HAPPY and Jane Traum know that their business, Homespun Tapes, has grown since last year. How much it has grown, they are not quite sure.
``We're just going over our annual statement now,'' says Jane Traum who, with her husband Harold (known as Happy), founded the business, producing music instruction audio and video tapes, 26 years ago. ``I would suspect it has grown about 10 percent. But we do things in a very organic way. We grow as we go. We take it carefully and slowly.''
Growing as they go is a theme that runs through the Traums' enterprise. Homespun Tapes, based in Woodstock, N.Y., began when Happy, a professional musician who wrote books on guitar playing, received letters from people who wanted to learn to play but could not read music.
In 1967 he began making audio tapes of himself playing the guitar and selling them through classified ads.
``The response [to the tapes] was good,'' Happy says. ``I did other tape series and then began enlisting the help of professional musicians who were friends of mine.''
Musicians started to send the Traums tapes and letters in the mail with ideas for lessons. ``Big-name performers will often come to us,'' Happy says. ``Many jazz and traditional performers will do it [perform on tape] because it documents their achievements.'' Performers earn up to 10 percent on the sales, which can be a ``considerable'' royalty, he adds.
By 1983 the Traums realized that video tapes ``were the coming thing.'' They say they knew of no one else who was doing what they did and they learned by experimentation. Video now makes up 80 percent of Homespun Tapes sales, with only two or three new audio titles each year.
In 1992, Homespun Tapes brought in a little more than $2 million in revenue. The company has a mailing list of 50,000 and the couple sold more than 50,000 audio and video tapes last year.
They have signed a contract with a division of Warner Bros. to distribute the tapes in Europe; they sell them in Japan through Yamaha; and they have broken into the music entertainment market in Australia and New Zealand with the help of Music Sales Corporation.
Most recently the Traums have launched the ``Heritage Series'' in conjunction with the Smithsonian Institution, producing tapes of ``American masters'' like Bill Munroe and Ralph Stanley who play traditional music such as bluegrass and country.
`Some of the tapes will go into the Smithsonian archives,'' Happy says. ``They're all done by innovators in their fields, musicians who have impacted American music.''
The Traums insist that what matters to them is that they communicate well to others the music they love. ``We're driven by the product, by the teaching and the lessons,'' Happy says.
``The success of the tapes and the lessons has been the real value to us,'' Jane adds.
But for two people ``with no knowledge of business,'' figuring out how to run a successful one has been a valuable experience, they say. From the very start the Traums put whatever income came from the business back into new products. ``We have not had any major financing or bank loans or investors,'' Happy says.
Homespun Tapes is now big competition to some larger names in the music industry. Two years ago CCP (Columbia Pictures Production)/Belwin bought and merged DCI and R.E.H., ``the largest and best [companies] in music instruction video production,'' according to Sandy Sneed, marketing director for CCP/Belwin.
The professional musicians the company uses on its tapes appeal to a different audience than Homespun's - their latest artist is Chad Smith of the Red Hot Chili Peppers. But both companies ``target the people who want to learn to play like their heroes,'' Ms. Sneed says.
``And there's only so much space in a music store,'' she adds. ``What matters is who gets the most space on the shelf.''
What matters to John Barnard, a lawyer from Quincy, Ill., is the quality of the teacher. Mr. Barnard began using Homespun Tapes about four years ago to learn how to play country blues guitar. ``It's the old teaching maxim,'' he says. ``Tell me and I'll forget; show me and I'll remember; inspire me and I'll understand.
``[Happy] has an eye for what's going to come across on tape. Plus he has a long reach in the music industry. But what's different about this company is its intimacy.''
When he occasionally has had a question about the tape he is working with, Barnard says he will call up Woodstock, N.Y., and speak with Happy.
``Kind of unusual, don't you think?'' Barnard says. ``I've thrown all my other hobbies away.''