I’m Hank Perritt. I asked you to get together for three reasons. First, I have done some song writing and worked with Tim and some others of you around the table who performed some some of the music that I wrote. As I got to know more people like you, I was impressed with the high level of talent, but the low of visibility. I was interested in trying to understand how the independent musician community worked in Chicago. In my day job, I do research and writing on the future of the music industry. I’ve published three law review articles on the subject and another is in the works.

Second, I’m on the board of the Chicago Council on Global Affairs and co-chair of a project there called “Global Chicago.” We convened  a task force about two years ago. On the task force, about 35 movers and shakers from different communities in Chicago discussed Chicago’s potential to become a more global city. One of the things that became very clear is that successful cities are places where people what to live. You can have everything else, but if no one wants to live in a place, you are not going to succeed. One of things that Chicago has going for it is that it is a place that people would like to live. People like to live in a city where they can enjoy music and other arts, and it’s also important that a city be able to draw artists—that artists want to live there as well as those who consume art. Chicago has enormous assets in that regard, but there are an awful lot of people in drama and filmmaking and music who think they may start here, but have to leave if they really want to be successful. And that’s not a good thing for the future of Chicago. Our report says that Chicago must do more for its music community, particularly its lesser known music community.

Third, through that effort, I met these two guys, Paul Natkin and Dan Lurie, who’ve been doing a valiant effort with the Chicago Music Commission. That’s a nonprofit organization that has as its mission to improve Chicago’s quality as a music city. CMC commissioned a study that University of Chicago did. They finished last summer or the fall and it’s just a superb job of social science research. It describes all the characteristics of the music community in Chicago compared to some other places and evaluates its economic impact. The conclusion of that report is that there are enormous assets here, but they are largely invisible to the rest of the world. When Dan and Paul and I had some initial conversations I asked, “How good are your contacts with the Indie music community?” And they said,  “Well not as good as we would like.” And so we cooked up the idea of having some group discussions like this to try to get you acquainted with what CMC is trying to do and to give some input to what they would like to do. More fundamentally, the goals to try to crystallize better an understanding of Chicago’s strengths and weaknesses as a place for people like to pursue your dreams in music.

My name is Ian Narcissi. I used to play in a lot of bands. I played with the Ghetto Billies, Status McMillan, guys like that. I played drums for about 26 years. I played with those guys and other groups. Then recently, I’ve decided to just go independent. I play piano so I wrote my own songs. I can play drums too, and then sing with that. Tim does the studio stuff and then I hire guys in to play and just distribute it around the world to try to get my name out there. It’s a fun project. It’s thought provoking music, but let’s see what happens. Throw it out there and see what happens.

I’d like to just have a name--some way of people around the world knowing who I am. As far as the monetary status, I’m doing quite well as a in my career right now. So that’s not as important to me, to be a musician that’s making a great buck—though I certainly wouldn’t turn it down if the opportunity came.

But right now it’s very difficult to get my name out there. Very difficult. I have my stuff all over MySpace, I have it all over my own web page, I have it all over. I can’t even tell you how many places I have it and yet the response is very small.

A lot of people like it when they hear it, but it doesn’t sell. “Yeah, I love, I love it. Can you send it to me for free? But I just love doing it and I will do it till the day I die.

I’m Neill Townsend. I’m a law student at DePaul. I have been interning at Track City Records here in Chicago since last fall.  I feel like right now is good time to be involved in music. While I play my own music, I don’t perform. Especially now that the record industry is falling apart. I’m looking at what the new options are and how that can benefit artists rather than labels. So I feel like Chicago is a good place to be now that this is all changing.

My name is Aaron Allietta. I am a keyboardist. My foundation band is Oucho Sparks, where I play with Tim Sandusky. I have gone done some other projects. My goal and aspiration is to keep my musical life as balanced as possible. A couple of the other groups that I play in have pretty good dance grooves, and more like an electronic thing. There is this new band I just joined in, All the Street’s Children, which is a little more stripped down and lighter thing.  I got into the recording process also. As a musician it’s important to be as balanced across the board as possible -- a mix between studio stuff, live shows, and more album-oriented projects.

I’m Evan Sult. I’m currently in a band called Bound Stems. I came from Seattle where I was in a band called Harvey Danger. I have spent some time on a major label, and I’ve spent some time on a local Chicago label, which are two really radically different experiences. I’m not ever interested in being on a major label again, but I also think that it’s no longer necessary.  I think that we’re in a super interesting period right now. Five years from now a lot of things are going to be settled that are unsettled at the moment: like how bands make money is going to be figured out some how. Or how somebody makes money off of music is going to get figured out. We’re just at the beginning. I think bands are in a spot right now that is the equivalent of what synthesizers were to rock bands in the 80s. Like were still have to figure out how they are used and you make some terrible mistakes in that process.

My goal is to figure out a way to for bands to be happily self sufficient. It doesn’t necessarily mean not having another job, but it would be great if it means not having another job. I want to figure out what really what’s necessary to make that happen these days. It used to be that you absolutely depended on somebody else to press your vinyl. That was just not a resource that bands had. Now I think bands have many, many more resources. But that doesn’t answer a ton a questions about how you actually solve the problem of people hearing your music, much less people paying for something that somehow comes to your pocket.

If we can figure out a way to do that either among ourselves or specifically in Chicago, it would be great. When you look at the way that Canada treats its musicians versus the way that the Chicago treats its musicians, it’s radically different-- when you look at the way that musicians receive funding in Amsterdam completely different than how you do in Chicago. So there are lots of possibilities.

I’m Tim Sandusky. I run a recording student, Studio Ballistico, that a lot of these people have recorded at. I play in a band called Oucho Sparks, and I care a lot about trying to figure out what indie music is going to be and what we all can do to have an effect on it. I’m Hank’s back-up in organizing some of these discussions.

I’m Darren Garvey. I play in Andreas Kapsalis Trio, Buddy Nuisance, Cameron McGill and What Army, Ernie Henderson, Danny Burns’ Defectors, Paper Arrows, and others. I teach piano, guitar, and drums at the North Shore School for the Arts which is in Glencoe, IL. I worked at Touch and Go Records for a couple of years. I run a management company, booking bands.

That’s what I do. And I try to find time for my wife once in a while.

Dreams? I’d love to continue what I’m doing and support a family, maybe buy a house.

Chicago is a good place to get started because of the vastness of it. There is some very open musician interplay. If you want to start a band, it’s a good place where you can meet other musicians. It’s a good farm-teamish kind of area like where there all sorts of venues to play. As long as you’re organized enough you will be able to find them. When you are starting off you will spend a few years just playing locally around and there’s plenty of different venues where you can get that accomplished. And then at that point it becomes a little bit more difficult, I would say.

When you cross into the music business aspect, there is a huge gray area. It used be oh you simply go to New York or LA cause that’s where the record execs are. That’s where the A&R guys are going to be watching Chicago. Well, the Smashing Pumpkins did it, but nowadays it’s completely changed. That’s no longer the issue.

So you’re making a distinction between playing for the capability of playing and playing for pleasure and the ability to play for pleasure. The music business component is once you’ve established that you like what you’re playing and you’re making the kind of musical progress you want to make, how to do something beyond that.

Right, right, right.

But it comes down to the concerns of the particular musician. Do you already have an established band? Do you are you looking to join up with another band? Or are you looking to start something and get other people to get involved? And for most of those I think Chicago is a great place to start out.

One big huge financial difference is the difference between a singer-songwriter recording and paying for recording, but then also getting all the money and a band putting in studio time--which is a lot longer for a group--and then splitting… I don’t know if any bands actually split the money equally or whatever. It always ends up going back into the band pile.

The great thing about living in the aughties is the real possibility for musicians’ not having to depend on a major label. You can’t because the financial situation is so radically transformed you don’t even necessarily have to create a physical product at all for distribution and promotion and all the other facets.  You can make CDs cheaply. You can make CDs covers cheaply.

This is you making stuff. Is there an industry that you can rely on… Let’s assume the goal to make it big whether it’s financial, or eyeballs or whatever. Can Chicago support more than a few artists? Is there an industry in place that can support that? It’s weird. I mean name the big bands right now from Chicago: Wilco and Fall Out Boy and what are the other groups? The Red Walls. There are a few.

But we’re talking about an entirely different things; we’re talking apples and oranges here.

I’ll give you an example. There is a girl that I know that works at the Old Town School of Folk Music. She is a piano player; she’s really great. Great songwriter. She’s put out three CDs on her own. Went and recorded them, then she manufactured them for approximately $.95 a piece. CD and little cardboard slip cover, color on both sides, and shrink wrapped. And she sold 1,000 of each of these three CDs at $12 a piece. Now to me that’s tremendously successful. And she could do that every year and make $10,000 profit on each of these things. To me that’s a whole lot more successful than selling $50,000 copies on Columbia Records and losing $250,000.

* * *

A do-it-yourself thousand CDs, with whatever amount per year, is obviously defined as success, but the question still is what is the business organization? Most musicians don’t have a strategy; they’re just playing around for five years doing a circuit thing. You have to have a business sense where you’re able to financially keep this all organized. Do your own publicity, do your own marketing and be able to sell a thousand CDs with like you know ___ with organized shows…

For Chicago the question is: are we going to have a sort of a self supporting community, which may the best route. Or are we going to look to a industry model like…

How many CDs a year to you think you guys sell when you go out and do your road shows?

A thousand maybe.

Yeah, so it’s about on par with that.

It you sign with a major label you’re basically signing a deal with a bank that’s gonna own everything you own. Even if it’s 12 times more successful you will never see a penny from it. You’re also I mean more likely to be getting 9% of the royalties than 50%.

So 12 times more sales to me really doesn’t mean anything because if you if you sell.… I have an example, this friend of mine that I helped get a major label deal sold 50,000 units on a division of Columbia Records, a division of Sony. At the end of selling 50,000 units she was $250,000 in debt. She never saw a penny from them. Zero. Never.

No advance at all?

No, because she made the record herself. Well, they paid the expenses of her making the record. So she got somewhat of an advance. She broke even on making the record. She made an independent record two years earlier that she sold 10,000 copies of and she made $100,000 profit. So which one of those equations makes more sense. And her goal was to be as big as Fall Out Boy, but it didn’t happen cause they didn’t promote her record the right way.

Columbia University that just did a study last year, about I think its called Reflective Chatter and Music Success and its conclusions were that blogging mention of music has the greatest statistical impact on sales of downloads and CDs; that print reviews have a negative effect, a negative statistical relationship. But they also found--pertinent to this part of the conversation--that if music that is promoted by a major record label is 12 times more likely to be successful commercially than music promoted by an independent label. Now things are changing so rapidly and they were working with data 2002-2003 so that may be changing under our feet, but there still is at least a perceived advantage and some evidence that the labels have commercial effect.

There are real advantages to a record deal. There also also real disadvantages to a record deal. If you get an advance of $200,000 that makes some things possible in your life that weren’t possible before. However, that also puts you in a relationship to a foreign entity which is BMI or Columbia or whoever you’re signed to that is very likely is not a relationship you need to have anymore.

Or would want to.

I don’t listen to Fall Out Boy, but that’s a band from this area who has profited in every way from being on a major label. I don’t think they made the wrong decision.

* * *

Our hypothetical 18 year old may not know that he wants to play music yet. I got to college and had no idea that I wanted to play music. Well I had no idea I wanted to drum, I knew I wanted something. And exposure to Seattle’s music scene created a musician in me. That’s how that happened. I would say one of the reasons that you show up from Des Moines to Chicago instead of someplace else is that there are venues, there are musicians, there are magazines, there is an infrastructure.

A key component of our question here is access. In Seattle you could get to the city, but you couldn’t see any music until you were 21. The liquor board made that impossible. So even though it was a rich scene, that city constantly was hostile to its music scene. Even in the 90s, when there was actually a reason for people moving to Seattle, people spending money in Seattle, the city could have done exactly what you’re doing here which is try to make money from music, or try to have money moving through the city because of music. Instead, they really they got scared of it and tried to shut it down where they could. That included an overly strong liquor enforcement policy.

One of the potential strengths in Chicago is that it has the capacity for all-age shows, although it’s massively underutilized. It has the capacity for 18 and older shows, although I would say that is also massively underutilized. When you go on tour you realize that there are places where every show is 18 and over or half the shows are all-ages. They have figured out a system where they mark hands or whatever. Without that all ages venues are almost impossible to carry forward because you don’t sell alcohol; kids spend five bucks and that’s it. Bars depend on you spending five bucks to get in and then spending another 20 bucks on beer.

In Chicago this is one of the main things we could do that would increase viability both for the clubs but also for the newcomer being able to see music when you get to town. This is a really really big part of how you meet the other musicians that you end up playing with. That’s how you see the bands that end up influencing you on what instrument and how you want to play and all of that stuff. That’s a really big component is how the liquor laws interact with the musicians and with the venues.

* * *

Is there a web site that exists right now that just lists active Chicago bands?

That’s a great question.

I’ve seen efforts like it but it’s really hard: it becomes stale in three months.

You don’t the think the bands would buy into it?

Something like a Chicago-only version of Metromix?

If you put out something that said just get the publicity; join up for free and all the bands got into it, it would work.

Although there are a few of things that MySpace does well, organizing your friends is not one of them. And that can make it really hard, in fact I’ve never had any luck with any kind of real searching via MySpace …

The search engine is awful.

I sure would like a list of active Chicago bands just even if they were essentially digital business cards that took you right to their web site or their MySpace page. That would be really interesting. One of the things we were talking about is trying to build a stronger Chicago infrastructure. A web directory of musicians would be one thing.

It also would be interesting to make a specific effort to increase intra-Chicago distribution of music. Like making sure that all the records stores in town represented Chicago music strongly. If there was somebody who was checking to see about that…

The record stores are all slowly dying; they’re not going to be around in five years.

What does everybody think about a Chicago iTunes channel?

I think it’s a great idea.

We’re starting to work on something. CMC just worked a deal with the airports where Chicago music’s going to get played in the airports 24/7 both airports.

Oh, cool.

And the next step after that is gonna be to actually sell music in each terminal. Chicago music at the airports.

Oh, that’s great.

And the next step after that is to have monthly or bimonthly concerts at both airports.

Wow.

Where people will get paid something.

A Chicago channel is a great idea. There are a ton of bands in Chicago and I would guess that we are have some like mindedness. Sort of like MySpace pages just for Chicago.

Some of those bands are the worst thing you’ve ever heard and that’s part of the price of trying to be inclusive about what’s going on. But if one of the goals is to create the Chicago identity, you’ve got to be able to first gather things up and identify them as Chicago.

It’s much easier to make to get a database of businesses in the music industry. And I’ve got a database of almost 600 names right now...

600?

Names of businesses and it’s gonna go up on the Web hopefully within the next month. But the band thing is a different story because probably 20% of the bands in Chicago are not really playing out. They’re just playing in their basement somewhere and there’s no way of contacting them. I mean how do you find these people?

So what you do is you put out press release saying, “Hey! Go to this URL and sign up for this.” The first people that would sign up would be all the cover bands because they’re great at publicizing themselves. But then the really hip bands will look at it and say I don’t want to be on a list with underwater people and Mike and Joe and Hair Bangers Ball. The whole thing falls apart at that point.

Tim, how would you feel about having Studio Ballistic listed on website that also listed as a recording studio someone who runs a completely amateur operation with a computer in his dorm room?

I would be okay with that.

* * *

There’s pretty good data in the Reader and RedEye online about whose performing at the end of the week. I even did a count and there appeared to be about a hundred performances a week at the venues that we know. And so you could get somebody collect band names from that list over a period of, say, six weeks and then you’d have at least a start at an inventory of who’s playing out.

It does seem to me like finding who is playing out is actually a pretty useful criterion. When you talk about “bands,” you’re talking about a broad concept, from “sometimes we play together,” to people who don’t have band names, to some kind of proto band, to people who have a band name but  don’t ever play out. They’re not necessarily relevant to this discussion. Getting to the point where you playing Uncommon Ground or Empty Bottle or Schuba’s or Tonic Room or wherever. Those are very different venues, each of those. you know there’s there’s a plenty of venues.

Well, what about him [pointing to Ian Narcissi}? He said he doesn’t want to play that much anymore and just wants to sell stuff on the net. He should have the same access to that audience…

* * *

Let me argue against criteria. The Web has been most successful when it didn’t have screening criteria--when it just has everybody. And, if a database turns out to be basically digital business cards, then consumers can figure it out. …

You would contact the Web site and give them your contact info and that would be it?

Yeah, probably supplemented by some kind of active gathering of data. Then you could figure out how to control for quality. At a simple level, you could just make it easy for consumers to go find the MySpace page and then they could figure out from the MySpace page whether the band is active and for that matter see if they like their music.

* * *

The beauty of MySpace is that you communicate face to face with the fans. You can talk right to them-- not face to face, but virtually face to face. And they love that. It’s like “Wow! I’m talking them!” It’s exciting and they tell their friends you talked to them.

* * *

We should look at what’s happening in Canada. A lot of folks I know are with Arts and Crafts which is a record label in Canada that gets financial support from the Canadian government. I know that’s a completely different arrangement in Canada I’m not saying that we should be like Canada, but the City of Chicago could offer grants to bands that bands had to apply to and receive. To receive money they would have to do certain things for the city. They could appear in the city’s promotional literature about the city. They could promote the City of Chicago when they go on tour Things like that that are great for everyone. If you can get the city invested in specific bands I think that’s really functional. In the same way that nonprofits vie for grant opportunities, bands could be vying for that opportunity. It’s one way to push things forward.

There are so many different ways it could work. One thing the city could do is to cover a band’s touring costs if the band, while they tour, promote Chicago somehow. Bands are really good at that stuff. They’re great at putting stuff on their drumheads, putting something at the merch table. Bands already are roving information objects that refer back to their city. So bands are already really well set up to impart to the world—to go out to the rest of the world and show how awesome Chicago music is and how supportivee Chicago can be.

* * *

Some people say that there’s something the matter with Chicago’s  infrastructure: that you can’t find promoters and lawyers that you can do business. It’s not necessarily because they don’t exist; it’s because their business models have such a high threshold for revenue that musicians who haven’t made it big yet cannot afford them. Some people also say that there’s a big problem with the venues and the audiences. That there’s an under appreciation of local music compared to national music. Could we talk about some of those issues?

* * *

Take a place like Schuba’s. Matt, over there, when he books, he saves the whole entire month for national acts. He tries to book all the national acts and fills in the local bands in the holes later.

Right.

Even if he sold his club out before he won’t confirm the days until he can make sure that he can fit you in between his national bands. I know its important to have these national bands when they come through. They only have a certain amount of days they can be in Chicago so he has to work around their schedules, but sometimes I feel like he gives local groups a cold shoulder until he can make it work. So it’s not really promoting Chicago bands.

I just got back from a trip yesterday from about 45 days all over the country. I talked to people in the South, in the Midwest, and on the East Coast. Chicago is, from a national perspective, seen right now very favorably in the music scene. People all over the rest of the country really are looking up to what is going on here. Chicago’s got some of the hippest clubs in America in all forms of music.

There’s lots of crap that out there, but infrastructure requires that people need get together and work together to make the rest of the world sit up and notice.

I make it a point everybody that comes in from out of town, I take them to the Hideout. I think everybody that comes in from anywhere outside of Chicago should have to go to the Hideout one night. They’ll go back there every chance they get. There are tons of places like that all over the city and their very poorly promoted.

Well what about Acoustic Chicago? Isn’t it kind of like a roaming club?

Chris Steinmetz at CRC put this Acoustic Chicago thing together. It’s a compilation with 17 artists on it. He’s working right now trying to get promo for it. I think Whole Foods is offering the CD and he’s talking about doing something with airports as well.

I’m still kind of waiting to see what kind of press and stuff it gets, but he’s had a couple of shows that went really well. There are some good artists on there.

It’s the idea, the concept that is profound. You start a roaming club-- a Chicago club that roams around the world with all the Chicago musicians. It’s a virtual club that goes around the world and plays and represents a city. It’s a very cool idea.

If you get an audience with the Mayor you got to know what you’re gonna ask for. Is all that we would ask for are a competitive grant program and more visibility? Or from your perspectives -- the three of you are competing in this marketplace, is there something else in the City of Chicago or blocking your pathway?

There’s no lack of clubs, there’s no lack of promoters, there’s no lack of musicians, obviously, I mean we are in big city. We have all the pieces that the city has…

But it’s the lack of centralized concern. Right now the city’s centralized concern is for the opera which it should have, but that’s a separate department. If a young person comes here and writes a report in a magazine, it’s not very obvious where to go. He might stumble into the House of Blues and that’s one kind of experience, but he’s not going to go home and write about how cool of an Indie music scene Chicago is.

He’s gonna go home and say I saw some crappy band at the House of Blues. The younger people are the opinion makers for the rest of the cities. Those are the people who are writing for magazines. So when you get a young person to come here, I would want her to be able to have a guide, like a museum guide, that she can look in and find the indie music venues. Because the museums have the same problem that the venues have: the museums are not just in one street. The museums go all the way from the MCA to the Museum of Science and Industry. You can go in the airport and get a guide that shows you a map and all the public transportation for how to get around to those things. You can get that for the opera. You can get a guide, but there is nothing that says how to I get from the Hideout to the Empty Bottle and that kind of thing.

It could be also be genre specific.

Or something like a city-funded musicians’ guide that’s also a CD that is free at airports or hotel rooms. The CD would have a map. It would also have a sampler of music.

Yeah like FM. They had a really cool thing where you could market yourself and do all your own promo. The page was yours and everybody saw where you were playing. They had the whole list of every club, what times.  You just put it in there and it right on the website. You can make your own posters.

That’s very cool.

Out of the 40 million people who come to Chicago, a certain percentage will say, “I don’t want to go and just have a commercial experience. I want to have a down to earth -- a real experience. I want to go see some real music in Chicago.” Any percentage of 40 million is gonna be pretty big. A certain percentage of them are gonna be the kind of people who want to see indie music.

The music business in Chicago generates money for Chicago. We’re trying to create in the mind of the government of Chicago the idea that independent music properly fostered generates money for the City of Chicago. That’s our goal: that the city understand that there’s something to be gained by increasing their support for the music industry.

That’s our whole mission right there.

Branding it  makes the most sense. The way that you get your band, plus your band, plus your band, plus my band to mean more than just four bands is by having us be part of a thing Mayor Daley could  recognize. That it’s a theme that’s happening. If you could give it a name, if you can give it a logo or call it “Chicago Bands” or something. There’s  a way to bring it into focus. To give something a name gives it a huge boost in identity. It’s like having people be a part of a union--not against anything--but it gives it a lot more capability.

We are going to have to have two brands: one for the well know acts and genres—the blues, Smashing Pumpkins, Wilso, and Fall out Boy, and another brand for the musicians that no one has ever heard of yet.

* * *

Picture a model in which somebody could advance a chunk of money to a band and have it somehow come back to that investor plus a profit.

Isn’t that what a record label is supposed to do?

That’s what a record label does, but a record label is not just money that they give to the band and then say good luck with that.

Record labels perform the physical distribution function, but they also--as importantly--perform other functions, from artist selection to promotion. The reason that doesn’t work anymore is that the scale of their business. They can’t record an album for less than about $500,000. They’ve got to feed all the parasites they employ--including lawyers that are suing kids. So one of the questions is: if you were to start from scratch with today’s technology in today’s marketplace and reinvent the promotion side of the record label, what would it look like? If you have a business model from the promotion company that matched with at least some of the musicians’ business models, things would be much better. And then--probably separately, because I think this is going to be an unbundled marketplace-- you could reinvent the capital formation and aggregation part of the record label. You could have a business model from a hedge fund that would match up with at least some Indie musicians.

It’s possible that an investor could make money on Andreas Kapsalis Trio, or Oucho Sparks, or Ian Narcisi. Whether you’d be willing agree to the terms, that’s a different question. But it is possible to go back to the drawing board and come up with some numbers to see whether it works in theory.  Whether we participate or not, somebody is going to reinvent the capital intermediation function.  Ten years from now we’ll all be able to look back and say, “Oh yeah, yeah, that was revolutionary. We’re in a transitional phase right now. The more that people like you participate in conversations with people on the other side about how to reinvent those functions, the better off everybody will be.