Bluegrass makes hay

THE long-awaited release of the new Beatles CD notwithstanding, these have not been great days for the music business. Back in November, the Los Angeles Times was reporting that record retailers were looking to releases by the likes of Queen, as well as the Beatles effort, to salvage a flat year. The signs are that things have not improved greatly since, due largely to consumers spending their spare cash on other forms of entertainment, such as video games and computer software.

But one small company has been able to celebrate its 25th anniversary with a bang. Boston-based Rounder Records has seen an anthology by a little- known bluegrass fiddler and singer sell 2 million copies and pick up a garland of awards. Moreover, although the label says it has been happy in the past to see its stars graduate from its minor-league stable to join the majors, it seems that this artist, Alison Krauss, is unlikely to abandon a connection with a company she began a decade ago in her early teens.

It is a tribute to the business philosophy of the three founders, Bill Nowlin, Ken Irwin and Marian Leighton Levy. In stark contrast to the ultra-commercial approach that is thought to characterise the behaviour of multinational record companies, they say they ask themselves three questions at the outset of a project: "Do we like the music? Do we like the people? Will we at least break even?"

But they never set out to establish a business in the first place. Though their company has, over the past quarter of a century, come to be synonymous with the best in "roots music" from the US and beyond, the three friends stumbled into what has become their life work.

Having met at college in the 1960s, they then, in the words of Ms Levy, spent three years going to lots of fiddle festivals and the like before Mr Irwin returned from one such event with a story of some people he had met while hitch-hiking back to Boston. They had formed their own record company, and if they could do it, so could he and his like-minded friends, he thought.

The result was the release of an LP by traditional banjo player George Pegram in 1970 - a record that paved the way for the slew of albums covering the gamut from re-releases of long-lost recordings such as the Louvin Brothers to new productions by George Thorogood, the rocker who was the label's biggest seller before Krauss happened along with her anthology Now That I"ve Found You.

In the early years, it was very much viewed as a hobby. Mr Nowlin kept his position as a college English professor for 12 years, and the other two have held day jobs from time to time. Slowly but surely the label - named to conjure up ideas of hoboes wandering around the countryside - has built up a solid reputation. In recent years, it has bowed to the blues boom by setting up a specialist arm, largely run by Ms Levy's husband, the musician Ron Levy.

It has also developed distribution links with similarly focused small labels, and, having previously relied on licensing deals, is in the throes of setting up a proper marketing operation for Europe to exploit a market that it believes could boost sales by as much as 25 per cent.

Mr Nowlin, who says he has assumed much of the responsibility for strategic and financial matters while Ms Levy concentrates on marketing and promotion and Mr Irwin on production, is reluctant to discuss figures. But the organisation, which also has a mail-order operation to counter customers' difficulties in finding such eclectic material in conventional shops, now employs about 100 people and has its catalogue available on CD-Rom.

Indeed, Rounder has prided itself on combining a love of old-fashioned music with an enthusiasm for technology. Having attempted to get over a slump in its fortunes by consolidating in the 1980s, it followed the bigger operations in seeing CD as a way out of its troubles. Though some really slow-selling recordings have not received the digital treatment, CD is now the basis of the huge and varied catalogue.

Most issues sell fewer than 10,000 copies a year - numbers that would be uneconomic for most majors - but Mr Nowlin stresses Rounder's uncommercial view. While it can survive on much smaller sales because its production costs are lower, the amount of sales required to break even depends on how much is spent on a release, he points out. Accordingly, some records will disappoint if they do not sell more than 25,000 copies.