Whilst getting ready to do some recording,
I checked my email and found an ol' buddy of mines' newsletter[I think I'm on some of Matthew's not yet released recordings] that contained an old essay about the realities of the 'music business' by Steve Albini who, I believe, produced Nirvana.
Check it out:
Excerpted from Baffler No. 5
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 shit. 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 shit 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 shit. 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 it again, please.
Backstroke."
And he does, of course.
I. A&R Scouts
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,
formersoundman 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 sign 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 term 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 label 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.
II. There's This Band
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. Anyway,
it doesn't cost them any thing 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 10 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. 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 getting a great royalty: 13% [less a 10%
packaging deduction]. Wasn't it Buffalo Tom that were only
getting 12% less 10? Whatever.
The old label only wants 50 grand, and 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 fucked 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 underlined, 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
Offline: $2,000
Online 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 millon 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 fucked.
©1994-2002 MAXIMUMROCKNROLL
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posted by george @ 6:11 PM
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