It’s 1990. Bruce Pavitt and Jonathan Poneman are in New York City visting Sony Records, the biggest label in the world. Their own Seattle, Washington-based indie label Sub Pop had only scraped by full-time for a couple of years. They’d sunk almost all of the cash they made back into the company (Pavitt paid himself $25,000 a year) and into signing bands including Tad, Mudhoney, and a trio called Nirvana, who made fuzzed-out, blissed-out, punk-tinged noise rock that was never intended to top charts. (Nirvana’s album Nevermind would bump Michael Jackson from the No. 1 slot on the Billboard album charts in 1992, and the band would go on to sell about 50 million records). Sub Pop would grow to a $20 million company in less than 10 years and become a driving force in "grunge," one of the last modern rock genres to earn status as a full-blown movement, one that influenced all sorts of art, fashion, and culture for decades.
But no one saw any of that coming when Pavitt and Poneman met with Sony for the first time. Sub Pop had launched the Singles Club, a groundbreaking scheme in which the label’s die hard fans paid a sum up front to get a certain number of limited-edition, hand-numbered, vinyl 7-inch 45s sent to them via mail in the course of six months or a year. Club members didn’t even know whose records they’d get--most of them hadn’t been recorded, much less pressed. After the Singles Club launched, major record labels suddenly wanted to talk to Pavitt and Poneman about buying shares of their startup. And Pavitt was about to learn why.Go to Source