Red House Records enters a new era

Digital revolution or not, it's been a healthy period for Red House Records, according to Manager Eric Peltoniemi.

While Peltoniemi says he can't be specific, he says sales last year rose slightly, buoyed by new records from Red House stalwarts Greg Brown and John Gorka. He says sales so far this year are ahead of 2006, thanks to new releases from songstress Lucy Kaplansky and a more recently signed name artist, former Jefferson Airplane guitarist Jorma Kaukonen.

Red House's success runs counter to what's happening industry-wide. Overall CD sales during the first three months of 2007 plummeted 20 percent from last year.

Some industry analysts have predicted the death of the CD and the album as an artistic concept because consumers, in a downloading frenzy, seem to be gobbling up their music one single at a time.

Marketing Director Luke Welsh says this trend has been devastating for the customers Red house has been cultivating throughout its nearly 25-year existence: bricks-and-mortar music outlets.

"Every year a few more people, a few more large independent stores that have been around for years and years if not decades, go, 'I can't do this anymore, I can't make a living. Less people are buying and I can't deal with these margins and I've got to close up shop,'" he says.

But Eric Peltoniemi says he and Red House are starting to adjust to the new digital reality.

"I have to say that I was more afraid of this some time ago than I am now. In some ways I'm quite excited about the future," he says.

The Red House catalog tends to appeal to baby boomers, who up to now have been more likely than younger consumers to continue buying cds in stores, rather than importing mp3's into their iPods or computers.

Seeing their longtime retail outlets struggle, Red House marketers are spending an increasing amount of time getting Red House music available on iTunes. The label also hopes that by the end of the year, you'll be able to download its entire catalog from its web site.

If the CD is replaced by some other digital format, Operations Director Chris Frymire says the Red House will respond accordingly.

"We produce and sell music," Frymire says. "The delivery format is dictated by the mass market. And we'll deliver the music in whatever format our customers want."

While Red House is bullish about its ability to adapt to digital music delivery, Luke Welsh says he's concerned by a larger trend.

"There are just less music sales than there have been in the past," he says, "I mean whether it's musical downloads or CD sales at retail."

In fact, there's been a seven-year drop-off in music sales, down approximately 20 percent since 1999.

But the part of the industry that's suffering most from this decline is the major labels, according to Mark Moss. Moss is editor of "Sing Out," a national folk music magazine based in Pennsylvania. He says the big labels and the global conglomerates that own them are too heavily invested in the old music economy, the mega music stores, the CD pressing factories, the multi-platinum records, to make a nimble transition to the new music economy in cyberspace. Smaller indie labels like Red House are far more flexible.

"Those of us that are closer to the ground have a much easier time being to take advantage of the news stuff and maneuver and manipulate in how we deal with the old stuff," Moss says.

Thanks to digital technology, Moss says a torrent of music is being unleashed on the masses, which is impossible even for avid music fans to keep up with. He says the record label's role as a filter or a guidepost has never been greater.

"There's going to be an interest for, let's say, an editorial eye, or an editorial ear, to be able to identify or help to organize this stuff so that people can navigate through," he says.

With its established brand identity and reputation for high quality music, Moss says Red House is already well positioned to assume this role.

Until his death last year, Bob Feldman provided the "editorial ear" for Red House. Manager Eric Peltoniemi says one of Feldman's most important legacies was his devotion to the artists on the label.

"One of the things that Bob did when he founded Red House Records, was to create a forum that was very artist-friendly, unlike some traditional record labels," he says. "That's a model we've just carried forward and we expect to carry forward in the future."

For a while Red House seemed content to grow old with its most-established artists, musicians like Greg Brown, John Gorka and Peter Ostroushko. Now it's back to developing talent. It's bringing in younger acts, like the Wailin' Jennys from Canada, the acoustic duo Storyhill, and the slightly edgier, Twin Cities-based folk band, the Pines.

"Some of these artists may seem more different," Peltoniemi admits. But he adds, "In our minds there's a lot of the same aesthetic. We are really driven by great lyrics. We have still in our minds a bar of excellence that we want artists to meet. With groups like the Pines or Storyhill, while they're new and younger, we sort of feel like they're the next generation of what we've always been doing, just a different package," Peltoniemi says.

While Red House's mission and business model remain the same, staffers say the future is still hard to predict. Chris Frymire says the industry and Congress have a lot of work to do to clarify and solidify copyright law in the digital age. He says things are changing so fast that one bad decision could have major repercussions.

"In a large part it's going to be up to the public. If they continue to buy what we release, and if they continue to support our artists by going to their shows, we'll still be here," he says.

Red House staffers compare today's industry unrest to the last big transition it had to make, from vinyl LPs to compact discs.

Manager Eric Peltoniemi has adopted a Norman Vincent Peale, "Power of Positive Thinking" attitude about the future. He says if you stay optimistic and true to your vision and listeners, you'll keep moving forward. He says if you're frightened of the future and close your mind down, you're probably going to fail.

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