In the second part of our new series on the financial infrastructure of British Christian music, Tony Cummings interviews Alliance Music's Marketing Director Dave Withers.

Dave: "That's a fair comment. The situation is far from ideal. To let them struggle away in the back of a Transit getting up to 1,500 unit sales takes a phenomenal amount of effort. The difficulty we have is we have to throw a lot of effort resource and money at the market place to get a new singer in at any sort of a level. This is a slightly a kakhanded example, we've got this new band called Raze. It's kakhanded because they are American. They were recommended strongly to us by the World Wide Message Tribe, 'cause we said to the Tribe, 'Look, we want new talent, we want new acts. Find us somebody 'cause you know better than we do. You've got your ears to the ground.' So, they found an American band, which seemed kind of odd. Anyway, we shipped them in here, Zarc Porter has produced their album and it comes out next month. So far we've spent in excess of £20,000 building this and the record's not out yet. So this is a grassroots thing with people who are evangelists at heart. They are incredibly talented musically and people we can believe in. They have never made a CD -they may have done some custom stuff in America but they've done nothing here. We are bringing them back here in August through the end of October for a huge amount of exposure and doing all that we can so the record company is, as far as Alliance is concerned, doing its bit to establish someone from absolute grassroots right through to hopefully being established in a short period of time. We seriously believe we can sell 15,000 records of their first album."

Tony: What about the cost of recording an album?

Dave: There's a rule spoken around A&R circles that you can afford to spend £1,000 on studio and musicians for every 1,000 sales you can reasonably expect to achieve. "That's a bit old now. On average an artist's royalty is about a pound to one pound 50 for every unit sold, let's say a pound for easy arithmetic. So if they are going to sell 1.000 the record company has to recover investment costs against that artist's royalty. So it's like an advance on royalties to make the record. It's an industry standard practice. So if we spend £5,000, to recover that £5,000 cost we have to sell 5,000 records - very simple arithmetic. That's how the industry works. Some people say that seems to be a bit unfair because the artist doesn't get any money until the record company's got it back. But the way we do it is we don't tend to do co-op albums. We invest the money so therefore it's totally our risk and if we don't get it back the artist is not left with a bill for the unrecouped balance. It's ours so the record company recovers it. Some people argue that we make profit anyway, which we do but anyone can go to Companies House and look how much and discover it's not a lot."

Tony: But there are numerous examples of artists making two or three albums and apart from mechanicals, composing royalties, not seeing any royalties.

Dave: "Sure. The strange paradox in this is artists like to spend a lot of money making their records. The tension is to spend the right amount to get the right quality but not overspend, based on how many you are going to sell. If you don't sell enough, then no you won't earn royalties. If you invest £10,000 and sell 5,000 records you are not going to earn artist royalties."

Tony: So what's a reasonable spend on a debut album?

Dave: "It all depends. On Raze we spent far too much - we spent over £10,000 on it. It depends on the band. If you get a really good quality band who can play their instruments and sing really well and you don't have to bring in specialist musicians you can make a really good album for three or four thousand pounds. But then by the time you've packaged it it's another two thousand pounds. And it's the packaging costs which have to be recouped as there is no other way you are going to recover it. The artists like to have very elaborate packaging with booklets, fold out pages and lots of photos."

Tony: Would an unknown be likely to get signed to Alliance on the strength of a great demo?

Dave: "No, not on a demo alone. Normally for us to really take notice the demo will be recommended to us by someone. We don't always get it right... We turned down Matt Redman!"

Tony: How do you see the future?

Dave: "There are a lot more mountains to climb. As much as we don't like the term sub culture, that's what we are. We are feeding a Church situation. Sometimes it's a product that's not designed for the Church, it's designed for everybody and we are therefore reliant on people who buy it to give to friends and that's no bad thing. The big challenge now is that when you are delivered with product of the incredible world standard we are now getting, even some of our own with the Tribe and Iona, that the quality and investment in making those records these days being huge, we are faced with the challenge of doing them justice and being serious about the general market. The big challenge for us now, having got the kind of machine in place with us and EMI in terms of actually being able to shift units in the right place and knowing how to market, the challenge now is to raise sufficient capital, to be able to achieve it and to be successful in it. And when you're a small independent company funded on three guys' houses there is a great limit in the capital you have."

Tony: If you had the capital, where do you think it would be put? Would there be a push to get the key records into more of the mainstream shops?

Dave: "Yes, there would be a push for that. That's a bit chicken and egg - you can't get it in because nobody wants it and nobody's buying it because it's not in there. We've got to create a buying habit for people to go into Our Price, Virgin, HMV and say, 'Look, I want to see these sorts of albums here and you're not stocking them.' But it's a lot to expect of someone to just loyally go in and do that. We have to somehow crack that particular difficulty. I think the only way to do that is do a Delirious? which is to crank up a real sophisticated and cost effective marketing plan and be dedicated to it and to support it on two or three selective artists. We will probably do that in the next 12 months."