01 INTRODUCING 005 009
My Story by Peanut Butter Wolf The Serious Stuff
02 WHO WE BE 012 017 018 021
A Few More Words from Peanut Butter Wolf How We Roll Artist Roster Now-Again Records
03 MONEY TALKS 024 030 034
2012/2013 Financials Consolidated Financials Free Cashflow
04 AND WE OUT 040
Until Next Time...
“ Dreams of
being the next Cold Chillin...
“
“ I put out what I personally “
like and save the rest for the other labels out there
EVERYBODY’S GOT A STORY, HERE’S MINE. -PEANUT BUTTER WOLF
Chris Manak, AKA Peanut Butter Wolf is a San Jose, California native but now bases himself in Los Angeles, California. Manak took the name Peanut Butter Wolf in the late-80s when he realized that a girlfriend’s youngest brother feared the “peanut butter wolf monster” more than death itself.
For me, 1986 was the year that I first considered starting a label when I grew up. I wrote a high school essay about it that year (Just recently found it). I even went so far as to decide against college, since I figured it wouldn’t help my music career anyway. (I later changed my mind and got my degree in Business Marketing). Four years later while still in college, I put out my first record (“You Can’t Swing This” by Lyrical Prophecy) with a label called PMR Records. It was run by Kim Collett, who DJed with me at the local radio station (KSJS). I got my dad to pitch in $500 to get the thing released, making me a part owner in the label. We only pressed 500 copies, never mastered it, cut and pasted the artwork, and didn’t even know you could sell them to a distributor. We gave some copies away to our friends and family and local radio stations and sold some to the local stores. After all that, we still had about half of the records leftover. But our goal was to make a record and we had reached it! We were local heros. Who would ever think a group from San Jose, California could put out their own hip hop record? Later, that year I met Charles Hicks AKA Charizma. We hit it off right away and before you knew it, we were a group. Charizma was a lot
like myself in that he was weird, liked to take chances musically, and had a good knowledge and appreciation of hip hop (even though he was only 16 when we met.) After a while, Charizma and I decided that we wanted to sign with a label that had already proven themselves. Wild Pitch and Tuff City came to mind, since we liked their artist rosters, but we were thinking bigger like an Elektra (Leaders, KMD, Del, Brand Nubians) or Jive (Tribe, BDP, Too Short). The Source had just come out as did Yo MTV Raps and hip hop promotion was becoming the fifth element of hip hop.
“Like too many other great MCs, Charizma’s life was taken by mindless violence.” After shopping our tape to a few labels, we decided to “settle” for Hollywood Basics (Walt Disney). We were never too excited about the deal (we were cocky back then), although we were fans of Organized Konfusion. We figured that at least we would have artistic freedom with them, since they were the most interested in us. Besides, they were promising us soundtracks, a movie role in “Sister Act 2” alongside a then unknown Lauryn Hill, and a big wad of cash.
As far as the artistic freedom, the exact opposite was the case. Since they hadn’t proven themselves as a hip hop label, they wouldn’t give any of the groups freedom. Being owned by Walt Disney made it even a harder situation, because the people in charge had no experience with hip hop. Charizma and I eventually got out of the deal right before they ended their hip hop division. Two months later, in December 1993, Charizma passed away. Of course, this put my life into perspective. At first I quit music completely. Eventually, making beats and DJing was a way for me to deal with the pain of losing both my music partner and my best friend. I also decided that our music had to be heard. I made some demos and gave them out to a few industry people I knew, but nobody was serious about the project. While I was giving out tapes, Dave Paul from the Bomb Hip Hop Magazine put out an album featuring the best hip hop artists of the Bay Area. It featured (among others) Blackalicious, Mystic Journeymen, Qbert, and of course Charizma. The next two years brought several compilations (Return of the DJ), instrumental beats (Peanut Butter Breaks), and production work (Kool Keith)
for me. I even released an EP called “Step On Our Egos” for Southpaw Records. Still in the back of my mind, I wanted to release the Charizma songs. Making the dream a reality. So, why am I telling you this personal story? Because Stones Throw Records is a very personal label for me. I put out what I personally like and save the rest for the other labels out there. As executive producer, I don’t put out what I think the people will like, I put out what I like. This has worked for me so far, and if it stops working for me, it will be the end of Stones Throw as a label. I’ve passed on some artists that I knew would sell a lot of units because I didn’t like the songs. That sounds like a bad business move and from a purely financial standpoint it is one, but profit isn’t the only thing that drives my label. If money were my sole motivation, I’d be rich by now because so far I’ve attained everything I’ve put my mind to. I may be wealthy someday, but only as an indirect consequence of putting out what I believe to be good music.
Stones Throw Records is an independent record label based in Los Angeles, California. Founded in 1996 by producer/DJ Chris Manak, AKA Peanut Butter Wolf, the label began as an output for his own creative musical endeavours and that of his friends. Manak originally ran the label from his bedroom in San Francisco but after securing worldwide distribution through Capitol Music Group, he chose to relocate to Los Angeles in 2000 and expand the full-time team to four. He employed artist Eothen Alapatt AKA Egon as general manager of the label, Jeff Jank as the labels in-house graphic designer and art director and Otis Jackson Jr AKA Madlib as in the in-house producer.
Stones Throw Records is the trillest record label this side of swansea. You heard? Ya’ll best buy stocks in this piece or else I’m coming for you... I ain’t even playin’. For real though, we do alreight.
“Our best seller to date is Madvillian... It’s also my personal favourite, on the real.”
In 2003, spurred on by the success of a compilation of rare 1970’s funk songs released on the label, general manager Egon launched his own imprint Now-Again Records as a subsidiary of Stones Throw. This sub-label has also been an instant success and has continued to grow hand in hand with Stones Throw. The labels often serving as an introduction to one another for their respective customers. Now-Again operates under the same ethos as Stones Throw and employs meticulous detail in all of their releases on vinyl and otherwise.
our team, broken out into far-reaching musical realms, started an entirely new musical journey with sub-label Now-Again and grown from a boutique West Coast hip-hop imprint to a globally renowned bastion of good music. We’ve faced many challenges and hurdles along the way, but done it in classic Stones Throw fashion with a healthy sense of humour and a clear conscience, all the while keeping the faith and releasing and promoting only the music we truly believe in, in a physical format as well as digital for those who refuse to give up the feel, smell and sound of a crispy vinyl record.
Since founding this humble little record label from my bedroom in San Francisco in 1996, we’ve since moved cities, significantly expanded
We’ve made some big strides in our 17 year history and built some solid friendships and business partnerships based on trust and a mutual
A FEW MORE WORDS FROM PEANUT BUTTER WOLF love of music. We feel that although profits are important, building the right kind of company is also important. That is why the decisions we face as a record label day in and day out are approached from an ethical stand point first instead of a exclusively profit chasing hungry model. With this ethical standpoint in mind, we may have not grown and expanded as quickly as some of our competitors, but we have consistently grown and expanded none the less, all with a clean and clear conscience and we feel that this is of optimum importance in 2013. Since this time Stones Throw has continued to thrive and in an era where many independent record labels are closing up shop or going completely digital, Stones Throw has stuck to their guns and continued to release a solid string of consistently good artists with a meticulous detail employed in all of their releases, and in doing so have pushed through the plethora of problems which face small record labels and carved out a niche market of musical lovers who appreciate the aesthetic and feel of a physical product as much as the music itself.
Stones Throw generally operates with a healthy sense of humour and a playful nature that is reflected in each and every release and the everyday operations of the business. First and foremost, Stones Throw Records is concerned with finding and releasing amazing new artists and further developing the careers of their current artist roster. But releasing music on vinyl, CD, cassette tape and digitally is not the only aspect of the business. Stones Throw has a healthy business in merchandise. Everything from artist and label centred apparel, various accessories including but not limited to books, vinyl slipmats, limited edition toys, artworks and posters and recently expanding into custom made drum machines. These aspects of the business have continued to be extremely successful, in terms of revenue and exposure to a wider audience.
STONES THROW ARTIST ROSTER LOS ANGELES, California Aloe Blacc Anika Dam-Funk J Rocc Jonti Jonwayne Madlib Mayer Hawthorne Myron & E Peanut Butter Wolf Quasimoto Strong Arm Steady The Lions Vex Ruffin Yesterday’s New Quintet
NEW YORK CITY Chrome Canyon CX Kidtronik Homeboy Sandman Madvillain Steve Arrington The Stepkids
DETROIT, Michigan Guilty Simpson J Dilla Karriem Riggins Pyramid Vritra
CHICAGO, Illinois Julian Malone
NOW-AGAIN RECORDS
370
RELEASES
COUNTING
MILLIONS
OF RECORDS SOLD WORLDWIDE
2012/2013 FINANACIALS OPERATING CASHFLOW In Millions
Notes
operating activities
Cash Received
2012
2013
$
$
2.24
2.31
-
Appropriations - Outputs
-
Taxes Received
-
121
140
Receipts Credited under FMA Section 31
-
1,891
1,957
Receipts Credited under FMA Section 30
-
432
228
Total Cash Received
-
1.6
1.875
Cash Used
-
Suppliers
-
48
48
Taxes Paid
-
.24
.27
-
.785
.831
22
.815
1.044
21
24
Total Cash Used
Net Cash from Operating Activities
EMPLOYEES
Notes INVESTING ACTIVITIES
2012
2013
$
$
Cash Used
Purchase of Property & Equipment
-
.023
.011
Purchase of Software
-
.0012
.0002
Taxes Paid
-
.0028
.0013
-
.026
.012
-
(.026)
(0.12)
Appropriations - Contributed Equity
-
.021
.013
-
.043
.046
Net Increase in Cash Held
-
.129
.013
Cash at Beginning of Reporting Period
-
.103
.146
Cash at End of Reporting Period
-
.146
.158
Total Cash Used
Net Cash Used by Investment Activities
FINANCING ACTIVITIES
Cash Received Total Cash Received
$120,000 1.4 MILLION IN PROPERTY INVESTMENT
WEBSITE VISITORS PER MONTH
CONSOLIDATED FINANCIALS CONSOLIDATED STATEMENT OF EARNINGS In Millions
External Revenues Intersegment Revenues Revenues Operating Expenses
STONES THROW
STONES THROW
PUBLISHING
RECORDING
$
$
.023
.012
-
.052
1.46
.093
(.071)
(.048)
Stock Option Charges
(120)
(83)
EBITDA
.0485
.0213
Restructuring Charges
(.0014)
-
Tangible & Intangible Assets
(.0027)
(.0128)
Non-Recurring Items
-
-
Depreciation of Tangible Assets
(.0041)
(.0069)
Amortization of Intangible Assets
(.0083)
(.0022)
1.35
.91
(.0036)
(.0012)
Earnings before Interest and Taxes Impairment Losses on Intangible Assets
13 AWARDS 22 CENT FOR THE YEAR ENDING 2013
DIVIDEND PER SHARE
REVENUE BREAKDOWN
sic Mu
Ad s
c Mis
es Sal
21.3%
lish Pub
ing
TOTAL REVENUE UP
n Mercha dise
Phy sic al Mu si
40%
Merchandise
20%
Publishing
20%
Advertising
10% 5%
MUSIC SALES
les Sa
15.1%
DIGITAL SALES UP
Di
g i t a lM us
Music Sales
miscellaneous
c
This financial year Stones Throw Records experienced a 21.3% increase in annual revenue. This spike can be attributed to several factors including: A strong release schedule, some exciting collaborations with visual artists and graphic designers for our merchandise, a stronger emphasis on getting our artists work into movies, television and on the radio and online advertising.
Our main focus as a record label is always the sale and promotion of our artists music. We experienced a boost in sales this financial year, particularly with digital music sales which rose 15.1%. Our aim is to double this figure in the following financial year. We do however, maintain a strong focus on pushing our physical releases and have a number of exciting limited edition pieces in the pipeline.
ic
Physical Sales
72%
Digital Sales
26%
les Sa
FREE CASHFLOW 2010
2013
2011
2012 CASHFLOW BREAKDOWN Through clever marketing, savvy business operations and an unrelenting focus on quality, Stones Throw Records has managed to significantly increase its profit margins and operating cashflow over the past four years, all while signing exciting new artists and expanding our full-time team to 24. We feel this is quite an achievement and we’ve got our eyes set on breaking this record in 2014. $m 2013
1.2
2012
.82
2011
.64
2010
.51
DIGITAL MUSIC SALES 20
13
EMPHASIS ON DIGITAL
200
9
2012
201 0
2011
31.7% 21.5% CASHFLOW INCREASE
PROJECTED INCREASE
There’s absolutely no doubt in it, the times have changed. While Stones Throw Records continues to produce quality music in a physical form, there’s no denying that the bulk of our revenue now comes from digital music sales. We have grown to accomodate this change by expanding our online presence and ensuring that our entire catalogue is easily available online in multiple formats. This is reflected in the steady increase in digital sales we’ve witnessed over the last few years. In millions of downloads 2013
4.3
2012
3.1
2011
2.4
2010
1.6
2009
.82
2014
SOME EXCITING NEW ARTISTS AND PROJECTS
POP UP STORE A IN AUSTIN, TEXAS FOR SXSW
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