Independent record labels are commonly defined through their antithesis to overtly commercial major labels. “This sense of polarisation has placed independent companies in a romantic position as champions and guarantors of authenticity in popular music.” (Wall 2003, p.99). Major labels are seen to be safe and standardised; operating through conventional practices and driven by profit. In contrast to that, independent labels are stereotyped as facilitators of new artists and their “unmediated art” (Cavanagh cited by Fonarow 2001, p.35); operating closely within a local scene and through unconventional business practices. Through examining the foundation of Factory Records in 1978 (24 Hour Party People 2002) and it’s subsequent output, it is possible to evaluate the validity of these assumptions.

Tony Wilson founded Factory with much of the “radical” (Wall 2003, p.99) spirit associated with the stereotype of independent labels. Ogg (2009, p.312) describes a “loose embrace of conventional business models” including a famous avoidance of paper based contracts. In an interview with Anthony Fyfe (2007) in Q Magazine, Wilson describes the first 50/50 pay deal contract which he signed in his own blood: “The central feature of the contract, which caused us disruption later, was the phrase ‘The musicians own everything, the company owns nothing, all our groups have the right to fuck off.’”

Factory was founded with a clear sense of identity in it’s location of Manchester. Ogg (2009 p.320) quotes the journalist and musician Cath Carrol: “It [Factory] was as much a part of the bricks and industry of the city as it was entertainment.” This theme of identity and Factory’s embodiment of working class values in the North East of England would become extended in to the opening of Haçienda nightclub. This would lead to Factory being placed in the centre of the international phenomenon “Madchester” (The Telegraph 2007).

We start to see a dichotomy to Factory and it’s relationship with the stereotypes of independence. Stephen Lee (cited by Wall 2003, p.101) “argues that the idea of ‘independence’ allows record company staff to take part in the construction of cultural communities in which the label will become a signifier for alternative values with a subculture of music fans (Lee 1995).” Factory conforms to the stereotypical assumption of independent companies being “closer to the street” that Wall (2003 p.99) asserts. But, whilst Factory was part of the cultural community of Manchester it also found success in a wider setting. 

The success of acts like New Order and The Happy Mondays challenges the stereotypical assumptions that independent companies are set up as part of “anti-capitalist, and pro-counter-culture position” (Wall 2003, p.98). New Order and The Happy Mondays accumulated five top 40 UK singles (including New Order’s number one hit World in Motion in 1990) and five top 10 albums. (Official Charts Company n.d.). Both bands also found international success accumulating 7 singles in the Billboard Hot 100 between them (Billboard n.d.).

Negus (1996, p.43) argues that many independent companies are not making and releasing material out of political or counter-cultural motivation, but rather as part of their commitment to their own financial success as part of the music industries as a whole. Whilst some of Factory’s output achieved commercial success, the company was established as an antithesis to the corporate cultures it saw in major labels. It’s archetypal eschewing of conventional business practice in favour of artistry and innovation validates many of the clichés through which we understand independence.

In spite of its commercial success, Factory was not driven by a brazen need for economic gain. Wilson is quoted in The Telegraph (2007) as saying, “You either make money... or you make history”. Arthur Baker, co-writer of Thieves Like Us (1984), is quoted by Nice (2010 p.244) as ruing that the song could have been a “monster single” but the band’s refusal to edit it down was indicative of their obstinance towards mainstream culture.

“It [Factory] was run in such a way that gave space for human beings to be themselves, not geared up to some corporate idea or schedule. ... I’d had talks with record companies, and found they were bloody awful and I hated them. So Factory wasn’t a record company, it was just a group of people with some mad ideas, the imagination to have the mad ideas, and the balls to commit themselves to the things they’d dreamt up.” (Vini Reilly cited by Ogg 2009, pp.321-2)

In his interview with Fyfe (2007), Wilson describes how, due to the 50/50 pay split and the cost of the Saville designed single sleeve, Blue Monday lost Factory 2p for every copy sold. “I didn’t want to make money” Wilson said. But money was being made and vast amounts of money were being spent in what Ogg (2009, p.334) describes as “unabated decadence”. £30,000 was spent on a board room table, £400,000 was spent on New Order recording Republic in Ibiza  and Factory’s estate was valued in the region of £2.5 million. 

Factory breaks from the stereotypical small budgets and limited resources associated with independent labels (Fonorow 2001 p.37). But with vast sums of money being spent on artistic endeavours without conventional business practice behind them, in 1992, Factory went in to receivership with debts of £2.5 million (The Telegraph 2007). Alan Mcgee is quoted by Keith Cameron in NME (1994): “There’s only two things that happen with independent labels... you either get bought out or die. And that’s it. There is no middle ground” (Hesmondhalgh 1999, p.51). The ‘burn-out or sell-out’ stereotype of independence is fulfilled in the story of Factory. 

In conclusion, Factory’s relationship with stereotypes of independence are varied. It’s artistic output, radical spirit and deep sense of identity in it’s location demonstrate a company that fits the oppositional force to major labels that independent companies are held up to be. Even though Factory’s financial extravagance would eventually lead to its demise, its commercial success challenges the small-scale, rough and ready stereotypes derived from guitar driven punk and indie labels (Wall 2003, p.98).

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OFFICIAL CHARTS COMPANY, n.d.. Happy Mondays [online] [viewed 23 October 2012]. Available from: http://www.officialcharts.com/artist/_/happy%20mondays/.

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Videos:

24 hour party people: the factory records saga, 2002 [online video]. UK: Channel 4 [viewed 20 October 2012]. Available from: http://mycourse.solent.ac.uk/streamvid/videoplayer.php?flv_url=ContentLocal-MP4/3726_4s~tctfzyql.mp4&title=24%20hour%20party%20people:%20the%20Factory%20Records%20saga&broadcast=CH4,%2008/04/02