Strange Music CEO Talks

Strange Music

With the release of Tech N9ne’s North American tour routing:

O’Guin founded Strange Music in 2000 with Tech N9ne, at what he has described as the “absolute wrong time” to get into the music business. With Tech as the label’s flagship artist, they went city by city, gradually establishing a reputation for providing shows which could fill venues, while avoiding the violence sometimes associated with hip hop.

Today, despite a massive decrease in physical sales, Strange Music’s touring business has kept the company raking in more than $20 million annually and has provided a platform for other artists to move on up through.

Digital technology has brought massive change to the music industry over the past 20 years, and nobody has been hit harder than independent record labels. However, O’Guin was consistently hopeful about the future of the industry and took some time to chat with Pollstar about the fining system he has used to prevent incidents on tour and the company’s upcoming plans.

How long has it taken to build the Strange Music brand into what it is now?

[Well] we started the ideas in ’98, even more so in 99 but really got active in 2000. Our very first paid show was back then. We thought we were doing something big when our first paid show was $500. Now that we’re in the six figures neighborhood for a lot of these shows that we’re doing, it’s a pretty interesting growth.

Back when we started touring, there was no independent that toured back in 2000-2001. As a matter of fact there was very little hip hop. It just wasn’t something that happened. The only shows that came through were Run DMC and Beastie Boys or LL Cool J … . There weren’t a lot of hip hop acts touring and doing what we ultimately set out to do. It was really hard in the beginning.

Hip hop, or rappers, had a really bad rap. And rightfully so, to a certain degree. And here I come along, I have a rap artist, that’s strike 1. His name is Tech N9ne, that’s strike 2. We really had a difficult time convincing these club owners and, if you will, “white America,” – and I’m a white guy. It was very hard.

I had to do some of the deals in the early days where I would literally go to a venue, nearly beg them to let us come there and play, and then I had to accept door deals. And that still wouldn’t get it done half the time. I had to make deals with some of these guys where I said, “Listen, if anything at all goes wrong, you keep the money.”

We had to get in the door because I knew based on our organization, based on the way we were developing and designing things, based on the people we surrounded ourselves with, I knew we were gonna pull off a successful show. And I knew we could do this time after time after time again all over the country.

After we would show and prove [our commitment] … three, four months later those same guys that were skeptics before, they were calling me, and they were saying “When are you guys coming back?” The tour that I just put together is 68 shows in 74 days. I had 152 different offers that I had to narrow down just to 68. All these promoters really dig doing business with us.

A part of it has been consistency right? You have avoided incidents like shootings and stage vandalism.

Even when we bring out acts that aren’t a part of our label, they are still subjected to the exact same rules, regulations, fining system. Our expectation of conduct is extremely high. I am running a business. This is the music business. And I’m going to make sure the business side of it goes quite well, and my tolerance for people doing outlandish stuff or doing destructive stuff or things that doesn’t serve the business side of it well, I have a zero tolerance policy.

It sounds like you are not intimated by rap artists, some of whom rap about their connections to criminal activity in the street.

I’m smaller now than I used to be, but I am a 6-foot, 300 pound, full-blooded Irishman. I don’t have a fear of these gangsters or wannabe gangsters.

But me and Tech’s relationship has never even entered into that realm. He and I have been in business 17 years and we’ve never had a single blowout argument. That’s just not the way we conduct ourselves. I know he is one of the most talented rappers in the world, he knows that I am one of the most talented business guys and we just let each other do exactly what we need to do and we work with each other to make it all blend.

Every once in a while you’ll have the artists that don’t get it. We try to educate them. If we can’t get them to understand how to make this thing work, we simply move on. And in 17 years, we’ve only signed 14 acts, so we don’t have a lot of those mistakes.

But you have had to let artists go?

There’s two artists that simply didn’t get it, so we moved on. I wish them the best. I hope things work out. I don’t know if they rap anymore, but at the end of the day, if you don’t want it for yourself, I can’t force it.

Can you talk more about the fining system you use to prevent incidents?

We start the tours in Kansas City. Every single tour starts here in K.C. Every artist on the tour and every crew member that is on the tour has to be here in advance. The day before the tour leaves, we require everybody [to take part] in the tour meeting, whether you are a DJ, whether you are the actual artist, whether you are that artist’s manager or crew, whoever is going on the tour, including all of the bus drivers … On a Tech tour that’s 36-40 people. They are required to be a part of a tour meeting. And that tour meeting goes on for nearly 3 hours.

In that tour meeting every single thing is discussed. It all starts off with why we’re here. It then goes into how we do it. Then it goes into the number of shows in the amount of days. It then goes into the conduct. The conduct is put into a system of multiple pages of tour rules that are attached with a fining system. And every single rule within our tour rules is because of something that has happened.

“Don’t light anything on fire while on stage.” That’s because an artist did that at one point. “Do not pour water on the heads of security.” “Do not barter with fans. And if they bring you cigarettes and Hennessey, [don’t] let them hang out on the bus.”

It’s about 20 pages long. And the fines vary based on the severity of the infraction. This wasn’t always in existence, but I finally got tired of talking about all the rules and talking to the guys that were breaking the rules. And I [thought] … “What has an effect on most people … well, you hit their pockets, and that’s when you start to get their attention.”

[P]eople will take it a little more serious and they think about their actions and if they actually want to go home with money at the end of a tour, they won’t do nearly as much stupid shit. I’ve had entire tours that not a single person of the 35-40 people that are on the tour got a single fine. And I’m very proud of those tours. [I]t’s normally only two or three people that really ever get hammered on fines on a tour. And sometimes its only one, it just varies from tour to tour. But we found out when we hit them in their pockets, everyone started acting really right.

And the guys that didn’t, the guys that got fined and lost thousands of dollars of their money? Those are the guys that are either not here anymore or they had a lot of explaining to do to their better halves [about] why they came home so short.

The other thing that is really important to note … the fines that are accumulated by these guys, originally it was thought, “Oh they are just doing that so they can keep more of our money” and “That’s messed up.” Well, we had a solution for that upon the onset of this fining system. All the money that they get fined … gets donated to a charity of that artist’s choice at the end of the tour. This isn’t about me keeping your money. It has to be a legitimate and a real charity.

The goal for me was, “Let me make some kind of good of your stupidity. Let a charity benefit if you are going to do dumb shit and cause yourself and your own family harm. And you guys are never gonna think I am fining you to keep your money. I have no interest in that. I want you to have it all.”

And because you are independent, you have the freedom to make those kinds of rules.

Oh yeah, that’s the beautiful part about being independent. We make the rules, we enforce the rules, we do everything the way we want to do it. And I quite enjoy that about the way we conduct our business.

Touring has been a big part of the way we’ve built the business. Merchandising, of course, goes hand in hand with that. And the music is all the foundation. None of it would exist without great music. We play very close attention to each facet of our business.

You have remained profitable despite a decline in physical sales. The live shows and merch is making up for that?

We had a 78 percent decrease on physical sales, year-to-year from 2015-2016. However, there were obviously advances made in streaming, although they are very insignificant in comparison to the losses of physical. But at one point last year I had six different tours out. As a label we did 438 shows in total. We keep busy. And it’s not just Tech N9ne. It’s Rittz. It’s MURS. It’s Stevie Stone. It’s Krizz Kaliko. We’re doing a lot of shows.

And if you look at the way we do our merchandise, we are the biggest merchandiser in hip hop, period. We’re doing large volume, we actually own our own merchandising facilities, we do all of our own screen printing, we do all of that stuff in our own businesses here in Lee’s Summit, Mo., a suburb of K.C. We have five buildings within the two block area. We have our own studios, we have our own video department, we have our own sound stage, we have our own cycloramic wall, we have some pretty amazing infrastructure here to support our efforts in the music business.

Which tours tend to do better?

Well my spring tours are always my best tours. Last year we sold out every single show with the exception of two. [L]ast year’s spring show was a stellar, stellar, tour. …

The fall tours are never as strong. Plus we had some key misses on the fall tour this last fall. … That to me was a little bit of a missed opportunity … but we still executed it because all of the promoters still absolutely wanted us to come through and do it. And when I commit to something we do it. In our 17 years we have never missed a single show with Tech. Not one show. None. Zero. Zilch. Nothing. 17 years. Rapper. Never missed a show. Who the hell else can say that?

It sounds like Tech N9ne sets an example in keeping the standard of the business high.

Tech gets it. It’s as simple as that. He understands, he gets it. He’s a very intelligent guy. That dude really is like my brother. That’s the kind of relationship that we have and we continue to have. He gets it, I get it. And we’ve had artists don’t quite get it. And we’ve have artists that didn’t get it in the beginning and they eventually got it.

He is a hell of an example because he is one of the dopest performers. If he didn’t have a killer show, we wouldn’t have this story and we wouldn’t be doing this many shows. If he did what a lot of other rappers were doing at the time, getting on stage for a 20-minute set, grabbing their nuts and missing half of the words, this wouldn’t work. When you’re getting on stage, you nail every single word, every single syllable in an hour-and-a-half long rager, with crazy rock energy. And you go out there and you destroy that stage, every single night, night after night, year after year. Then you have this kind of longevity, you have this kind of success and these results to show for it.

You and Tech are the reason the label exists. What are the goals moving forward? Is he always going to be at the center of Strange Music’s brand?

Well, we have a lot of artists that are developing and doing quite well. Rittz, out of Atlanta, is not only doing tours with Tech, but also his own headlining tours and is doing very, very well. We’ve got him to a really nice level right now. My guy Krizz Kaliko is doing a lot of headline touring on his own and he’s killing it. I’ve also have artists like Stevie Stone and Ces Cru that are doing their own shows and runs; they’re killing it.

MURS, out of Los Angeles, who was in the business before he signed with us, is doing quite well. I took out Jay Rock, and you know Kendrick Lamar used to be the hype guy for Jay Rock on our earlier tours before we ended up upstreaming him to Interscope. And now the rest is history.

[At] the Grammys last year [I] watched the little guy that used to sit out on the office steps and used to be the thinker of the group go out and win five Grammys. We’ve been involved in a lot of things over and above. …

It’s fun to be a part of that. I took Slaughterhouse out on their first tour. I took Machine Gun Kelly out on his first real tour, and we did the longest tour in hip hop history. I think it was 99 shows in 107 days. I take E-40 out on tour. Plus, this last tour that E-40 did, I was the one that organized that and then I put Stevie Stone out with him on that particular tour.

So we’re just very active in independent music, independent hip hop. But the label is broadening because we are also venturing into the pop world in a very big way right now with three different acts. Above Waves is one of them. This young lady named Mackenzie Nicole is another. And Darrein Saffron out of St. Louis, who is mind boggling. He’s the most talented kid I think I’ve ever experienced. But he’s more of an R&B artist.

So we have a lot of things in the plan. Right now Tech is always at the front of it all, because he’s earned it. But in the future I think you’ll see other acts come up through Strange Music that may far exceed the level of success that we’ve had with Tech.

As the CEO of an independent music label, you are very hands-on and have a lot of control over how things operate. The bigger labels have a lot more middle management, but give you access to a lot more resources. Do you have goals for how big you want to get as an independent? Would you ever want to get bought out?

I think about it a lot. Plus, I have a lot of people always approaching me. … There’s only three majors left. You either do Warner Bros., Sony or Universal. And each of the three of them have all attempted to buy us. …

You know, it’s crazy because a long time ago that might have been what I wanted. But here we are an independent company doing north of $20 million a year, and have done that for quite a few years now. I don’t need their money. The only thing I haven’t been able to totally infiltrate and master – but I’m getting much better at it daily – is the radio game. Right now we’ve got one of Tech’s songs on the Top 40 on Rhythmic, Top 40 on Urban and continually climbing.

[And] because radio has shifted and changed so much since I’ve started this, they’re opening the door to us independents. So with that success and the success that a buddy of mine named Ghazi over at Empire is having, I think he and I are probably the two big independents. … He’s having a ton of success with D.R.A.M. and Fat Joe … with his distribution and his label, he’s figured out the digital space quite well. And where we’re at we’re very strong on the physical side still, even more than we should be, and then touring and merchandising and other ancillary incomes.

I think about it. Would I like to get this company to be a $200 million a year company? Absolutely. Do I think its possible? I think it could be possible in the near future. Because if you look at streaming, streaming is still an infant. The diaper still has to be changed. If you look at it, streaming only touches 15 percent of the world’s population today. … It’s not in Russia. China has 1.4 billion people. It’s gonna happen in Russia. ….

The future of the music business can be quite interesting five years from now. Think about Spotify. If they end up having to go for an IPO, they’re gonna have to become a profitable company. So those 70 percent of people that currently use their free service are gonna be instantly converted, or forced to be instantly converted. They’re playing the dope game, or the cable TV game right now. They’re getting them hooked on this new consumption and eventually they will be charging them all for that service. And that’s when it will get good for the labels again. And for the artists.

There’s a lot of interesting stuff. It’s in a transitional period. It hit bottom. And now it’s going to improve. We signed onto it just recently. Embracing streaming isn’t something I’ve done until this last year. But I had to hit a critical mass. I had to see a certain amount of decline in physical units and the way in which people consume to go and embrace this. Because I would have cannibalized everything that I’ve built up to that point. I had to take a more calculated, a more lengthy approach to streaming, but now I have, I’m looking forward to streaming growing … and I’m already figuring it out. I think the future for us is very bright in that space.

How did the live shows get strong enough where you could keep yourselves afloat off that revenue?

Well the first VIP package I did was in 2003. And now everybody’s got a freaking VIP package. We built much of the independent touring model, not just in hip hop but other genres. It’s definitely stuff that we laid the foundation for and created many of the processes. Look at it. In Kansas City, I know there’s probably two shows tonight somewhere. Back when, there was one or two shows a month that would come through. Now there’s one or two shows a night, in every city in America. But that’s also out of necessity too though, because (A) you can’t make any money on the music, especially if you’re signed to a major, and (B) they see the success that we’ve had and a few others and they want to go out and get a piece of that.

It sounds like as you grow, you’re not worried that you will damage the quality of your live shows and the other parts of your business?

I refuse to damage them. I won’t. The music is the foundation. You get these guys that bring their CD in and they already got the artwork done and they’ve mixed it and they’ve mastered it and they say, “We’re 90 percent of the way there, we just need your help with this and that.” And I say, “Listen man, when you get to this point, and let’s assume you have one of the best records that I could possibly listen to, congratulations, you are 20 percent of the way there. It is the most important 20 percent, it is the foundation, now you have to build everything on top of that.”

I spent $4 million building two studios. I definitely understand the importance of everything being the highest quality, the best sounding records, SSL dualities, every single piece of equipment in the studio you could imagine. I really take a lot of pride in being sonically correct and doing amazing music because I know how important that foundation is. And it gives me the utmost confidence, moving forward, when I start building other things around it, and I start doing the marketing efforts, and I start doing the touring efforts and all the other stuff that goes with it. I have no hesitation, because I know I have a great product. The music will never be compromised, never. It is the most important piece. But it is only that first 20 percent. Now I gotta go do the other 80 percent to make this a success.

Here are the dates for Tech N9ne’s North American tour with Brotha Lynch Hung, Krizz Kaliko, Stevie Stone, and Ces Cru.

March 22 – Omaha, Neb., Slowdown
March 23 – Davenport, Iowa, Danceland Ballroom
March 24 – Minneapolis, Minn., The Myth
March 25 – Green Bay, Wis., Sandlot Complex
March 26 –  Sioux Falls, S.D., The District
March 28 –  Rapid City, S.D., Rushmore Plaza Civic Center
March 29 –  Billings, Mont., The Pub Station
March 30 – Missoula, Mont., Wilma Theatre
March 31 – Spokane, Wash., Knitting Factory
April 1 – Seattle, Wash., Showbox SoDo
April 2 – Portland, Ore., Roseland Ballroom
April 3 – Eugene, Ore., McDonald Theatre
April 4 – TBA
April 5 – Boise, Idaho, Knitting Factory
April 6 – Salt Lake City, Utah, Complex
April 7 – Ft. Collins, Colo., Aggie Theatre
April 8 – Denver, Colo., Fillmore
April 9 – Grand Junction, Colo., Mesa Theatre
April 11 – San Francisco, Calif., UC theatre
April 12 – Fresno, Calif., Selland Arena
April 13 – Sacramento, Calif., Ace Of Spades
April 14 – Santa Cruz, Calif., Catalyst
April 15 – Los Angeles, Calif., Belasco Theater
April 16 – Anaheim, Calif., House Of Blues
April 17 – San Diego, Calif., House Of Blues
April 19 – Las Vegas, Nev., House Of Blues
April 20 – Flagstaff, Ariz., Orpheum
April 21 – Tucson, Ariz., Rialto
April 22 – Phoenix, Ariz., Marquee
April 23 – Albuquerque, N.M., EL Rey Theatre
April 25 – Oklahoma City, Okla., Diamond Ballroom
April 26 – Austin, Texas, Emo’s
April 27 – San Antonio, Texas, Aztec Theater
April 28 – Dallas, Texas, Gas Monkey
April 29 – Houston, Texas, House Of Blues
May 1 – Pensacola, Fla., Vinyl Music
May 3 – Orlando, Fla., Club 578
May 4 – St. Petersburg, Fla., Jannus Live
May 5 – Fort Lauderdale, Fla., Culture Room
May 6 – Jacksonville, Fla., Mavericks
May 7 – Charlotte, N.C., Fillmore
May 8 – Raleigh N.C., Ritz
May 9 – Norfolk, Va., Norva
May 10 – Baltimore, Md., Sound Stage
May 11 – TBA
May 12 – TBA
May 13 – Worcester, Mass., Palladium
May 14 – Philadelphia, Pa., The Trocadero Theatre
May 15 – Pittsburgh, Pa., Stage AE
May 16 – Buffalo, N.Y., Town Hall
May 17 – Cleveland, Ohio, House Of Blues
May 18 – Columbus, Ohio, Newport Music Hall
May 19 – Detroit, Mich., Fillmore
May 20 – Indianapolis, Ind., Egyptian
May 21 – TBA
May 23 – Louisville, Ky., Mercury
May 24 – Nashville, Tenn., Marathon Music Works
May 25 – Chicago, Ill., House Of Blues
May 26 – St. Louis, Mo., Pageant
May 27 – Milwaukee, Wisc., The Rave
May 28 – Des Moines, Iowa, Val Air Ballroom
May 30 – Columbia, Mo., Blue Note
May 31 – TBA
June 1 – Tulsa, Okla., Cains Ballroom
June 2 – Wichita, Kansas, Cotillion
June 4 – Kansas City, Mo., TBA

You can learn more about the company at StrangeMusicInc.com.

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