Dependent Records goes out of business, blames piracy

The German electro / industrial imprint Dependent Records recently declared that they will go out of business by the end of Summer 2007.

Label co-founder Stefan Herwig posted a statement on their website about the reasons for giving up, which got translated into English by one of their artists.

According to Herwig, illegal downloads of Dependent albums outnumber legal purchase by a factor of three or even five to one. "Money was always tight," he says, "and in the future it's only going to get tighter, because even if we were to continue to produce quality CDs, the rate with which they will be purchased legally will continue to decline. Each album released would represent an ever-increasing financial risk."

Herwig also points out that an unnamed Russian warez site recently distributed over 5000 downloads of one of Dependent's releases in just one week while the label only sold about 1000 copies of the same release in physical discs.

"A popular claim often seen on Internet maintains that the P2P culture weakens the majors and bolsters the independent labels. This is, we can assure you, 100% bullshit. Even if there are listeners who download first and buy later, they are clearly in the dwindling minority," says Herwig.

This case is a worthwhile reminder that issues like the recent 20% downturn in CD sales in the U.S. affect everyone in the music industry, not just the major labels. Unfortunately, Herwig looks at all the wrong places for a solution of the problem:

"It is actually the job of the (German) federal government to insure that musicians and record labels have a platform on which to operate. That platform is known as intellectual property law. ..If the law provided even a glimmer of hope that the situation for labels and musicians would improve, then we would keep on fighting," he says. "But the outlook for the next few years is bleak," he added.