In the new music industry, there's room for everybody.

While the major labels are finding their way back from oblivion with the staggering success of streaming, the digital age has allowed smaller players to lead the charge rebuilding the industry.

What makes +1 Records unique is that they sit right in the middle — at once a left-leaning, do-it-yourself alternative label, while also a partner to the larger 300 Entertainment with resources and a tech mindset. It's the kind of hybrid model that we'll see a lot more of as the music industry continues into uncharted territory. So I was excited to chat with +1 founders Jonny Kaps and Nat Hays in their Manhattan office. Here's our conversation:

Danny Ross: +1 Records signs mostly unknown artists. What's behind that approach?

Jonny Kaps: There are very few labels signing artists with no research or statistics. That makes us different — and If I want one thing, it’s to be different. I like finding new artists and playing something totally new for people I trust. That's why I got into this. 

Nat Hays: We work with artists that are primarily unknown. Most labels want to see momentum, but we're not interested in that. Most of the artists we find don't have a lot of the pieces in place — and that's our sweet spot. Instead of waiting for an artist to make their own mistakes, we like to help them make the right decisions early. The problem is that it takes a lot of time and energy before it pays off, which is why we're unicorns in this industry.

Kaps: It sounds cool, but artist development sucks most of the time. Usually you're dealing with not having enough money or traction. Sometimes you have to help get the show or the artwork together because it's not good enough. It's not always glamorous or fun, but it's what we're good at. We started this company to be flexible and adaptable and ahead of the curve.  

Hays: In the industry, an artist’s story has a lot to do with their success. But when you have an unknown artist with no footprint, streams, tour history or previous momentum, you have to really know who your artist is in order to present them. Our focus is telling that story.

Ross: In 2014, it was announced that +1 Records partnered with the music company, 300 Entertainment. What is 300? And how did that affect your indie aesthetic?  

Kaps: 300 started as these four music industry legends who wanted to create an independent company with a streaming focus, while also partnering with technology companies. 

Hays: Jonny and I were sitting at the Soho Grand Hotel, and I heard about this new venture. We texted our contact there and they said, "Come meet us right now!" They offered us a deal on the spot, Jonny and I looked at each other, nodded and said, "Let’s do it." The company didn't have a name yet and we didn’t see a business plan. But their track record spoke for itself and we believed in them. We thought we'd be one of 50 labels, and were shocked to learn we were among just a few.

Kaps: That meant it was a real opportunity for us to sign artists with big budgets and have people like Lyor Cohen make calls on our artists' behalf. It was very organic, and they wanted scrappy people like us who could find talent. Lyor's mission statement was the same as ours — to take risks and be different, innovating and developing artists. Now we can have options in our deals, and be with artists for their whole career with a long-term interest. We have more resources available but we're very cognizant of not changing our values. That would be a big mistake. 

Ross: So how has a partnership with a big company like 300 changed your approach?

Kaps: It's allowed us the time to experiment. Our artists Coast Modern, Anna Of The North and Rejjie Snow have become the pillars of our roster, and they all took two to three years before releasing an album. We took our time — slowly releasing singles, mixtapes, remixes and marketing leading up to it. As a result, those artists have over 100 million streams now. We can get analytics to see which songs are reacting, and it may not be the song we think. With Coast Modern, we released nine singles before the album came out to make sure we had the audience in place. And just this summer, there was an Anna of The North song in a pivotal scene of the Netflix movie To All The Boys I've Loved Before. I’ve never seen a reaction like this from a film. And we’ve been developing her since 2014. 

Hays: It's the wild west right now when it comes to streaming. Everyone's learning in real-time what does or doesn't work. It's been an interesting case study over the last three years how to drip-feed singles in this market place. We spend a lot of time deciding what to release and when. For example, you don't always put the best song first because there’s no audience yet. 

Ross: How does the live show play into all this?

Kaps: It used to be that we discovered an artist by seeing them live. Now we do it on Spotify or SoundCloud, and often they've never played a show before — and that's okay. In this market the artist doesn't need to play live for the first year or two. 

But a compelling live show makes the difference in connecting with people. There are lots of artists who have tens of millions of streams but don't have any fans. The key is converting streaming listeners into fans, and the live show becomes important to break through. 

Ross: Speaking of which, are you seeing a resurgence of New York bands like in the early 2000s?

Kaps: No. But all it takes is to have one band with one song to knock people out and give energy to that kind of music. I believe that's still possible. The Strokes sounded like Television — they weren’t unique but they were authentic, looked cool, and could play live. I think there will be some very important bands coming our way in the next few years.

Ross: Were you always interested in having a record label? 

Kaps: Growing up, I didn't realize I could be in the music industry. It wasn't something my guidance counselor or my parents told me I could do. As a 20 year-old punk kid, I got an internship at Gear and told them I can't work for free. So instead of being an intern I became the receptionist. There would be invitations to parties in the mail, and I was allowed to go. So I made fake business cards that said I was an Editorial Assistant, and that was my introduction to the music industry. I realized that music PR is what I wanted to do because publicists were throwing these parties, so I got a job doing public relations for bands like The Avalanches.

Ross: How did you transition to management?

Kaps: A friend told me to come to Brooklyn to see this band, stellastarr*. So I went to the gig, there were 30 people there and the band was just amazing. I had a fire in my eye talking about stellastarr*, and people were curious because I was insane about them. I eventually became their manager, started getting them better gigs, and slipping them into conversations with music writers. Within nine months, I got them a deal at RCA. Then they killed it at SXSW— Carson Daly showed up and booked them on Last Call. 

Ross: Is that when you guys met and started +1?

Hays: Jonny and I started +1 originally as a hybrid management-public relations company. It's crazy but we were the first company in America to do that. When I started in the music industry in the mid-2000s, it was like walking into a forest fire. Everything had just been torched, everyone was covered in soot, and we walked in with clean clothes and a fresh idea. So right around the time when everyone said the future of labels were over, Jonny and I said "Let's start a record label." In hindsight the timing couldn't have been better because streaming had just begun to get serious. 

Ross: How did you compete when the industry was falling apart?

Hays: The idea of the label was to work in artist development to a certain point, and then hand it off to bigger labels. We viewed ourselves as the farm system. The first artist we signed was The Heavy. Their album sold 5k units, but then they were featured in a Super Bowl commercial and it sent that record flying! We tried to maximize and invest in that success, so we spent at least $60k trying to compete with major labels on alternative radio. In retrospect, I probably would have gotten a better return on investment if I lit that money on fire (laughs).

Ross: Why?

Hays: While everything else in the music industry has been destructed and reinvented, radio is the last old guard. You're dealing with a finite amount of shelf space, almost like the beverage industry. That's why Coke or Pepsi have hundreds of different soft drinks — they're trying to take up 90% of the shelf space in the supermarket. So if I'm the new guy trying to get on the shelf, it's not that easy. The major labels also have songs coming before and after, so there's a long-term relationship I don’t have. That was the writing on the wall that opened our eyes. We needed to scale, which later on led to 300.

Ross: Wrapping up, what advice would you give to up-and-coming musicians?

Kaps: First, there are many young artists thinking more about social media than music, but it starts with the songs and how they're produced in a way that connects with people. Second, you need to think of yourself as a brand. If you want people to identify with you, the imaging needs to be right. All the artwork, photos, videos, sites and socials need to be compelling. Partner with an artist if you need to. Third, just be nice. Understand it's only music at the end of the day. Everyone takes themselves very seriously, everything is life and death — but this is all about creating art, expressing yourself and finding a good team around you.

Hays: I think there's a lot of good music being made, but not a lot of great music. So if you can make great music, there are more opportunities than ever. Between playlisting, blogs and the general public, people are hungry for it.