Hot tubs, weight-lifting rooms, garden concerts and a panoramic view of the Pacific where staffers ride the surf during breaks for New Age record label Higher Octave Music, it’s more than a business, it’s a lifestyle.
To be sure, the laid-back routine is an oddity in the often ruthless recording industry. Yet it seems to work for Matt Marshall, 41, and Dan Selene, 50.
For five of the past seven years, Higher Octave has been Billboard magazine’s No. 1 independent New Age label and for six years it has had the No. 1 album for the genre’s independent distributors.
The label concentrates largely on so-called smooth jazz. Its artists include former Jefferson Starship lead guitarist Craig Chaquico; vocalist Jon Anderson; Yulara, a Berlin-based jazz duo; and Shanin & Sephr, a fusion jazz group.
“They are one of the last big independents left,” said John Diliberto, who produces Echo, a syndicated New Age radio show. “They dialed into a niche in terms of light, smooth jazz vein.”
Still, it remains very much a boutique label. With 120 artists in its worldwide roster, Higher Octave is expected to generate $7 million in revenues this year, up from $6.6 million in 1996 and $5,000 in 1986, its first year.
“Their astute alternative marketing methods, as well as their ability to look over the horizon to anticipate new technologies, combine to make the label one of the most unique and inspiring in the music industry,” said Carol Archer, new adult contemporary/jazz editor for Radio and Records magazine.
Certainly, there is plenty of competition in the New Age genre, including Los Angeles-based Windham Hill, which is distributed by BMG Music Publishing Worldwide, a division of German media giant Bertelsmann AG; and Milwaukee-based Narada, a boutique label that was just purchased by Virgin Records.
Though New Age still represents less than 1 percent of the market share of recording industry sales, Marshall estimates that the category generates more that $200 million in sales a year.
“Compared to Warner Records, everyone is a boutique label,” said Allen Kepler, vice president for programming at Broadcast Architecture, a Los Angeles-based radio consulting firm that assists such New Age stations as KTWV-FM 94.7, known as The Wave. “These New Age labels are run by their owners. They listen to their music and they stand for something.”
Besides selling on the Internet and in major record stores, Higher Octave has deals with The Nature Co., The Sharper Image and Borders Group Inc. “They have had a tremendous success with marketing in alternative ways,” said Kepler.
Sitting in the back yard of his headquarters overlooking the Pacific, Marshall concedes that his company might have the touchy feely look of ’60s encounter-session groups.
“We might look less grounded (in Malibu), but we want to be a tight, well-grounded company,” said Marshall.
Indeed, the Malibu estate, which is next door to screenwriter Joe Eszterhas’ beach house, contains 22 employees who handle the sales, marketing, accounting, and production departments. The company uses the Internet to sell and preview its albums to its fans. A recording studio is in Ojai.
“We are a mini record company,” Marshall said.
Higher Octave’s principal audience is 25 to 55 years old. “About 20 to 25 percent of all records that are sold are bought by buyers over the age of 40,” Selene said. “Our music appeals to adults.”
The seeds of Higher Octave were sown when Marshall, a Hollywood talent agent, met Selene, who was a school teacher, at a self-awareness seminar. Both men were searching for inner peace and growth, and a friendship developed. They tapped into the New Age, self-help boom that has made superstars out of instrumentalists like Yanni and John Tesh.
“The music so touched us that we felt it would be a factor in a changing society,” Marshall said. “We felt that the music was part of a movement that was happening in America, like the writings of Deepak Chopra and the social impact of people like Oprah Winfrey. I felt there would be a music attached to this movement.”
The two entrepreneurs borrowed money from friends and investors and spent a year studying the recording business before quitting their day jobs.
“I was a bit naive when we started the company,” Marshall admitted. “But I fashioned the company after the talent agency where I represented actors and actresses and I knew that the more you sent out, the more the royalties would eventually start rolling in. It was the same with the record business. The more records you put out there, the more the royalties would start kicking in. It would become a nice base.”
Higher Octave made a dramatic turn when it signed Ottmar Liebert, and while the guitarist no longer records for the label, his “Nouveau Flamenco” still remains one of the top New Age hits.
“He is a great live performer,” Selene said, “and that helped drive the genre.”
Today, Higher Octave has been branching out to enlist hard rockers who have turned to a smoother touch, such as Chaquico, as well as Journey members Neal Schon and Jonathan Cain and Porno for Pyros drummer Stephen Perkins.
“Rockers have gotten older. They grew up and they had kids,” Marshall said. “They also want to show a softer side.”
Despite their success, Marshall and Selene admit that going up against the big locomotives of the recording industry is not easy.
“Money is a great equalizer,” Marshall said, “and they have more money. And if you have more money, you spend it. We look at it like David and Goliath. But if you hear a record on the radio and you like it and it’s ours, that, for us, is the equalizer.”
