Traxsource leads the way with fairer payments for artists and labels

Traxsource represents a new way of online retail. Honest, forward thinking and genuinely caring about its regulars, in an unprecedented move at ADE this year, Traxsource announced it was giving back to its label partners in a unique way.  Royalty payments held in escrow since 2009 would be partially repaid to the labels, which came about from re-examining the books, and finding a fairer way to work.

We caught up with Traxsource boss Brian Tappert to talk about the implications, the future of the scene and how its all been going so far.

Hi Brian, great to meet you. Thanks for finding a few minutes to chat to Decoded Magazine today. How are you?

Thanks for the opportunity…I’m doing great.  We’re super busy these days and that’s a good thing.

So tell us a little of the history of Traxsource. What was the vision for the site, any difficulties at the beginning, and how things stand now.. 

The short version is that Traxsource was born out of our record company Soulfuric Recordings which was popular in the late 90s.  We first created the site to reach our fans with a digital product which at that time did not exist as DJs played only vinyl. As time went on and the idea developed we turned it into a full store. At that time there was no business model for this and the whole concept of selling music online as files was a bit strange.

It’s been an amazing ride with constant challenges.  But thank God, we have always rose above them.   Currently were hitting our stride again and seeing solid growth…things looks very bright.

Coming from a background of music retail myself, I particularly liked reading the lengths to which you vet the music featured on your site. It gives me as a shopper confidence that I’ll be browsing quality music. But in terms of your business making money, have there been moments where you wondered if just allowing all of it on would be financially more viable? 

Let me clarify, our vetting policy is about what we feature not what we carry (though that once was the case).  Back in the day, we didn’t have the man power or bandwidth or technology to put everything into our system so it initially stemmed from necessity, but in the last years we have developed new systems which allow us to ingest any amount of music we would like…

So now the challenge is how to find those gems in and amongst the rest!  We have some pretty cool systems to help us but the key element is good old fashion A&R.  Being as this is where we come from, we like to listen to things and debate the artists as if we were a record company.  It’s just part of our culture.  Sheldon Prince has been with us forever – way back to the Soulfuric days and it’s in his blood.  He is our head of A&R and he and his team do a wonderful job of “digging” week in and week out.

For all of us, Traxsource is a labor of love…we didn’t get into the music biz to make money. We say this all the time, that when people get into the music biz for the wrong reasons it never works.  It’s like when you’re DJing and having a great time – that comes out of the speakers somehow and the people have a great time too.  But if your not vibing then it’s crap. We believe our fans can sense that we love what we do and that’s why they come to us. Not everyone understands house music (haha) but the ones that do – well we spot each other a mile away.

traxsource 2

Digital rights and payment issue has been a real bone of contention at the moment with many parties voicing concerns. We understand that online stores were forced to put a percentage of every sale in escrow while you were setting up licenses with the many various global copyright agencies. Could you outline the reasons for this percentage? 

Right, this is a very complicated issue but to simplify it down as much as possible…

When we were forced into this “new” way of working, we basically had a gun to our head and the only way to get them not to pull the trigger was to do what we were told.  So we did that and this was basically based on what other stores were doing whom were in a similar situation. Since then, we have now completed deals with copyright societies around the world and we have a “real experience rate” instead of a knee jerk “guesstimate” so we decided to do the right thing and alter it moving forward and refund the rest.

So essentially, in the digital age, the publishers etc decided to move the goal posts and collect the royalty monies directly. Why? Other than the medium change, what else sparked such a dramatic shift in the business model? 

That’s a good question. We always imagined the powers that be didn’t see the digital age coming and when it arrived they were forced to adjust quickly.   We can appreciate why the old model didn’t work – as record companies were simply not equipped to deal with the new “data” driven publishing world.  So the next logical step was for them to go to the source and tap the keg there…

As far as the rest of your question, your guess is as good as mine. I suppose all societies are essentially businesses so they all did what they felt was best for their business and game on.

Traxsource has taken a very firm stance on this and are the first to give back to the artists… 

Thanks… We have always tried to do the right thing.  This ethos is what drives us.  After all we are a record company too and our Soulfuric money is tied up in all of this too! It’s difficult to say or comment on what other company’s have done – we are just grateful to have gotten through this and much thanks goes to our attorney of 20 years and his staff, Kurosh Nasseri…as without his consistent guidance we would surely be gone by now.

Since ADE, when this was all announced, how have your fellow retailers taken the news? Will we see the likes of Beatport etc follow your lead do you think? 

To be fare, we don’t keep to much tabs on them and cannot really comment on this subject.  Saying that by the looks of recent sfx headlines I imagine they have bigger fish to fry!

Brian tappert

In an unprecedented and frankly, positive new business model, Traxsource will focus more effort on working with labels and publishers regarding transparency and clarity. Given this, how do you see the landscape of the digital market change over the next few years? 

One can only imagine how things will progress but I for one and on behalf of Traxsource surly hope things change.  Currently, there are so many giant obstacles to deal with it’s going to take some divine intervention to get it right in my opinion.  Things like piracy, publishing rights and streaming royalties must be fixed…the music business seems to make bad decisions time after time.  We should learn from the movie and tv business but we don’t!  p.s. Labels – if you care about these subjects you should check out and join the AFEM as these guys are doing the right things and working to solve all of that and more!

Is the music industry ready for a more levelled playing field, or have you experienced any hostility at all? 

Oh yea… People want and need this. The industry is like a mistreated dog, it doesn’t trust anyone and rightfully so. We have not received anything but praise for the work we have accomplished.  It’s been a very rewarding situation.

So lets get down to brass tacks here. What does this mean for the average Joe Producer? Can they now enquire with the labels for exact breakdowns, and claim back monies owed?

Yes sure, all labels and distributors will get paid out over 3 tiers with the majority being finished before the end of the year.   Depending on how successful their releases were will depend on the amounts received. Some labels have received some nice cash back!

With more than 20 thousand labels and a quarter of million artists on your books, I expect this whole process is going to take some time! How can we help you guys out? 

Haha…Please send bags of coffee!

This all sounds really positive for the scene Brian. I really hope this is the turning point for the music industry, and we can all make music and be paid fairly for it. In closing is there anything else you’d like to add? 

Just would like to say thank you to all of our fans and DJs who support the scene and still buy the music they perform from reputable sites.  Without you guys none of us have a job! Many many thanks!