Ryan Foltz and his Knoxville-based Music Label Arcade Sound Ltd. Have Tapped Into the Sound of the '00s with Florida Producer MillionYoung

A hodgepodge of scissors, glue, construction paper, and cassette tapes is sprawled out over every surface of Ryan Foltz's downtown apartment. At first glance, it looks like an arts-and-crafts session gone awry. "We're sold out," says Foltz, co-founder of the Knoxville-based boutique record label Arcade Sound Ltd. He gestures at the cassettes on the floor. "We ran out of copies on the website just, like, a week after we made them available. It's awesome."

Foltz's apartment, a law office on Summit Hill Avenue that was converted into a residence about a year ago, looks exactly like you would imagine a makeshift studio/office/home to three other people would look like. In his studio, foot space is virtually non-existent; a maze of cords and music equipment fill almost every inch of the cramped space. The walls are covered from floor to ceiling with posters, from the Velvet Underground to Sound Tribe Sector Nine. The adjoining room, where Foltz keeps most of Arcade Sound's odds and ends, is just as packed, mostly with vinyl.

Arcade Sound started as an outlet for Foltz and Will Croucher, who currently lives in Columbia, Tenn., to release their own music while the two were studying at Full Sail University in Winter Park, Fla., just outside Orlando. With the school specializing in recording arts and music business, Foltz and Croucher were surrounded by classmates who had plenty of promising material, but no legitimate way to release it.

"Recording my own stuff was mostly just an outlet to get into what I'm doing now," Foltz says. "My main goal is to put out music that I'm really passionate about and that's obviously not always going to be my own."

In the last few months, Arcade Sound has grown from a side project into a full-time venture, largely due to the addition of Florida singer/producer Mike Diaz, who records his enchanting and tranquil electronic compositions under the name MillionYoung, to its roster. Diaz's EP Sunndreamm, a languid blend of synth-pop, down-tempo disco beats, and muffled, heavily filtered vocals that helped define the emerging genre called chillwave (or glo-fi or hypnagogic pop), caught the attention of the influential website Pitchfork, which described the EP as "exactly what chillwave produced a stone's throw from South Beach ought to sound like."

With the release of his second EP, Be So True, through Arcade Sound, both Diaz and the label are poised for even greater exposure in the next few months. That puts Arcade Sound in a unique position in Knoxville—in a town where labels are run as hobbies, with bands financing their own recording and distribution under what are essentially vanity imprints, Arcade Sound is on the verge of operating as a for-profit enterprise with national impact. In the last week of February, the label had almost 100,000 iTunes downloads, and Foltz sent off an order to press 100 more cassette copies of Be So True. His willingness to explore alternative methods of distribution might be one key to his success.

"Cassette releases are, I guess, the trendy thing right now," he says. "Maybe it's just a fad, but if it's what people want then that's what I'll do."

An even bigger part of his success has been his decision to stay—at least for now—in his home town.

"You know, a lot of people ask me why I decided to come back to Knoxville when Orlando is such a huge city," Foltz says. "But it's funny, even though there's a lot of good music coming out of Orlando, the label didn't really start to move forward until I moved back to Knoxville. People don't realize it, but Knoxville has such a thriving music scene and it's because people aren't as competitive. Here, everyone wants to help me out and give me advice. It's just more open. And with the amount of touring I'll be doing in the next year and a half, I don't see the need to leave quite yet. I really haven't even thought about where I'll go next."

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Foltz, 22, is one of those people who has always known exactly what he wanted to do. In high school, he started playing music and eventually trained himself to record his and his friends' material. In the fall of '07, a year after he attended Bearden High School, he headed to Full Sail University. He and Croucher started Arcade Sound Ltd. while they were students there, but it was still a casual pursuit when Foltz first encountered MillionYoung's music on MySpace.

"I was completely appalled that he wasn't affiliated or signed with anyone," Foltz says. "Then when I looked around on the Internet and saw all of the blog publicity he was getting, I was even more amazed that he wasn't locked in with anyone. I really liked the sound, it fit really well with all of the music that's really hot right now, like Washed Out, but it's more accessible and poppy."

The two had mutual friends in Florida who brokered an online exchange—Diaz would send Foltz his new material, Foltz would offer feedback. The first time they met face-to-face was in New York City last year. Diaz was playing a few shows in Brooklyn and invited Foltz to come up and join him. In a kind of twisted blind-date fashion, they arranged to meet at a Williamsburg bar.

"It was sort of like meeting someone online or whatever except with beer and music," Diaz says. "I lucked out that he ended up being a cool guy."

Since Foltz came back to Knoxville in the spring of 2009, he's juggled Arcade Sound with an internship at AC Entertainment, the local music promotion company that stages Bonnaroo, Big Ears, and Sundown in the City. A substantial loan from his family strengthened the business side of the label—"Without their support, there's no way I would have been able to do everything that I have," he says—around the same time that Foltz started to work seriously with Diaz. The ensuing months have been a whirlwind of gradually increasing intensity. Besides finding artists for the label, Foltz also serves as management, booking agent, publicist, and everything in between. He's started to delegate some of that to others—the Chicago-based company Danger Village has started handling some of his PR.

"I remember the first time that [Pitchfork's] Ryan Schreiber called me to ask if the site could review MillionYoung's material, and if we could send him a few more copies of the album," Foltz says. "At first I thought it was a joke, but when I realized it wasn't I almost completely freaked out. It really was the first time that I realized what was actually happening."

"Ryan's really ambitious," Diaz says. "I've worked with a lot of other friends who have been like, ‘Oh yeah, let's start a record label,' but he's definitely got the drive and he's always on top of things. It motivates me a lot to even make more music and keep working on stuff. It's working really well. We keep pushing each other to make more connections and meet people."

Arcade Sound now represents six artists, including MillionYoung and the equally dreamy Canadian duo Memoryhouse, whose song "To the Lighthouse" has been remixed by Diaz.

"A lot of music out there right now is niche based," Foltz says. "I think what has worked for us is that both of the bands I'm primarily working with are really accessible outside of just indie music. They have a really broad potential fan base. People say it all of the time, but everyone likes pop music."

The MillionYoung buzz seems to be headed for a crescendo this spring. Foltz has booked Diaz to play on tours with of-the-moment indie acts Pictureplane and Surfer Blood, as well as a showcase at SXSW in Austin, Texas, and a summer-long European tour that keeps getting bigger. It's a lot for a guy who, besides trips to New York, has spent hardly any time outside of Florida.

"It's exciting," Diaz says. "But it's kind of weird. This whole trip thing is going to be kind of kooky and definitely new.... It's cool. I'd like to see it keep going further with both MillionYoung and Arcade Sound. It's already been way more than I expected. Ryan is always calling me to let me know about different write-ups and stuff we've gotten on the Internet. But yeah, I wouldn't have done any of this if it wasn't for Arcade Sound and I think that soon a lot of people will be saying that."