Starting your own record company would never rank in any financial adviser’s top 10 investment tips: in fact, it would be in the high-risk category, along with buying a racehorse and backing an independent movie. But that has not deterred Elijah Wood. Nor is Simian Records some sort of vanity project for the record mogul formerly known as Frodo. If it were, he would hardly be signing as his first act a cult band who have been slogging away for the best part of 15 years without managing a single hit.

It must, therefore, be his genuine love of their resolutely uncommercial psych-pop music that prompted Wood to make his debut as a label boss this summer by releasing, to a largely indifferent world, New Magnetic Wonder, the sixth studio album by the Apples in Stereo. Wood signed the Apples not so much because of his belief in their untapped commercial potential as from a simple desire to share his love of their music.

“I’m a huge fan of theirs,” he declares, those big blue eyes bursting with conviction. In fact, the 26-year-old actor still can’t quite believe he’s now their label boss. “It’s kinda amazing,” he grins over a coffee in a London hotel bar. “I’ve been a fan of the Apples for years, but never really imagined I’d get a chance to work with them. What fascinated me is that they had been around for years and – I felt – not really been properly appreciated for what they had done. To be a part of the process of getting them back into the fold... And it’s a great record!”

Although he claims not to have interfered in their creative process, Wood did spend time in the studio while they recorded the album, acted as A&R man in discussions over which songs to release as singles, and made his directorial debut on the video for the first single, Energy. He is also helping to promote the record by giving up his time to do interviews such as this, squeezed in between shooting a new film, The Oxford Murders, and voicing an animated feature, 9.

The Oxford Murders stars Wood alongside John Hurt. “John plays a mathematician professor, and the two of us discover a dead body, which sets us off on a journey to try to figure out who the killer is in a series of deaths. We try to deduce who it is by using mathematical logic. It’s interesting: lots of twists and turns.”

A former child star, Wood has said Frodo Baggins was his favourite role – and it’s certainly made both his name and his fortune – but his taste in film projects more closely mirrors his esoteric music tastes: 9 is an animated film based on an Oscar-nominated short by Shane Acker, who juggled his pet project with earning a crust as animator of Mumakils on The Lord of the Rings. “It was actually his college thesis, and it took him four years to animate and make it,” says Wood. “The original didn’t have any dialogue – it’s basically about these robotic rag dolls that live in a postapocalyptic world. They’re the last things left, and the film explores why. He has a beautiful animation style, unlike anything I’ve seen: not very cartoonish, it’s very dark.”

During filming in the UK, Wood rented a flat in central London, hoping to hit the town and catch up on some of his favourite bands. Inevitably, with the early starts and long days, he didn’t achieve as much as he’d hoped. “There’s a bunch of gigs that I’ve missed,” he grumbles, and immediately he’s off on his favourite subject, enthusing about bands new (Field Music, the Brian Jacket Letdown), old (Os Mutantes, the Monks) and reunited (Slint, Gang of Four, Dinosaur Jr). “Glam has been a big comeback,” he declares, apropos of nothing much.

He is adamant that he’s not a frustrated musician himself, though he admits to having “fantasies of playing mandolin or banjo in a bluegrass band. I’m just a huge music fan. I took piano lessons when I was a kid, and I collect musical instruments, but I don’t really play anything proficiently”. Perhaps being a child actor satisfied his creative crav-ings? “Yeah, I always had a creative outlet at some level,” he agrees. “Music for me has always been a passion that I’ve invested time in listening to. I suppose my label is my outlet creatively. Instead of being a passive listener, I want to be involved, in the sense of putting out music I care about. So, I guess, for me, having a label is like having a band. It’s like the same thing, except I have nothing to do with the music beyond putting it out, finding acts I care about, and trying to get their music heard. It came out of a frustration at the fact there are so many bands that are great but don’t get heard.”

The label’s only criterion will be that Wood likes the music it puts out. He says he would “love to sign an English band”, but is adamant that Simian, which has no employees and no office (“Not yet”) will not be synonymous with any particular sound. “I don’t want it to be a genre-specific label,” he says. “My taste is all over the place. As a kid, the first record I ever owned was The Best of the Monkees, but my brother, Zack, who’s seven years older, was a huge Prince fan, and my mum always really loved soul music. The Beatles were huge in my developing tastes, but from the age of eight, I was travelling around so much that I was exposed to different kinds of music from different people I was working with – everything from Elvis Costello to Ween by the age of 13. Then, when I was 15 or 16, it became serious after I heard Miles Davis and Squarepusher for the first time. After that, Nirvana was hugely influential. And I was a huge Smashing Pumpkins fan, but then I realised that there were no boundaries, and my taste expanded from there – Joni Mitchell, Billie Holiday. Then I got into Delta blues, Skip James, Robert Johnson. It all expanded, and the more I heard, and still the more I hear, the more passionate I become. And the more I realise that there is still so much to discover.”

One of those discoveries is Simian’s second signing, Heloise and the Savoir Faire, who made their UK television debut on The Graham Norton Show earlier this year. “They are essentially the first band I’ve found on my own and solely signed,” says Wood, who has known the New York outfit, with a sound somewhere between Goldfrapp and Scissor Sisters, for several years. “Their music is not easy to describe,” he says. “You can hear one song and call it electropop or electroclash, but while it’s heavy on electronics, it’s also got funk and soul to it, and it’s got a punk-rock aesthetic while not really being punk rock. And the live show is almost like a mad cabaret. It’s pretty amazing.”

Wood, who must have more than enough money to retire to the Shire(s), is realistic about Simian’s prospects of turning a profit in a waning business. “I think it would be naive to think that it could, to be honest,” he concedes. “I’m certainly not starting it to make money. My interest is to put out music and get it heard. If the bands become successful – which is certainly something you’d want to happen – and you end up making money, that would be a nice bonus, but it’s not the intention. Starting a small label with the intention of making a lot of money is kind of ridiculous.”

Simian releases the Apples in Stereo’s new single, Can You Feel It?, on September 24

Explore Music

• Proms

• Festivals

• CD Reviews

• Live Reviews

Editor's choice

• The End: the worst movie endings ever
• Introducing The Times Proms Podcast
• Heath Ledger tipped for Oscar