Now it’s 2011. As I mentioned in my Christmas post I intend to add tons of new posts in the first 4 months of 2011. As of now I don’t have any structure or plan covering these upcoming posts so I will encourage everyone to post their suggested topics as comments. I will certainly be adding more info on recording, playing live and band politics. Beyond that I will just write what comes to mind.
This morning I had a conversation with a musician friend about the demise of the music business. It’s interesting to note that some people are still arguing that the music business still exists. This is complete lie. The days of the huge labels controlling a massive industry are over. The labels that remain are pale shadows of their former selves. How did this come to be? It’s simple. They did it to themselves.
In the late 1980’s and early 90’s the music business underwent a format change. Vinyl records became obsolete and the CD became the new format. For the major labels (names like Columbia, Warners, RCA, BMG, Arista etc) this brought in a deluge of unearned money. It’s important to understand why this money wasn’t earned.
When CD’s were first introduced they were viewed as some kind of miracle. The supposed quality was in a new class. This new technology was promoted as extremely expensive to produce and manufacturer. This, of course, was a lie. Yes, the earliest releases cost huge amounts of money to create. Yes, the new production plants were expensive to build. Yes, the digital format had higher apparent clarity and as a result the recordings needed to be carefully produced in order to exploit this clarity but the whole story was cleverly hidden from the musicians and more importantly the public. The real story was that the manufacturing process was like most manufacturing processes and as the amount of units created rose the costs per unit plummeted. Soon after the introduction of CD’s the cost to produce each CD dropped from $6-8 to $1.25 per unit, On the other hand the labels had used the introduction of the new format to raise retail prices from about $7 per vinyl record to $14 for a CD. Their production costs had risen slightly and they had doubled the price. And then, like a rain of gold from the gods, every hit record from the 60’s, 70’s and 80’s became hits again.
What most people don’t realize is that the vast majority of music is bought by people 16-24 years old. This is a key factor in understanding the mechanics of the music business. It defines the way records are marketed. It drives the cycles of music movements and it means that a tyranny haunts the record labels. If they don’t get you to be a fan of some of their artists in that 8 year period then you are lost to them forever. Yes, there are some odd characters, like me, and, perhaps like you, that listen to new bands for decades of their lives but most people are not like this, they fall in love with certain bands as a teenager and they listen to them ’til the day they die. This makes the music business obsessed with youth culture and youth trends. They create them. They track them. And they exploit them.
The format change to CD’s didn’t change this pattern of human behavior but it did add an interesting wrinkle to it. Suddenly everyone that had loved music when they were young decided to completely rebuy their favorite artists of yesterday. This translated into a deluge of cash to all the major labels.
Rather than seeing it for what it was, an aberration, a strange one time gift, they decided that this was the new normal pattern and expanded their staffs – fueled by the river of money rolling in the door. The mania reached a fevered pitch and the word that money could be made in this remarkable way spread. Sony, the Japanese electronics giant, bought Columbia and Epic records in an effort to acquire their catalog. The thought being that they could introduce yet another format change ( the mini disc) and sell billions of dollars worth of gear to those crazy americans. They falsely believed that they could once again resell the complete catalog to the whole american public. All the while that this was going on the web was growing in scope in the background. It didn’t occur to any of them, as they counted their millions that the massive price increase that they had duped everyone into paying wasn’t in direct opposition to the MARKET. That’s the MARKET as an entity. The type of entity that levels playing fields with brutal indifference.
It is interesting to note that my experience working inside record labels as a manager had taught me that on the whole the executives of the large labels were lousy businessman. The upper echelons of the major labels are stocked with people who couldn’t run a Carvel ice cream store with any authority. On more than one occasion I sat through a lecture by an executive about how the music business was different. The normal rules and market forces didn’t apply.
All of this carping and self-delusion was a smokescreen to cover a little considered fact. It’s a dirty little secret. The Music Biz is an illegal cartel. To state that more clearly in case my terminology is kinda vague, the biz is a group of huge corporations that meet secretly to fix prices and control all supply to the stores. The same companies own the production and large portions of the distribution networks. They own it all and they never compete in the one area that counts, price. That’s why a visit to any large music retail chain will find the average music buyer looking at a sea of releases, all at the same price. Imagine that, what an interesting coincidence. How do they get away with it? Do you really have to ask? The answer is bribes. Big ones paid to politicians and regulators.
So now this particular blog has moved up to recent history. Starting in the very late 90’s the music business started to hemorrhage money. It couldn’t have happened to a more deserving bunch. Let me take a moment to point out, so as to be crystal clear, that I am not talking about musicians. Musicians have little to do with the music business. The music business if made up of people who know little about music and in my experience have little interest in music and more to the point none of the are musicians.
As file trading came on stream the fact that music CDs had never fallen to a market driven price sent the feeding frenzy of kids downloading into overdrive. Any what did the major labels do? Did they let the price of CDs fall since they were a dated technology? No they sued their potential customer base and got together to decide that they should RAISE the price of CDs. What utter idiots.
Now they are attempting, yet again, to use a potential price controlled monopoly system to get everyone to pay ridiculous prices for music – Apple’s I tunes. Yes it’s an amazingly convenient brilliant new technology that demands you pay the same damn price that doesn’t work in the stores. It makes this demand even though there are no costs of delivery, no physical format to manufacture and minimal artwork to produce. I expect that some of you will argue with me on this point. Go ahead I will argue back. Please keep in mind that the rise of filetrading devalued my life’s work by a factor of ten. Nonetheless I believe it can’t be fought and needs to be utilized cooperatively.
What does this mean to you, the dudette playing in a band? It means that the labels are of no value to you. They are whales beached in the sun. Their continued attempt to dominate the market will only serve to drive music from the center of youth culture. It will only serve to make every band have to make it by playing live and promoting themselves. It means that the labels will now move aggressively into merchandise (t shirts and stuff) and live fees as part of their contracts. It means that you should avoid labels like you avoid herpes. Oh wait a minute that’s a bad analogy for musicians…fill in your own…..Is there a way out for the majors? Yes, but I am not about to tell them how to do it. Right now there is a kid in his bedroom that has the same thought and he will end up buying their catalogs. Good for him……………..
Copyright Brad Morrison/Billiken Media 2011
The last section covered how a recording deal is structured. Please read it before reading this blog. If you don’t I guarantee that you’ll be confused.
As I mentioned in the last blog the deal is structured as a series of options. These lock the band into a consecutive series of time periods when they are bound to the label and are working on creating a set of recordings that meet their obligations laid out in their contract. I realize that sentence is pretty complex and may not make much sense without a great deal of head scratching. Let me put it another way.
A recording contract says that the band can only record for the label and no one else. This is absolute and final. There is no scenario where the label will allow the band to record tracks without the label being in absolute control of those masters. I have run into these kind of conflicts while managing bands. For example the band Miracle Legion was on tour with the Icelandic band The Sugarcubes. As is natural on a tour the bands became good friends. Soon they started to join each other on stage. The logical next step? I get a call saying that they would like to record together.
I immediately knew the problems that would come once the labels got wind of this plan. Miracle Legion was signed to Rough Trade at this time and that label, perhaps the only one in existence at the time that would allow it, I knew would work out a compromise. The Sugarcubes on the other hand, were signed to Electra. Electra, like all majors, had no capacity to compromise.
As soon as the bands brought it up I booked the time and rearranged the tour to free up a recording block. I then set about doing my best to cover up what we were doing. I started some false rumors. “Miracle Legion was leaving the tour” “There was tension based upon who was sleeping with whom” etc. All the rumors were untrue of course, but I tried to make them as plausible as possible knowing that any potentially harmful rumor would grab the label’s attention. If they were concerned about who Bjork was sleeping with they might not spend the time to notice exactly why a hole had appeared in the band’s schedule and it conveniently left both bands in New York for three days. I knew that the key was to get the bands into the studio and get the tracks cut before the label could stop them. That’s exactly what we did.
The end result was 4 wonderful songs and years of war with electra. We put the tracks out under Rough Trade and said “Sue us”. So they did. At least the fans got to hear it. The point to this little tale is that once you sign with a label they own you. What I did with the Sugarcubes was basically unheard of… no one signs with a major and then records without their approval.( well Hendrix did and Miles Davis, and a few others…) They never, ever, ever give their approval unless it is their idea.
So if you sign with a label you are their possession, their slave. If this doesn’t sit well with you then DON’T SIGN WITH A MAJOR LABEL! I am sure some of you are imagining that your stubborn son of a bitch personality will allow you to manipulate them into allowing whatever you want. This is extremely naive. They have enslaved bigger egos than yours, bet on it.
So now lets look at the second half of a recording contract the section that covers royalties and payments. This is the heart of the agreement and this is the section where the band gets screwed. Yes the first section that controls everything you do is bad but the second section where the deal outlines how the band is paid is the part that really guts the band and controls them.
The way that royalties are paid and accounted for is based upon the way records were sold long, long ago. As a result the language used and the system used can be confusing. The first thing to understand is that everything is based upon MSRP. Manufacture’s Suggested Retail Price. This is a price, agreed by the major labels and representatives of retail music chains. It is a fictional price that is somewhere near the real average price that CDs sell for on a daily basis. I have been in the business for twenty-five years and I am unsure exactly how they decide this number. I expect that I could find out more about the process but I just don’t care to. The only thing that matters is knowing what the number is. For the balance of this blog let’s just assume that the MSRP is currently $14.98. I have no idea if this is current but it doesn’t matter. The number is a basis for calculating what a band is paid.
A typical contract my say that the band will be paid 12% of MSRP. This works out to $1.80. So it appears that for each CD sold the band, the artist, you will be paid $1.80. Sounds great doesn’t it. So you sell a 100,000 CDs and get paid $180,000. Fantastic. Well it would be. It’s just that the balance of the of the language in the contract takes this simple formula and starts to alter it. So what is the real formula? Well it goes something like this……. The first thing they take off is called a “packaging deduction”. This is a fictional discount that the artist pays for to “package the CD”. ???? What the hell does that mean? Well, quite simply they are charging you for putting the CD in a jewel case and putting a booklet in the case. The standard seems to be 25% currently. So now we add this to the formula and it looks like this $14.98 x 75% =$11.24 $11.24 x 12% royalty = $1.35. So that little trick cost you $.50 of your royalty.
So now you sell those 100,000 CDs and you get paid $135,000 right? No, not so fast. It seems that the sales figures and not just a simple count of CDs sold. The first 50,000 CDs get half the normal royalty rate….What???!!! what the fuck???!! Oh yeah, don’t worry about that you’re gonna sell millions right?
So let’s look at the formula again….100,000 sales now pays $106,000. Ok still seems like you can get by on this kind of money. BUt that, of course, is not what the band is paid. The band paid the producer, 40,000 and the studio 90,000 so that money is still owed. Yes, that’s right, the fees for production and recording come out of the band’s share. Doesn’t sound fair does it? (Let’s not get all trapped in the whole “fair” thing…it’s just too complex) This little fact looks even more outrageous when you consider that the band pays for the recording sessions and producer, engineers etc but the label owns the recording. In fact even though the band is paying the producer the producer answers directly to the label. Any band that thinks otherwise will learn a quick lesson. It might be workable if this is where the band’s debts ended but, of course, it doesn’t. The band also pays for promotions costs. Yup, that’s the costs that the label incurs to promote the record. The band pays for radio bribes. The band pays for print advertising. The band pays for the generation of artwork. Let’s just cut to the chase—- the band pays FOR EVERYTHING THAT HAS TO DO WITH THE ALBUM!!!. Yes that’s correct. I didn’t just make it up.
So the A & R guy flies out from LA to visit the studio while the band is cutting tracks. He stays a few days a goes back to tell the label how brilliant the band’s new tracks are….. and sure enough 18 months later the costs of the flight, the hotel he stayed out, the car he rented (and boy was it a nice one), the meals he ate and yes, that nice meal he treated the band to… they are all deducted from the band’s cut.
Here’s another possibility. The record starts to get some college airplay in the Northwest on a half-dozen college stations. The head of College promotions jumps right on this trend. He jets out to Seattle, rents a car, gets a pocketful of cash and starts to make the rounds of the radio stations. he hires as many of the music directors and program directors for these radio stations. He pays them to put up flyers for the band on campus and more importantly on other campuses and to talk to other DJs and staff at other college stations about how they too could have this cool, lucrative job putting up flyers. As a result the band’s record climbs from 36 on the Northwest college charts to #11. This whole little exercise costs $43,000 over the course of two months. two years later the band discovers they must pay back $43,000 before they earn any money.
Here’s another angle. The band hears about the scheme to promote the record in the Northwest and says “hey we got a better idea. Why don’t we play in Seattle and Tacoma and Portland and Vancouver!!” So you rent a bus and gear and travel around and play all these towns and your record goes from #36 on the college charts to #1 on the college charts. The label, orgasmic over this cosmic stroke of luck decides to celebrate. They fly a third of the staff out to Seattle for a rocking celebratory show. Here it comes… you guessed it kiddies…two years later the band discovers that their tour support, the chartered plane, the hotels, the bribes they still insisted on handing out to DJs etc. are all being paid back out of the bands cut of the royalties. It all comes to a whopping $211,000. Are you starting to see the picture here?
Let me be extremely clear about this blog and this particular topic. IF A BAND SIGNS A MAJOR LABEL CONTRACT EVERY SINGLE DIME SPENT TOWARDS MAKING THE RECORD OR PROMOTING THE RECORD OR PAYING ANYONE COMES OUT OF THE BAND’S CUT!!! As a result, unless you become Bruce Springsteen you will make nothing from recording for a major label. There is only one exception to this rule. Whoever writes the songs and controls the publishing of the songs on the record may very well make some money. Since the law demands that labels pay for the use of the songs the songwriter is the only one that gets paid consistently when a record sells.
Well that’s enough for the moment. I realize that I haven’t been posting lately so I am now back in the swing of it……….
©Brad Morrison/ Billiken Media 2010
Well I’ve been dancing around this topic since I started the blog 5 months ago. I haven’t written this blog for some unknown reason. It is certainly not due to lack of interest from you all. The emails and votes for a blog on a record deal have been relentless. So now I will give in and outline the inner details of doing a deal with the devil.
Through the decades I have managed quite a few bands. Every one of them has lusted after a recording contract. After the first few contracts I developed the habit of telling all of these starry-eyed children that getting signed to a recording contract was the worst possible fate. All of them laughed. All of them ignored me. Did this bother me? No, it was just me covering my moral ass. If I hadn’t warnedthem, with what I know about recording contracts, then I would have been guilty indeed. All of the musicians I represented got what they wished for. All of them regretted it in one way or another. In some cases it destroyed them and ruined the band. Oh well, I warned them. Now I will warn you.. [Bad Brains -Pay to cum]
Listen carefully -You do not need a record deal. You do not want a recording contract. You will be making a big mistake if you sign a recording contract. Are there exceptions to this? Yes, of course. If by some strange twist of the time space continuum you, the reader are a guy named Elvis and the guy giving you advice goes by the name of Col. Parker then ignore me. If your name is Jimi, you play a lefty strat, and the most important fact it is June 1966 in your world then go right ahead and sign anything anyone offers as long as it comes with a cash advance that is available now. For all of the rest of you….DO NOT SIGN A MAJOR LABEL RECORDING CONTRACT!!! Is that clear? [The Who -Dr. Jimmy]
Now I know you will all ignore me. So be it. If you are being offered a major label deal then it is extremely important to keep in mind that any major label deal is ridiculously complex. YOU MUST HAVE A REAL LAWYER INVOLVED! That means that your uncle Taco is out of the deal. Further you should have a professional manager involved and you should be taking his advice. If you do not have a manger then contact me and I will pass along some contacts or tell you what my consulting fee would be. (I can hear the wheels turning in the minds of many of my readers. Do not attempt to fake a deal in order to get an email full of names from me. It won’t work. The first thing I will do is contact the label and confirm the basic situation. Sorry, I applaud your creative thinking though) The advice I just offered is deadly serious. If you sign a contract without the advice of a real, experienced lawyer then you will get fucked. If you don’t believe me then think about it this way. If you are offered a deal and it is negotiated by a real lawyer and a real manager you will get fucked. With this is mind what will happen to you without their advice? You will get screwed so bad that someone else will end up owning everything including the band dog, the band groupies and that beat up piece of shit guitar that you keep around because you learned to play on it. Enough said.
Now I am not going to explain how to negotiate a recording contract, that will take a few blogs and I hope to get to that soon. Before we approach that topic I must explain how a recording contract works. For those of you taking prescription antidepressants now would be a good time to check that you have dosed yourself.
OK let’s go. Let’s assume that a major label wants to sign you. How does something like this happen, in real terms, how does it go down? [Bowie TVC15]
To reach this stage you will have done all the preliminaries, showcases, meetings, presspacks sent and read, managers and label dudes (and dudettes) making endless calls, rumors, fistfights, depression, elation…so now what happens?
Generally the label starts by issuing a “deal memo”. This is a letter that they send to your lawyer and manager. It is one page and it is a summary of the deal that they are about to offer. IT IS NOT A CONTRACT. It outlines the basics of the deal. That is to say it outlines the basics of the deal they would love you to sign since you haven’t negotiated with them yet. It will tell you how big the advance they will give you for the first few records. It will tell you the total length of the contract and it will outline their offer for your publishing. If they are not attempting to buy your songs then it will address how they plan to pay for the use of your songs on the records.
Your lawyer will turn this offer down and begin to negotiate with the label. Every young band will panic at this point and attempt to override their lawyer management team and sign the deal as first offered. They don’t want the label to change its mind. The band has been hoping and fighting for a deal for so long they talk themselves into believing that negotiating the deal is risky and may drive off the label. Actually the opposite is true. The label expects to negotiate. It is their favorite part of the process. If the band doesn’t try to sell itself high then the label can become doubtful. If the band doesn’t know in its heart that it is the greatest band on earth then how will the fans believe it? Taking a label’s first offer is a sure-fire way to speed up the process of the label losing faith in the band.
So you negotiate with the label and finally come to an agreement. At this point the label sends multiple copies of the 60 page contract. The band sits down and signs them all in multiple places. NOW YOU ARE SIGNED. What does a deal like this say? [Velvet Underground “White Light, White Heat”]
Every record company contract is different. Every deal is different but there are many things that are common to all the deals. These are the things that count. So I will explain them in as basic a fashion as I can. If you understand the basics of how deals like this work then you will be prepared to open your mouth in a meeting and maybe get what you want or need in a deal. This applies to both big label deals and small label deals.
Every recording contract is designed to lock the band into only recording for the label. As a result the deal will be split into two halves, the first covering what the band must do, can do and cannot do when it comes to recording. The second half will cover how the band gets paid for its services as recording artists. In addition there may be a third section covering specific commitments to promote the records and to provide tour support. Finally the contract may cover song publishing and include a complete publishing contract. I will not cover the details of publishing in tonight’s blog. You can check out some of what is involved in my two blogs about publishing royalties. [Yes -Close to the Edge]
Part one the section that covers how long the band is bound to the contract is always structured as a series of options. What the hell does that mean? Well it isn’t like choosing one item from column A and two from Column B at the chinese take out. (if you have no experience with chinese take out then you are either an underage hippie kid living at a remote commune, playing a hemp guitar, or not a musician)
The options in a recording contract work like this – the band must make the first record for the label. The label can take a god awful long time putting it out. You must wait. Once they release the recordings the clock starts to tick on the band’s option. Let’s say that it’s a one year option. This means that within one year of the album’s release the label must tell you if they would like another record from you. It is the label’s option not the band’s. It is NEVER the band’s option. [Jackson Five -I want you back] If they say that they would like to “excercise the next option” then the band makes another album. Most major label record deals have TEN options. In practical terms this means the band is committed to the record label for up to 15 years. (California has restrictions on deals that are this burdensome so most labels use NY law to get around this anti-slavery law. Think carefully about this sentence….yes….a recording contract is a form of slavery…remember I warned you….)
Often bands will talk about getting “three records guaranteed”. This means that the label commits to exercising the first two options after the first release. In practical terms this is never true. The label can usually get out of the options by paying off a penalty. [Iggy Pop- The Passenger] If the label decides it doesn’t want to release any more records from a band, any band, they will stubbornly stick to their guns. Even though the band may have language in their deal that states that the label must do it in practical terms this will not make them release the record. They will pay the penalties, no matter how large, and move on. Even a sizable non-release penalty payment is cheaper than releasing a full-scale release. When you add in the fact that an unwanted release would require lots of staff time, time that could be spent on a record the label is excited about, then you can start to see why they do this.
So a contract that guarantees three albums will be released doesn’t mean three albums will be released. What does it mean? Well it shows that the label was enthusiastic enough when they signed the deal to commit serious money to the project of developing the band. So deals like this primarily measure how committed and excited the label was about the band during the negotiation process and little more. All bands and all labels rise and fall in their enthusiasm and this affects the way albums are promoted.
Now we’ve established that the contract revolves around options and that options are set to certain time periods and all of this is nailed down to the concept of a “record”. This concept is certainly being tested in the modern market. Bands no longer go into the studio and put together a 10 song, 34 minute vinyl LP (the standard from 1967 ’til 1987) nor do bands go into the studio and put together a 12-14 song , 45 minute Compact disc (the standard from 1987 ’til 2003). I think we can also rule out the old school idea that bands go into a studio and cut two tracks which are turned into a single.
[Mission of Burma “Academy Fight Song”]
The current environment is one of changing standards where bands are releasing individual tracks as downloads, collections of varying lengths in every format they can concoct and in the near future streaming the live creation of recorded music through peer to peer networks. [Bad Brains “Banned in DC”]
Despite the state of chaos and the coming changes labels seem to be sticking to locking a band’s output into the concept of albums and collections of songs. [Deep Purple “Pictures of Home”]. No matter how a contract is structured all of the band’s recorded output will be controlled by the label for the duration of the contract. If a contract did not accomplish this there would be no reason for the label to enter into the deal. In short the band will only record for the label and every single note put to tape during the contract will be owned by the label.
In this section of the deal the contract will also cover who controls the different aspects of creativity. Here’s a short list of things that will be covered.
1. Who’s songs are going to be recorded? Are there going to be any Bob Dylan songs? Is a ghost songwriter going to be employed? Can the label force songs on the band? Often the label will require the band to submit demos and then the label will pick out the tracks to be recorded. Sometimes the selection will be by mutual agreement. When the deal is structured in this manner the band will discover that it is very hard to win an argument on song selection with the label.
[Bob Marley “Crisis”]
2. Who will produce the recordings? Here is another case where the label will demand complete control. For all bands without a hit the label will use the producer to control the band and micromanage the band’s recordings. Once again if the band gets the label to agree to a situation where the producer is agreed by both sides then the band will have a great deal of trouble over ruling the label. [Love “Live and Let Live”] In many cases a band will attempt to be self producing. That is to say they want to make their own records and do their own tracking, mixing and editing with the help of a buddy who is an engineer. This kind of provision is very hard to get from a label for the simple reason that all major labels know that this is an extremely bad idea for any new band. The label knows that the band has no experience creating a record that will compete sonically on the radio. If the band makes this point a do or die point of negotiation the label will act as if they are giving in and just demand more flexibility to remix. Then under the cover of darkness they will “remix” the record by tearing it to pieces and producing the product they wanted all along. [Rolliing Stones “Sympathy for the Devil”]
3. The budgets for recording of each optional record. The language that covers the recording budgets will name maximums that the label is willing to put up for recording. They will often include language that allows the label to exceed these numbers but only with the written permission of the label.
4. The budget for the total amount of money to be advanced to the band. This will be a large sum which will include many smaller sums like recording budget, tour support, personal advances to band members, allowances for gear purchases etc. [Santana “Black Magic Woman”]
5 Budgets and maximum allowances of money to pay producers. Once again these sums will be controlled solely by the label. In general the producer will be paid an advance payment which will be part of the money that he will earn when the record sells. THIS MONEY AND THE ROYALTY POINTS COMES OUT OF THE BAND’S SHARE!
6. Allowances and advances set aside for the band’s manager. This amount is usually negotiated by the manager as he works out the deal. This is a blatant conflict of interest on the part of the manager and is, as a result, standard practice in the music business.
There are other items that are often included in the first section of a recording contract. I’m certain I am forgetting a few but it doesn’t really matter. What is extremely important to understand is that the number of options, the guarantee of options, the total contract length will all determine how long you may be locked into a label.
When a label is courting a band they will be the most charming, supportive, understanding, coolest people who you have ever met. This view will change once you begin to work with the label to create your first album. I promise that any label will be much less attractive once the deal is over. Always keep this in mind.
Without exception the area of the contract that covers options and budgets is the part that gets a band licking their greasy chops. It is very easy for these numbers to add up to over a million dollars for the first option. This is what lures the band in and gets them to sign.[Beatles- 8 days a week]
Now here is the fact that puts all of this in the proper perspective. Everything that is done to create, manufacture and promote the record, everything that is done to pay off the business, all of the advertising, all of the advances , all of the tour support, all of the gear allowances, all of the catered food and press events, all of the plane tickets given to writers, all of the cash put up to print up t shirts, everything in every possible way that is paid for by the label ultimately comes out of the band’s cut of money. Go back and read that again. What does this mean? EVERYTHING DONE TO MAKE THE RECORD AND PROMOTE IT IS PAID FOR BY THE BAND OUT OF THEIR ROYALTIES!!!
Think about this fact. It the fundamental truth about record deals. The band pays for everything out of the royalties that the band MIGHT receive. As a result of this the way a recording contract is structured the average musician in a successful band will not only make no money from making records they will spend years OWING THE LABEL MONEY!!!
[Grand Funk “I’m your captain”]
I will explain how this works in the next installment when I cover royalty payments. Let me close by saying that it often works out like this :
Recording Studio $200,000
Each crew member $12,000
remix engineer $40,000
Mastering studio $20,000
Band member $7500 and a new guitar, amp and a few pedals
Ask yourself do you want to give the best you’ve got to give, perhaps the best you will ever give since you are in your prime, in return for $7500, a new guitar and amp and a year’s worth of crappy catered food as you make an album?
[Gang of Four “Anthrax]
©Brad Morrison/Billiken Media 2010
About a month ago I ran a posting asking people to send in their demos. As I mentioned in that posting the idea was for me to criticize the demos in an effort to teach you, the reader, something about songwriting and recording. I got quite few submissions and, in general, there was some good stuff. Nonetheless I intend to kick the stuffing out of the songs I have picked. I am not doin’ this to discourage the musicians that were brave enough to go through this process. Instead I am going to give you an idea of how tapes are torn up by label people and producers.
As I mentioned in one of my earlier blogs almost everyone in the music business can come up with one solid criticism of anything they hear and that is that whatever it is, no matter how good or bad, it would have benefited greatly if the person doing the talking had been involved in its creation. The music business is full of people who are firmly convinced that they know everything there is to know about writing songs, recording music and turning that music into a mega popular world-wide hit. In the few cases were I have seen this actually happen it usually results in something like “The Witch Doctor Song” as sung by Alvin and the Chipmunks or the Macarena. It is useful to remember that very few of these people actually have any talent. If they did they would be musicians. During the Golden Age of record companies there were A & R people who really knew their stuff. There are even a few of them alive now. ( I’ll mention Joe McEwan and leave it at that…Hi Joe..How’s the wife?)( I should also admit that this whole blog is based on the premise that I know something about writing songs, recording songs and creating hits. At least I have succeeded in all three activities so there is a chance I am qualified)
Sadly, if you are determined to be involved with a large label then you will end up dealing with dullards, power mad gay hobbits, Human version of Jabba the Hut and slimey limey Simon Cowell types. You may even get lucky and find yourself attached to one of the people in the business that understand that it is a business but at its heart it’s about music. Good luck.
Tonight’s blog is not going to actually get around to presenting some music and then pulling it apart. In order to reach that point I must talk about what demos do and don’t do for a band. I must also address some of the stupid misconceptions about demos.
The first grand misconception..”In order for a demo to be effective you’ve gotta break the bank and spend as much as you can on recording and producing it”. This is completely untrue. I suspect that this fallacy is kept alive by studio owners and indy producers that make serious coin when they run into a band with a rich daddy that will pay the bills. The truth is that the value of a demo is determined by the quality of the songwriting and the fire in the belly of the band that cuts the track. It’s that simple. Good recording, bad recording, 24 track digital, two-track kids cassette deck it doesn’t matter. If you can’t hear the song, if you can’t really hear the band then that’s a lousy demo. If the band spends lots of money and time recording a demo they will get nothing other than a lesson. The lesson will end up being that it was a waste of time and money.
Second misconception “The formula for a demo is ____________. ” I’ve heard many things used to fill in the blank. “It’s gotta be just three songs” “It should be two upbeat songs and a ballad” “It needs to have a hundred-dollar bill and a gram of coke tucked into the CD sleeve” . This last one might actually get you the attention of the kind of record executive that will spend your whole recording budget on coke. Truth is there is no formula. Demos shouldn’t be really long since it will never get listened to all the way through. Demos should consist of a few great songs with enough material to show exactly what a band sounds like.
Third Misconception – ” A great demo will start a bidding war and land a deal overnight” I’ve heard this one ever since I entered the music business in 1978. That’s …hmm let me think…32 years ago. In all of that time I have never met a band signed as a result of a demo. I think that ends that rumor. The way that a band gets signed is a result of many factors adding up. This has to be matched by having contacts and interested people working for you. When you put great shows, great songs, great demos, popularity (the most important factor), buzz, press attention together with a network of people who know about you , you end up with a recording contract.
In short your demo can have things about it that sucks but if the band is great that should shine through. If, as is usually the case, the band is just OK, perhaps good in some ways and not so good in others, then you will not get a deal due to those factors and the demo will just show other people the band’s weaknesses.
So now we reach the question “What do record companies do with demos? Who listens to them? How do I get them listened to?” These are all part of the same subject.
All of the major record labels do not accept unsolicited demos. Why do they do this? Why are they so mean? It’s simple really. They believe that any band that is worth listening to will have people promoting them. They will have a manager or a lawyer or they will have devoted fan that IS IN THE MUSIC BUSINESS. They believe this because it is true. Promoters, agents, managers, producers, lawyers, road managers, film makers, DJs, studio engineers etc. all have their ears open for a great band. These people insulate the major labels from the mountain of demos that are not worth listening to. All of these characters have their ears open in an effort to find the band first and get onboard to make some money as the band succeeds. Many musicians have a problem with this concept. They view all of these people as parasites. This is a stupid, self-destructive attitude. These people are not parasites they are symbiotes. What does that mean? It means that they do not feed off of the band and bleed the band and weaken the band, no, instead they work alongside the band and help them succeed. They teach the band the craft of being rock stars and the tricks of the trade. They produce and promote records. In general the further a person is from the major labels the greater the native talent they need to survive. An independent producer must search out and discover band after band and then convince them to let him produce a record. Then promote this recording. These are all valuable services for the band.
Now I can hear a certain number of you out there saying “Not me, I’m the next demigod of rock and no one knows it. All I need to do is walk on stage and the world will crawl to my feet.” Gee I hope that is true, for your sake. Even if you are Loki, the god of the underworld, you need to learn how to put on a great show and how to arrange your songs. You need to learn how to record. You need to learn how to talk to a writer and how to do a radio interview without sounding like Bozo the Clown.
So now that you know that you can’t just send in your demo – why should you make a demo? Well, you need the demo to get the other characters interested. You need to make a cheap, dirty beginners demo to turn on a producer or engineer. This allows you to make a better demo that ends up getting you a lawyer and catches the ear of a booking agent that will pick you up as your audience starts to grow. This gets you to a label that finances some development demos that lands you a publishing deal….Are you starting to see the sequence?
So let’s go back to demos and the major labels. I will take the time to answer a few basic questions just to get them out of the way.
“How do I get them listened to?” Demos that make it to an A & R department of a major label get there by being passed on by an established manager, lawyer, producer or booking agent. They are the gatekeepers. The status of the person that submits the demo determines who will listen to it. For example I managed three different acts on Columbia records at one time. The PResident of Columbia was (and I think still is) Don Ienner. Don and I have met professionally many times. We’ve met to discuss promoting my acts, releasing various items from these acts, coordinating tours of these acts etc. If I were to call him he would pick up the phone. He would do this for two reasons. First he knows me professionally and respects the fact that I manage bands that have enough clout and status to be signed to Columbia. Second he knows from his experience with me that I only call people when I have something concrete to talk to them about. He also knows that whatever I want to talk to him about WILL LIKELY BE ADVANTAGEOUS TO HIM AND COLUMBIA. This is an important point. Always call people with something that might help them. This will make your phone calls wanted rather than an annoyance.
If I were to call Don Ienner and ask him to listen to a tape he would tell the VP of A & R to listen to the tape and give him his opinion. Then, if that opinion was favorable he would listen to it and call me up with a reaction. If the music seemed like something Columbia might want he would suggest a showcase and ask questions like “Are you planning on managing or producing?” You might be surprised to know that, although I have known Don Ienner since 1988 I have only called him about a tape twice. Why? Because I have only found two occasions where I was in the position to pitch him a tape that fit with Columbia’s interests and I had the job of pitching the band. In both cases Columbia did not offer the band a deal. Since one of the bands was the band Phish and they went on to be one of the biggest bands of the 1990’s I expect that the next time I call him he will listen to whatever I send him.
Let us compare that scenario with a different, fictional one to help explain how the system works. Let’s say that a junior lawyer at an Entertainment Law Firm in Minneapolis,MN calls Columbia to pitch a tape. Columbia will take him seriously since he is a professional and is in the business. They will probably tell him that someone will call him back. This call will get routed to an A & R co-ordinator. This is a person in the A & R department that works out all kinds of things like flights for A & R staff, showcase arrangements and, as in this case, calls from unknown law firms and managers. They won’t ignore the call. What if this band turns out to be the next Phish? Every major label is haunted by stories of how they turned down an artist that went on to fame. As a result they try to at least chalk up a rejection for everything that someone in the business shops to them.
In this case the A & R co-ordinator will pass on the contact to a junior A & R guy. He will call the lawyer, listen to the pitch and tell the lawyer to send in the tape. He then lists the tape in the incoming demo log. He is supposed to listen to the tape shortly after it arrives. Unfortunately he may make ten calls like this every day. The stack of unlistened to tapes grows and grows. As it does he pushes his boss to let him hire a “listener”. This is a person, usually an intern that gets cheap wages to listen to mountains of tapes. For each tape he writes a little blurb and rates it. He may get to pick out three or four as his favorites which the Junior A & R guy will then listen to.
So, it’s obvious that your chances of getting a deal through the junior lawyer in Minneapolis are slim. Even if the tape does get someone interested this is just the beginning of a long process with showcases, various demos and finally the word that they are gonna pass. During that time you can grow old and die. NEVER WAIT TO GET SIGNED!!! It’s fine to pursue getting a deal but never put of making records and playing live while waiting to get signed. This is a common and deadly mistake.
Next blog I will post two demos, one from the band Spiral Jetty Club and the other from the ever-present reader Oliver from Australia. I will then pull them apart and tell you how a label would view them, how a manager might view them and how a producer would hear them so stay tuned…………………………………………….
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We live in the age of the death of record companies. They may not know it. You may not know it but retailers do and many, many artist mangers are fully aware that the end has already come for the mega star record companies that ruled the music world from the 1920’s until 2001.
In 1999 I was retired from managing and owning a label and was living on my royalties. It wasn’t a huge income, I have never been rich but twenty-five years of managing and producing had set me up to retire. I had invested in musical copyrights. That means I owned lots of recordings, or parts of recordings. Like most people I had worked hard and earned some time off. By 2002 my income from royalties had evaporated. The age of the file trader had come. I am not relating this story to get sympathy. I am telling you this so that you can understand the magnitude of the changes that we are living through. People are no longer willing to pay for recorded music. Let me rephrase that, people are no longer willing to pay Major label prices for music. Instead they will pay for music when convenance and connection with the band’s aura can be balanced against money. Let me rephrase that, price your full length record at 5.99 with artwork or as a download, make the music amazing and you may just redefine the concept of the gold record.
This brings me to the general subject of recording contracts. I have quite a bit of experience with these kinds of contracts and relationships. In 1993 I was managing The Figgs, an upstate New York band amongst other acts. They were extremely young and, of course, extremely ambitious. They wanted to be rock stars nothing less. In point of fact, they were rock stars, they had everything you wanted in a rock star and enough left over to produce other rock star’s records. Great band, nice guys, at least in the beginning. They wanted to get signed to a major label. They wanted it bad. I warned them repeatedly that they didn’t have a clue what getting signed would do to them and it might very well destroy their music and destroy the band. Being young, wanna be rock stars they listened and didn’t hear a word.
I produced and released a single for them . We produced some indy sounding tracks and released them on lo fi cassettes. I booked them into places they only dreamed of playing. They learned faster than I could teach them. I filled out their musical knowledge, taught them a ton of studio tricks and got them lots of stage time so they could work up a show. (always remember you are putting on a show…if you’re not then stay home and play guitar hero on your couch..) In the late summer of ’93 (I think, it’s all a little hazy now) they moved into my house for a couple of months to record a real record. They spent their days smoking bongs, watching planet of the apes movies, playing under the covers with various female fans and eating my cooking. Every night when the sun went down we went into my studio, Morrison Hotel, and cut tracks. They were fuckin’ smokin’! I’ve recorded lots or sessions. thousands of hours of sessions and I gotta tell you these kids were burning it up.
We had a few rented pieces of nice gear, a couple of mics, a mic pre and a few compressors. I was recording everything to 16trk 1″ tape at 15ips. This may mean nothing to you but I’ll translate–we were laying down big, fat, rocking tracks. Whenever I hit playback the speakers almost melted. After we recorded about 25 tracks they cornered me and demanded to know when I was going to get them a record deal. I repeated my warning about record labels. They basically told me to go fuck myself. Then I knew they were ready. If I hadn’t done it to them they would have dumped me and found some sleaze ball that didn’t give a damn about their music to do it. There was no doubt they would get a deal.
We were mixing the record down. It was tentatively called “Waiting for the Bugasaurus”. We had pared the tracks down to 15 and come up with a sequence. It was going to be a fantastic indy record. It would make them. I had tons of contacts in the indy record world and we could find a home with a cool, well-connected label. Maybe start with an English release then get the record played on every college station. Everything was in place.
I talked to the band about labels and tried, in vain, to warn them for the last time. They demanded a major label deal ignoring all of my warnings and logic. I made two calls and set up a showcase at SIR studios in Manhattan. The band played a set for a major label A & R guy. Halfway through the set he phoned the label owner and told him he found the label’s next big signing. For the story of how they met the label owner and got offered a deal see my first blog “It’s all about being famous”. This evenings blog is about what went wrong.
The Figgs signed with Imago Records. Now let’s pause for a moment and remember that the band has a great album done, it just needs to be mixed. Now the band has to deal with an imbecile A & R guy that knows nothing about music. He listens to the unmixed record and hears one major problem. Even though he listens very carefully, through an extremely expensive stereo at ear shattering volume he just can’t hear enough of HIS OPINION in the record. As a result it just sounds flat to him. So he immediately demands that the band rerecord the record. Then he demands that we use his sequence. When one of the band members points out that he sequenced the record with the first 5 songs in the key of D, one after the other, he looks at them like a dog watching a Fellini movie and says ” Tell the engineer to change the key of the songs in the mixes so that it’s not a problem anymore” . Now the band wants him dead.
Of course the album is rerecorded and remixed. It does well but the label does not. The label folds in the middle of their second guaranteed album. So The Figgs move to Capitol Records, following the same A & R troglodyte. At the new, bigger label they are much smaller fish compared to the bands the label is making money off of. Whole departments of Capitol Records listen to demos and rough tapes of the album that is in the works and come to the conclusion that the band is utterly lacking these departments opinions and should start over. The art department wants to change the name of the record. The radio promotions department wants to change the band’s idea for artwork. The distribution department wants the band to reschedule the release for 16 months from now when they are certain they will not be busy since they operate on a 15 month in the future calendar. The band gets stoned one night and decides that the most important thing to argue about with the label is what color the paper label of the band’s vinyl release will be even though vinyl is only 1% of the sales at this point in history. 9 Months later they release an album with the original title “Bando Macho” (an inside joke so it means nothing to the fans), Artwork that they never approved and makes no sense, a really cool rear cover photo which was the only thing the band did. They get their special colored label on the vinyl release and the label immediately drops them. The fact that they battled to a standstill with the label president over the color of the vinyl record’s label certainly contributed to his decision to drop them despite their guarantee of three records.
This illustrates many of the problems that come with every recording contract with a large label. I can’t even claim that it only happens to smaller bands that have no clout with the labels. Phish signed with Electra when they were well on their way to being a stadium act. Electra treated them like crap. For example, the band wanted to get some play for its videos. So their manager put pressure on the label to get them some attention at MTV. Did the band get medium rotation? No. Did they get a few plays on the alternative video show? No. Instead they got an offer to be the house band for a pilot for a children’s show! The label even argued that they should be thankful since the show would pay each member a regular salary of $800 a week for the 13 week run if the show got picked up. Phish turned down the offer and were angry. The label was mystified. Perhaps the fact that the band was routinely selling out theaters and earning $100,000 a night had something to do with it.
Now let me touch on another point about recording contracts. It is a point that I will expand into a complete blog at a later date. Recording contracts are set up in a way that all the benefits go to the label while all the risk is the band’s. The band pays for everything but the label ends up owning it. The band pays for everything but the label decides everything that is important. Even with the advice of a talented knowledgable lawyer the band ends up signing a deal that largely is a massive con job. Why would any band do this? The labels control the gateway to fame. Once an artist becomes famous the relationship becomes a battle with the band winning sometimes and the label winning sometimes. Fortunately for everyone reading this blog, the earth has opened up and swallowed the record labels. It couldn’t have happened to a nicer bunch of guys.
In the post web world the labels no longer hold all the cards nor do they control the keys to fame. The only traditional system that the labels still control is commercial radio. There is even light at the end of that tunnel since radio is in a confused desperate period. They have no idea what to program and the cracks have appeared under their feet – satellite radio, web radio, podcasts and many more trends have begun to destabilize commercial radio. So the last of the Major label strangleholds is on the way out. Where does this leave the record labels?
It leaves them stripped down to what they have always been, marketing companies. For decades the labels have argued that they were powerhouse artist development machines, starmakers (not to be confused with star fuckers!), distribution geniuses and creators of musical trends. Little of this bragging has been true. Certainly a label like Blue Note helped popularize certain jazz trends and Rough Trade/4Ad rewrote the rise of post punk. Dischord defined hardcore and rap, hell the rap labels have tattooed numerous street trends on multiple generations of kids but in the end they are just marketing companies. They don’t make great records they promote great records.
Now, with the web you too can promote great records. This blog proves it. In the nineties, your access to the advice of an experienced manager/label owner would depend solely on your connections. Now it depends on your broadband connection. So in the 21st century learning to be a rock star on a web blog is one of the magical ways to succeed at rock………….
©Brad Morrison/Billiken Media 2010 Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. ZMVTCS8QHAVF
Reader Oliver was kind enough to post a comment with a question that covers a topic I have intended to cover for a few weeks now. That topic is how do you cut up money within a band? What’s the whole royalty payment thing mean for individual band members over the long haul?
Read through Oliver’s question and I’ll be back at the end……By the way Oliver is well-informed, and has put some thought into how his actions will affect other’s lives and their desire to be in the band. This proves Oliver is not a sociopath. Good for you Oliver. This may prove a handicap when dealing with all the bona fide sociopaths in the music business but it’s likely he’ll be a more satisfied rock star……………..
Sorry if I’ve missed this somewhere but in keeping with the non-democratic approach you described, whats the best way to go about song rights/royalties? How do I avoid this situation:
i) Write every note and syllable and take all the royalties but gradually lose my band (but buy one eventually) (Dylan-esque)
ii) Write every note and syllable, split the money with band members to keep the band, drive myself crazy giving away money to the non-writing band, potentially lose the band anyway (Dandy Warhols-esque?)
iii) Agree to play/record anything good that any member writes and allow the rights/royalties go to the contributing member, run the risk of losing direction/ internal power struggles/ control over band. (Stones-esque)
None of these options seem good to me, and although I’m not greedy I’d hate to see a disgruntled band member in 30 years cruising on a yacht he bought with my songs (fanciful I know). I assume there’s no right answer, but you’ve been there and there must be a slightly better option of the three. I feel I’ve got to get this right early.
Regards and many thanks for publishing knowledge you can’t buy.
None of these options seem good to me, and although I’m not greedy I’d hate to see a disgruntled band member in 30 years cruising on a yacht he bought with my songs (fanciful I know). I assume there’s no right answer, but you’ve been there and there must be a slightly better option of the three. I feel I’ve got to get this right early.
Regards and many thanks for publishing knowledge you can’t buy.
You’re welcome Oliver. I appreciate my readers and I know that getting an informed opinion is valuable. That’s why I write this blog.
Oliver’s predicament is classic. He is the primary creative force in his band. This is common. Most musicians are not also great songwriters. A typical band is made up of :
A drummer – a rock steady rhythm monster with a flair for knowing exactly when to step in and a flash. He is the backbone and holds the rest of the band in the pocket and is the timekeeper.
A Bassist – He builds the groove and either adds the drive or defines the song as a dance tune. He can add darkness or light, thunder or soul.
Guitarist – Endless, colors and flavors, rhythms, melodies, flashy solos and roar.
A Lead singer – this is the ego and the magnet and turns the writing into an experience.
Any and all of these people make up a band and make the magic that the world recognizes as rock. Any and all of the people could be primary writers. Any and all of these people make it work and without them the magic is lost. All you need to do is think of two or three great bands and it’s easy to point out an instance where the loss of a minor member seemed to change a band’s spirit and as a result the band’s golden years were over. Making music is a touchy thing, little changes often have big results for the better or worse.
Since this is the case how does a band split up the money? In a way this question misstates the reality of the way money is usually dealt with within a band. The vast majority of bands are controlled internally by one or perhaps two creative geniuses. This is the person that writes the material and provides the vision that makes the band unique. This person has more power than the other members so saying how does a band split up its money is dishonest. The real question is how does the person that controls the band allow the money to be split up? Or what is the best way for a band to work out a compromise that keeps everyone on board and gives credit and money to the person (s) that deserve it based upon contribution.
Another wrench that gets thrown into the possibility of an easy fair system is the fact that most of a band’s career is spent in poverty. The lifespan of bands after they get a deal or a hit, or build a base is, at the absolute extreme 10 years with 3 years being a much more likely scenario. As a result of this reality in most bands money is never discussed except perhaps as a fantasy until it is too late and there is a pie to split up without a system to do so.
I suggest quite strongly that if you are in a band, form a band or join a band that you force the band to have some kind of agreement on how money is cut up.
In the underground indy world, the world that I lived in for twenty years and helped create, there is little money to worry about as a band works out its career. Gigs can be for $50, or perhaps a $100 and recordings are simple affairs that are self financed. So nothing to worry about right? No, there is still a little money being passed around and more importantly people will often PUT MONEY INTO THE BAND. So you and your Mother’s Uncle’s Nephew pay for the band to record a record, who owns it? The answer is 50% you and 50% your brother. Or 50% you and your brother and 50% the band. What about the producer? I think you get the point.
When your band first starts out have a serious band meeting. Discuss the following topics and write down the results. It’s better to lose a nutty bassist during an argument before things get going then to have him walk out on tour when he doesn’t get all of the door which is what his warped mind had decided was fair. (this happened to me. He started with “Everyone knows I have the most talent…..)
1. Does the band keep a joint piggy bank? Who keeps it? In what form? (cash or an actual bank account)
2.What is done with gig money? Most bands use this to build up the piggy bank.
3. If you pay for a recording what is the split on the ownership of the recording? On this one I will suggest that you work out something where the person that pays gets their cash back first, then the band owns the recording with the person that paid getting an extra share for risking their money. This is a common arrangement.
4. Is one person the leader and or main writer? If this is the case that person MUST GET SOME CONTROL over the use of their songs, and get the publishing money. I will explain this later in the blog. Let me just say that songs make money and bands make money and the songwriter is gonna end up with the song money no matter what you may want. If this pisses you off then write a great song about it, turn it into a hit and keep all the money to prove how unfair that system is….
Have a meeting. Write this stuff down. Then rewrite it in the form WE the members of Dog Dandruff being Joe, Schmoe, Larry Schmoe, Curly Schmoe and Gonzo Garbigian do hereby agree to the following……then put all the crap you agreed to and sign it. Make four copies sign them all and Larry, Curly and Joe get a copy. Gonzo’s mom gets a copy since he can’t read. This is a binding contract. It’s not a very good contract and it’s not a contract written up by a lawyer but in court the judge will hold his nose and respect it. Make sure it covers what to do with gig money, royalty money and songwriting money.
Now if it comes down to a fight about money and this goes to court this contract and your two-bit agreement will run smack into the LAW. There are laws about songwriting royalties. (see one of my blogs for an explanation) There are laws about contracts and working for hire and working for a cut. There are sleazy lawyers. There are sleazy bass players with sleazy lawyer cousins. What does all this mean? As soon as you have some success and/or a manager redo all of this with a lawyer doing the consulting. If you do end up using a lawyer YOU TELL HIM WHAT TO DO!!! He doesn’t tell you. He works for you. He will advise you and you’d be an idiot to pay him and not listen but in the end if the band wants to leave all of the money to the Museum of Idi Amin then that’s tough luck for the lawyer.
Now for some practical advise. Perhaps this will help our Reader Oliver. The vast majority of bands, and by that I mean a band formed by unknown musicians in an attempt to make it big, split their gig money evenly. Since recordings are becoming less and less valuable as money-making endeavours this may turn out to be the lion’s share of the money. So split the money evenly after the band covers gig expenses. The better you do the more the gig expenses cover. Once the band starts to play regularly and your fee starts to get healthier it’s wise to start a system of per diems. (that’s Latin for Per Day) What does that mean? Well, let’s say your band is getting paid $400 per gig. You are doing 4 to 7 gigs per month. The gigs are all within a day or two drive from your home base. The band will be covering a hotel room where you can all fight over who gets the single bed and which three fools have to sleep together in the King size. The gas for the van will be covered as will tolls and strings and drum sticks etc. What won’t be covered is food, drinks etc. (of course, you will read one of my future blogs about how to get a promoter to feed you and get you drunk. But that’s only one meal a day) So in this situation you make a joint decision to give each band member a $20 per diem each day you are on the road. If you have crew it applies to them as well. (even the T shirt girl) Why would you do that? It’s simple. If you try to have the band pay for dinner, and drugs, and alcohol you will soon be really pissed at the one guy in the band that eats steaks, smokes high-class bud and get’s loaded every day. Every band has one. Well, maybe Fugazi didn’t…well come to think of it I think they just SAID that everyone was straight…
If you go with a system where everyone gets a little cash every day then if they eat too much or drink or whatever most of it comes out of their own pocket. This is fair. You will be surprised how many days you can go on twenty dollars a day if your bed is paid for and the promoter gives you food and drink once a day. sometimes it’s $5, sometimes $10, sometimes $50, I’ve never seen it go over a $100 unless it was a cheap excuse for the band to subsidize the members drug habits. (the breeders, The stones, Etc.)
When Miracle Legion toured Europe in 88? (I can’t remember which of the dozen tours it was) I sent a new member of the road crew out with them. His name was Tommy, he was from Philly, someone’s cousin’s friend, tough, strong, compact, didn’t say much. The kind of crew i prefered. If he had been Scottish I would have had him cloned. Hey you can clone a dog, why not a great roadie?
Well Tommy was new to the road so I gave him the standard lecture and then told him he would receive $24 each day. I forget why we picked that number but that was the per diem. He looked at me like and owl in the headlights. I asked him what was wrong. He said “That’s a lot of money.” The other crew members laughed. LAter I noticed him loading a ten pound sack of rice into his backpack with a camp stove and pot. I told him he had to dump the rice. He looked hurt so I told him we would buy him ten pounds of rice in London since the issue was bringing grain across the English border (no fruits or grains)
The tour went out for twelve weeks. When I met them all for the wrap up at tours end I asked the tour manager how Tommy had done. “Too fuckin’ good!” was the reply. It seems that Tommy lived on boiled rice and whatever he could scrounge. He didn’t smoke or drink. He got high once a week on the band’s day off. Since the band demanded a full meal each night at the gig he was all set for food. So he hadn’t spent much money. To top it off he had lent all the other crew money when they ran out and charged them 5% interest (he ok’d this with me. How the hell could you say no to that?) He came back with everyone owing him money and he still had $1780 of the 2100 in per diems. Smart Kid. They all ended up hating him because he made them look bad. They tried to keep him off of the next tour so I made him crew boss with a different band.
So you split up the gig money evenly. You give out per diems based upon what makes sense. Now we come to publishing and recording which was the central issue with Oliver’s questions.
I’ve seen numerous solutions and they all have strengths and weaknesses. I’ll start with recording.
The most common solution is for the band to split the royalties from and recordings evenly. This split only pertains to records that you actually play on. If you leave the band you keep the royalty payments on albums you played on and forfeit all future royalty earnings on future albums. You have no rights to the band’s name. That remains with the band that continues on. This is important. Ask the prog rock band Yes. They had a PRODUCER take the band’s name away from them. That sucks huh?
Now we come to the complex one, songwriting and the use of songs. This is often where the big money comes in. This money is largely outside the grasp of the record company. It has the law backing it up. Radio pays it. TV pays it. Concert Halls pay it.
When a songwriter writes a song it is, by law and common sense, his property. He cannot stop someone from recording it including his own band. They do, however, have to pay him for it and the payments are set by law. (I strongly suggest that you read my blog about royalties.)
This brings us to Reader Oliver’s questions. In essence since he is the writer and guiding light he is wondering what is fair when it comes to splitting up money from his song’s publishing. Should he give his band members some of this money so that if he becomes wealthy they will too, at least in some smaller way. There are arguments on both sides.
Now keep in mind that this does not have anything to do with songs that the whole band writes of songs that other members write. In that case everyone will share or the individual writer will get the money. But what about a band where one member is the writing machine?
So let’s now imagine Oliver goes to see his Big NY Entertainment LAwyer Harvey Jacobowitzhofffriederstein. Yup he sounds like he’s a stereotypical NY jewish lawyer. Don’t worry I will also send Oliver to other stereotypical characters of other races and religions in future blogs spreading his fictional life around amongst all of America’s stereotypes! whoopee! Sorry I got carried away.
Harvey is smart, he knows the business and he has decades of experience. He says
“Kid what a you meshugenah? You’re talkin’ about giving away your money? Don’t you think the law is fair?”
He goes on to explain to Oliver that careful consideration had gone into the law and songwriters get exactly what they deserve. He, of course, is a lawyer and lawyers are paid to represent your interests alone. They also seem to think that the law is always fair. If they changed the law today, he would tell you it was just as fair tomorrow. In some ways the lawyer is right. Why would Oliver give away his money?
Oliver on the other hand realizes that if he has a hit song his royalty money will pour in. The band will not see any of this cash. Yes, the record will sell but the band will be in debt to the record company for big money. All of the sales of the record will go to paying off the band’s debt and the individual members will see little of it. This brings about a situation where one member is rich and the balance of the band gets nothing.
So now Oliver goes to see his manager, Clive Bakersfield -Coopersmith, a sweating, overweight Englishman with bad teeth. The manager listens to his problem while answering phone calls and returning emails. He says
“Oliver, baby, you’ve got to keep the boys happy. You should split up your songs and give everyone a share. You’ll get the most of course. I’ll make a call and get you a publishing deal so everyone has some money by next week. That should keep everyone happy.”
He goes on to explain that Oliver will write many hits and will be rich beyond his wildest dreams. He shouldn’t begrudge his band mates a piece of the pie. In many ways the manager is correct as well. What to do?
Now oliver goes to see me, the retired Indy manager that has seen bands implode for ridiculous reasons and for good reasons.
And I say “Oliver, thanks for reading my blog. Here’s some advice from someone who has no dog in the fight, me. Your instincts are good. You should make some provision for the guys that play in your band. It is, after all, your band and your songs. Lots of the people who you will play with will forget that or never learn that fact fully. This members will become problems and you cannot be tied to them forever. So this is the practical solution that I would suggest.
1. Start your own publishing company Artful Dodger Music. This company will publish EVERY SONG YOU WRITE. This company can collect your radio, tv and movie royalties directly without any other middleman. Choose one of the performance rights societies, either BMI or ASCAP and join as both a writer and as a publishing company. Of course at any time this company can choose to sublicense some or all of the songs to a large established publishing company in return for a cash advance and a commitment to land soundtracks, commercials and tv spots.
2. Offer the band members a publishing contract. It would work like this. They must publish all of their songs through your company. At any point they can opt out of this requirement in which case they lose all FUTURE payments on FUTURE work. They will still retain any income or rights earned up to that point.
3. As the second part of this deal they will receive part of the publishing company’s income. It will work something like this.If they write a song and publish it with Artful Dodger Music they, of course receive all of the writer’s shares and also a share based upon the main writer’s deal (oliver’s cut) This makes it so they cut the same cut for their songs that you get for your songs.
4. The longer that they stay in the band the more interest and ownership they will gain in the publishing company. Each year will add a set percentage until they reach a maximum cut. They will never lose this, the company will pay them royalties in perpetuity (forever or until Ronald McDonald is elected president whichever comes first) The percentage of these cuts is open to discussion although I would suggest that you enter into the discussion with two numbers in your head. An ideal deal for you and a compromise that you’ll except in order to do the deal. Remember ONLY WEAK PEOPLE DON’T KNOW WHEN TO COMPROMISE. I might suggest that you shoot for 50% of the publishing company and settle for 40%. This would leave 50-60 percent for them to split up. If they stay in the band 4 years they get their full cut of the band’s piece of the publishing company. Each year they are in the band they receive 25% of the total amount they might get if they make it four years. As the band builds up their cuts the unassigned money goes to you.
5. If they leave they retain payments on everything published up to the day they leave. They never lose this percentage. Any new member starts out at the bottom and has to accrue his cut as he goes, once again he maxes out at four years.
So what would this mean in the real world. OK let’s say that your write a hit “Beat’s the Dickens out a me”. It is published by Artful Dodger and released on your band’s major label record. The record label pays mechanical royalties, radio plays it and sends in royalties and it appears in a bad kids sitcom where Miley Cyrus goes to 19th century london. For each $100 the song generates this is how it splits up.
1st year $50 to oliver directly as the writer
$2.50 to each of the four band members that own 1/4 of their potential cut of 4/5ths of 50%
The balance of the $50, $40 goes to oliver so he earns $90 in the first year.
2nd year $50 to oliver directly as a writer
$5 to each of the band members that own 2/4 of their potential cut of 4/5ths of 50%
the balance of the $50, $30 goes to oliver so he earns $80 in the second year
$50 to oliver directly as a writer
$7.50 to each of the band members that own 3/4 of their potential cut of 4/5ths of 50%
the balance of the $50, $20 goes to oliver so he earns $70 in the second year
4th year The band members reach full shares
$50 to oliver directly as a writer
$10 to each of the band members that own 2/4 of their potential cut of 4/5ths of 50%
the balance of the $50, $10 goes to oliver so he earns $70 in the second year
If they bitch about such a small cut explain to them that they are free to write their own hit records at any point at publish where ever they like. Also tell them that you do not have to give them anything and this is most commonly what is done.
What I like about a deal structured in this way is that it provides some incentive to stay in the band, do as they are told and not bitch too much. It also recognizes that they are helping your career in a substantive way. This earns them money for good. And finally if you become stinking rich they become really rich. Most people can live with that. Since a hit record in today’s market could generate about 1,000,000 in publishing in a year you can see how it would be a fair deal.
The band will secretly pray that you write lots of hits and hopefully help you do that by giving you the solid backing you need………with a deal like this you are on your way to succeed at rock…………………………..
©Brad Morrison/Billiken Media 2010