Green Day Pulls Early Albums From Local Label

Berkeley's alternative music scene was dealt a heavy blow last week when legendary punk band Green Day, which left local label Lookout Records 11 years ago, reclaimed the rights to its early albums from the label.

The decision followed years of financial trouble at Lookout. Some bands have pulled their music from the label's catalog after it was unable to make royalty payments.

However, Green Day's withdrawal may be Lookout's most difficult hurdle yet.

The label, which was founded in 1988 and has launched groups like The Donnas and Rancid, first made its name with Green Day's first four albums.

The band joined with Lookout in 1989, releasing their first album, "39/Smooth," in April 1990.

Though the loss of the rights to Green Day's first few albums threatens to put the label out of business, there seem to be few hard feelings from the label's president, Chris Appelgren.

"(Green Day) hung in there with us through thick and thin, but now it's time to move on," Appelgren said in a statement on the label's Web site. "Despite any rumors or conjecture to the contrary, Lookout and Green Day's long relationship has always been based on trust, friendship and partnership."

Appelgren said that, ultimately, Lookout's financial woes stem from bad business decisions and overextended resources.

"Lookout has gotten to be quite an operation," he said. "That translates into a lot of expense every month and frankly we haven't been selling enough records to cover all these costs. Green Day's decision was a result of our internal problems, not a cause."

Appelgren said that the label will try to stay afloat by reworking its business strategy.

"Lookout Records is not going under or closing up shop," he said. "We are, however, making some significant changes."

These changes include laying off many of the label's employees and stalling all new releases. Appelgren also said that Lookout will be moving into a smaller space.

"We're tightening our belts and getting to work to meet our obligations, do right by our bands and partners, our supporters, and even our detractors," Appelgren said.

Lookout's struggles are typical of the challenges faced by small labels in the highly competitive music industry, said UC Berkeley Haas School of Business adjunct professor Peter Sealey.

Sealey said large record labels have a stranglehold on distribution methods and that trying to break into the business can be a difficult and costly endeavor.

"In the traditional world of physical distribution, a small label is not going to have the clout," Sealey said. "This whole world is a business in which the acts have to gravitate to the larger distributor."

For Green Day, after the moderate success of its earlier releases with Lookout, fame came with the 1994 release of the band's breakout album, "Dookie," with the much larger Warner Bros. Records.

However, large corporations like Warner may not hold such an advantage over digital music, which experts like Sealey said will dominate in several years.

Since distributing music online costs much less than producing and distributing CDs, local labels like Lookout could challenge the clout that major labels have in the industry.

Sealey added that the future for music distribution is in online communities such as the Facebook and MySpace.

"I think it's possible with electronic distribution, with a more vibrant, personal marketplace," he said. "Once you remove that physical distribution, I think it's going to be a wide-open playing field."

For Robert Alonzo, who works on the rock floor at Amoeba Music on Telegraph Avenue, that day can't come soon enough.

"The major labels are just trying to mimic indie labels," he said. "Indie labels nurture the musicians. It's a shame that Green Day's not with Lookout anymore because that's what put them on the map."

A correction to this article can be found here.

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