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The Heretic’s Comment: We decided to repost a very famous article written by Mr. Steve Albini discussing the cold hard facts regarding Major Labels, Smoke & Mirrors, and Money. Mr. Albini wrote this article nearly 20 years ago, but his views concerning music business economics are still right on point to this very day. Unfortunately, most of the current crop of Artists/Bands/Musical Groups/Songwriters/Producers/Performers are not familiar with this piece of music history, so the Heretic shares it in order to further our goals of enlightening and empowering our readers and subscribers to make informed decisions in the event any of you decide to sign an Exclusive Recording Agreement.

Now in reference to the article, we will be the first to admit, you will have to invest time and effort in reading Mr. Albini’s comments, but we feel like it is well worth the effort and will give you insight miles ahead of a large segment of individuals operating in the music game today (additionally, you know that we try our best not to waste your time in this blog….so (as Bloggers) we try to discipline ourselves to provide you high quality posts that will be well worth your time to digest and implement into your strategies and operations when possible).

Okay, enough background….Please give us your thoughts and comments after reviewing the article. Remember: The Heretic Believes in You!!! Mr. Albini’s article appears below:

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 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 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.

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 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 bold and underlined, expenses are not.



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 fucked.

Steve Albini is an independent and corporate rock record producer most widely known for having produced Nirvana’s “In Utero”.

http://www.negativland.com/albini.html

The Heretic’s Comment:  While we were researching music topics for today’s post, we were struck by how many stories featured artist complaining about how difficult it has become to actually make any sort of living during Rap music. To state the obvious, we all know that almost every genre of music (including rap and hiphop) are taking negative hits toward record sells, but we found the comments instructive because of the complaints revolving around the increasing frustration with not being able to secure paying live shows (in other words, most of the complaints involved the frustration of having to do free shows or promo shows constantly with no hopes of ever getting paid gigs). In looking deeper at the frustration expressed by indie rap and/or hiphop artist, it is quite true (in defense of live performance venues and fans) that numerous shows have been performed by artist who have not taken the time to develop their live performance skills, or who are too high or too drunk to effectively deliver their lines and keep their flow locked on the beat, or who have so many people on stage it is hard to distinguish whether you are being forced to watch a bunch people standing around on stage or an actual live performance, or who are so caught up in set tripping and gang related mentally that they actually attack individuals in the audience or worst yet individuals in the audience attack them…we could go on and on concerning missteps indie rap and hiphop artists have made toward delivering quality live performances. One more observation on the above before moving forward, it is also true that Major Label Rap/Hiphop Stars are guilty of the same offenses described above, the difference, however, is that Major Label artists have PR machines that can clean things up (or cover things up) and also Major Rap/Hiphop Artist are more likely to have a base of fan support that will allow them to survive a negative incident. Most indie artist, unfortunately, do not possess the above luxuries. As a result, when a indie artist makes a mistake on stage…even one mistake…this mistake could have a devastating impact, because the mistake has now made him/her/them unmarketable for paying shows for the foreseeable future.

Despite the above, Indie Rap and HipHop are still both such critical genres for artists/producers/labels to pursue and live performance venues (as well as) Fans have to be willing to support indie Rap as well as HipHop by attending live shows (not just free shows, but paid shows as well).

Over the last several months, we at the Heretic have been exposed to a number of wonderful independent rap and hiphop projects that will be launched during 2011. We mention this to highlight the fact that there are literally thousands if not tens of thousands of artists, producers, songwriters, artist development companies and indie labels still risking everything in order to generate profits in the rap/hiphop game. In our minds, the key in figuring out whether forthcoming Rap/Hiphop projects will be profitable on the one hand or loss money on the other hand will be based on answering the following question…..will the project be able to generate paying live shows?

If time permits, please give us your thoughts and opinions regarding the above subject matter. Or we offbase? Do you disagree? What is your opinion?

Closing Comments:

As we stated at the beginning of the post, all genres of music are faced with challenging times (not just Rap and Hiphop). If your particular genre of music is also suffering from a lack of paid live performance opportunities please give us your feedback as well.

The Music Business Heretic © 2010 Cross Live Media All RIGHTS RESERVED For the MAKE YOUR OWN MONEY Movement……..

The Heretic’s Comment: We found a great article from columnist Angelina Chapin providing strategies regarding turning page views into Album Sales. We highly recommend you read the entire article for yourself, but we have provided some of the article’s direct quotes for your convenience. The following is commentary centered around the band Arcade Fire’s you-tube video release entitled “The Wilderness Downtown“. Okay, enough setup, let’s check out the quotes:

“Last month, the band (Arcade Fire) released an online interactive video titled The Wilderness Downtown, a collaboration with Google and American music video director Chris Milk that uses the latest in HTML5 web technology to evoke the feeling of nostalgia expressed in the band’s song “We Used To Wait.” Viewers enter their childhood street address and the video takes them on a virtual tour of their old neighbourhood. Multiple browser windows simultaneously show close-ups of your street via Google Street View, footage of a man running, and an invitation to write a postcard to your childhood self.”

“When you see something like that, it’s an example of ‘Wow, I guess everything hasn’t been done yet,’” says Alan Cross, host of syndicated Canadian radio show The Ongoing History of New Music, adding he’s not a diehard Arcade Fire fan. “It changed my opinion of them, and I passed it on to everyone because I think it’s so damn cool.”

“With more than four million visitors to the site so far, the video has surely helped get attention for the band’s new album The Suburbs, which debuted at No. 1 on the Billboard charts prior to the video’s release. Sixty-two per cent of sales of The Suburbs have come from digital downloads, compared with half that number for their previous album. And though the band’s management declined to comment on whether there was a direct correlation between the online project and sales, Jordan says it’s not about the short sell anyway. “It’s key to super-serve your core audience,” he says. “By giving things for free, it creates a culture of support where fans don’t mind buying tickets for your show or your album because they know they’re getting more value.”

Adding value to a product or service strengthens your clients’ loyalty to your company, explains Nova Scotia-based new media and design consultant Brad Smith, but it has to be done in a way that makes them feel rewarded rather than accosted. Smith advises that his clients always give fans a little extra to help create a sense of exclusivity around a brand. “Social media is intimate,” he says. “When you leak details, it feels to fans that you’re leaking secrets.” For example, he encourages the varsity hockey teams he works with to leak shots of new features on their jerseys so fans can blog about it and create buzz.

Closing Comments:

We want to commend columnist Angelina Chapin again for putting together a very informative article. One of the things to pull away from reading this information is to always stay conscious of the need to reward your Fans with value in exchange for their association with your music. In terms of giving music away for free in order to build fan support, Unfortunately, we have witnessed numerous examples in our law practice where clients feel justified in thinking that free music means SONG REJECTS (music that I don’t  want to release commercially). We have witnessed clients giving away free music consisting of poorly recorded songs as well as (in some cases) songs that are not even fully produced. This is a terrible mistake, because it doesn’t build value between your music and a possible Fanbase building around your music and brand. If you make the decision to give away music for free, then don’t give your potential Fans “SLOP“. In other words, Free should not mean SONG REJECTS. Instead, Free should be viewed as an opportunity to showcase quality material (yes, let us repeat…your commercial, high quality material), so that both established Fans as well as potential new Fans have a low risk way to fall in love with your music and brand.

One last time….never, ever, ever….shortchange your Fans!!! Give them quality with all that you do (and by consistently doing so) you maximize opportunities to turn page views into Album Sales, Merchandise Sales, Live Performance Sales, Sponsorship Sales, Endorsements Sales, Special Appearance Sales, etc…!!!!!!  (you get the picture)

Give us your thoughts

http://www.canadianbusiness.com/after_hours/lifestyle_activities/article.jsp?content=20101011_10030_10030

The Music Business Heretic © 2010 Cross Live Media All RIGHTS RESERVED For the MAKE YOUR OWN MONEY Movement……..

The Heretic’s Comment: Apple’s iTunes music portal has reportedly wielded its 1 billion pound sledge hammer again by demanding that song previews will now jump from 30 seconds to 90 seconds. Apple argues that a 90 second preview will provide potential song buyers a better chance to decide whether a song is truly worth purchasing or not. The policy will reportedly apply to all songs that are over 2 minutes and 30 seconds in length. Any song shorter than 2 minutes and 30 seconds will remain at a 30 second preview.

“For those who do not accept the new terms (those as in music labels), they can withdraw their music from the iTunes store. Acceptance is accepted by continuing to submit music to the store”.

Closing Comments:

We are not saying that iTunes song preview policy (as described above) is a bad thing, but we are saying (on the other hand) that it demonstrates again that Apple runs the iTunes Music Portal with an iron fists and if you don’t like it…you are out of there!!!!!!!!!!!!

Something to thing about for the Indies……….

Give us your thoughts