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Urban Hat€monger ? 05-31-2006 03:56 PM

The Problem With Music by Steve Albini
 
So I keep reading from people on this forum how it`s perfectly OK to download stuff off major labels because they have huge amounts of cash & the artists are just a bunch of money grabbers , and that you should always buy stuff from independant labels to support the artists.All I say to that is BOLLOCKS. Wanna know why? Then read this & see just how much average selling bands (Which are the majority) on major labels are in the **** financially...........

The Problem With Music by Steve Albini

Whenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying ****. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end holding a fountain pen and a contract waiting to be signed. Nobody can see what's printed on the contract. It's too far away, and besides, the **** stench is making everybody's eyes water. The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the ****. Eventually, one of them capitulates, and there's only one contestant left. He reaches for the pen, but the Lackey says "Actually, I think you need a little more development. Swim again, please. Backstroke". And he does of course.

Every major label involved in the hunt for new bands now has on staff a high-profile point man, an "A & R" rep who can present a comfortable face to any prospective band. The initials stand for "Artist and Repertoire." because historically, the A & R staff would select artists to record music that they had also selected, out of an available pool of each. This is still the case, though not openly. These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave.

Lyle Preslar, former guitarist for Minor Threat, is one of them. Terry Tolkin, former NY independent booking agent and assistant manager at Touch and Go is one of them. Al Smith, former soundman at CBGB is one of them. Mike Gitter, former editor of XXX fanzine and contributor to Rip, Kerrang and other lowbrow rags is one of them. Many of the annoying turds who used to staff college radio stations are in their ranks as well. There are several reasons A & R scouts are always young. The explanation usually copped-to is that the scout will be "hip to the current musical "scene." A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences. The A & R person is the first person to make contact with the band, and as such is the first person to promise them the moon. Who better to promise them the moon than an idealistic young turk who expects to be calling the shots in a few years, and who has had no previous experience with a big record company. Hell, he's as naive as the band he's duping. When he tells them no one will interfere in their creative process, he probably even believes it. When he sits down with the band for the first time, over a plate of angel hair pasta, he can tell them with all sincerity that when they sign with company X, they're really signing with him and he's on their side. Remember that great gig I saw you at in '85? Didn't we have a blast. By now all rock bands are wise enough to be suspicious of music industry scum. There is a pervasive caricature in popular culture of a portly, middle aged ex-hipster talking a mile-a-minute, using outdated jargon and calling everybody "baby." After meeting "their" A & R guy, the band will say to themselves and everyone else, "He's not like a record company guy at all! He's like one of us." And they will be right. That's one of the reasons he was hired.

These A & R guys are not allowed to write contracts. What they do is present the band with a letter of intent, or "deal memo," which loosely states some terms, and affirms that the band will sign with the label once a contract has been agreed on. The spookiest thing about this harmless sounding little memo, is that it is, for all legal purposes, a binding document. That is, once the band signs it, they are under obligation to conclude a deal with the label. If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength. These letters never have any terms of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes. The band cannot sign to another laborer or even put out its own material unless they are released from their agreement, which never happens. Make no mistake about it: once a band has signed a letter of intent, they will either eventually sign a contract that suits the label or they will be destroyed.

One of my favorite bands was held hostage for the better part of two years by a slick young "He's not like a label guy at all," A & R rep, on the basis of such a deal memo. He had failed to come through on any of his promises [something he did with similar effect to another well-known band], and so the band wanted out. Another label expressed interest, but when the A & R man was asked to release the band, he said he would need money or points, or possibly both, before he would consider it. The new label was afraid the price would be too dear, and they said no thanks. On the cusp of making their signature album, an excellent band, humiliated, broke up from the stress and the many months of inactivity. There's this band. They're pretty ordinary, but they're also pretty good, so they've attracted some attention. They're signed to a moderate-sized "independent" label owned by a distribution company, and they have another two albums owed to the label. They're a little ambitious. They'd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus -- nothing fancy, just a little reward for all the hard work. To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but it's only 15%, and if he can get them signed then it's money well spent. Anyways, it doesn't cost them anything if it doesn't work. 15% of nothing isn't much! One day an A & R scout calls them, says he's 'been following them for a while now, and when their manager mentioned them to him, it just "clicked." Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time. They meet the guy, and y'know what -- he's not what they expected from a label guy. He's young and dresses pretty much like the band does. He knows all their favorite bands. He's like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude.

They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot. The A & R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question-he wants 100 g's and three points, but they can get Don Fleming for $30,000 plus three points. Even that's a little steep, so maybe they'll go with that guy who used to be in David Letterman's band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe-- cost you 5 or 7 grand] and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about. Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but he'll work it out with the label himself.

Urban Hat€monger ? 05-31-2006 03:57 PM

Continued ............



Sub Pop made millions from selling off Nirvana, and Twin Tone hasn't done bad either: 50 grand for the Babes and 60 grand for the Poster Children-- without having to sell a single additional record. It'll be something modest. The new label doesn't mind, so long as it's recoupable out of royalties. Well, they get the final contract, and it's not quite what they expected. They figure it's better to be safe than sorry and they turn it over to a lawyer--one who says he's experienced in entertainment law and he hammers out a few bugs. They're still not sure about it, but the lawyer says he's seen a lot of contracts, and theirs is pretty good. They'll be great royalty: 13% [less a 1O% packaging deduction]. Wasn't it Buffalo Tom that were only getting 12% less 10? Whatever. The old label only wants 50 grand, an no points. Hell, Sub Pop got 3 points when they let Nirvana go. They're signed for four years, with options on each year, for a total of over a million dollars! That's a lot of money in any man's English. The first year's advance alone is $250,000. Just think about it, a quarter million, just for being in a rock band! Their manager thinks it's a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so they'll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, it's free money. Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. That's enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody In the band and crew, they're actually about the same cost. Some bands like Therapy? and Sloan and Stereolab use buses on their tours even when they're getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. It'll be worth it. The band will be more comfortable and will play better.

The agent says a band on a major label can get a merchandising company to pay them an advance on T-shirt sales! ridiculous! There's a gold mine here! The lawyer Should look over the merchandising contract, just to be safe. They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo. They decided to go with the producer who used to be in Letterman's band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old "vintage" microphones. Boy, were they "warm." He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very "punchy," yet "warm." All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies! Here is the math that will explain just how ****ed they are: These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. income is bold , expenses are not.

Advance: $ 250,000
Manager's cut: $ 37,500
Legal fees: $ 10,000
Recording Budget: $ 150,000
Producer's advance: $ 50,000
Studio fee: $ 52,500
Drum Amp, Mic and Phase "Doctors": $ 3,000
Recording tape: $ 8,000
Equipment rental: $ 5,000
Cartage and Transportation: $ 5,000
Lodgings while in studio: $ 10,000
Catering: $ 3,000
Mastering: $ 10,000
Tape copies, reference CDs, shipping tapes, misc. expenses: $ 2,000
Video budget: $ 30,000
Cameras: $ 8,000
Crew: $ 5,000
Processing and transfers: $ 3,000
Off-line: $ 2,000
On-line editing: $ 3,000
Catering: $ 1,000
Stage and construction: $ 3,000
Copies, couriers, transportation: $ 2,000
Director's fee: $ 3,000
Album Artwork: $ 5,000
Promotional photo shoot and duplication: $ 2,000
Band fund: $ 15,000
New fancy professional drum kit: $ 5,000
New fancy professional guitars [2]: $ 3,000
New fancy professional guitar amp rigs [2]: $ 4,000
New fancy potato-shaped bass guitar: $ 1,000
New fancy rack of lights bass amp: $ 1,000
Rehearsal space rental: $ 500
Big blowout party for their friends: $ 500
Tour expense [5 weeks]: $ 50,875
Bus: $ 25,000
Crew [3]: $ 7,500
Food and per diems: $ 7,875
Fuel: $ 3,000
Consumable supplies: $ 3,500
Wardrobe: $ 1,000
Promotion: $ 3,000
Tour gross income: $ 50,000
Agent's cut: $ 7,500
Manager's cut: $ 7,500
Merchandising advance: $ 20,000
Manager's cut: $ 3,000
Lawyer's fee: $ 1,000
Publishing advance: $ 20,000
Manager's cut: $ 3,000
Lawyer's fee: $ 1,000

Record sales: 250,000 @ $12 = $3,000,000
Gross retail revenue Royalty: [13% of 90% of retail]:$ 351,000
Less advance: $ 250,000
Producer's points: [3% less $50,000 advance]:$ 40,000
Promotional budget: $ 25,000
Recoupable buyout from previous label: $ 50,000
Net royalty: $ -14,000


Record company income:

Record wholesale price: $6.50 x 250,000 =
$1,625,000 gross income
Artist Royalties: $ 351,000
Deficit from royalties: $ 14,000
Manufacturing, packaging and distribution: @ $2.20 per record: $ 550,000
Gross profit: $ 710,000



The Balance Sheet: This is how much each player got paid at the end of the game.

Record company: $ 710,000
Producer: $ 90,000
Manager: $ 51,000
Studio: $ 52,500
Previous label: $ 50,000
Agent: $ 7,500
Lawyer: $ 12,000
Band member net income each: $ 4,031.25

The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this ****ed.

adidasss 05-31-2006 04:05 PM

soo...you really expect someone to read all that? haven't you learned we're the ADD generation?

right-track 05-31-2006 04:07 PM

Quote:

Originally Posted by adidasss
soo...you really expect someone to read all that? haven't you learned we're the ADD generation?

Which explains why so many suckers sign in the first place.
Already knew about this. Eye opener isn't it?

swim 05-31-2006 04:09 PM

I knew a lot of this but it's nice to have facts behind it. It's all a bunch of damn shit and it's not fair to anyone. I figured someone would make the comment that it's a lot of reading.

Merkaba 05-31-2006 04:10 PM

It says the band make about 300,000 on royalties with a deficit of 14,000.

Surely that doesn't mean they're left with 14,000.

Shouldn't that mean they still get about 286k to split however many ways. (300-14)

EDIt: Nevermind, someone updated stuff:p:

adidasss 05-31-2006 04:20 PM

well i've read it and i think it's bullshit...i think this can only be true for not so talented bands that make average records and can't even repeat that averageness on the second record...if they're really good there's absolutely nothing the big record companies can do to stop them from becoming millionaires....

swim 05-31-2006 04:22 PM

So because they're mediocore bands it's ok for them to get jipped?

adidasss 05-31-2006 04:23 PM

pretty much yeah...

Urban Hat€monger ? 05-31-2006 04:24 PM

Quote:

Originally Posted by adidasss
well i've read it and i think it's bullshit...i think this can only be true for not so talented bands that make average records and can't even repeat that averageness on the second record...if they're really good there's absolutely nothing the big record companies can do to stop them from becoming millionaires....

Wait a minute

You wouldn`t be using the talent = popularity arguement there now would you?

I expected so much better

swim 05-31-2006 04:24 PM

But the managers and record company deserve that money for finding a mediocore band? That's a dense way of thinking.

right-track 05-31-2006 04:24 PM

Quote:

Originally Posted by adidasss
well i've read it and i think it's bullshit...i think this can only be true for not so talented bands that make average records and can't even repeat that averageness on the second record...if they're really good there's absolutely nothing the big record companies can do to stop them from becoming millionaires....

You'd be surprised. When a new band just signed start out, they get ferried around in limo's, put up in fancy hotels etc.
While they are thinking "this is great" they are being billed all along.

swim 05-31-2006 04:26 PM

^And that's legal because of something in their contracts or they just get ass hacked?

Merkaba 05-31-2006 04:26 PM

How many records has Jessica Simpson ever sold?

Cause I remember her having a fricken mansion of a home. She spends 3000 on sheets for christ sake. And if 250,000 albums sold only equates to 14,000. She would need to have sold close to a billion.

I don't think so.

swim 05-31-2006 04:27 PM

You'd be surprised what stupid people will buy and you'd be surprised how many stupid people there are.

adidasss 05-31-2006 04:28 PM

Quote:

Originally Posted by Urban Hatemonger
Wait a minute

You wouldn`t be using the talent = popularity arguement there now would you?

I expected so much better

that's exactly what i'm saying acchulleh....in any case, bands can make a shitload of money today signed on indie labels...serves them right for being stupid and not reading the contracts *gets all lawyery*

Merkaba 05-31-2006 04:29 PM

Quote:

Originally Posted by swimintheundertow
You'd be surprised what stupid people will buy and you'd be surprised how many stupid people there are.

Oh I know, but I'm just using numbers here, if shes got that much money to blow, she must surely get more then 14,000 for ever 250,000 records sold. SURELY.

right-track 05-31-2006 04:29 PM

Quote:

Originally Posted by swimintheundertow
^And that's legal because of something in their contracts or they just get ass hacked?

It's known laughingly as an advance.

swim 05-31-2006 04:31 PM

Quote:

Originally Posted by Merkaba
Oh I know, but I'm just using numbers here, if shes got that much money to blow, she must surely get more then 14,000 for ever 250,000 records sold. SURELY.

There's a lot of money in endorsements and her show probably as well. There's actually more money in endorsements so, me finding how many she's sold overall is useless.
Quote:

Originally Posted by right-track
It's known laughingly as an advance.

*stomach curdles* that's bull shit.

adidasss 05-31-2006 04:33 PM

please people....cee lo ( or what ever his name is, the dude that sings for gnarls barkley) only sold 250000 copies of his solo work and i didn't really imagine him keeping his day job to support himself...it's utter bullshit...

Merkaba 05-31-2006 04:38 PM

Quote:

Originally Posted by swimintheundertow
There's a lot of money in endorsements and her show probably as well. There's actually more money in endorsements so, me finding how many she's sold overall is useless.
shit.

Glad you came to this point.

The amount a label hands over is not really the be all and end all. 14,000 doesn't include promotions, doesn't include shows, doesn't include endorsements and doesn't include an ongoing distibution of cds which will last for years to come as on-the-side income.

14k is only the tip of the iceberg.

I'm with adidass, those figures don't show it all.

boo boo 05-31-2006 04:48 PM

The upside to big labels however, is that it often leads to a bands mainstream success... And labels or not, bands DO make a good deal of money off live concerts, even though there are touring expenses... Thats how many bands really make their money anyway, but the more records a band sells, the more people that will go to their concerts... Though there are exceptions for some bands, like Phish.

Urban Hat€monger ? 05-31-2006 04:52 PM

Quote:

Originally Posted by Merkaba

The amount a label hands over is not really the be all and end all. 14,000 doesn't include promotions, doesn't include shows, doesn't include endorsements and doesn't include an ongoing distibution of cds which will last for years to come as on-the-side income.

14k is only the tip of the iceberg.

I'm with adidass, those figures don't show it all.

Well it`s not really the point.It`s just showing you an example of the basic return from an album that sells 250,000 after one year & how easy a band can get into debt from the record company.
Obviously there are other factors involved such as radio play . songwriting , etc etc.And even then everybody takes their cut from those too.
It`s not fact , it`s just a guide to show you where all the money goes.

Merkaba 05-31-2006 04:53 PM

^ It does suck doesn't it.

adidasss 05-31-2006 05:02 PM

Quote:

Originally Posted by Merkaba
^ It does suck doesn't it.

yes, poor bands on big labels....i pity them...i really do...my heart bleeds for them in fact....

Urban Hat€monger ? 05-31-2006 05:30 PM

Quote:

Originally Posted by adidasss
yes, poor bands on big labels....i pity them...i really do...my heart bleeds for them in fact....

Yeah heaven help any band that wants to spend a bit of time & money making the best album they can with the best people they can :rolleyes:

hiu 05-31-2006 08:52 PM

I read this at least 3 years ago. You're a tad late.

Sound Devastation 06-01-2006 05:44 AM

Quote:

So I keep reading from people on this forum how it`s perfectly OK to download stuff off major labels because they have huge amounts of cash & the artists are just a bunch of money grabbers , and that you should always buy stuff from independant labels to support the artists.All I say to that is BOLLOCKS. Wanna know why? Then read this & see just how much average selling bands (Which are the majority) on major labels are in the **** financially...........
but buying their CDs really isnt gonna help them that much the only way to get a bit of extra cash to a band without going through the label is by walking up to them and handing them a handful of cash.

its the band's own fault signing the deal.

IndiElectronica 06-01-2006 06:08 AM

interesting article. the verbiage is mostly spot on and a great read for any new band... the math is a bit sketchy tho as it doesn't include so many other factors involved...

Urban Hat€monger ? 06-01-2006 11:13 AM

Quote:

Originally Posted by Sound Devastation

its the band's own fault signing the deal.

Just as I said before , whats wrong with wanting to spend time & money on an album and get the best people involved?

I realise that you are pro independent to the point of extreme but the fact is some bands are better suited to indie labels & some to major labels.You make it sound like a stigma to be on a major , but why shouldn`t a band aspire to be something better? You think Radiohead could have had the time & the money to make something like OK Computer on a small label? I doubt it somehow.Nick Cave has been recording in indie labels for over 25 years , his last album was his first on a major & it`s the best thing he`s done in well over a decade as well as one of his most ambitious musically.
There`s good & bad to signing to both types of labels and it`ll take a bit more than saying 'oooh sony are evil' to convince me otherwise.

Sound Devastation 06-01-2006 12:07 PM

Quote:

Originally Posted by Urban Hatemonger
Just as I said before , whats wrong with wanting to spend time & money on an album and get the best people involved?

I realise that you are pro independent to the point of extreme but the fact is some bands are better suited to indie labels & some to major labels.You make it sound like a stigma to be on a major , but why shouldn`t a band aspire to be something better? You think Radiohead could have had the time & the money to make something like OK Computer on a small label? I doubt it somehow.Nick Cave has been recording in indie labels for over 25 years , his last album was his first on a major & it`s the best thing he`s done in well over a decade as well as one of his most ambitious musically.
There`s good & bad to signing to both types of labels and it`ll take a bit more than saying 'oooh sony are evil' to convince me otherwise.

yes some bands are suited to majors.. but being on a major does not automatically make them better. what i meant by that is that the band knew what they were getting into, they knew theyd lose all ownership and (most lose) all choice. the original article made the bands out to be victims which theyre not.

surely 90% of an art based industry thats all about expression and passion and enjoyment in the hands of four corporate giants cant be good.

Urban Hat€monger ? 06-01-2006 12:19 PM

Oh I totally agree with you on a lot of that.

But the point i`m making is I don`t see it as a bunch of gullable bands signing up for the hell of it. It`s a gamble
Do you stay on an indie label doing well knowing that maybe you`re not reaching your full potential whether that be due to finance , exposure or whatever.
Or do you go to a major , put time & money into your work , have all the backing that a major can give you and possibly make a success of it.

I don`t think it`s as clear cut as everybody makes out.Otherwise everybody would be on indie labels if it`s as good as people are making it out to be.


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