Ten years ago, Jeffrey Remedios was one of the music industry's rising stars. He ran Virgin Records Canada's promotions department in Toronto, oversaw a nine-person staff and likely would have risen even higher up the corporate ladder if he hadn't shocked his employer by quitting his job to start his own business.
When he left Virgin in 2003, the music industry was starting to undergo massive changes. Digital music was in its infancy – Napster had been created three years before – but illegal downloading was beginning to affect the business.
Mr. Remedios could see just how much of an impact digital music would have on his company, so he decided to get out before it was too late. But he didn't find a job in a less volatile sector. He decided to start his own label – Arts & Crafts – instead.
Needless to say, people thought he was nuts.
"My parents thought I was crazy for leaving a full-time job to start something new in an industry that was falling apart," he says. "Co-workers couldn't believe it either."
While he knew he was taking a big risk, he felt that the time was right to create a company that wasn't trapped in the old ways of doing business. "I felt like now it was time to experiment, and I couldn't experiment by being one cog in a large machine."
Mr. Remedios's big idea at the time was to create a partnership between artists and the label. He wanted to manage the musician, own the publishing rights to the songs and act as the person's record label.
That "360 deal," as it's called now, is becoming more common, but it wasn't the norm 10 years ago. He also wanted to experiment with digital releases and other non-traditional ways to promote music.
The only way he would be able to get the label off the ground, though, was by finding an artist who would buy into his vision.
Just as he was thinking about leaving, Kevin Drew and Brendan Canning, Broken Social Scene's co-founders, asked him to listen to their second record, You Forgot It In People. He loved it, but rather than putting out the record by himself, he asked the band whether they wanted to be partners in the new label he was hoping to start.
Mr. Canning said no, but Mr. Drew decided to give it a shot and became Arts & Crafts's co-founder.
Funding for the label came from a surprising source: Mr. Remedios' day job. When he told Virgin in November of 2002 that he was quitting to start his own label, they asked him whether he needed a company to distribute Broken Social Scene's record across the country.
The company also offered to give him a $50,000 advance, and when that money was recouped they would give him $50,000 more. "That gave us the cash flow to get started," he says.
They also let him work out of their office for free. It was an unusual setup, he admits, but the company needed him to stay on until March and allowed him to work on his label and his regular job at the same time.
The label was successful from the start. You Forgot It In People ended up selling a few hundred copies a week and then a few thousand. It also won a 2003 Juno Award for alternative album of the year.
He then began releasing albums from other Broken Social Scene-related artists, such as Stars and Leslie Feist, who went on to become an internationally recognized, Grammy-nominated artist.
A big part of Arts & Crafts's success came about because the company was willing to try new things. One of the biggest challenges Mr. Remedios faced was illegal downloading. Whenever he would send advance music to reporters, retailers and other people who needed copies before the release date, it would invariably end up on a file-sharing site.
For the Stars' 2005 album, he and the band decided to let people buy the album digitally at the Arts & Crafts website at the same time that he sent out the advance copies. Fans wouldn't be able buy an actual CD for two months.
Mr. Remedios was worried that no one would buy the physical product when it came out – and he says the retail stores were upset with him – but people still bought the CD.
"We sold a ton of music digitally, and then we came out with a stunning physical package," he says. "It worked."
The label also gave a lot of music away free. One of his artists, Timbre Timbre, released a record in mid-2009, but Mr. Remedios says it wasn't doing as well as he had hoped. On Halloween he put the album on his site and allowed people to have it for nothing. Nearly 40,000 people downloaded it, he says.
Soon after, album sales picked up and touring opportunities opened up for the band. Giving away the record enabled people to listen to it and talk about it, and that broadened the fan base, he says.
Arts & Crafts celebrated its 10th anniversary this year, and while the industry looks a lot different than it did a decade ago, Mr. Remedios says it's an even scarier place than it was when he started the label.
It's harder than ever for artists to make a living, and now that anyone can release music online, musicians have a more difficult time getting noticed.
Mr. Remedios's company is still innovating, he says. The way people consume music is constantly changing – there was no social media when he started, for instance – and he has to continue finding new ways to give people what they want.
For its most recent release, Moby's Innocents, the company uploaded files of individual instruments on the same websites that allow people to illegally download music so that fans could take the tracks and remix the songs themselves. That would have been unheard of 10 years ago.
Most of the chances he and his artists have taken have paid off. Mr. Remedios has 33 employees and offices in Toronto, Los Angeles and Mexico, and he's confident that he'll still be putting out music 10 years from now.
Most importantly, though, his parents no longer think he's making a mistake.
"They're super proud of me," he says. "They don't think I'm crazy any more."