At the time, vinyl sales were plummeting, electronic music magazines were folding and iconic clubs were closing – all signalling the end of the nineties’ British electronic boom.
Fast forward a decade and the UK’s dance scene is stronger than ever and Toolroom is an international brand boasting a roster of top notch producers, DJs and songwriters including Adam Walder, Paul Thomas and Funkagenda.
We caught up with managing director Stuart to learn about the biggest challenges and opportunities Toolroom faces as it celebrates its 10 year anniversary...
Toolroom is now 10. How has the company changed since it first started out?
When we started it was just myself, my brother [DJ/producer Mark Knight] and our business partner Owen, all cramped in my parents' study. We each did a bit of every task – from A&R, to licensing, even to flogging the records ourselves!
Cut to 2013 and we have 20 staff, all of whom specialise in their particular area. We've also diversified hugely – as well as selling music, we have a publishing company, an events team, and we produce video content too. So it's a completely different company to the one I started 10 years ago, but I hope we've kept the same ethos throughout – which is that it's the music which ultimately matters.
The past decade has been phenomenal for dance music. Why do you think that is?
We just released a documentary on this very same thing. When we started Toolroom in 2003, I remember reading an article by Alexis Petridis in The Guardian claiming that dance music was dead, and at the time he had a point. Vinyl was dying, clubs were closing, and fans were jaded with the average music and overpaid DJs.
But the scene just did was it always does – it went underground again, back to its roots, and I think a number of labels that started in 2003, such as Cadenza, Buzzin Fly, Size, Armada, Crosstown Rebels and ourselves – helped make the music fresh and exciting again.
The key thing is that the music has constantly evolved and pushed boundaries, bringing new fans to dance music. Then of course there's been EDM and the explosion of dance in America, which has resulted in huge opportunities for our genre and brought a new generation of fans in.
So does Toolroom have much of an international presence? If so, where, and how important are those markets to your business?
Yes, Toolroom has always had a big international reach. We always aimed for this approach, when it would have been easier (certainly in the early days) to license our music to various territories around the world. But what we sacrificed in short term cash-flow at the time we've gained for overall brand awareness. We now sell 76 percent of our music overseas. America is our number one market (always has been, even prior to the EDM boom) and we're also strong in Germany, Japan and Australia particularly.
What is your largest revenue stream?
Digital music sales are still our biggest revenue stream, but the pleasing thing for me as the managing director is that we have multiple income streams that make a significant dent in our turnover. We're seeing streaming income really push on which is exciting for us here.
Is the compilation market still big for you?
Yes definitely. Both in terms of our own compilations - which are our main source of music income - and in terms of licensing our tracks to external compilations.
What forms of electronic music do you find particularly suited to synchronisation, and why?
I think drum ‘n' bass lends itself more to synchronisation than house music (sadly for us). I think drum ‘n' bass records have a bit more inherent movement in them which probably compliments film and TV advertising more. Also electronica, with its more dreamy and introspective soundscapes, tends to fit well. But having said that, house is making a bit of a renaissance, with Ben Pearce and Breach both getting big synchs recently.
What are the biggest misconceptions surrounding dance music publishing?
That there's loads of money in it!
What are the biggest challenges facing dance music labels, publishers and producers in 2014?
For dance labels, I think the challenge will be holding onto the key artists. It seems prevalent, particularly in dance music, for an act to get to a certain size while being on an independent label, then either leave to set up their own label or to go to a major. So for medium sized companies like mine, artist development is a huge challenge.
For publishers I think staying on top of the administrative burden of registration is a big challenge, and also making your voice heard in a very noisy synch market.
For producers I'd say making something original is getting harder and harder, given production has been opened up to the masses with the impact of cheaper technology.
How effectively has the dance music business adapted to advancements in digital music technology, streaming services and new retail platforms?
Speaking on behalf of dance independents, I think very well. The hardware companies such as Pioneer and Native Instruments have helped by creating incredible products for DJs – who are the core of our business – fuelling demand for digital music sales.
A lot of independent dance labels cherish physical product and mourn the demise of vinyl, but ultimately we have rolled with the changes and created thriving business based on selling digital music. Streaming is obviously the next step change. As a label I can see the benefits of releasing music to ultimately sell advertising space from, but to some of my artists this is something of an anathema! However we're all for embracing the changes.
What more can be done?
I think when the larger retails stores make the effort to meet dance labels, it truly helps. Understanding why certain releases get support on retail platforms and others don't – and what can be done to help this – is so vital to us, so it can be slightly frustrating when the doors to communication are closed with these guys – especially seeing as without labels, there would be no product to sell!
What’s your take on the Ministry lawsuit against Spotify?
Why waste money and time on legal fees when we should be making music?
Read Stuart's comments on dance music publishing from a songwriter's and producer's perspective.
Watch Toolroom's '10 Years of Dance Music' documentary: