THAT WAS 2006, BUT BY 2007 YOU’D HAD YOUR FIRST TOP 40 SINGLE…

We’d found this band, Koopa, who’d built up a pretty good fanbase. We explained to them that we thought we could get them into the charts. This was around September [2006], and we put them on pre-order from then until the second week of January [2007] – because we’d learned that was the quietest release week in the industry, back when CDs were prevalent.

We’d also worked out something important: they allowed SIM card purchases [in the UK chart] back then, but they didn’t actually check if the user downloads the track. So we bought a load of SIM cards off eBay – you could buy them for £2:50 each with £5 of credit on them. We’d buy the song three times on each SIM for £4:50 with the £5 credit, and we’d get three pounds back [from the sale as the record label]. So we get three chart sales, and earn 50p back each time.

Me and Matt were sitting in this little council flat downloading this track off these SIM cards, with our mum helping us. It was mad. And then, in the second week of January [2007], we had a phone call at 8 o’clock on the Monday morning. I assumed it was for a bouncy castle. But it was a guy saying, ‘What’s Ditto Music? You’ve got a song No.12 in the midweek charts.’ It was unbelievable.

THAT TRACK ENDED UP AT NO.32 IN THE SAME WEEK THE OCC CHANGED ITS RULES SO YOU DIDN’T NEED A CD SALE FOR CHART INCLUSION, RIGHT?

Yes, it was crazy. Radio 1 came round to our flat, the BBC [news] came round. I remember a journalist in our flat holding up a USB stick on the 6 o’clock news and calling it an MP3 player – no-one seemed to understand what was happening [to the music industry].

We were thrust into quite a lot of industry attention, and we became known as ‘the digital company’, when the majors were still obsessed with the CD. The labels are all congratulating themselves on having the best year ever now, but it makes me laugh; if it was up to the labels, not Spotify and Apple etc., the industry would still be based on Compact Discs!

Because we were in the press so much, all these artists started coming to us. We moved into an office, took on staff and started building Ditto into what we wanted it to be – a record label that was fair to artists and which offered them all the tools we never had.

WHY DO YOU THINK THE CALIBRE OF ARTISTS YOU’VE WORKED WITH IN RECENT YEARS – DAVE, STORMZY ETC. – CAME TO DITTO?

What it really comes down to is that our staff are always at shows and doing real A&R work for artists. When Stormzy came through, we were there; we’ve had Dave since he released his first song and did his first freestyle – we’re very active in that scene.

People come to us because they trust us, they know we’re real fans and they know we’re going to do a good job. It sounds really easy, and in a way it is; in my experience, major labels don’t want to do that [grass roots A&R] – they’re more interested in short-term market share gain, and that means getting involved later in the cycle.

When Stormzy blew up a bit, they came in with a bunch of money, but the hard work had already been done by Stormzy and his team.

HOW DO YOU COMBAT THE ABILITY OF LARGER COMPANIES TO COME IN AND OFFER BIG CHEQUES TO ARTISTS YOU’VE HELPED BUILD? ARE YOU SEEING THAT PATTERN CHANGING?

It’s sometimes hard to compete because we haven’t taken VC investment. We do give advances to artists – good, sustainable advances. But we’re about the long-term. We’re not going to go in and fight for market share if someone’s going to give an artist a million pound deal which they know they’re not going to get back, and that happens all the time, even amongst our distribution competitors. People at the majors sometimes prioritise market share over getting an actual return. 

We’ve taken on radio staff and PR staff in London and we’re building out that team – and we’re entering into longer-term deals with artists with options on them. Major labels don’t want to offer 80% [royalty] deals to artists! If they could, they’d be signing 20% deals every time. You find any artists from the ‘90s who still have any money left or are still getting cheques [after recouping] – they are very thin on the ground, and I have friends in that situation.

[The deals at majors] have got fairer because of companies like us; now they have to compete with us. The work we do speaks for itself. We always have about five or six tracks on New Music Friday in each territory. There definitely is still that very wrong idea that Universal or Warner or whoever can do things Ditto can’t because we’re smaller. But it’s a long-term thing and eventually more and more people will realise what we can do for their career globally.

IS IT PARTICULARLY HARD TO COMPETE WHEN THE MAJORS ARE SWIMMING IN THE CASH THEY’RE CURRENTLY EARNING FROM STREAMING?

I can’t mention any artists’ names, but if you take away Stormzy – and when he left us he was already a huge success thanks to the work he put in with his team – I’d say 50% to 60% of people who leave Ditto and go to labels come back to us.

A lot of artists end up frustrated after they sign those major deals, because they sign away some or all of their independence. I’ve travelled around the world this year and taken on a lot of people from the majors, and I believe those frustrations will always exist.

WHY HAVEN’T YOU TAKEN ON VC MONEY?

I never even knew what a VC was until five years ago. When we started Ditto, we just wanted to make £50 a week to go to the studio, then when we started building it up we just wanted a business that was profitable.

As soon as you take on VC money everything changes. 90% of people in major labels are really smart people, but they have so much hassle from the people above them – which all feeds down from the shareholders – as to what they can and can’t do. I don’t want to be told what I can and can’t do. I want to be able to sit with an artist and talk about what they want to achieve and how they want to achieve it, and I want that to be a creative discussion.

Whether we’ll [take on VC money] at some point, I don’t know. As I say, at the moment, literally two or three people a week will contact us about [potential investment] and that’s been the case for three years now. We’re very profitable so it’s a short-term thing to take on VC money; it gets you to a point a lot quicker than you would have done it without it.

I’ve been doing this 12 years and it’s been a long, long 12 years. But now we’ve slogged it out for all that time, and got through the painful periods, it would have to be a huge thing for me to [sell equity in Ditto] right now.

HAVE YOU HAD MAJOR LABEL ACQUISITION INTEREST?

Yes. Of course our competitors have tried to buy us – that’s no surprise. And labels have sniffed around, offering us money for [upstream deals].

Universal and Warner have built similar platforms as Ditto [Spinnup and Level Music], but they’re not as successful because their primary reason for doing it is to get the data; it’s not about music, it’s about avoiding doing A&R work. We’re doing it for the right reasons; people know how passionate we are about it.

 

Originally posted on MUSICBUSINESSWORLDWIDE.COM