Disc Makers president Tony van Veen touches on downloads, major labels, and the life expectancy of CDs.

How do you think the advent of digital downloads and new technologies will affect the CD market in the short and long term? Especially for indie artists?
There’s been a clear impact, for major label and independent artists – though in my opinion the impact on each has been quite different. Major artists rely on name recognition to sell units. Name recognition is their biggest strength, but with regard to downloads – the illegal kind – it’s also their Achilles heel. Clearly, music fans go online in massive numbers to find free content to download, and that cuts into major artists’ profits by reducing CD and paid download sales. On the flip side, for independent artists, downloads are a great tool. Independents don’t have name recognition yet, and can use the internet – and downloads in particular – as a tool to become more widely known. By offering free downloads off their own site, or even by seeding Peer to Peer networks with free tracks for others to find, downloads are actually a way to increase name recognition. And of course, selling downloads on sites like iTunes, Napster, and DigStation.com provides a revenue opportunity.

So how long will CDs be around?
For a long time. Overall CD sales are declining slightly, but the ones taking the hit are the major labels. Independent CDs are still growing. Think about it. As difficult as it is for independent artists to get radio play, distribution, and promotion, their main opportunity to make money from their music is by performing live and selling product – both CDs and merch – at their performances. You can’t sell a download at a gig. That takes CDs. I foresee independent CD sales to keep growing for many years to come – with the simultaneous growth of download sales.

What do you consider the most exciting developments/opportunities for independent musicians?
How technological advances have opened doors for artists and given them access to resources they never would have had even 10 years ago.

It starts with recording, and some of the great tools available on the desktop today for quality recording, mixing, and mastering. Programs like ProTools, Cakewalk, and even Apple’s Garageband are examples of this democratization of recording.

As that’s happening, professional recording studios and producers are now actively wooing independents at rates they can afford, so great quality recordings are definitely in the artist’s reach. Furthermore, technology has broadened artists’ opportunities for performing and promoting themselves, as well as generating revenue through publishing, and licensing for film soundtracks, TV, and video games. Sonicbids and Taxi are two prominent companies that empower artists in those areas, and there are others out there.

And while physical distribution through bricks and mortar music stores is still very difficult to secure, online distribution and sales through sites like CD Baby have made it possible for artists to sell product worldwide. And download sales through major sites like iTunes and DigStation continue to enhance artists’ sales channels.

If you were back in college today, trying to make it with your band, what would you do differently?
I’d pay a lot more attention to the business side of being an artist. When I was performing, all I was interested in was writing songs, rehearsing, recording, and performing. The business side – booking, promoting, getting radio play, etc. – was a distant second to the artistic side. Yet, it’s a huge factor in an artist’s success. We looked at music as a fun diversion, not a job. That led us to doing the fun parts, and not the hard parts. This has nothing to do with technology. It’s as much true today as it was when I was performing in the ‘80s.

Would you try for a major label deal?
Ah, the elusive major label deal. So many artists aspire to it as a way to easy riches. But the odds of success are extremely small. When we performed, we never focused on getting a deal. We were a hardcore band anyway, so getting a deal kind of went against our whole reason to be.

In this day and age, my recommendation to artists is to do as much of it yourself, for as long as you can. Build your fan base, build your buzz, tour the country in a van, and build up the number of CDs you sell. Once you have a track record of selling thousands of CDs, you can negotiate better terms if you have the opportunity to sign with a label – major or indie. Major labels present an opportunity for artists with a track record: they provide access to promotion and distribution resources that you just can’t get on your own.

Of course, we have many customers who don’t aspire to a label deal. And many don’t even perform live – they’re songwriters looking to sell some CDs and maybe get a publishing deal. That’s a different music career, and one that can be lucrative as well.

The internet has already dramatically influenced the entire music business in so many ways. As the new breed of music fan is increasingly internet savvy, how do you see that impacting how indie bands market, sell, and interact with their fan base?
The internet is such a great communication tool. It’s cheap, even free, to set up your own web site, and get onto other sites like MySpace that get you in front of thousands or tens of thousands of potential fans. It makes it super easy for fans to let others know about you, and folks coming to your site get to see and hear you. This wasn’t possible 10 years ago.

The tools online that enable artists to manage their mailing lists and send email are incredible. Between email and blogs, artists can now communicate regularly with their fan base at virtually no cost. An artist’s challenge is to get fans to know they exist. The internet can help with that. But even more so, artists need to remind fans who know them that they’re still around, that they’re performing, that they have a new recording out. The internet is an incredible tool for those kinds of communications.

What drew you to Disc Makers in the first place? It was a much different company back then.
It was. When I started here in 1987, Disc Makers was a small regional company pressing vinyl and duplicating cassettes. I was a drummer in a band, and wanted to work in the record industry. I had to support myself, so I couldn’t afford to do an unpaid internship at a label, studio, or radio station. Disc Makers allowed me to get into the record business and pay rent.

It was a great fit, because the company president, Morris Ballen, had just decided to start focusing on independent artists. I was the customer he was focusing on, so I was able to bring my understanding the indie music scene to Disc Makers. And with my business education on top of that, I was able to contribute and help to grow the business.

Looking forward as the president of Disc Makers, what do you see as the most exciting new possibility and area for growth?
There are several. Optical discs continue to grow at double-digit rates. And as we continue to grow and develop our in-house services and processes, we should be able to continue to improve our delivery times, which are already the fastest in the industry. Most packages are now done in just 10 business days – start to finish. We’re looking to improve that. That will make our services more attractive to artists, who are always in a hurry to get their product out on the street quickly.

The second opportunity is to continue to deliver orders in smaller quantities. Our online Short Run Self Service program allows artists to order as few as 100, 50, 10, or even just one CD or DVD. This has been an area that has grown very strongly in recent years.

We’re excited about our offering digital downloads with DigStation.com, which gives artists a free page that sells their downloads for just 99¢ – 70¢ of which goes right to the artist. We’ve also been successful with the launch of our custom Merch program, which offers artists an easy, affordable way to get custom-printed shirts, hats, and more to sell at their gigs.

What do you see as your biggest challenge?
As we continue to get bigger – both as a player in the marketplace and literally in terms of the growing number of employees – keeping Disc Makers in touch with our indie roots is going to require an active effort. When CDs first hit the market, we were in a different building with maybe a tenth of the staff we currently have. Now we’ve got a number of outside sales offices, a full replication plant, and almost 500 employees.

Of course, this growth has served our clients and has enabled us to do all the things we do today. But with this growth has come the inevitable need for us to grow up, as a company, and new policies and procedures have replaced some of the looser ways of the old days. It’s part of our getting better, but I recognize we can’t let that undo the fabric of who we are. We have to cultivate and nurture the indie music roots that define us.

Not that it should be such a difficult a task. Just take one walk through our building and you can see we’re flush with independent musicians, artists, and thinkers. Our holiday party, DMPalooza, consists of 25 bands made up of Disc Makers employees playing the night away. We’ve managed to stay true to ourselves through growth and change, and our job will be in continuing to deliver great value, quality products, and friendly service to our clients.

In January 2007, Tony van Veen took the reigns as President of Disc Makers, having served as Vice President of Sales and Marketing for nearly a decade. He joined Disc Makers in 1987 as a marketing associate and project manager upon graduating from the University of Pennsylvania’s Wharton School. Tony played drums, recorded, toured, and released a few projects on vinyl and cassette with several underground rock bands while in college, and also ran a successful small independent record label for four years.