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GUY RAZ, host:

Welcome back to ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

This year, Merge Records, a small, independent label based in North Carolina, is celebrating its 20th anniversary. And at a time when the record industry as a whole is struggling, Merge really is celebrating.

What started as a tiny outlet for local bands has grown into one of the most respected and successful independent labels in the music business. Its roster includes M. Ward, Arcade Fire and Spoon, and the label's releases have even begun to crack Billboard's Top 10.

Jacob Ganz tells us about the label's simple formula for success.

(Soundbite of song, "What Do I")

JACOB GANZ: This is the sound of the garage, North Carolina, 1989.

(Soundbite of song, "What Do I")

Mr. MAC McCAUGHAN (Vocalist, Superchunk): (Singing) Here I go again. I pretend I don't know about the complications. Here I go again. I pretend I don't remember all the frustration.

GANZ: The band is Superchunk. In the spring of '89, two of its members, Mac McCaughan and Laura Ballance, were looking for a way to release seven-inch singles of their band and other local groups.

Mr. McCAUGHAN: We figured, you know, why not put these singles out so at least there's some record of these bands that we really like.

Ms. LAURA BALLANCE (Bassist, Superchunk): And some chance that someone outside of Raleigh and Chapel Hill would get to hear them and something they could take on tour with them.

GANZ: So they launched Merge. Today, starting a small label can be as simple as firing up the laptop, pressing record, burning CDs and then posting samples on MySpace. But 20 years ago, the process was a little more mysterious.

Mr. McCAUGHAN: For me, growing up and looking at my dad's record collection, I didn't know how stuff got from being music that was played by the Rolling Stones somewhere to being on a record, you know, to being in my dad's living room.

GANZ: Getting music into living rooms can still be kind of complicated, especially when you're dealing with physical CDs.

(Soundbite of song, "Tokyo")

Once you've actually made them, you still have to get them into stores - mostly small, independent ones. Then comes publicity and radio play and touring to let fans know the records are out there.

(Soundbite of song, "Tokyo")

Mr. MICHAEL BENJAMIN LERNER (Vocalist, Telekinesis): (Singing) I, I, I went to Tokyo. Only in my dreams because they're all I know. Neon colored lights flashing in my brain. Cruising through the city on a bullet train.

GANZ: What continues to set Merge apart from other labels doing this is that it hasn't built its rep on a single band or sound.

Alex Ross writes about classical music for the New Yorker magazine.

Mr. ALEX ROSS (Writer, New Yorker Magazine): It's kind of like a cross-section of the entirety of pop music, or at least indie music of the last 20 years.

GANZ: The names include Lambchop…

(Soundbite of song, "The Man Who Loved Beer")

Mr. KURT WAGNER (Vocalist, Lambchop): (Singing) To whom can I speak today? The brothers they are evil. And the old friends of today, they have become unlovable.

GANZ: Magnetic Fields…

(Soundbite of song, "I Don't Want to Get Over You")

Mr. STEPHIN MERRITT (Vocalist, The Magnetic Fields): (Singing) I don't want to get over you. I guess I could take a sleeping pill and sleep at will and not have to go through what I go through.

GANZ: Neutral Milk Hotel…

(Soundbite of song, "The King of Carrot Flowers")

Mr. JEFF MANGUM (Vocalist, Neutral Milk Hotel): (Singing) When you were young, you were the king of carrot flowers, and how you built a tower tumbling through the trees. In holy rattlesnakes that fell all around your feet.

GANZ: Arcade Fire…

(Soundbite of song, "Rebellion (Lies)")

Mr. WIN BUTLER (Vocalist, Arcade Fire): (Singing) People say that you'll die faster than without water. But we know it's just a lie, scare your son, scare your daughter.

GANZ: Even if the music doesn't all sound alike, there is a unifying sensibility, says Rich McLaughlin.

McLaughlin runs "The Alternate Side," an indie music show on WFUV-FM, and programs one of the station's HD channels. He says FUV gets over 100 CDs a day all vying for attention.

Mr. RICH McLAUGHLIN (Content Director, "The Alternate Side"): There are very few labels, I think, that you can trust their entire roster of artists. So I think when you see a Merge Records envelope coming in, it's something that you set aside because you have a pretty good idea that you can trust the label and trust their output.

GANZ: Every one of those Merge bands is hand-picked by Laura Ballance and Mac McCaughan, who still run the label out of North Carolina without any investment from a major. They say that the exposure that comes with a release by Arcade Fire brings new listeners within their reach. But working on a small scale doesn't mean that each new record isn't a gamble.

Ms. BALLANCE: Oh, they're all gambles, every single one.

Mr. McCAUGHAN: It's just that we're gambling with very small amounts of money.

Ms. BALLANCE: Yeah.

GANZ: Even so, McCaughan and Ballance have to be tough.

Ms. BALLANCE: It doesn't always make bands happy to be told, we're expecting your record will sell maybe 2,000, and that's how we're going to market it. But I guess, you know, running a successful business sometimes involves saying things that aren't always nice for people's feelings.

Mr. BRITT DANIEL (Lead Singer, Spoon): They're not going to spend tons of money on the things that aren't really necessary. They're very frugal.

GANZ: Britt Daniel is the singer for the band Spoon, which signed with Merge in 2001 and has stayed with the label ever since.

Spoon is now one of Merge's biggest successes, but at the time the musicians were signed, they looked like damaged goods. They had just been dumped by Elektra Records and were anything but a sure bet.

Mr. DANIEL: There was a small amount of investment on their part, and it wasn't necessary that we sold, you know, 100,000 records in order for them to turn a profit. So I guess, sort of the long term, it was just about the ability to just put out records at our own pace, the kind of records that we wanted to make, and do exactly what we wanted to do.

(Soundbite of song, "Anything You Want")

(Singing) If there's anything you want, come on back 'cause it's all still here.

GANZ: A big part of the label's anniversary celebration this year is a 14-CD, mail-order-only box set. Mac McCaughan admits it's ridiculous but insists that it's exactly the kind of package — extravagant, mysterious and lovingly curated — that he dreamed about when he and Laura Ballance started Merge 20 years ago.

Mr. McCAUGHAN: I think that we've always run the label as music fans, you know, and I think that our customer base is music fans. We started a label and we run a label counting on there being people like us.

GANZ: For two decades, at least, they've been right.

For NPR News, I'm Jacob Ganz.

RAZ: Later this month, Merge is throwing itself a birthday party right down the road from where the label pressed its first seven-inch records, five nights of live shows, 25 bands celebrating 20 years. You can hear some of their music at npr.org.

(Soundbite of music)

Unidentified Group: (Singing) That it don't mean nothing at all. That it don't mean nothing at all, all, all.

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