Two record labels thrive by thinking small

With pervasive digital downloading dramatically reshaping the music industry, we seem to hear a regular drumbeat that the music industry as we know it is coming to an end. 

There's a lot of truth in that, but it's still possible to run thriving record labels these days. The key, at least in two prime examples, is to think small and focus on the craft, not the spotlight.

BusinessWeek recently published a nice profile of Numero Group, a small Chicago label that specializes in reissuing richly packaged collections of long-forgotten music, be it from small regional labels or long-forgotten talents (Capsoul Records and Syl Johnson to name a few). Numero's pressings run in batches of 5,000 CDs and 3,000 LPs, and research and production costs per project average $50,000, which wouldn't cover a single-song fee for many of today's hit producers. Numero may focus on the small, but its revenue topped $11 million last year, a decent living for its 11 employees who seem thrilled they actually get paid for their work. 

And NPR Music's "The Record" blog just posted a multimedia profile of XL Recordings, a small London label whose unassuming offices are home to some of the best-selling releases in recent years (Adele and Vampire Weekend among them). XL is a major player in terms of sales, yet operates out of a small office (which Vampire Weekend's Ezra Koenig describes as having a "communal" feeling). 

I noticed several common themes each label: Both focuses on the craft, limiting releases to a half-dozen a year because any more would inhibit creativity and focus. And both live small, operating out of small, older buildings and in stark contrast to what BusinessWeek calls "traditional industry trappings as big glass doors and in-your-face logos."

I've bought records from both Numero and XL in the past, and after reading about their approaches to music and business, will keep their work at the top of my wish lists.