YouTube stars don't always welcome record deals

By Antony Bruno

SAN FRANCISCO (Billboard) - The Dutch village of Oosterbeck is not a very big place -- population 31,944. So it must have been quite a shock when a local hotel received a phone call from Atlantic Records looking for assistance in tracking down an 18-year-old resident named Esmee Denters.

The label representative had the astonished hotel clerk provide phone numbers for every Denters listing in the local phone book and then called each one until he reached Esmee's very surprised mom.

That call was just one of many Denters has received from artist and repertoire (A&R) reps during the last five months to discuss a potential recording contract.

Never heard of her? Well, hundreds of thousands of YouTube members have. The doe-eyed girl-next-door with a soulful voice and shy smile has become a bona fide Internet sensation. She's posted videos of herself singing Beyonce, Monica and Natalie Imbruglia covers -- using nothing but a karaoke machine and her sister's low-tech webcam -- that have been streamed almost 8 million times. Nearly 20,000 fans have subscribed to her YouTube channel to receive automatic updates, with about 200 added a day, putting her at No. 22 on the all-time most-popular list.

Denters has since traveled to the United States and met a veritable who's who of the music industry's leading executives, from Jason Flom to Antonio "L.A." Reid to Tommy Motolla. She has recorded demo tracks with Kelly Rowland and is fielding TV deals with Sony Pictures Entertainment.

GOING IT ALONE

The obvious logical next step, then, is a record label deal, right? Not so fast.

"We may decide not to get together with a label," Denters said via phone, waiting for a flight from Los Angeles to New York for another round of meetings and recording sessions. "We may try new stuff. I've already accomplished so much on my own, we'd like to see what we can do with that."

Artists like Denters, emerging from the realm of user-generated media, have learned to tap the viral power of the Internet to do what acts a generation ago could only dream of -- build a grassroots following numbering in the thousands at very little cost or effort.

But being talented and building a fan base is only part of the equation. Artists who decide to go it alone must bear the full financial weight of the various aspects of a music career -- recording and production fees, distribution costs, marketing and promotion expenses and more.

These costs are falling in the digital age. Recording and production fees can be extraordinarily cheap, depending on the level of sophistication desired. Tech-savvy artists can further cut costs with a good laptop and ProTools.

Distribution can be done digitally through such firms as the Orchard or INgrooves, which take a flat percentage of each sale for their efforts. Physical sales can be handled by CD Baby at $4 a pop. There are a gaggle of online services designed to host commerce and promotional sites for unsigned acts as part of a "music social network," most notably PureVolume and Sellaband.com. Companies like Musictoday can serve as a one-stop shop for artists for Web site hosting and design, digital downloads, concert ticket sales, CD replication, fan club management, and merchandise sales and fulfillment.

For licensing, digital services like Rumblefish, PumpAudio and even some digital distribution firms like the Orchard promote their clients' work to advertising firms and film producers and charge only a percentage of the licensing fee in return. And since they've taken no recoupable advance, these artists get to keep all the proceeds.

PROMOTIONAL POWER

Yet the reality is that no act has carved out a lucrative career doing all this on its own. Many point to Clap Your Hands Say Yeah as a DIY success story. And while it's true that the band declined to sign to a label for either its 2005 self-titled debut or its sophomore album, "Some Loud Thunder," released January 30, the band did secure major-label-affiliated distribution through the Alternative Distribution Alliance. After capitalizing on blog buzz the first time around and selling more than 125,000 copies, according to Nielsen SoundScan, the band has sold only 29,000 copies of its follow-up so far.