Victory Records: A Marketing Case Study

Company Information:

VICTORY RECORDS
346 N Justine St.
Chicago, Illinois, USA

www.victoryrecords.com

Purpose & Research Methodology
Purpose of Study
The current North American music industry is going through a period where the previously feared all-consuming oligopoly of major conglomerates is being challenged by new, creative, and aggressive independent companies. Independent labels have not simply benefited from the obvious appeal of cultural authenticity. Their recent success has also been a product of several other factors. Creative, innovative, and direct marketing techniques have allowed them to catch the attention of consumers largely without traditional means, such as corporate radio and television. Freedom from responsibilities and obligations related to shareholders, parent companies, and contractual agreements with other labels has also helped. For the most part, all of these advantages have not been sufficient to compete with the capital and wealth of industry-wide connections possessed by the major players. Nevertheless, there are independent companies who are taking great strides to turn that around.
One of these companies, and arguably one of the most significant ones, is Chicago’s Victory Records. Originally a hardcore punk label, Victory has grown to feature a large roster of artists, creating original music of several different genres, and almost $20 million in annual record sales[1]. Victory is a privately owned company, therefore no financial information is available, but one need only look at Soundscan figures and the prevalence of their artists’ merchandise to see that there’s a market for independent music.
Although $20 million is small compared to Universal Music Group’s $5 billion in revenue[2], it still shows that major labels aren’t the end of the story, and that progress in the way music is sold is still just as healthy as progress in the way music is created. Victory Records prides itself on being the number one independent rock label in the U.S., and makes for a perfect subject of study into the future of marketing the music industry.
Research Methodology
The majority of the time I spent as an intern at Victory during July and August of 2005 was spent doing mainly homogeneous tasks for the sales department. Although being immersed in the environment did let me converse with many of the employees, artists, and fellow interns from all around the country; as well as participate in some street promotions, I felt that observations were not enough. To obtain the majority of my information for this study, I conducted interviews with a dozen employees, all within the sales, promotions, production, and publicity departments. The interviews averaged about half an hour in length, and the employees answered several questions about their responsibilities and their opinions on the label’s general marketing practices. The interviews were recorded to ensure the accuracy of quotations.
Shortcomings
Since the interviews were done before the outline of the case study was created, the questions did not necessarily conform exactly to the sections in the study. This resulted in some sections having stronger support from quotes than others. Secondly, there were two important people at Victory that I did not interview. At the time, I was interviewing whoever responded to my requests, but in retrospect, a larger effort on my part to set up interviews with these two people would have greatly helped the study. Those two people were Tony Brummel, the Owner/Founder/President, and Ramsey Dean, VP of sales.

Company Overview
Basic Facts
· Victory Records was started in 1989 by a young punk fan from Chicago named Tony Brummel.
· It currently employs about 40 full-time staff at its offices in Chicago, divided into the following departments: promotions/publicity, sales, accounting, graphics, warehouse, and screen printing. Victory also employs three full-time “street assault” van drivers.
· Its revenues are divided into three streams, all going to separate company names. These are Victory Records, Another Victory Publishing, and Victory Screen Printing.
· It currently has a roster of 37 bands.
· The most prominent bands in Victory’s 16-year history are Taking Back Sunday, Thursday, Snapcase, and Earth Crisis. Currently, its most successful bands are Hawthorne Heights, Atreyu, Straylight Run, and Silverstein.
· Its roster currently includes four Canadian groups: A Perfect Murder, Comeback Kid, Silverstein, and The Black Maria.
Marketing Structure & Pertinent Staff – August 2005
Promotions & Publicity
Heather West – Director of U.S. Publicity
· General Publicity – “I secure articles, TV appearances, newspapers, TV programs, internet sites, press releases, newswire items, AOL music, Yahoo music, and any other kind of media exposure possible.”
Stephanie Marlow – Promotions and Publicity
· Video Promotion – “With the video promotion side of my job I am the one responsible for getting our videos played on national networks and regional networks, be it MTV, MTV2, Fuse, MTVU…Much Music, Music Plus in Canada, and a bunch of other regional television shows…anywhere you see our videos, internet too.”
· Tour Promotion and Publicity – “I work really closely with booking agents, booking agencies, promoters, bands, i) trying to get our bands on tours, ii) making sure promoters have all the materials that they need, be it posters, CDs…and we’ll get [our bands] written up on local media…which in turn helps the promoters sell more tickets to the shows.”
· TV Advertising – “I also do TV advertising…Paul [in graphics] will design our commercial spots and I book all the advertising time, well get blocks….with Fuse and MTV…if you look you see our commercials on all the time, that’s not cheap…more expensive than print ads…we spend the most money on TV spots.”
· Copyrighting and ASCAP
· New Release Publicity
Katie Robinson – Promotions Assistant
· Consumer Advertising – “I do all of our advertising, which means everything print, I deal with all the magazines, newspapers, and I deal with everything online, not only banner ads but I get our bands featured spots like Purevolume.com and Myspace.com, and I handle all of our mp3 pages.”
· Marketing Plans & Weekly Report – “I compile all of our weekly reports…all of our sales and marketing stuff for the week. I also write all of our marketing plans for each release, per department.”
Tom Wojcik - Marketing/Publicity Assistant
· Tour Promotion/Publicity – “We do a lot of marketing for shows that our bands are on…we handle the press in the local areas…contact newspapers, publications, pretty much everything except radio, invite them to shows, have them do previews/reviews, make the band’s presence in town known.”
Abby Valentine – Director of Street Promotions
· Street Assault Vans and Street Team – “I come up with their day to day activities, routing…I’m in charge of any promotional material, like samplers, stickers.”
Timothy Binder– Director of Radio Promotions
· “I facilitate our bands getting airplay on the radio. I have to…get program directors and music directors…the music and keep a running relationship…I mainly deal with commercial radio…give them reasons why the artists should get played on the radio.”
Mike Jakubow – Radio Promotions
· “I work in the radio department, I handle everything from commercial rotational stuff…I also handle all the college radio in North America…I do all the satellite radio, which is XM, SIRIUS radio. I do all the digital stuff…basically like radio on TV…every non commercial station as well, like public.”
Sales
Ramsey Dean – VP Sales[3]
· Co-op Retail Advertising
Erin Burks – Direct Sales
· Direct Sales Representative – “I have a domestic account base of 400 accounts of indie accounts I call on a daily basis.”
· Distribution – “I take care of all of our international distributors, so everyone in the UK, Australia, Japan, Greece…”
Rick Linus – Direct Sales
Direct Sales Representative – “I solicit all music and merchandise to…record stores, clothing stores, web stores…talk to buyers, store managers…get our merchandise better visibility.”
Manny Ruiz – Sales
Sales Representative – “I do a lot of band stuff, I do restaurants, bars, softball leagues, church groups…whoever needs any kind of promotional material, its not just shirts, we do mugs, visors, bags…I’m a sales rep for VSP [Victory Screen Printing].”
Production
Clint Billington - Production
· “I get the bands in and out of the studio, I get everything mastered for the record, layout and packaging, send it out to get pressed, coordinate shipments, graphics, stock, warehouse.”

Strengths
Victory’s internal strengths revolve, for the most part, around the quality of the people working there. The advantage of the perceived authenticity that independent labels have is copious at Victory. From their reluctance to deal with anything corporate, to the colorful offices they have in an almost ancient building in Chicago’s near west side, to the presence of Victory staff at all Victory-related local shows, to the famous aggressive and sometimes coarse management style of Tony Brummel; they are a true product of the scene they represent.
The Victory staff pride themselves on their youth, passion, and enthusiasm. The high rate of turnover, to them, is indicative of the intensity of their jobs. Erin Burks and Rick Linus are two members of the sales department who deal with direct music sales to retailers.
“We’re all pretty young…we’re all in touch…there are so many labels that are…old bitter industry dudes…for example Drive-thru Records used to be an awesome label 7-8 years ago…its run by a brother and sister and you can see that as they’re getting older the label doesn’t seem like its doing as well and it just seems like they’re out of touch and…pretty much everyone here is 20-27…and I really think its awesome…some of us are fresh out of school…we all work hard for the same thing. There’s a lot of turnover in sales [department] just for the fact that it really is a hard job…you kind of make it or break it… [due to pressure from Tony].” – Erin Burks

“We do have a lot of creative people here…everyone that’s evolved here has their ear to the ground…they always say the best or most honest ideas come from the young people…the music were putting out there is for younger people…it would be great if all of our bands were on TRL but were not going to compromise between what we think is good and what we know will sell…we all have a good knowledge of where our music is coming from and where it should go…we’re all pretty experienced too.” – Rick Linus

Having staff that are passionate about the product being sold is important, and most certainly makes for a great selling point for the sales department. It takes more than a passion for the product to compete for the ears of rock fans. Stephanie Marlow and Heather West argue Victory’s superiority from the point of view of the publicity and promotions department.
“We’ve been in the business longer, Victory has been a full time label for ten years, a label for 15 years…there’s a very dedicated and devoted fan base which keeps growing every year…a lot of labels that have bands that are competing for the same spots as we do, half the time its just a handful of people in an office somewhere, here we’re fully staffed, full time, everybody who works here is really passionate, really into the music, we put in really long hours…we do it because we love it.” – Stephanie Marlow

“We all work our asses off, we work at night, we work on weekends…maybe if the other labels were as committed as we are they would get further in the world.” – Heather West

Most people could argue that many successful companies claim that their staff has a unique work ethic, but in Victory’s case, this is not spin. Every Victory employee works at full speed, operating at a level of stress that would be unhealthy for most people over 30, from before 9am until after 7pm every day. To most executives this would seem normal, but for those who know the independent music industry, this is definitely impressive.
The authenticity of Victory’s independent, anti-corporate, and anti-establishment aesthetic is another crucial strength for this self-proclaimed “Lifestyle Label”, especially with their alternative-leaning fan base. In early 2005 Victory printed a line of tour programs for their largest act, Taking Back Sunday, who was going on tour with Jimmy Eat World. On the back of this program was a picture of owner Tony Brummel, with a Victory Records manifesto printed beside him (see appendix 1). This manifesto summarizes the Victory aesthetic, as well as much of the general marketing strategy that will be discussed in detail later in this study. Promotions assistant Katie Robinson’s disgust of major labels reflects the general attitude of those around her.
“I have never had anything to do with a major record label, I don’t really know too much about the majors, I don’t want to, because I think they’re all scumbags…our Canadian distribution is Universal Canada, and I know when we were meeting with them, they were taking notes from us because they want what we have…none of them will be able to because they’re all corporate retards…we’re all from this culture and we know all these bands…they’re very bottom line oriented…we don’t have a board of trustees we have to meet with.”
– Katie Robinson

Despite the attitudes of the staff, Victory does still function with a very serious and almost corporate atmosphere. This has led to many disputes among fans, bands, and critics concerning the legitimacy of these attitudes. A member of Taking Back Sunday, who have since left Victory and signed with Warner, posted this complaint about the aforementioned tour program on the band’s website:
"This morning I came across a tour program having absolutely nothing to do with our current tour. ... After close examination of said program, one would be led to believe that we are currently on tour with every band on Victory Records ... [as there's] not a mention of Jimmy Eat World. The whole back page ... is nothing more than a corporate agenda (cleverly disguised as an anti-corporate agenda), placed strategically in front of everyone to raise funds for more Escalades, vacation homes and non-corporate office supplies."[4] – TBS vocalist Adam Lazzara

Although he is a very controversial person, and well known for his aggressive personality, most Victory employees would argue that Tony Brummel is a very effective leader. In a cut throat and highly competitive industry, sometimes it is an advantage to have a leader who will do whatever he can to succeed.
“Tony is also what sets Victory apart because he’s a really good leader for the company, meeting other label heads he’s way more intense, way more passionate, the example that were expected to follow, that we all do follow is just better than anybody else’s.” – Stephanie Marlow

Unfortunately, Mr. Brummel’s actions are not always well thought out, and end up having negative repercussions for his company. In the past year, Victory’s highest selling artist left the label, presumably through an escape clause in their contract, due to differences with the label. Secondly, Victory’s second highest selling band attempted to end all direct contact with the label due to violent threats from Tony. Thirdly, a former employee took legal action against Tony due to the manner in which she was abruptly terminated and evicted from Victory’s offices. Regardless, Tony Brummel is a very successful businessman with no business education, forty very dedicated employees, and plenty of satisfied bands. His relations with his distributor in the US as well as with major labels are explained briefly in an article in the first appendix.

Weaknesses
As with any independent label, Victory Records does not possess the manpower, influence, or relationships needed to make an impact in the modern mainstream corporate media. Dominated by major label influence, most radio stations, with the exception of college radio, largely ignore independent labels and artists. The same goes for music television such as MTV and MuchMusic, but to a lesser extent. Victory has three people in total working in their radio department, and their work has not yielded very much success to date. Although Victory recently signed a distribution deal with Universal Canada which has vastly increased their artists’ exposure in Canada, they are still fighting an uphill battle in the largest market, the U.S. In light of this summer’s Sony-BMG payola scandal, where the major label was found to have illegally promoted its music at radio stations, Tony Brummel expressed his outrage publicly:
“Hawthorne [Heights] is beyond gold and on its way to platinum and we cannot even break the Top 40 at radio. As you are not in a top market I know that you get passed over more often than you'd like. As the No. 1 independent rock record label, Victory gets passed over every day even though we have the results that merit airplay. Why is 99.4% of what radio plays major label content when over 20% of the sales come from the independent sector? Are you going to continue to support companies that make no money, are in a state of flux and have no brand equity? ...Clear Channel could send a very serious message to the radio and music industry in light of everything that is currently happening regarding AG Spitzer and company. By programming real music that real people are buying and seeking out you help yourselves and you help me along with providing careers for these great and deserving artists.”[5] – Tony Brummel

This outlook seemed to be the general consensus with all of the employees interviewed, including the radio department.
“We’re a small company that’s run like a big company…were trying to compete with the big boys…we lack in radio support, if you’re not a major label its hard to get an act on the radio…the third largest market is Chicago and we could not get Q101 to play [Hawthorne Heights] and we’re based in Chicago…until we were finally starting to get spins everywhere else, MTV was coming on board, and that’s the only reason we were getting support…spins are proven to sell records.” – Manny Ruiz

Otherwise, the internal weaknesses present are small and have mostly to do with time, space and organization. Several of the employees offered their opinions on internal issues:
“Everyone kind of does stuff that they’re not hired to do…you’ll see some random report that has nothing to do with your department…kind of sidetracks you…like Soundscan…” – Erin Burks

“Not enough time in the day” – Stephanie Marlow

“We’re a little disorganized, at all different ends, think about everyone that works here, we’re all music lovers, I don’t think any of us are overly genius, educated, I mean we’re all educated…but I just think we’re slackers sometimes…sometimes things aren’t organized, fall through the cracks from the top all the way down…but that’s part of the music…it happens everywhere, even at Sony.” – Manny Ruiz

“When you’re dealing with entertainment...this is not something people need, its something they want, it kind of has to be redundant…if we’re signing new artists and putting out new records…sometimes it feels like you’re doing the same thing over again…everything’s repetitive because you have to use a similar formula for each record … [we should] manage our time better…we always bite off more than we can chew…everyone thrives on stress.” – Rick Linus

“We need more space, all of the interns are crammed over there…we have no storage space.” – Abby Valentine

Environment Overview
Opportunities
Victory’s external environment is that of an industry surrounded by a culture that is changing and evolving technologically, socially, politically and economically more rapidly then ever before. The culture industries are welcoming the growing and changing demands of youth and facing the challenges of technological evolution. In the age of the Ipod, more people are seeking out and listening to more music and more genres of music than ever before. A few of the staff discussed how the environment has recently affected them and how it might in the near future. Stephanie Marlow and Tom Wojcik argue how youth are becoming increasingly aware of the difference between majors and independents and of new alternative genres outside the mainstream:
“Kids want indies…kids are getting smarter now…a lot of bands that are comparable to what we do are development deals and incubator labels where its not real, its just some major label money with some nameless, faceless corporate suit people sitting back counting their dollars while these kids are bleeding in something that doesn’t necessarily mean anything…look at Victory, I mean Victory is turning into a brand…kids know that they can trust labels like Victory and other indies…I think people in the actual industry are taking note of that, you know…we’re an indie, just an indie that’s had their videos played on TRL…we’re kind of leading this next wave of what’s happening with majors folding and indies are up and coming.” – Stephanie Marlow

“I see a lot of heavy music coming back with Sounds of the Underground, Taste of Chaos, and these tours are rivaling Ozzfest.” – Tom Wojcik

In the realm of digital media, P2P, and copyright, Victory has surprisingly very little concern. They are the farthest from being ignorant of these issues, as they are heavily involved in internet promotion, and even distribute Ipod cover stickers as promotional merchandise. Most of the employees rejected these fears, which are common among larger labels, publishers, and artists, and cited the fact that their CD sales have consistently increased despite digital downloading. Victory uses legal digital downloading as a promotional tool through websites like http://www.myspace.com/ and http://www.purevolume.com/.
“I think the thing that’s affecting the music industry the most is downloading, I don’t think it’s affecting Victory as much because our fans are more dedicated and like to get the whole record.” – Clint Billington

“I really don’t subscribe to that notion that everyone’s sliding into the sea because of digital downloads, or bootlegging…back in the day when the whole internet thing first started a lot of people were throwing really large advances around the different labels because it was the “wave of the future” and then after 9-11 the dot com world kind of exploded for a while and now it’s all rebuilding but no one’s offering the kind of money that they used to and everybody wants to get stuff for really cheap and we’re not interested in selling our music cheaply, so we’re holding out, but I think that’s something that’s going to be changing.” – Heather West

“Just in the last year, myspace and purevolume have gotten huge, that’s where a good part of our marketing money goes; not with traditional banner ads but with band features…at first they were easy to get but now they book up early and everyone is raising their prices…indie sales don’t really go down, its really major label stuff…some of our artists are moving into major territory…all of our normal bands, they sell what they’re going to sell no matter what…most of the people who buy it buy it cause they like the band and because it’s their subculture…they already [download]…we already give away 1/3 of our albums online.”
– Abby Valentine

The majority of Victory’s external opportunities seem to surround their branding as an independent, underground, punk lifestyle label. According to them, consumers are looking for new music, and for a new image to go along with it, which means more than downloading a few songs off Kazaa. Victory’s branding will be discussed in greater detail in the marketing analysis that follows.
Threats
Despite healthy growth and an optimistic outlook, there are still changes occurring in the market which Victory needs to pay attention to. Traditionally, the two most important sources of revenue for independent bands and labels were album sales through independent retail and income from live concerts. Despite Victory’s progressive movement towards other sources of revenue, which will be discussed later, there are trends that threaten to hurt those traditional income streams.
Historically, independent retailers have been the greatest supporters of independent music, but as in most retail industries, those stores are being pushed out by larger chains.
“Every week there’s a store that’s closing and web stores are doing better and better…our target audience are conditioned by the internet, mass media, trends…if there’s any way I could see us changing…more of an online presence…10-20 years down the line were not going to have CDs anymore, everything’s going to be digital, its one thing that I think a lot of people fear, cause when you eliminate the physical CD then you eliminate a lot of business. You kind of have to adapt to it, we’ve adapted so far…we actually don’t have any online sales.” – Rick Linus

Although there are a significant number of music enthusiasts that are making an effort to immerse themselves into musical culture, there are also others, mainly youth, who are paying less attention. Whether one trend is more significant than the other is up for debate.
“Music used to be a way of life for people…it wasn’t so much TV…competition…video games…there’s more passive listeners than active listeners.” – Manny Ruiz

Marketing Strategy Analysis
The general analysis of Victory Records’ marketing strategy is divided into the standard target market analysis followed by a marketing mix analysis (Product, Place, Price, and Promotion).

Artists & Repertoire – Selecting Target Market
In the music industry, like in many culture industries, the determination of a target market is not as black and white as in many other well defined industries. Labels like Victory are born to promote and live within certain subcultures. Victory lives on a foundation of an aesthetic defined by certain beliefs, and any market research and market segmentation decisions made usually conform to those beliefs. Like many of its counterparts, Victory is not going to sell whatever product they think will attend to the needs and wants of consumers and turn a profit. Victory Records originally started as strictly a hardcore punk label, presumably from Tony’s passion for the genre. In recent years, the label’s roster has expanded to neighbour sub-genres, like hardcore metal, emo, and screamo. There are positive connotations to this expansion, such as a larger consumer base and greater media exposure, as well as negative ones, such as the possible alienation of consumers devoted to the hardcore punk subculture. Several of the staff shared their opinions on the subject.
“We’ve definitely found our niche market and we keep expanding, look at the diversity of our roster, it was just the hardcore kids, now it’s the punk rock kids, and the emo kids, now its everybody…we keep expanding…I don’t listen to one kind of music, most people don’t…if I had to sit around and work a record that sounds exactly the same as the last that would drive me insane…I think that most people who aren’t totally shallow who are more open minded will appreciate Victory.” – Stephanie Marlow

“Victory lost hardcore for a while…they made a big push in the last year with Comeback Kid, With Honor, Sinai Beach, for a while it was Premonitions of War, A Perfect Murder, those aren’t even hardcore bands those are metal bands, the label was built on hardcore, Earth Crisis, Warzone…there’s only so many hardcore kids, the hardcore scene is a pretty small, very devoted scene…we’re going after the pop-punk stuff, or screamo or emo, those are the kids who have disposable income…support bands, buy t-shirts…it’s a smart move to go after this demographic…you’re not going to see Comeback Kid sell 600,000…Tony still says he likes all of the bands…its smart to diversify the label…I don’t think we’re going to get into rap or country…but other labels are…the hard part about that is like for Heather…its totally different magazines…as much as our label is diverse, there is a lot of crossover…its all really hard rock…it’s the number one rock label in the country…Tony’s always talking about “we’re branding the label”… that’s why you see our label on the back of the shirts…once they’ve got you in the door, they want to keep you…people are impressionable…some people are purists…there’s that artistic fine line that music people don’t want to walk…you got to make a living...but I respect all of our artists and so does everyone that works here…there’s just people who like being negative (and hate bands/labels)…and people try and instigate…the numbers don’t lie.
– Manny Ruiz

“This label has always been a punk label…you know DIY attitude, the independently owned and ran attitude. All of our bands fall from the same tree…they all still have a very basic punk aesthetic…none of them really come from a mainstream place.”
– Rick Linus

“One [advantage] is of course our diversity…a lot of people like Victory because we’re diverse…we are hitting two different markets, which a lot of labels aren’t doing…we can sell more because there’s more CDs to sell…even the snobbiest hardcore kids have to admit that Comeback Kid and Bury Your Dead are pretty hardcore” – Abby Valentine

“With the heavier music coming back, I would like to lean more towards that, but when you have a band like Hawthorne Heights that does so well and June and Silverstein…and we have all that love and passion for the bands, why not.” – Tom Wojcik

“On the one side hardcore fans, when they go buy a Victory CD there’s no guarantee its going to have the Victory sound, if you read old reviews you’d read that a band has the “Victory sound”…if Victory was losing money we couldn’t give these smaller bands the opportunities we want to give them.” – Clint Billington

“The sad truth is a lot of those really successful pop bands are making it possible to put out the less successful harder bands.” – Heather West

“Victory is always kind of doing the next thing…I’m sure there are people who feel like we have sold out, put out emo now, but business wise, its like an empire now.”
– Katie Robinson

Overall, the opinions shed a positive light on the inclusion of new genres. It should not be surprising that a company speaks positively about its own decisions, especially when those decisions have brought the company to a level of success it has never seen. The true evaluation of this target market expansion lies with the consumers, though. Most of the staff and interns, and especially street team members will admit that they have run into fans that do not think very highly of the label anymore. Abby Valentine mentioned that “Some people think that we’re too corporate.” Here is a post found on an internet blog that express those kinds of opinions. Its importance can be debated, but it represents the opinions of more than just this individual:
“I would trade them one good review of one of their shitty CDs for a One Life Crew test press. I know they've still got that shit lying around. Otherwise, fuck Victory Records. They spent years building a name around incredible and influential releases only to wipe it out and disgrace the memory of real hardcore with records by the likes of Taking Back Sunday. It's honestly just embarrassing but I'm sure they're enjoying the millions of dollars they're making by raping all their pop-punk bands with shitty contracts.”[6]

Product
A record label is not in a single-product industry, it is part of the culture industries. In a global economy immersed in the information age, culture industries are a constantly changing organism. It is crucial for any company to avoid relying on a single solitary product or medium. Consumer demands change and technology evolves, and companies work hard to stay ahead of or, at the very least, keep up with trends. For a record label, this means evolving past a reliance on music CD sales, and finding new ways to produce income. For the most part, Victory has done well in this respect, but there are still opportunities to be taken. This section outlines the different income streams Victory has, what the future might hold for those streams, and any possible new streams that are on Victory’s horizon.
CDs/DVDs/Vinyl
As discussed earlier, CD sales are an extremely healthy source of revenue for Victory, and show no signs of slowing down. This seems to be true for two reasons. The first is the punk culture associated with much of Victory’s music. Most consumers who consider themselves a part of this subculture make the effort to immerse themselves into the subculture as much as possible. As far as music goes, this means going and getting a copy of an album rather than downloading a song or two off ITunes. This gives consumers more of an attachment to the band. Also, a lot of independent music tends to be album-driven rather than single driven in comparison to mainstream pop music.
“We don’t have a digital agreement with anybody, our CDs, every year gets bigger and better for Victory…people point their fingers at those 12-24 year olds who are doing most of the downloading but that’s our major market, and these kids buy our CDs…we’ll put bonus stuff and we’ll enhance the CD or we’ll add a bonus DVD or we’ll re-release of all this cool stuff and people keep buying it…I could easily steal all of my music…I still buy CDs…I don’t see the CDs going away.” – Stephanie Marlow

The second reason for the healthy CD sales is the effort Victory has made to add value to the product. As Stephanie Marlow explained in the above quote, Victory has added extra material to many of its releases in the past few years. Common additions are:
· Bonus DVDs with band interviews and live performances
· Enhanced PC-friendly CDs
· Bonus tracks of new songs, live versions of songs, or acoustic versions of songs
· Bonus CDs/DVDs promoting other bands on the label
The last item is the newest and one of Victory’s most cutting-edge promotional tactics. Promotional videos or EPKs (Electronic Press Kits) of newer artists are put into larger releases as a “piggybacking” promotional tool. This way, the more successful releases help promote less known artists in an effort to improve the performance of their later releases, such as the “Introducing Silverstein” DVD included in the re-release of Hawthorne Heights’ album (see picture above). This idea, like most, is never perfect.
“Some things it’s like I cant believe we doing something like that…like the re-release of the Hawthorne album…some of the footage on it was terrible…some other stuff is a little redundant…putting the exact same songs on samplers…Ohio Is For Lovers was on every sampler for like a year…but there’s no telling who you’re hitting with each sampler so realistically you could be giving to a kid who’s never heard that song before…we get very little radio…so if we do want to push a single…that’s the only way to do that…like “well if you like Thursday and TBS then you’ll like…”…I mean you have to piggy back on what’s made you successful but sometimes it becomes a little redundant.” – Manny Ruiz

Merchandise
Band merchandise is one of the most important aspects of independent music subculture. A lot of kids like to wear t-shirts, hoodies, and other items proclaiming their support of a certain band, genre, or movement.
“This is a lifestyle label. The Victory catalogue and…it wasn’t just buying a piece of music its buying a culture…if you run your business properly then you know that…it may seem like you’re exploiting it but that’s what the kids want, they want to wear the shirt of their favorite band…they should be able to make their own decisions…these days its so easy to be “punk”…its online, it’s at the mall now.” – Rick Linus

Traditionally, bands have printed their own merchandise and sold them at live shows. Although this is still the norm, Victory saw the demand for merchandise and began selling their own merchandise representing their artists. Eventually, the demand grew to a point where it became feasible for Victory to start printing their merchandise in-house. Today, VSP (Victory Screen Printing) takes up a large portion of the label’s offices and employs a full-time staff. They buy the base materials (blank t-shirts, sweaters, messenger bags, and jackets), create the designs, and use their line of screen printing machines to produce their band merchandise. Their largest retail customer, Hot Topic (http://www.hottopic.com/), tends to order thousands of one item at a time. Victory’s full catalog can be accessed at www.victoryrecords.com/webstore. With low variable costs, this is a very profitable division.
“VSP is big, if you think about it, it costs $2 to make a shirt and we sell them on the site for $17…they’re printing $10 bills back there, that’s a lot of money, especially when you consider some albums like the Forecast, Giles, The Hurt Process, that sold like 3000 albums, its not so much Giles…we thought Between The Buried and Me fans would buy it…something like the Forecast, we put a lot of money behind it…VSP helps offset those costs…we don’t do any tour revenue, its really the only way a band makes money, they don’t make money of selling albums...but when they tour, selling merch’, they make money” – Manny Ruiz

“In our contracts the bands give us a certain amount of designs and we make money off that” – Abby Valentine

Along with an effort to expand its catalog, Victory has made an effort to stay current with trends.
“Right now its back to school so a huge trend that were showing right now is like everyone wants a messenger bag, everyone wants a sweatshirt…Another trend that were going to focus more on is the female demographic as a whole because we want to do tote bags and like t-shirt dresses and ….its a huge market that were not tapping into…we want to try to do more merchandise because it makes more money, CDs, we can make thousands of them and the takeaway isn’t as much as producing t-shirts…that’s where VSP…that’s the other revenue…In Australia…Silverstein just got back from a tour there…and they were saying kids were freaking out because normally when bands come down there sweatshirts are $80 and t-shirts are $40…the venue told them to sell them that much but they sold them for $25 and $30 and kids were like going crazy because its “so cheap”.”
– Erin Burks

Licensing & Additional Revenue
As much as many enthusiasts would like to deny it, in the business world, the lines between subculture and pop-culture are never definite, and many aspects of pop-culture usually originate in some kind of sub-culture. This is why independent labels have as large an opportunity as any to get involved in pop-culture related income streams. More than ever before, television and film producers are looking for new original music to include in their productions. Cell phone technology has opened the door for music and videos on phones as well as ringtones. Opportunities for licensing revenue for Another Victory Publishing are appearing everywhere, and Victory has done what it can to capitalize.
“The world of television commercials and movies is a very lucrative world that the majors have had locked up for a very long time, and there’s a simple reason for that, Universal is a movie studio and a record label, so why wouldn’t they use their own product more than they would use someone else’s…more and more people are looking for different sounding music so I feel that’s an area that we can really grow (licensing).” – Heather West

“I think mobile stuff, like ringtones, videos on phones; I think those are the forefront of being a really big part of what we do...we just started last year making belts and wallets…that and moving into the TV market…even maybe more commercials and infomercials where you can order direct…that’s just ultimately album sales…we do have Another Victory publishing…we license pretty much all of our artist’s music for TV shows, movies, soundtracks, video games, compilations, DVDs.” – Katie Robinson

“We do licensing…Tony owns all the masters…all that stuff we license out…Atreyu was just on the Mr. And Mrs. Smith soundtrack, [Taking Back Sunday] was in Spiderman 2.” – Manny Ruiz

For the most part, Victory has followed along with major labels in these respects. There is, however, one glaring exception. Victory does not have any online music sales. In the interest of keeping Victory’s product as true to the punk aesthetic as possible and valuing the album over the single, Tony Brummel has avoided all internet sales, such as ITunes, and even rejected a lucrative offer to be a part of the launch of Yahoo’s online music venture.
“Tony is really weird about…you can’t get anything online from us…we don’t have any downloading…pretty much anything if you find it online it’s illegal…we recently did ring tones for Atreyu and Hawthorne Heights…kid of stepping into it…we’ve had offers…the people from Yahoo came and… did a business presentation…they’re going to start something that’s just like I-Tunes…they wanted to work directly with Victory and feature our artists and we were going to be on their front page and… Tony was like “no”…he just really doesn’t like the internet downloading and mp3s type stuff…I don’t know if that will change eventually.” – Erin Burks

“I’m sure that were ultimately going to have to make a deal for online sales [but] were not interested in selling ourselves short…” – Heather West

Tony’s views on this issue are controversial. One could argue that regardless of subcultures, digital music has become common among all of the music industry’s dominant youth demographic. For Victory, this is a situation where its beliefs are prohibiting it from profiting from a medium that is providing significant revenue to other labels.
Place
Distribution/Sales Outlets
Victory’s distribution is outsourced to different companies in different countries. Their distributors in the U.S., Canada, and Australia are Red Distribution, Universal Music Canada, and Stomp Distribution respectively. Victory’s sales team not only works with the distributors, but also does direct sales to independent retailers and sets up promotions at larger chain retailers. They make an effort to sell to outlets that are frequented by their target market, which include many independent “mom and pop” stores, as well as online stores. These efforts place victory music in most retail outlets in the label’s largest markets, and ensure that their artists are getting at least a moderate level of visibility and promotion through the outlets.
“We’re always sending people CDs, posters, and also Rick and I work together on …putting our artists on listening posts…all of that goes through Rick and I…I work directly with Red which is our distributor…different retail coalitions…I work directly with Dan a lot of the times with marketing for albums ….Stomp is doing a huge promotion with [Between The Buried And Me]…Stomp is our distributor in Australia…pretty much every store in Australia goes to Stomp…its like 1500 of one CD of one title…the big chains are taken care of through Red…[Ramsey] talks to Red all the time…Hot Topic, anytime you go into Hot Topic its because of Rick...HMV, all that stuff we have Red here in the States in Canada we have Universal. Canada, there really aren’t many independents in Canada, pretty much everyone gets their stuff through Universal, and then if they get merchandise they go through us…since Universal is so huge, we don’t really want to step on their toes so we don’t try to do to much…the Jam Van…that’s one of my accounts…we can still sell to them if they buy merch. because if we only sell them CDs then it’s a breach of contract with Universal…Hot Topic hands down [reaches the most kids]…everyone has independent stores but its hard to work with some independent stores that are very set in their ways…but any kid can go to a Hot Topic and we’re Hot Topics number one company…that’s like the biggest thing right now because kids will can go into Hot Topic and say like “Hot Topic has it”…kids will buy shirts that they see at Hot Topic and they’ve never even heard the band but they like the shirt…” – Erin Burks

“I deal with the stores who deal with our target audience…I sell X number of CDs with Interpunk, and I know that’s [where the hardcore kids are].” – Rick Linus

“This is an independent label but its run like a major label…our distribution is so good you can find us anywhere.” – Manny Ruiz

The Victory merchandise is sold directly to retail chains by the sales department, as well as directly to consumers via the website.
Price
With so many different kinds of music, products associated with them, and levels of value placed on them by different consumers, price is not an exact science in the music industry. Price sensitivity can vary depending on the kind of consumer. When a product like a CD has to go through several parties before it reaches the end consumer, price is also not easy to control. Despite this, Victory’s staff makes an effort to make sure the prices are reasonable for consumers as well and coordinate prices with the perceived value of the product. Here is what some of the staff expressed with regards to pricing:
“We always want to be as reasonable as possible…especially with merchandise…all of our bands on tour [sell their stuff for reasonable prices]…we do have an operation that’s very much like “we do it ourselves and we give it to you”…we do have to cut corners when we have to.” – Rick Linus

“You’ll see almost exclusively a suggested retail price of 12.98…our records we have, number one a commitment to the fans, and number two we want to sell.”
– Heather West

“You’re getting value for your price, if you charge $19 for your CDs no one’s going to buy it, if you charge 12.98 and have a bonus DVD who wouldn’t buy it…they might have a deal going on, other labels, its more like us worrying about what were doing. Abby’s street-team-ers do retail checks. – Stephanie Marlow

“There’s been a conglomerate that’s lowered their price of CDs...i think that’s why people download music because why am I going to spend $15 bucks on a CD that’s probably going to suck when I can get it for free…concert wise, if you’re going to want to go see them…people pay.” – Manny Ruiz

“Some of our [distributors] are consignment accounts are like a dollar, like Amazon…they bring in like 20,000…most CDs are 8.50 some are 9-10.50…its definitely about how much it costs for example we just increased the price of our shirts…when you have a $500 order it adds up…with Hot Topic (our shirts) are like $9 now (sold for $17.50)…so I definitely think there is a lot of price sensitivity cause people…can just go to a one stop. [with the end consumer] it depends on the person, I honestly think that… [people are like] “this one has a bonus DVD but its still $2 more”…some people would pay but some people won’t… we did the best buy m-pass and it was just Victory artists and we saw a lot of take-away from that.” – Erin Burks

“I would never ever buy a CD for 17.99 but 13.99 for sure…frankly [kids] do have a lot of money but its money their parents have given them, so they’ll probably go for the cheaper CD…we’ll always sell CDs to our distributors for $7 but that doesn’t stop them from turning around and jacking up the price…before we got Universal our CDs were really expensive in Canada and a lot of our bands were freaking out.” – Abby Valentine

“I think it’s important to stay at competitive prices…especially with the big retailers” – Katie Robinson

Promotion
Multiple Impression Attack on Consumer
“There’s a concept in advertising and marketing of multiple impressions, the theory goes that the more impressions you can make on a person, the more likely they’re going to act.” – Heather West

Victory Records functions on the multiple impressions concept for its promotional planning. Although there are many promotional methods that are much more effective than others, the general idea is not to find the best ones and focus on them solely.
“I don’t think its one thing I think it’s a combination of everything that we all do…its everybody working together...its like a domino effect, its about multiple impressions its not about somebody seeing one thing and being like “I have to buy this” its about them getting hit over the head constantly.” – Stephanie Marlow

“Our most impactful [promotional tool] is just the whole advertising and marketing campaign as a whole…the most visibility in the right market.”
– Katie Robinson

This forces Victory promotions and publicity staff to keep looking for new ways to reach consumers, and reach them more directly. This strategy seems to give victory an advantage that can help counter its troubles breaking into mainstream radio and television.
Penetrating Target Market
In an effort to appeal to its consumer base, Victory has made an effort in recent years to brand itself as a lifestyle label rather than just a record label. The company’s job postings make it explicitly clear that they will not hire anyone who doesn’t already have a passion for everything they do and everything their brand represents. This study has already discussed how this branding has manifested itself in Victory’s line of products. What has not been discussed is how they promote brand meaning and brand recognition, and all the products attached to the brand, to the target market.
“The label is a brand…as much as we have bands…Victory is pretty recognizable…they’ve always had someone who’s been really hot…and kept the label on the forefront of what’s going on…there were people who were haters, but I think that’s kind of gone away especially with some our new bands, like Comeback Kid has been like this savior, I mean no one dislikes that band…were getting back to our roots…and were making money…for a while we were losing a bit of that ‘street cred’…if Victory became a major…we’d lose all of our staff.” – Manny Ruiz

All of Victory’s products and all of their promotional tools make it as clear as possible that these products are Victory records products. The first goal is to create brand recognition with the “bulldog” logo. Many of the advertisements try to encourage brand preference by stating that consumers can trust Victory to provide them with the authentic and original music that they are looking for. The majority of Victory’s promotions try to connect the brand with the product, and stay true to the brand meaning associated with the label’s punk aesthetic.
The largest amount of Victory’s marketing budget is allocated to media and internet promotion. Specifically, television commercials or “spots” are the most costly. Victory has been aggressively purchasing commercial spots on Fuse, a relatively new and rock-driven American music television network. These spots advertise releases, often two or three at a time for bands of similar genres. These commercials always make it clear that these releases are Victory Records releases, which is part of the overall branding effort. This year, Victory launched “VicTorV”, which is a one hour program airing on Fuse every Sunday morning featuring Victory music videos and other material. This channel is also one that Victory has been able to get their music videos played on regular rotation.
“Television spots are probably the single most effective thing.” – Heather West

“We do all the TV spots…if you look at profit margin…I don’t know how effective it is opposed to a banner on myspace…webzine, trade publications…I don’t think any other label puts as many ads as we do on Fuse or MTV2.” – Manny Ruiz

In accordance with the concept of multiple impressions, Victory also invests in numerous other promotional tools. Outside of television, Victory pays for print ads, outdoor ads, and anything else they can find that is targeted in the right publications and places for whatever release they are promoting. Victory also invests in internet advertising, including banner ads and band features on websites like http://www.myspace.com/ and http://www.purevolume.com/. Sites like these and punk-related websites are increasingly becoming hubs of information and communication for music lovers.
“We do bus bench ads as well…like for the Tossers we do that in Irish neighborhoods…I get one budget for internet, purevolume features, and print ads, and Stephanie has a whole other budget for TV advertising, it’s a lot more expensive…” – Katie Robinson

Victory’s radio department continues to promote its music to commercial radio, despite only reaching moderate success with its most successful releases, like Hawthorne Heights’ album, The Silence in Black and White.
“We have almost a four [person] radio department and we really don’t have that much radio play…it’s a pretty big market…I remember going to a seminar once and the speaker was a DJ and he said “the average person listens to the radio five minutes a day…you have five minutes out of someone’s day to sell your product or your band…if we had more [airplay] that we would see a lot more sales…radio-listening post-sale…radio stations really don’t play indie music…” – Erin Burks

Fortunately, new radio movements like Sirius and XM satellite radio, digital cable radio stations, and college radio stations have all welcomed Victory’s music. This has given the label good exposure in these small but growing media markets.
“If you get good radio airplay that can actually reach a good number of people, that’s the most direct form [of promotion].” – Mike Jakubow

The publicity department makes a daily effort to find new publications, media-related programs, or events and to pitch Victory artists and releases to them. They find magazines and newspapers that are willing to do articles or features on Victory artists. They also look for television and radio programs that are interested in having bands do interviews or live performances. These efforts are usually tied to album releases or tours.
“The most important thing for me is to get features that are large and informative in targeted publications, which for metal would be Revolver, for pop punk AP [Alternative Press]…if you’re really trying to hit a targeted scene or genre then that’s your best bet.” – Heather West

“For a while our print ads were kind of lacking…as far as being different and new, but were re-doing that for the fall.” – Katie Robinson

“Some of the other labels have very small publicity departments and trying to get out the word to newspapers is pretty much just making the phone call and pitching to them why A Perfect Murder should be on their feature, listing…We have VicTorV (Victory TV)…I don’t know of any other labels that have their own show.” – Tom Wojcik

Victory’s street promotion, headed up by Abby Valentine, is what definitely separates this label from its competition. This department started off with a street team, which is a network of volunteers all around North America who go to events and hand out cheap promotional materials like flyers, stickers, or posters, which are sent to them by Victory. These volunteers receive remuneration through concert tickets, free promotional items, and a better chance at internship positions. In the past few years this has expanded in two ways. Victory was one of the first labels, if not the first, to give away mass quantities of sampler CDs via the street team. These sampler CDs featured songs from several of their artists, and were distributed in cardboard sleeves.
“10 years ago there’s no way I would have walked out of a show and get a free CD” – Rick Linus

Details concerning Victory’s street promotions can be seen in the street report located in the second appendix. The second expansion is the Victory “Street Assault” Team. Victory now owns three vans, which are completely customized with graphics covering the entire vehicle and electronics inside. Full time drivers are paid to follow large tours around North America, and promote bands directly to fans. The VATs set up booths at shows, hand out promotional materials including sampler CDs at shows, and perform retail store checks in the various towns they travel through.
“With every record its different…we have the guys on the road the drivers…on tours with no victory bands playing…its people that we already know like that type of music…(like The Tossers).” – Erin Burks

“I think the VAT for sure [is a great promotional tool], I mean putting stuff directly in the hands of kids…also now [the VAT] can carry much more because they have the vans.” – Abby Valentine

“I think we get the most takeaway from the street promotion than anything else…television goes to the more passive consumers who look for name recognition.” – Clint Billington

Overall, Victory’s street promotions are a very powerful promotional tool. None of them require very large investments and they reduce dependence on media for release promotions.
In the sales department, Ramsey Dean takes care of retail co-op advertising. This is any advertising organized with retail stores or chains, to help sell releases. For example, Ramsey organized the creation and use of an HMV commercial advertising Silverstein’s new album, Discovering the Waterfront.
The final promotional tool used by Victory is touring itself. Victory does not subsidize tour costs nor does it collect any tour revenues. This is all in the hands of the bands and their management. The bands are encouraged by Victory, though, to tour as much as possible as the exposure is mutually beneficial. Whether the band is touring with other bands they know or opening for larger acts, the shows win over new fans every night.
“One of the most effective…aspects as far as marketing goes…I think touring is one of them…anytime you see one of our bands spike in sales its because they’re on a good tour…someone like The Forecast struggles, its cause they’re never on tour…kids can’t got to bars…going to shows is a great marketing tool, the Hawthorne tour is not about them gaining more fans, its about the label building up Bayside and Aiden.” – Manny Ruiz

“Getting the kids to the shows and buying CDs from the bands…having the guys on the road has been a big help, they put a face to the name, something sales people here can’t do.” – Tom Wojcik

Competitive Advantages
Victory’s direct competition is both majors and other independents. Beyond the differences in resources and tactics, the Victory staff believes they have a few solid competitive advantages. Manny argues that Victory has succeeded in its effort to create brand preference, and has managed to cultivate a loyal base of consumers.
“We have a built in crowd…we just got lucky, we’ve signed some bands that people have really latched onto, and right when one bands leaves there’s one band behind them to pick up the slack…Grade broke up, then it was Thursday, Then TBS, Hawthorne, now its going to be Silverstein, we’ve been lucky to have sustained [sales] for a long period of time…like Drive-Thru was huge when they had New Found Glory, Finch, Starting Line, now those kids aren’t even on their label…Marketing wise, kids are very impressionable and I think a lot of our marketing is toward kids, making them believe that this is what you should be doing…it’s a little bit like mind tricks.” – Manny Ruiz

Another advantage that Victory holds over many other labels is the character of their staff. Innovative promotional tactics, the ability to take risks, and a great work ethic give it an advantage and make Victory a leader and pioneer in their industry.
“We work harder…we’re always willing to take risks. Nobody was out there wrapping vehicles unless they were a major label until we did it…everything we do, we see all the other labels imitating it within 6 months…Tony’s not afraid to spend money. He was inserting free samplers with 5 or 6 different bands on them back in Thursday’s day, and nobody was doing it…that’s expensive. A band starts to break and you’re shipping 200,000 copies… it ended up being a great idea and it helped break a lot of young bands, but a lot of other labels don’t put their money where their mouth is…a sampler is the best thing in the world because you either like it or you don’t.”
– Heather West

“Marketing wise we can do pretty much anything…and also we’re very organized which a lot of independent labels, a lot of our competitors are not.” – Katie Robinson

“I think that Victory is always trying to be the innovator, a lot of labels follow Victory’s lead…Ferret Records has the exact same sticker only a ferret instead of a bulldog…we were one of the first labels to give out promo t-shirts with our CDs…when you’re at the top of the mountain everyone’s coming up shooting for you…everyone’s trying to sign screamo….now its synth-pop…everything comes around in circles and if you’re the leader of the pack then everyone’s going to follow you…our site, we had a site up for voting for Hawthorne on TRL, now Fueled By Ramen has done the same thing for…Fallout Boy…copying is the most sincere form of flattery…we include DVDs on all of our bigger releases [that promote smaller bands]…and now Warcon…is now doing the exact same thing…you have to constantly be changing our marketing ideas…we’re pretty fortunate that we have people who are pretty innovative and creative…and the end of the day you’re still selling CDs to kids, but you have to keep finding new ways to keep it exiting.” – Manny Ruiz

Victory’s grassroots promotional methods are also allowing many consumers to hear a lot of their music before hearing it though conventional means like radio and television.
“We’ve had to deal with things in a different light…major labels tend to invest differently, they tend to throw a lot of money at…getting them on the radio…and it’s often something no one’s ever heard of…we do really well with [grassroots promotion]…we’re kind of at an advantage in that we usually take things to radio that already mean something to people…radio is usually one of the last things that happens [when promoting our bands].” – Timothy Binder


Final Analysis
Victory Records has grasped and executed many marketing tactics into its overall strategy. It has a clear idea of its target market, and it exercises new and innovative ways of penetrating it. Victory has a line of products that is more diverse than most other independent labels, and has made a strong effort to create a branding strategy around them. Overall, it is hard to find major flaws in the label’s marketing practices, especially in a time of rapid growth, opportunity, and rampant creativity.
The situations involving Taking Back Sunday and Atreyu give the impression that Victory is having trouble reconciling its anti-establishment/anti-corporate aesthetic with its newfound commercial success. It also appears that this aesthetic is stopping the label from taking advantage of opportunities in the digital music realm. As the company grows and gains influence in the industry, it will be forced to find ways to improve its structure and efficiency as a business. Aside from keeping the staff young and in-touch with their target demographic, it will be challenging for Victory to maximize its growth and profitability without “seeming” corporate.
Nevertheless, the opportunity to be a dominant force in the American music industry is right in front of Victory and it has the momentum to prove it. The most important reason for its momentum is simple. It’s the music itself. Victory and its owner are committed to putting out creative, passionate, authentic, and original music, in a market growing increasingly weary of the homogeneity of pop and hip-hop music. Where Victory has lost a core segment of consumers it has gained two other much larger segments. When it loses one retail outlet in one market it finds two new ways to sell in that market, or hands out music there for free. Young fans who download all their music will buy Victory CDs anyway because of the bonus materials.
Victory Records has made efforts to create a brand that consumers can associate with their music, and have used branding in a way that is not commonly used in the music industry. Their goal is to have fans buy Victory CDs because they are Victory CDs, on top of their opinions of the artists themselves. This style of branding has helped many companies in many industries, but only time will tell if the Victory Records brand is a successful one in the long term.

Suggestions
The suggestions and guidance provided regarding the results of this study are based on observations, information obtained, and a limited knowledge of marketing theory. Since they are not based on experience working for Victory Records or significant work experience in the music industry they are inherently flawed. Nevertheless, they are rationally derived from the observations explained in the study, and incite debate about several issues.
Victory succeeded for its first ten years by focusing on a core subculture, and a music genre associated with it. Their core supporters were those immersed in the subculture, and they were interested in associating bands and their albums with that culture. If this were still the case, it could be understandable why Mr. Brummel would see mp3 downloads of a single song as something that would severely cheapen the aesthetic. The case today, however, is that Victory has released music that has expanded its consumer base far beyond the original hardcore punk subculture. The most successful bands, like Taking Back Sunday and Hawthorne Heights have moved Victory’s music well into the mainstream. It is well known that the mainstream youth demographic downloads a lot of their music, and are not necessarily connected with any subculture. Also, the promotions for these bands have revolved largely around singles. The point is that large amounts of people are downloading this music, and a percentage of these people would be willing to pay the 99 cents it costs to do so legally. Victory already offers some songs off their releases online for free giving listeners a taste of the music, hoping consumers will buy the album or go to a concert. There are many people who will likely follow this course of action, but there are also many who will save themselves the effort and their pocket money and download the rest of the album. Allowing for digital music sales lets those people do so legally, and adds a new source of income for Victory. Unless Tony has an issue working with digital music companies, then Victory should move into the legal downloading realm.
The issues surrounding branding, image, corporate culture and beliefs are complicated. Victory has always made an effort to transfer its core beliefs into its work, but its growth and expansion into new areas has made that more challenging in recent years. To stay true to their aesthetic and beliefs, other than signing bands that represent those beliefs, Victory needs to do several things.
All branding-related efforts should reflect those beliefs. Victory should realize that mass marketing its image and profiting from it can make an anti-corporate label look very corporate. This is not to say that growth, market development and market penetration are bad, they are just challenging. Victory’s publicity head Heather West mentioned that the successful mainstream bands make it possible to promote the hardcore bands. The key for Victory is to stay as true as possible to the subculture that gave it its initial success and credibility. Victory could not only do this by continuing to put out that kind of music, but by also tangibly supporting the beliefs tied to punk culture. Actively supporting and even investing in movements like animal rights, anti-drug use, anti-corporatism and even liberal politics could help in giving Victory the authentic image it wants.
If Tony Brummel’s aggressive management style focused on positively affecting the industry rather than creating unstable and rocky relationships with other important players, and the Victory brand became a bulletproof symbol for all that is good in music, then Victory Records should have no trouble taking over the world (a slight hyperbole).

© 2005 Alex Leduc

Appendix 1:
Copyright 2004 BPI Communication, Inc.BPI Entertainment News WireSeptember 23, 2004, ThursdaySECTION: Entertainment News
Music Reporter: Victory label will keep running in indie circleBy CHRIS MORRIS, The Hollywood Reporter

Victory Records is the hottest independent label going, and its distributor, RED, whose contract with Victory is up in July, went an extra mile or two recently to keep it in the fold.Last month, when Victory owner-founder Tony Brummel ran in the Chicago Distance Classic in the label's hometown, three executives from RED, including President Ken Antonelli, flew into town and ran with him.RED has good reason to work up a sweat over Victory. Brummel estimates that the label will account for 17 percent-22 percent of the distributor's overall volume this year. Last month, "Where You Want to Be," the new album by its act Taking Back Sunday, debuted at No. 3 on the Billboard 200. It has sold 372,000 units to date, according to Nielsen SoundScan. Victory sports a strong slate of developing rock acts that includes Atreyu, Straylight Run, Silverstein, Action Action and Hawthorne Heights.The 11-year-old label has been with RED since 1996, and Brummel has nothing but good words about the Sony-owned distributor. But he does express concern about the recent merger of Sony and BMG, and about RED's strategy to upstream its distributed acts through Sony Music Distribution.Brummel says that "it's too early to talk" about his label's future at RED. But he adds, "I don't know what the big guys (at Sony BMG) are going to do. . . . I can tell you I'm not into the upstreaming. It's even more offensive than Lyor's incubator."He is referring to Warner Music Group chairman and CEO Lyor Cohen's recently announced inauguration of two "incubator" labels for baby acts, to be handled by Warner's indie distributor Alternative Distribution Alliance.The intransigent and often obstreperous Brummel made his feelings known about the plan in a blistering Sept. 16 e-mail to Cohen that has been widely distributed on the Web."Your incubator idea will not work," Brummel's e-mail read in part.Victory has an ongoing and tempestuous relationship with the major labels (including Warner), which continue to come calling. "There's always vague conversations," Brummel says.But it's unlikely that Victory will sell out soon, literally or figuratively. Brummel sold 25 percent of the company to Universal's now-shuttered MCA Records in 2002, but called back the deal within a year."We're not for sale, we haven't been for sale, we don't have a book on the street," says Brummel, who calls the MCA deal "a good learning experience.""Everything that can happen to an indie from a victimization standpoint has happened to us already," he says.So, with a roster of happening acts and increasing subdistribution of other music and DVD imprints, Victory looks to work in the same pocket in the foreseeable future."It's a great time to be an independent," Brummel says.
Accessed Nov 2 2005 on LexisNexis Database via UWO Library

Appendix 2:

Weekly Sales Report – 8/10/2005 (Not Available to Public)
Street Report 8/17/2005 (Not Available to Public)

[1] Estimate calculated from weekly overall sales figures in Appendix 2 and a wholesale CD price of $8.50.
[2] Vivendi-Universal Finance
[3] Not Interviewed
[4] Taking Back Sunday Article (VH1)
[5] www.variety.com/article/VR1117926680
[6] http://ww.lambgoat.com/blog/comments.aspx?id=55