| Author | Message | ||
  DC Groups (shermanb) 1-Arriviste Username: shermanb Post Number: 7 Registered: 4-2004 Posted From: 205.131.188.5 |
Can anyone explain the formula used to pay artist? | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 513 Registered: 3-2004 Posted From: 209.240.205.63 |
Depends on the contract Sherman. Generally it is an agreed upon percentage of the wholesale price of the record. The artist will not see any royalties until certain expenses are paid back to the company. This would include session and musician fees, promotion ( such as the making of a video ) etc. Royalties are usually paid every six months. | ||
Jimmy Mack (luke) 6-Zenith Username: luke Post Number: 551 Registered: 4-2004 Posted From: 152.163.252.200 |
Doesnt that depend on the initial contract, these days? DO record companies still charge the artist for the musicians at the recording sessions? | ||
Fred (fred) 3-Pundit Username: fred Post Number: 39 Registered: 4-2004 Posted From: 152.163.252.200 |
The standard practice today is to provide the contract artist with a "recording fund" which he or she is free to spend in any way they want as long as they deliver a "commercially acceptable" recording according to the schedule laid out in the contract. Under this arrangement, the session players are paid out of the recording fund, which is entirely recoupable against royalties, so yes, the artist pays for the session musicians. | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1351 Registered: 4-2004 Posted From: 68.163.61.188 |
DC, Its referred to as an al in or all inclusive recording fund. Out of this fund, all musicians, arrangers, session singers, studio time for recording and mixing,travel and entertaiment expenses, per diems for food and hotels, and in essence any and al costs incurred for the production of your "masterpiece" Artists are paid an agreed upon royalty based on the retail and sometimes wholesale price of the recorded product. sometimes an artist is signed to a production company who in turn sell or lease the master(s) to a record company. In this scenario, the record company pais the production company and in turn the production company pays the artist{s) A common roaylty rate these days is somewhere around 16% of the retail seling price of a cd, vinyl record or cassette, minus al costs incurred during the production of the record, so not unless you have mega sales figures, you stand to make VERY little money from this product unless you also wrote and/ or shared in the publishing income, which is a seperate issue unto itself. Good luck!! | ||
DC Groups (shermanb) 1-Arriviste Username: shermanb Post Number: 8 Registered: 4-2004 Posted From: 205.131.188.5 |
Eli, If the artist only gets 16% how is the other 84% divided? | ||
Rodmann (rodmann) 6-Zenith Username: rodmann Post Number: 426 Registered: 4-2004 Posted From: 12.223.151.165 |
Eli, you wrote something on the forum after the death of John Whitehead earlier this year that's haunted me every since. You talked about how you wondered why McFadden & Whitehead didn't receive the royalties that they were due with all of the major success they had in the industry. Your comments struck me as odd because I figured you of all people would have some answers being an (Philly) music industry insider! Is it possible for you to tell us more about John's story (struggle)? It seriously BURNS ME UP that this man was living in the ghetto when it's impossible to turn on the radio or television without hearing one of the classic songs that he was involved in! Sickening!  | ||
Chi Drummer (chidrummer) 4-Laureate Username: chidrummer Post Number: 120 Registered: 5-2004 Posted From: 24.15.230.2 |
DCG, I'm sure Bobby will answer for himself, but another place to find the answer to your question can be found in a wonderful explaination of how royalties are divided given by noneother than the late Left Eye Lopez! Catch VH1's Behind the Music for TLC and LE will tell you all about how a group can sell 3 million dollars worth of records and still be broke. It would be great comedy if it wasn't true. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 40 Registered: 4-2004 Posted From: 149.174.164.84 |
DC, First of all, the artist doesn't really get 16%, even if that is the rate that is quoted in the contract. First of all, the 16% is routinely calculated on 90% of sales, rather than 100%, so that takes the artist down to 14.4% Then there is the 25% reduction for packaging. Now no one actually believes that it costs $4.50 for a jewel box and an insert card, but that's what they deduct. The artist is now down to 10.8% There's free goods. The label tells the artist they aren't going to pay royalties on CDs they give away to promote the CD to reviewers and radio stations. Nor are they going to pay royalties on the extra copies they give the distributors and retailers as a bonus for taking a certain number of regular copies (for instance, if they take 50 they pay for, they throw in 10 free ones more). The retailer can sell those at list as pure profit, or reduce the list price of all 60 to bring more customers in. Standard "free goods" deductions in contracts these days run from 25-35%. If we take 30% on our example, our artist is down to 7.56% of the retail price, or less than half of the contract royalty rate. Until the last ten years or so, there also used to be a 10% breakage reduction to cover CDs that were shipped broken. Of course, CDs are tough to break, but this language was a hangover from the days of vinyl, and it stuck around a long time. A lot more common, unfortunately, is the "new tech" deduction. Back when CDs were introduced, the labels went to their artists and said "Look, we don't know if this CD thingee is going to work. We want to put your stuff on CD, but you have to share the risk with us, so agree to reduce your royalties on CDs by 15%." The artists signed. CDs were a success. The labels stopped making black vinyl. The deduction stuck around nonetheless. Let's say our artist has a good enough lawyer to beat the breakage and new tech cuts. He is still only getting 7.56% of list retail. On an $18 CD, that comes to $1.36 a copy. Now, remember that the label isn't getting the retail price. It is getting the wholesale price for copies it ships. That is about 50-60% of the retail price. For simplicity, we will say our label has a wholesale price that is 50% of retail, or $9 a copy. Our artist gets $1.32 a copy, if there is an honest count. (There isn't.) Where does the rest of the $9 ($7.68) go? If the CD has 15 cuts, each about 4 minutes long, the label will have to pay the music publishers $1.275 per copy for mechanical rights. There are ways for the label to trim this number if the artist is also the songwriter, but that would be the maximum nut. That takes us down to $6.40. Hire a big name producer, and he will get some points. Lets give him three on retail. That 54 cents. The label is down to $5.86. Nobody knows for sure what it actually costs a major label to manufacture a CD. The RIAA doesn't collect that information. For an initial run of 50,000 copies, you can estimate that the cost of manufacturing the CD will run about $1.10, and add another $1.50 for the jewel box and artwork. The label is down to $3.26. Distribution costs will go another 50 cents or so. The net is down to $2.75 Out of that $2.75, the label has to pay for marketing and promotion, overhead (including the front office, the back office, legal and accounting, etc), taxes and (if they are lucky) profit. And that, roughly, is where the money goes. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 41 Registered: 4-2004 Posted From: 149.174.164.84 |
On reviewing my post, I realize I inadvertently cut the artist royalty from $1.36 to $1.32. I apologize. I had lunch with a label exec today, and I guess the math wore off on me. | ||
David Meikle (david_meikle) 5-Doyen Username: david_meikle Post Number: 330 Registered: 3-2004 Posted From: 81.130.211.124 |
Fred Thanks for the above information. David | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 519 Registered: 3-2004 Posted From: 209.240.205.63 |
And like I've often said through my career...Selling shoes makes a lot of sense at times. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 42 Registered: 4-2004 Posted From: 152.163.252.200 |
Sure, Ralph, but until supermodels start chasing shoe salesmen there will always be people who will dream the dream. | ||
Chi Drummer (chidrummer) 4-Laureate Username: chidrummer Post Number: 121 Registered: 5-2004 Posted From: 24.15.230.2 |
Thank you Fred. That had to be one of the most honest and straight forward explanations of how royalty rates are really paid out as I have ever seen. Do you have any thoughts on a band that signs a production agreement and leases their masters to the record company? | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 525 Registered: 3-2004 Posted From: 209.240.205.63 |
Fred, Oh yeah...I knew something had slipped my mind. As David mentions, thanks for the great post. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 44 Registered: 4-2004 Posted From: 152.163.252.200 |
Chi, Ralph and David, Thank you all. I've just completed contract negotiations for a young artist. He was an absolute blank slate when it came to the record business, so the royalty breakdown I posted here was a slightly edited version of one of the tutorials I gave him so he would understand what he was getting into. (I also want him to look back in 20 years and say "Damn, that was a great first contract," because it is a great first contract, if I say so myself.) Since the question of where the money goes is one of the fundamentals, and I had my explanation at hand, I thought it made sense to post what I had already written for him, as it seemed to be the answer to the question here. I ended up doing about 100 pages of this plain English explaining for my client (he lives about 300 miles from me and has neither a fax or a computer, so I had to put this all down on paper and mail it to him) and shared some of it with a couple lawyers and a writer or two to make sure I was not oversimplifying things or leaving critical things out. They have all encouraged me to expand on what I have done and turn it into a nuts-and-bolts contract guide for new artists. If I can find the time, I may get around to it. The process of working with an absolute novice client was a refreshing one for me, because it made me go back and think hard about some subjects that I had come to consider �common knowledge.� Back when I started working in the entertainment world, I would often have dinner with my father, who was an engineer by training and a very practical and logical man by nature. I would explain to him what I was doing, and I knew exactly when I had crossed the looking glass into the Wonderland of entertainment law because he would simply give me a quizzical look when what I was saying no longer made sense in the real world. That always forced me to re-evaluate what I said and try to make logical sense of it. I was not always successful. Working with the new client took me back to those dinners. Those of us on the board who deal with music and making records on a business basis have all learned the hard way that the fundamental issue is always one of control, specifically, control of the things that create income. In our Wonderland, those things are the master recordings and the music publishing. When you boil a recording contract (or any contract for services) down to its bare essence, it becomes nothing more than a contest over control. The artist comes to the table with two things of value; potentially marketable talent, and the ability to create potentially marketable music. On the other side, the label has all the assets necessary to turn those potentials into money; the capacity to produce, manufacture, distribute and market that music. What the artist has to decide at the beginning of the negotiation is how much control over his or her music (both the recordings and the compositions themselves) in order to gain access to what the label has. The ultimate goal is to give up as little control as possible, which is never as easy as it sounds. It has never been an even negotiation. There has always been a surplus of people who want to become recording artists, and there has always been a limited number of entities capable of fulfilling that desire. Things have changed rapidly in the last ten years, however, and the labels no longer have a monopoly on production when every garage can be a world class studio, every computer a CD manufacturing plant, and every website a potential combination record store and publicity mill. They still do some of these things better, sometimes far better, than an artist can do on their own, and they still have an advantage, but a label no longer wields absolute power in contract negotiations. The artist can always DIY and maintain complete control, even if it means limiting his or her access to potential record buyers. Some artists are happy with that limit, some want more access, and are willing to give up some of that control. This finally brings us to Chi�s question about production deals and leased masters. Because the artist maintains ownership of the masters and only leases them to the label for a set period of time, obviously this works to the artist�s benefit in terms of ultimate control of one of the things that makes money. The catch is, of course, because the label is getting less in the way of control than they would under a straight royalty recording contract, they are usually willing to give less money in return, and, in turn, with less of an investment, there may not be the same commitment to distribute and market the leased masters, especially in a situation where the leased masters have to compete with wholly owned masters for limited marketing funds at the label. It is only natural that they would spend money first promoting something they own over something you own. If you can actually negotiate a promotion budget in the lease, you can avoid a lot of this, but that usually doesn�t happen. There is also one very critical problem with the usual lease agreement. In such a deal, it is not unusual for the label to provide an advance to the artist, but collateralize that advance by a lien on the masters themselves. In a straight royalty contract, advances are only against future royalties, and if a record doesn�t recoup, the label (and the artist) are just stuck with red ink. In a collateralized lease arrangement, if the leased records don�t recoup the advance, the label can foreclose on the lien and take ownership of the masters. In a nutshell, this is how MCA got the entire Chess catalog, and if it can be done at that level, it certainly can be done on an individual artist level. Still, I like production deals and leased masters in the right situation, which usually involves a young band with a good fan base, who tour hard and long, and who can live and work on the cheap. If they get the promotional assistance from the label that allows them to reach a broader audience, both sides can win. The trick, as always, is to keep a close eye on the label�s books. | ||
Carl Dixon (carl_dixon) 4-Laureate Username: carl_dixon Post Number: 86 Registered: 4-2004 Posted From: 195.153.219.170 |
Fantastic Fred. Great information. I may archive this for future use! | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 526 Registered: 3-2004 Posted From: 209.240.205.63 |
Fred, It's time for you to write a book. | ||
Chi Drummer (chidrummer) 4-Laureate Username: chidrummer Post Number: 127 Registered: 5-2004 Posted From: 68.78.39.218 |
I second that emotion... Careful Fred, you might turn music into an actual business complete with full disclosure and accountable executives.  Thank you so much for your advice. PLEASE write a book. | ||
DC Groups (shermanb) 1-Arriviste Username: shermanb Post Number: 9 Registered: 4-2004 Posted From: 205.131.188.5 |
Fred, I started this thread and the information I gained here has been very usefull in my research. Many thanks to all that responded to this thread there are some very knowledgable people here . Thanks | ||
bigdaddyg2k4 (bigdaddyg2k4) 3-Pundit Username: bigdaddyg2k4 Post Number: 68 Registered: 4-2004 Posted From: 63.102.169.68 |
I third that emotion! People like you who educate potential artists, established artists and novices on how the "music business" really works, and how these major labels have "benefited" a.k.a.:SCREWED their artists out of control both finanically and creatively. No wonder conglomerates like Universal and Sony are multi-billion $ corporations, but have executives who care nothing more about the process of making music, but care greatly about the bottom line, how much money the artist can make for them. While these executives live "high on the hog" with million $ salaries, perks and the like-the artists, especially new ones, are living hand-to-mouth from what little money they recieve from royalties, while selling millions of copies of their work and becoming very successful-for the labels-not for themselves. There is something wrong when a song/video is being played on the regular, but when the established artist (people like DMX, Eagles member Don Henley and others who has expressed disenchantment from the treatment they recieved from their labels) goes on record to say they don't make much money from record sales in part of the mathematical jargon they have to read on their contracts, and shady dealings from people they supposed to trust in order to extort monies/control/ownership of masters and publishing, something is amiss in this story. Thank you Fred for shining a glimpse of light on the situation regarding record company contracts and how they work against the artist, but benefit greatly financially for the labels. I will archive this post to better educate myself, along with other sources of information, because knowledge is power, and it will help me and others possibly pursuing the "bizness" full time, but avoid getting ganked in the process. Thanx a mil. | ||
bigdaddyg2k4 (bigdaddyg2k4) 3-Pundit Username: bigdaddyg2k4 Post Number: 69 Registered: 4-2004 Posted From: 63.102.169.68 |
And another thing, if you need a lawyer/attorney who needs to sit down and thoroughly explain how these "contracts" work, DO NOT TALK TO THE LABEL LAWYER! They will always work in the best interest of the label, not you. They have to, they're on the payroll, so it's natural that they work in the complete interest and advantage of the label(s) they represent. Find your own lawyer, but not just any lawyer. A specialist who is an expert on the functions of the entertainment business and has years of experience in working for the artist and the artist alone. You would'nt hire an aircraft mechanic to fix your car, would'nt you? So it makes perfect sense to hire an entertainment lawyer who has battled large and small companies to get the royalties/publishing rights, etc that the artist/producer/songwriter, etc. deserve. Of course, you pay a little more for your hired gun to fight for with you on the battlefield that's called the "bizness", but it is very worth it in the long run. As if you would with any doctor or contractor, check his/her credentials, see if any current/former clients has any satisfactory/unsatisfactory services recieved from said attorney and are happy or unhappy with the results; also see is he is bar/board certified, that will tell you if he/she is licensed to practice in the field of law or is disbarred because of legal woes/ethics violations, etc. etc. I therefore is not an expert whatsoever in the field of entertainment and law, but I felt compelled to tell y'all this because it's good to know these things and it's just good common sense to take care of business the right way. Peace. | ||
soulseeker (soulseeker) 4-Laureate Username: soulseeker Post Number: 71 Registered: 7-2004 Posted From: 192.94.3.10 |
Fascinating stuff Fred. You've taken this business of music (A very good book) and translated it into English. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 45 Registered: 4-2004 Posted From: 64.12.116.138 |
Soulseeker and BigDaddy, Thanks for your kind words. On finding a good attorney: references from other musicians are best, especially from artists who have been around a while and know the rough and the smooth of things. The business of music is a relationship business. If you are an artist looking for a deal, there are lawyers who can help get you in the door because they know, and are known by, the right people to talk to at the labels. The drawback here is that the connected lawyer may consider his relationship with the label more important than his relationship with you. Ethically, this kind of conflict isn't supposed to happen, but it does. A lot. It is possible to have the best of both worlds, but it actually requires having two lawyers, one to shop you and one to negotiate the contract, and that means two legal fees. That can be expensive in the short run, but save you plenty of grief in the long term. A quick rule of thumb for assessing whether your potential music lawyer is a good one: go into his office and see how close to his desk his copies of "This Business of Music" (Krasilovsky and Shemel) and "All You Need To Know About the Music Business" (Passman) are. See how beat up they are. The closer they are to the desk, and the more use they show, the better the odds are you are dealing with someone legit. These are the bibles of the trade. If he has Shulenberg's "Legal Aspects of the Music Industry" next to those two, you've got a great head start. Your lawyer is admitting that he doesn't have all the answers himself, but he knows the right questions. That is far more than half the battle. | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 529 Registered: 3-2004 Posted From: 209.240.205.63 |
I agree with SoulSeeker, Fred. you've taken the concept of This Business Of Music, which truly is one of the bibles of the legalities of the Business, to a different level and made it easier for us non-legal types to understand. You really should consider some sort of book. It could prove invaluble to young talents just starting out. | ||
Juicefree20 (juicefree20) 6-Zenith Username: juicefree20 Post Number: 1982 Registered: 4-2004 Posted From: 24.46.184.162 |
Fred, Your post of Aug 19th was the best, forthright & most detailed explanation I've ever seen outside of a book. Thank you for fully breaking this down to us lay persons. It goes to show the potential pitfalls out there facing aspiring singers who think that they're going to get rich quick. You should write a book & have a chapter titled "When Signing A Contract Goes Wrong". I already have a commercial scenario to sell your book. A young singer goes to the label heads office after his Triple Platinum CD nets him a mere $50,000. The singer's upset because he has a brand new Bentley & 7 Hummers, a 20-karat Platinum Diamond necklace to pay off, 7 bodyguards & countless family members & an entourage of 50 to support. The label head breaks down all of the recoupables & says: "The bad news is that you actually owe us $ 2.5 mil. The worse news is that you ain't gonna save sh*t on your insurance. They just repossesed all 8 of your cars. And by the way, the IRS just put a lien on your future earnings". Great stuff Fred , very useful & very informative!!! If I ever know anyone who wants to get into the business, I'm sending them to you!! | ||
Bob Olhsson (bob_olhsson) 1-Arriviste Username: bob_olhsson Post Number: 7 Registered: 4-2004 Posted From: 209.247.222.111 |
I've started a music business forum in an effort to help educate people. I'm hardly an expert but it isn't nearly as complicated as some people want artists to believe. Thus far we seem to mostly have recording engineers and rock bands participating so it would be great to bring some additional expertise into our discussions. http://marsh.prosoundweb.com/i ndex.php/f/12/?SQ=8cd9e56623e9 95ad773e9a103b712fa8 | ||
isaiah imani (isaiah) 3-Pundit Username: isaiah Post Number: 58 Registered: 8-2004 Posted From: 205.188.116.138 |
Great thread, and great information Fred, Eli, and Bob Ohlsson... Rodman, playing devil's advocate here... Could it be the John Whitehead was focused more on the entertainment component of the business, rather than equally focused on the business, itself, as a reason for his residence in the ghetto?(smile!) Reading this forum has given me a different take on things regarding business practice, as I have owned my own business too... Business owner's are in business to make money, not give it away... As much as they can hold onto they will... When an artist signs these contracts without reading them, they consign themselves to hell, as the record company doesn't hold a gun to their heads to sign... Holding a gun to one's head is another story, and that has been addressed here in the case of Jackie Wilson, but it must be understood by us outside of the business that there are real costs to running a business, and I don't think artists are always aware of those costs - particularly back in the day... In John Whiteheads' case, I am sure he learned a great deal about the business just observing how Philadelphia International was run... He learned about production there, and what is entailed in being the head of such an operation... Perhaps, he chose not to go out on his own because of this - or other reasons which we are unaware of???(hint-hint) We can take it for whatever it is worth, but if one owns the means of production in a capitalist environment, they are going to emerge with the lion's share of the profits when they come in. Gordy and Gamble&Huff were in business like anyone else, to make money, not do a philanthropical thing for the artists... It is the artists responsibility to be clear about this, and take steps to OWN whatever they produce... Peace! Isaiah | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1384 Registered: 4-2004 Posted From: 68.236.49.47 |
Until November of 1990, writers at the afforementioned company were paid an arbitray figure not related in any way to any contractual undertaking, therefore what they received was "chump change" compared to what they should have received. There was "fine print" that when read, gave them way below sub par renumeration and not enough to live a life accustomed to what they should have lived at that time and most of them were always in the red because of their advances which were somewhere between fifty to one hundred dollars per week! In November of 1990, a large publishing purchased the catalogue, at which time the writers would get their propper payments, but of course by that time most of the songs have run their course. Now of course, there have been some songs that have been covered after 1990 but most of them were written by the "main writers". (Message edited by phillysoulman on August 22, 2004) | ||
Soul Sister (soul_sister) 6-Zenith Username: soul_sister Post Number: 1403 Registered: 4-2004 Posted From: 65.43.165.74 |
GOOD STUFF GUYS!!! S.S. | ||
Rodmann (rodmann) 6-Zenith Username: rodmann Post Number: 454 Registered: 4-2004 Posted From: 12.223.151.165 |
Thank you Isaiah for digging my old post out of the grave! LOL. I actually tried to delete that post but it was too late. Judging by the lack of responses originally, I figured that I had went into territory that I shouldn't have. At the time I thought that John's story fit right into this topic. Isaiah, it's possible that Mr. Whitehead's own business neglect was partly to blame for his situation but it seems as if (judging by Fred & Eli's posts) the whole business is set up to keep the artists in debt. As far as I know John Whitehead made the same folly that most new artists (producers and writers) make. They sign these bogus contracts as hungry newcomers which basically makes it legal to cheat them out of royalties. I'm not sure if you're suggesting that John's payment came through what he learned about the business while at PIR? I totally agree that the record label owners are in business to make money but isn't it "bad business" to take EVERYTHING away from the people who's product helped you stay in business? | ||
isaiah imani (isaiah) 3-Pundit Username: isaiah Post Number: 62 Registered: 8-2004 Posted From: 64.12.116.138 |
Well, Rod, I guess that depends(smile!) If you're Nat WhatshisName, and ya chump Berry and Billy Rochel outta their paper on a couple of great songs, that would be really bad bidness(smile!) Imagine Jackie Wilson at Motown, and all of their great writers... If you're Berry, who gets to sell the Motown catalogue for more than a hundred million, or Gambel and Huff, who sell theirs for 20-mill, then it's not bad business at all... It's a question of ownership... I used to get bent when I read how all of my heroes got jacked financially, then I looked and saw Ray Charles and Sam, and later, Stevie, in ownership of their stuff, and I said there's more here than meets the eye... As in the general population, there are some who've got an eye toward managing their money, and some who don't... Those who do, we'll never see them complaining(smile!) My point, Rod, is that the artists have to take responsibility for allowing themselves to be rooked and rooked and rooked... Gee whiz, how many times does one have to have their behind beat, before they feel the soreness??? As for John Whitehead, I have asked myself, who shot John Whitehead, and have been told it was some drug dealers... Really??? Why would John Whitehead be shot by some drug dealers??? Did he have a relationship with these guys, of some kind??? Aint nobody willing to ask the question, and aint noone willing to answer that question... Let sleeping dogs lie... Another Sam, another Biggie, another Tupac, another N dead, and aint nobody give a shit, dig??? Peace! Isaiah | ||
Rodmann (rodmann) 6-Zenith Username: rodmann Post Number: 455 Registered: 4-2004 Posted From: 12.223.151.165 |
You made some valid points Isaiah and I'm sure that some artists are broke because of their own business neglect. My point is that most recording acts never get into a position to take control of their business their music. Some got stuck in unfair contracts and by the time they were out of them their careers had ran it's course. Others like Dionne Warwick were great singers and entertainers but unfortunately weren't really writers. How could someone like her go about owning her music when almost every big hit she had was written by Burt Bacharach? I'm all for artists stepping out and starting their own labels but how can they compete with the giants of the biz? Even if they did learn everything about the biz while they were at one of the major companies it's almost impossible to get independent music out there (now more than ever). Look at Micky Stevenson. A great writer and a hell of a producer who I'm sure soaked up everything while at Motown but his own labels failed for some reason. Isaiah, on one hand I completely agree with you about entertainers needing to step and take charge of their business but I just don't think that it pertains to everyone. It just seems as if the cards are stacked against recording artists. The majority of the wealthy artists have used their fame to make money OUTSIDE of the music biz with merchandise, TV programs, films and endorsement deals. Those opportunities weren't available to most R&B/Soul acts until very recently. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 46 Registered: 4-2004 Posted From: 152.163.252.200 |
Rodmann, It is actually easier to get independent music "out there" now than it ever has been. The Internet has made that possible. There are two real practical impediments to a new independent label, however. The first is getting the music heard. Radio consolidation has severely limited the options for new bands and new labels. The near death of local programming means that for a great majority of radio stations, what gets played is decided in some office far from the station. There is no way these days that Sam Phillips could walk into the studio of the biggest DJ in Memphis with an acetate of a rank unknown and get it played immediately, like he did with Elvis. There is a very good chance that the biggest DJ in Memphis isn't even in Memphis anymore. The second real obstacle to a new label's success is that they are starting from scratch without a catalog to generate income until something new hits big. Even for the majors, catalog sales represent more than 40% of sales, and an even higher percentage of their profits. Without that steady cash flow, unless a new label is very, very well funded, it is going to sink in an ocean of red ink in less than a year unless it hits big right out of the box. The recorded music business tends to swing back and forth between consolidation and fragmentation. When power and money gets concentrated, it seems that the music itself gets more conservation and predictable. This means that new and different sounds don't make the cut with the leading business players, and it falls to the independents to pick up the slack. This happened with R&B in the 40s, rock and roll in the 50s, soul in the 60s, rap in the 70s, and grunge in the the 90s. Eventually the big fish catch on and not only gobble up the leading artists but the leading indy labels as well, and the petrification of the genre begins (rap seems to defy the odds here), which means that the indies have to find something new. Right now, we are down to four major players, but there are also thousands of indies, from one-artist labels to bigger outfits like Artemis. If you are looking for new music, it is the worst of times to be in the power center, and the best of times to be on the fringe. The new stuff, and the "next big thing" is out there. | ||
soulseeker (soulseeker) 4-Laureate Username: soulseeker Post Number: 72 Registered: 7-2004 Posted From: 192.94.3.10 |
Wow Fred! I was just about to ask your opinion on this very subject. You must have been reading my mind bringing up the Independents and the Internet. You've already talked about the Independents so I won't go into that one. I was reading an article by Leflaw (I'm sure you're familiar)about the internet's role in the music business. He outlined a plausible scenario where Artist could cut out the middleman completely. The trick however, is to get the music heard by a big enough audience (on the net) and to get that audience to pay to download the tracks. You probably won't get filty rich but you could make a decent living doing what you love. | ||
Chi Drummer (chidrummer) 4-Laureate Username: chidrummer Post Number: 130 Registered: 5-2004 Posted From: 67.175.80.214 |
Isaiah, I hear (or is that see?) what your saying and you're right. Many, many artists should have taken better care of their finances while they were "in the mix" and given some thought to what would happen to them after their hit days were over. On the other hand, back in the day, major record companies held far more control over the market place than they do now. Those "standard" contracts Fred speaks of were almost always weighted heavily in the record company's favor. Now one could argue "well, read the contract stupid and don't sign with that label." But, I think the fact is (and Fred please correct me if I'm wrong) that virtually every major label's contract were set this way. A new, unproven artist has very little leverage in this situation and even less knowledge about his/her options. Even if they knew the deck was stacked against them, it was either sign with this company or play your tunes for your family and friends because those were the only people who are going to hear them. I think this was how things worked for most of the Rock & Roll era. Within the last ten years much more information has been made available about the business side of music. I know when I was young I'd never even heard of an entertainment attorney and now I know three and actually use them for transacting local business. That was unheard of as late as the 1980's. Fred has already mentioned the changes in the industry that have allowed indie labels to flourish and home recording to become major factors in the business today. One thing I admire about the rap community is that they know much more and work much harder at the business side of this industry and it shows. So, don't be too hard on us older folks. The times were so different then, but I really think most artists did the best they could. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 47 Registered: 4-2004 Posted From: 152.163.252.200 |
Chi and Soulseeker, As I said way back up this thread, recording contracts, like any contracts, are resolved along power lines. An artist starts with absolute control of his or her songs and performances. A label starts with control of the purse strings, and with productiong, manufacturing, distribution and marketing machinery in place. What ends up in the contract essentially comes down to how much control of songs and performances the artist is willing to give up in order to get to use the label's money and to get access to the machinery. Because there always have been far more people who want to be stars than there have been labels able to make them stars, the balance of power starts with a solid lean to the label side, and pretty has pretty much stayed that way since the dawn of commercial recordings. The one-in-a-hundred case who becomes (and stays) a successful recording artist gets to tip things his or her way, but they are far from the norm. If an artist just starting out aims at something other than superstardom, his or her chances of attaining their goal is far better if they are not with a major label these days. A major label contract is the equivalent of sharecropping (Dave Marsh's concept, not mine, but it works). On the other hand, the availability of viable production, manufacturing, distribution and marketing "machinery" outside the control of the majors gives an artist a chance to make a living at music and from their recordings (which is not the same thing) without giving up control of the songs or the recorded performances. Up to today, the Internet has not broken a major new artist or recording, except as an adjunct to a "traditional" marketing campaign. (Wilco, the Internet poster child, already had a track record and established fan base when they used the net to make a hit of "Yankee Hotel Foxtrot.") It will happen eventually, I am sure, but it hasn't happened yet. What the Internet does do now, however, is create an opportunity for what I call a "music middle class," people who can make a living from performing and recording. No Escalades or Cristal by the case, but a paid off Saturn, a six-pack in the fridge AND money in the bank. As long as there are major labels, there will be artists who will sign with them. The dream of the brass ring is strong and enduring in human nature, and anyone who ever bought a lottery ticket has some of it in them. The great thing is that a major label contract is no longer the only means to success in the business, as long as you have a practical definition of success. And, Soulseeker, I know the Leflaw piece you are referring to. I am no big fan of Larry's, for reasons that have nothing to do with the argument he makes, although I do have to say that he wasn't saying anything new. If you look carefully at the piece, however, and Leflaw's other stuff on the web, you discover that while he makes a good case for excluding the traditional middleman, he makes an equally convincing case for a new middleman, who looks a lot like, well, who looks a lot like Leflaw. Ten years ago, at the dawn of the Internet, there might have been a case for that kind of arrangement. Thankfully, time has passed it by, and the environment is far too decentralized for it to work now. Internet distributors like CD Baby and the coming tidal wave of pure digital distribution have made the central conceits of Leflaw's positions largely irrelevant. | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 532 Registered: 3-2004 Posted From: 209.240.205.63 |
Once again Fred, we appreciate your most valuble input here on Soulful Detroit. | ||
Carl Dixon (carl_dixon) 4-Laureate Username: carl_dixon Post Number: 87 Registered: 4-2004 Posted From: 82.44.203.80 |
Ralph - Fred's advice would have cost an arm and a leg, if paying. | ||
soulseeker (soulseeker) 4-Laureate Username: soulseeker Post Number: 73 Registered: 7-2004 Posted From: 192.94.3.10 |
Thanks again Fred. Intriguing Stuff. And yes, I know Mr. Feldman is looking out for number one. It was an interesting concept nonetheless. I had no idea that it was pretty much obsolete. Thanks for the insight. | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1396 Registered: 4-2004 Posted From: 68.163.47.37 |
All.. I'm not going to mention any names, but there are certain people in our fair city, although extremely likeable and happy go lucky in the public eye, have a seedy and sinister side that involves hanging with the "wrong people" and owing considerable sums of money to these seedy folk, of the underbelly of society, and in the end become a sitting duck and target for those unpaid debts. Capice??? | ||
Fred (fred) 3-Pundit Username: fred Post Number: 48 Registered: 4-2004 Posted From: 152.163.252.200 |
I don't take body parts in compensation anymore. The bank says they mess up the drive-through window. Thanks again for your kind words, Ralph and Carl. All I am really doing is passing along object lessons my clients learned years before I became a lawyer. And to those clients of mine who occasionally visit SD, relax. This is not billable time. I'm making these posts while I'm on hold (mostly at UMG, it seems). It's August and it seems no one is working except me. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 49 Registered: 4-2004 Posted From: 152.163.252.200 |
Eli, I don't get it. | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1397 Registered: 4-2004 Posted From: 68.163.47.37 |
Fred, I was referring to a certain individual who was mentioned here on this thread who was recently gunned down. | ||
Gil (gil) 4-Laureate Username: gil Post Number: 116 Registered: 5-2004 Posted From: 66.156.31.169 |
WOW! That's heavy. | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1399 Registered: 4-2004 Posted From: 68.163.47.37 |
In this biz, sometimes all is not what it is perceived to be. Our city is notorious for artists and songwriters being used ,abused and ripped off by the very people who are held in high esteem by some of us here. Trust me, all that glitters is NOT gold. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 50 Registered: 4-2004 Posted From: 152.163.252.200 |
Bobby, Now I get it. Slow on the uptake, but I'm going to see Buddy Guy and Robert Cray at the Ryman tonight, so I'm just fine. | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1401 Registered: 4-2004 Posted From: 68.163.47.37 |
Fred, Enjoy the show. I'll be in Nashville on the tenth of September, Lord willing. | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 533 Registered: 3-2004 Posted From: 209.240.205.63 |
Carl, I don't mind paying an arm and a leg when I know I'm dealing with a guy that knows what he is about. I'd be proud to pay Fred his deserved arm & leg. | ||
paulie3$hoes (paulie3hoes) 4-Laureate Username: paulie3hoes Post Number: 127 Registered: 4-2004 Posted From: 68.163.47.37 |
not fer nuttin but did dat jeffrey dahmer guise get an arm and a leg?? capice??@#$%^&*() | ||
Carl Dixon (carl_dixon) 4-Laureate Username: carl_dixon Post Number: 89 Registered: 4-2004 Posted From: 82.44.203.80 |
Well Ralph, I guess there is no 'arm in it! All this to me is a minefield and help from any of the professionals on the forum is appreciated. I know I move a little further forward when I understand the implications more. Even though frightening, it is encouraging to read the same things apply in the music business as in any other � humans at their best! With that in mind, we still strive to achieve ambitions and goals, knowing often a brick wall awaits. But, I know tomorrow is another day and often that cloud with the silver lining is in full view. | ||
Rodmann (rodmann) 6-Zenith Username: rodmann Post Number: 457 Registered: 4-2004 Posted From: 12.223.151.165 |
Fred, thank you setting the record straight about today's independent music. I guess the tricky part is getting independent music played on the airwaves! Eli, I had no idea. I'm still not sure what this person's seedy activities outside of the studio has to do with them (possibly?) receiving little payment for writing several blockbuster singles that have made millions for others and are still making money. I'm not disagreeing with you but I'm just trying to understand. After all, you were there and I'm sure you know more than all of us about this particular situation. | ||
Steve K (ltlftc) 2-Debutant Username: ltlftc Post Number: 19 Registered: 4-2004 Posted From: 24.11.188.92 |
Fred; How are royalties due the artist (or writers/producers etc , for that matter) handled when a record is deleted from production? For example if a record company manufactured 50,000 lps, sold 20,000 retail upon release and then exiled what was left of the remaining 30,000 to the cut-out bins, how are the various creative parties generally paid; how are artist royalties calculated on deletions , if at all? | ||
Eli (phillysoulman) 6-Zenith Username: phillysoulman Post Number: 1406 Registered: 4-2004 Posted From: 68.236.8.254 |
Rodmann, I wanted to avoid saying this outwardly, but since what I had to say was not "understood" by some here , this is what happened. The man owed a drug dealer $5000.00 ,and when he couldnt come up with it, he was gunned down, plain and simple! There were other "musical icons" in our town who were also involved in similar incidents, and were shot at different times, but actually lived to see another day. As I had said before, al that glitters is not gold. The temptation is out there, but some are not strong enough to resist, and some are just too greedy to know better. | ||
Fred (fred) 3-Pundit Username: fred Post Number: 51 Registered: 4-2004 Posted From: 152.163.252.200 |
Steve, Standard recording contract language excludes cut-outs or anything sold at less-than-cost, from royalties for the performing artist. The songwriter and publisher make out better as the mechanical license is granted (and the fee paid) for the full number of copies in the inital press run, and then the license is granted, and paid for, again for any additional number pressed. Think of the mechanical license as a grant of a right to press up to X number of copies, with the fee set a 8.5 cents times X. If the label wants to print X plus one copy, they have to go back and get another license and pay 8.5 cents for it. If an artist wants to keep his stuff out of the cut-out bins, the best way to do that is in the contract: on deletion of the title from the catalog, the artist should have the right to purchase unsold stock at the market price for surplus. In my experience, most labels have no problem inserting this clause. The artist can then turn around and either find a distributor himself, or, at the least, sell the CDs at live appearances and pocket all the proceeds. With a little more clout, an artist can get at least some limited right to deleted masters; either a license with little or no advance, or some residual ownership right, usually after the passage of some time after deletion. I've had good luck with both approaches in the past. Oddly (or maybe not) in every case where I've negotiated a delayed return of ownership, the titles have never been deleted from the catalog, even in those cases where the sales have been absolutely negligible. If nothing else, that should indicate how valuable the masters are. Even if they are making no money, the labels won't give them up | ||
Steve K (ltlftc) 2-Debutant Username: ltlftc Post Number: 20 Registered: 4-2004 Posted From: 24.11.188.92 |
Thanks for the 'cut-out' info, Fred. Great thread!!! | ||
Kevin Goins - KevGo (kevgo) 5-Doyen Username: kevgo Post Number: 171 Registered: 4-2004 Posted From: 64.33.151.109 |
Fred, Bobby & company: Thanks for not only bringing this thread to light but for sharing this valuable information. Like someone mentioned before, giving this advice would've cost an artist an arm and a leg. Hopefully, those who want to pursue a career as an artist have cut & pasted this thread and saved in on their computers. As I stressed when I was in NYC, now is a fine time for those who are making their music independently to strike while the conglomerates are swallowing each other up. As for what happened to the group TLC, it also happened to En Vogue and Toni Braxton - these acts signed with PRODUCTION COMPANIES, not record labels. Therefore, they were "talent for hire" - they were paid a fee for their work and talent and nothing more unless they contributed in the songwriting. That's why TLC had to file bankruptcy and sue La Face (as Toni later did) - they were flat broke because they never saw any residual income (read - royalties) after they bought the houses, cars, clothes, etc. As in Toni's case, while she was dealing with her legal woes, she at least had the smarts to pursue Broadway by starring in the stage production of "Beauty & the Beast". Kevin Goins - KevGo | ||
Gil (gil) 4-Laureate Username: gil Post Number: 117 Registered: 5-2004 Posted From: 192.44.136.113 |
I remember an interview with En Vogue when they were at the peak of their popularity. They said that despite the millions they've sold, they can't afford to move out of their apartments. I guess Foster/McElroy got everything! | ||
Kevin Goins - KevGo (kevgo) 5-Doyen Username: kevgo Post Number: 172 Registered: 4-2004 Posted From: 64.33.194.12 |
Gil: You should research the Dawn Robinson interview that waw published in Vibe Magazine 2-3 years ago. She gave a blow-by-blll rundown as far as what happened with "the money" and the relationship between Fonzil-McElroy. Kevin Goins - KevGo | ||
soulseeker (soulseeker) 4-Laureate Username: soulseeker Post Number: 75 Registered: 7-2004 Posted From: 192.94.3.10 |
Well TLC's deal was extra bad because their manager Pebbles had them signed to so many other deals wherein Pebbles got a large cut. | ||
Bob Olhsson (bob_olhsson) 1-Arriviste Username: bob_olhsson Post Number: 9 Registered: 4-2004 Posted From: 209.247.222.106 |
It's really easy to spend more money on becoming number one than you can earn from being number one. Where a lot of artists get screwed is by management companies who are getting paid a percentage of the gross income for gigs that the artist actually loses money on and shouldn't be accepting. | ||
Ralph Terrana (ralph) Moderator Username: ralph Post Number: 537 Registered: 3-2004 Posted From: 209.240.205.63 |
Bob, It's good to see you back on the forum. Hope all is well with you. |
