band’s nonmusical pursuits, “but it’s working. We’re chasing our craziest ideas-that’s always been the source of the bond between me and Tim.” (OK Go also includes guitarist/keyboardist Andy Ross and drummer Dan Konopka.) “And it starts musically, but it goes in lots of other directions, and as the whole system changes, we’ve found all sorts of new ways to let that creativity out into the world.

“There’s nothing more exciting than doing things that are basically uncategorizable and then sharing them with people,” he continues. “It’s such a huge thrill to watch that explode across the world.” Kulash thinks for a second, presumably about the band’s Rube Goldberg-inspired video for its song “This Too Shall Pass,” which premiered on YouTube in early March and racked up more than 6 million views in its first six days online. “It’s hard to describe what it’s like to sit in your backyard hitting ‘Refresh’ over and over again, trying to see whether or not you’ve hit 7 million yet.”

IRRECONCILABLE DIFFERENCES

Given the public disagreements between the band and its label over the distribution of that video and others, the split between OK Go and EMI Music wasn’t entirely unexpected. Citing a nondisparagement clause in the deal that releases OK Go from EMI, both the band and the label declined to speak about the specific terms or circumstances of the group’s departure. Billboard has learned from sources familiar with the situation, however, that Paracadute will assume ownership of OK Go’s latest album, “Of the Blue Colour of the Sky” (originally released Jan. 12 on Capitol), while the band’s first two albums-2002′s “OK Go” and 2005′s “Oh No”-will remain EMI catalog items, as will the videos from those albums. The label will retain a stake in sales of “Blue Colour,” and the band will continue working with the company’s licensing department in a nonexclusive capacity. (OK Go also pursues synch opportunities through band manager Jamie Kitman’s Hornblow Group.)

In a prepared statement released by the band and the label, EMI said it had “really enjoyed our relationship with OK Go” and that both parties had decided “to part ways by mutual agreement.” Speaking in a video posted on the band’s Web site, Kulash said, “We’re leaving very amicably, and they’ve been very good to us.”

Yet sources paint a different picture of the partnership, one in which both parties felt somewhat aggrieved: The band complained of being underserved by EMI’s promotion and marketing efforts, while the label never could reap the sales rewards of OK Go’s viral-video success.

“It’s like you’ve got a guy throwing a 105 mph fastball,” one source close to the group says, referring to the tens of millions of YouTube views OK Go has earned with such videos as the Grammy Award-winning “Here It Goes Again,” in which the band performs an intricately choreographed dance routine while riding treadmills. “And this guy’s dominating the game, but you don’t have an infield to back him up. So how are you going to do anything?”

According to the source, EMI dedicated little energy or resources to working OK Go’s singles at radio and to stocking its albums in stores, continually insisting that the label “needed a story” for programmers despite the band’s growing online presence. “There was a real lack of investment in conventional marketing,” the source says, to match what the group was accomplishing in the new-media sphere.

One former EMI staffer says that the disregard wasn’t necessarily intentional. “People at the label always liked OK Go but were easily distracted by no-brainer hits like Coldplay and Corinne Bailey Rae-artistswho were already established or were more mainstream. Capitol never took full advantage of the opportunities.”

Former Capitol chief Andy Slater, who signed OK Go in his first deal at the label, insists that he wasn’t neglecting the group but was waiting for the right moment to take it to radio.

“The key to having success with an unconventional band like OK Go is knowing when that moment is,” Slater says. In his view, the time had arrived not long after the band performed its treadmill routine at the 2006 MTV Video Music Awards. “All of this stuff had started to bring OK Go to the forefront,” he says, “and that’s right when the label underwent a change in leadership.” (In 2007 EMI merged Capitol and Virgin, dismissing Slater and appointing Jason Flom as head of the newly formed Capitol Music Group.) “Up to that point, though, we were building a fairly aggressive radio campaign based on seven months of work.” Flom, now president of Lava/Universal, didn’t return a phone call seeking comment.

Former Capitol GM Mark DiDia seconds Slater’s point, calling OK Go “a full-on priority” for the label during his tenure there. “They were Andy’s first signing, and he wanted to prove them more than anybody,” DiDia says. “We spent over $5 million in marketing. I bet a lot of other bands would want that level of commitment.”

Sources close to EMI in more recent years, meanwhile, contend that the kind of investment the band was calling for “just didn’t make economic sense” given the group’s sales history and performance in callout research. Although OK Go “makes great videos,” one person familiar with the situation says, “they’ve never demonstrated that they sell albums. They’ve done OK with some tracks through the years, but with this album in particular, the sales really aren’t there.”

The new album has sold 27,000 copies, according to Nielsen SoundScan. “Oh No,” the band’s best-selling album, has moved 269,000, while “Here It Goes Again” has sold 821,000 singles. None of the band’s other singles has broken the 100,000 mark.

“If you took out the word ‘video’ and put in the word ‘single,’ and you took out ‘online’ and put in ‘radio,’ this wouldn’t be a story,” another source with ties to EMI says. “Put it another way: Imagine a label spends a lot of money to get a song to No. 1 on the modern rock chart, then it only sells 25,000 copies and the label decides not to move forward with the band. That’s not a story.”

One person familiar with the label’s thinking says the company took issue with Kulash’s claim in an interview with New York magazine that because of its current debt troubles EMI lacked the funds needed to support its bands. “It’s absolutely untrue to suggest that EMI didn’t have enough money to promote OK Go at radio,” the source says. “It was a choice.”
Further disagreement between band and label flared up earlier this year over EMI’s decision to restrict some OK Go videos from being embedded on unauthorized Web sites (in an effort to drive would-be viewers to YouTube, which pays record companies for each stream of their copyrighted material). Kulash aired his grievances in a widely publicized New York Times op-ed-his third for the paper on music-industry matters-that urged the label to “recognize the basic mechanics of the Internet” and allow OK Go to engage with its fans wherever the fans see fit.

“There are parts of the piece that I knew weren’t going to sit well with the label, but for the most part my intention was to write something that was even-handed about the situation,” Kulash says. “You see so much vitriolic anti-label stuff from our fans, or from everyone’s fans, and you see so much complaint from the music industry about the ground eroding from underneath them, that I wanted to present the position of a musician who isn’t wildly anti-label and isn’t angry at them but who sees the unsolvability of that position.”

One person close to EMI says that although it might have looked like it, the Times piece didn’t have any impact on the decision to part ways. “I can’t argue with his point, and I didn’t,” the person adds.

MOVING FORWARD

Now that OK Go has detached itself from its major label, the band’s next job is finding a way to stay solvent. That won’t be as difficult as it would have been on EMI, according to Kulash. “In the most traditional sense,” he says, “it takes a lot fewer records sold to pay for our small operation to survive than it does to support an international distribution company.”

Kulash and Nordwind peg the number of employees working (both full- and part-time) under the OK Go/Paracadute umbrella at around 20, including the four band members, Kitman and his assistants, two Internet consultants, two booking agents, a radio-promotion rep, a lawyer and a publicist. (For the moment, at least, the band doesn’t plan to sign outside artists to Paracadute.)

But it’s not just about a reduction in overhead. Kulash says he and his bandmates-experienced dabblers in left-field marketing, from their early gig as the house band on NPR’s “This American Life” to their recording a fight song for the Chicago Fire soccer team-have made their living “entirely on licensing” for the last several years, and he expects that to continue to be the case. Why? “We make music that is accessible but not overplayed and generally sort of upbeat,” Kulash says. “So it fits behind a lot of stuff. Also, we own our own publishing, so we don’t wind up in a three-week debate with some lawyer at a publishing company trying to figure out whether or not it’s worth it. We OK things in 30 seconds.”

“The band’s fans are basically a combination of teenage girls, music supervisors and advertising creative directors,” says Kitman, who says that OK Go has notched more than 450 synchs. “That’s the reason they’re still with EMI’s licensing department-because they’ve made millions of dollars on OK Go.” Kitman points to the band’s inclusion on last year’s “New Moon” soundtrack as among its most lucrative licensing deals, though he declined to specify how much the band earned.

According to Kulash, licensing “follows success: When the treadmills video broke, we got more licensing requests for everything on our second album.”

“And the first album, too,” Nordwind adds.

“It calls attention to and raises your profile,” Kulash continues. “Our admittedly naïve business plan has always been ‘Make good stuff happen and people will give a shit.’ ”

With nearly 10 million views at press time, the video for “This Too Shall Pass” has brought even more attention OK Go’s way, and not just from fans. In a deal brokered by EMI’s brand partnerships division, insurance giant State Farm funded the production of the complicated clip (which various sources say cost somewhere between $160,000 and $190,000 to make) in exchange for a brief logo shot at the end. Kulash says the band is “certainly” interested in pursuing other such corporate alliances.

“There’s lots of kinds of advertising, but the kind that suits us best is good old-fashioned patronage of the arts,” he says. “It’s a high-minded game-it doesn’t get your product in front of billions of eyes. But it can associate your brand and your product and the thing you do with real awesomeness. I mean, the Rube Goldberg machine truly is inspiring. I watch it still and get this incredible sense of-”Hell-yeah-ness,” Nordwind says.

“It’s such a triumph and an achievement for all the people involved,” Kulash says. “And State Farm looks so much cooler having just allowed us to do it rather than interfering with the art of it.”

“We’re in conversation with dozens of corporations right now that want to work with us,” Kitman says. “It’s definitely a new model.”

Touring figures heavily into OK Go’s plans for the rest of 2010 as well: The band launches a seven-week U.S. tour April 13 in Salt Lake City that includes two sold-out shows at Brooklyn’s Music Hall of Williamsburg and winds up at the Sasquatch Music Festival outside Seattle. It’s also scheduled to play Bonnaroo and a number of European festivals this summer, as well as make upcoming appearances on “Late Show With David Letterman,” “The Colbert Report,” “Late Night With Jimmy Fallon” and “Jimmy Kimmel Live!”

Kitman even stresses the prospect of old-school record sales, pointing out that “Blue Colour” has only been out for a little more than two months. “Based on previous experience, we usually sell more in the second year than in the first,” he says. “There’s nothing inherent in the construction that you have to have a big opening weekend or else your artistic project’s dead. That’s a uniquely corporatist view based on a system that worked adequately when 85% of the things failed miserably. And that’s not the business we’re in.”

Bringing the Paracadute outline back to the form that originally built OK Go’s buzz, Kulash says he anticipates earning at least a few bucks from plays of the band’s videos on YouTube, now that he and his bandmates own the new record. “How EMI monetized videos was only known to us insofar as it affected what we were allowed to do with those videos,” he says. “But look, we’re not total morons-everything will get reviewed. A year from now we’ll see what’s working and what’s not, and though I have faith that we’ll get some money from dealings with YouTube, if we don’t, then we’ll look for it somewhere else.”

VIDEO KILLED THE MAJOR-LABEL DEAL

So will this cobbled-together model of music-business bits and bobs actually work?
Kitman thinks so. ” ‘This Too Shall Pass’ is the third time OK Go’s had a viral hit,” he says. “No one’s done that before, and it undercuts the argument that they’re a flash in the pan, that it’s something purely accidental. Some have tarnished it by saying, ‘Well, it’s just a video.’ But that was true in 1983. You could just as well say, ‘The singer just has a great voice,’ or ‘They’re just really pretty.’ I don’t think it’s too fanciful to say that this is what a hit looks like in the 21st century.”

Still, Kitman is quick to point out that OK Go’s story “doesn’t have an awful lot of application to bands that don’t already have an audience and a history of licensing. It’s not a way to develop a baby band into a major international act.”

“They’re obviously doing something that’s resonating with people,” one current EMI insider says. “Unfortunately for us it’s their videos, and we’re a music company. Now they have the freedom to monetize anything they want and channel their creativity into whatever it is they think they can do really well at the moment. And if they find the model that works, please tell us. We don’t care where it comes from.”

“We’re starting our new company specifically not as a record company,” Kulash says as he and Nordwind prepare to head home for an early night. (Tomorrow they start shooting a new video for the song “End Love,” the latest step toward their goal of making a clip for every track on “Blue Colour.”) “I mean, it will be our record company. But we want it to be the home for all the creative things we do in the future. And we’re trying to keep that as unconstrained by conventional definitions as possible, because the conventional definitions just don’t matter anymore.”

“Damian’s talking about my space ballet,” Nordwind says.

“You think he’s joking,” Kulash deadpans. “But I have something to show you.”

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