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The Future of Making Money in the Music Biz


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Many years ago I predicted that the music biz was going to go to a "patron of the arts" corporate-based model, like the way the De Medicis sponsored art in the renaissance, or a king's court had musicians and jesters. We've already seen companies paying licensing fees for songs (Cadillac meets Led Zeppelin - I bet LZ got a lot for that one), and now we have Absolut Vodka and Deadmau5. Thbe net result will likely be the same as the pre-internet music biz: There will be a few big acts that make a lot of money, and a whole lot of serfs at the bottom trying to get noticed.

 

The more things change, the more they stay the same :) Just that the patrons of the arts will be multi-national corporations instead of record labels.

 

 

 

 

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Many years ago I predicted that the music biz was going to go to a "patron of the arts" corporate-based model' date=' like the way the De Medicis sponsored art in the renaissance, or a king's court had musicians and jesters. We've already seen companies paying licensing fees for songs (Cadillac meets Led Zeppelin - I bet LZ got a lot for that one), and now we have Absolut Vodka and Deadmau5. Thbe net result will likely be the same as the pre-internet music biz: There will be a few big acts that make a lot of money, and a whole lot of serfs at the bottom trying to get noticed.

 

The more things change, the more they stay the same :) Just that the patrons of the arts will be multi-national corporations instead of record labels.

 

 

 

 

Sort of reminds me of our current socio-economic system... the gap between the haves and have nots is widening...

 

Life mimics art or music mimics life?

 

I may post a "Patron of the Arts Wanted" in the church bulletin... maybe someone will pay me to write music... you never know...

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And remember when I said "I don't understand why Apple doesn't do artist development? They have the money and it would give them a competitive advantage." Check this out: http://www.rollingstone.com/culture/features/how-apple-hopes-to-win-the-streaming-war-20160628#ixzz4D714OdkY

 

They're a little late to the party, but it seems that's exactly what they're doing.

 

Meet your new record label...

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Well, around here, local musicians can donate their music to our local NPR station for their "Capital Soundtrack" project, which the station seems to think will be beneficial to the artists. I wrote to them asking if they paid for submissions and got back this answer:

 

"We're a noncommercial, public broadcasting service where the music rights and royalties are negotiated as a blanket agreement by the Corporation for Public Broadcasting. That said, any composers hired by us to write a new theme song would be paid through whatever negotiating terms are agreed to (money, on-air credit, etc) and we would the retain the rights moving forward.

 

The real impact of this initiative is about giving our regional bands, artists and musicians a higher profile in the community by airing their music on WAMU. It's truly a "sense of place" effort in that it's reflecting the vast talent our region has to offer in terms of musical culture, and it gives the artists exposure in a way they might not have had before. It's a win-win."

 

Usually when you get a complex answer to a simple yes-or-no question, that means "no." When I filled out the submission form for a fake entry just to get to the bottom (literally) of the terms, in the first and last paragraphs, I found, respectively,

 

"The LICENSOR hereby grants a royalty-free, worldwide, non-exclusive license to American University’s radio station, WAMU, (“WAMU”) and its subsidiaries, affiliates, licensees, successors, assignees, and agents, to use the musical composition(s) and sound recording(s) in the following Recording(s) (hereafter referred to as “Recording(s)”)"

 

and

 

"The LICENSOR agrees that no monetary compensation for licensing my Recording(s) to WAMU shall be due to him or her and agrees that any and all revenues received by WAMU in connection with this License shall belong entirely to WAMU. The term of this License shall be in perpetuity and subject to termination at the election of the LICENSOR for any reason. LICENSOR must provide fourteen (14) days written notice of termination to WAMU 88.5 at music@wamu.org and/or to any applicable authorized LICENSEE representative(s). Upon termination, WAMU shall not include the Recording(s) in future broadcasts, streams, and podcasts. Notwithstanding termination, WAMU has the right to retain the Recording(s) in programming that occurred prior to termination of this License. Additionally, WAMU has the right to continue providing previously aired programming with the Recording(s) to listeners, for archival purposes, after the termination of this License. The LICENSOR has carefully read and understood the terms and conditions of this License, and agrees to be bound by them."

 

But just think of how much you'll make from the exposure. ;)

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Well Mike, at least the NPR contract is non-exclusive :), and didn't include the words "in perpetuity" or "throughout the known universe."

 

I think you'll get a kick out of this, which was originally published in Electronic Musician:

 

 

Craig's List: Five Artist Contract Lines Explained

 

1 “Subsequent to completion of the Recording, Company may assign its existing rights and obligations hereunder without the consent of Artist.” Well, didn’t you always want your music featured in a laxative commercial? Or a KKK recruitment video? Or the music bed behind the cable access TV spot for Honest Frankie’s Quality Used Yugo dealership in Ho-Ho-Kus, NJ? Exciting exposure opportunities await you when a record company president is highly motivated to pay off his gambling debts! Especially in New Jersey.

 

2 “In perpetuity and throughout the entire universe.” A bunch of lawyers were drunk one night. “How about ‘throughout the world?’” “Nah, let’s do ‘throughout the solar system.’” [much laughter] “The galaxy!” [hearty guffaws] “The ENTIRE EFFING UNIVERSE!!” The lawyers all dissolved in gales of laughter and wrote “universe” into a contract as a lark—and the term stuck. (Although to be fair, some believe lawyers are spawned from the evil ice planet Zardox, so “universe” might actually be relevant.)

 

3 “Right of inspection of books with prior written notice of no less than seven (7) days.” Even accountants who move more slowly than Jabba the Hut can sub the funny money books for the real ones in less than seven days. And if you do inspect the books, expect to be locked in a small cubicle with a man who keeps referring to himself as “Thee Avenger,” has a really big teardop tattoo, and plays absent-mindedly with a knife he calls “my Precious.” Yessiree—you’re “livin’ the dream!”

 

4 “The recitals contained at the beginning of this agreement are incorporated herein by this reference.” No one has any idea what this means. No one ever has. No one ever will. In a brilliant move—given that lawyers bill by the hour—this line is inserted specifically so lawyers can argue about it for hours and hours. And hours. Even days and weeks, if needed. Ka-ching!

 

5 “Covenant of Good Faith and Fair Dealing: Company and Artist agree to perform their obligations under this Agreement, in every respect and at all times, in good faith.” Although contracts are allegedly nonfiction documents, a hallowed legal tradition is that every contract include at least one line that’s totally bogus. This replaces the clause used in older contracts, which was “Company and artist shall slay dragons, turn lead into gold, and cast magikal spells in the company of elves and fairies.” Spoiler alert: That didn’t happen either.

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I Love #2!! Hilarious - I've known some of these lawyers. You forgot one thing however, after they recovered from their night at the bar, they outlined this exact discussion in a 250 page document, and then charged you for 70 hours at $250/hour for their work.

 

 

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<...> The net result will likely be the same as the pre-internet music biz: There will be a few big acts that make a lot of money, and a whole lot of serfs at the bottom trying to get noticed.<...>

 

So what's new?

 

From the serf at the bottom who got noticed by the record company, but was ignored when he wanted to get paid for it. But also from the serf who is lucky enough to make a living doing music and nothing but music for most of his life (I did try two real jobs that didn't last long - normal is so over-rated).

 

Actually it's like any small business. Most small businesses stay small and just have a good life surviving and working for themselves. And every once in a while one out of thousands happens to be in the right place, at the right time, with the right product, and the right business skills to become a McDonalds or Macys.

 

That produce stand where I buy veggies will never become a Publix, Kroger, or Safeway, my doctor will never have his own TV show, and that little Italian restaurant down the road will never be a Pizza Hut. But they aren't doing badly either.

 

Such is life.

 

Same for writers, most novelists sign over enough rights so the publisher gets all the dough. But every once in a while a novel goes viral and the author can negotiate a better deal next time. For every Rowlings there a thousands you never heard of.

 

I have no regrets for choosing a career in music. I consider myself lucky. I may have been luckier if we signed the deal with Motown and didn't make any money on our first (and probably only) record, but then again, it may have gone worse too.

 

Insights and incites by Notes

 

 

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I'm not saying there's anything wrong with just playing music on whatever level works. If I'm nostalgic for anything, it's for the days when there were sufficiently vibrant local music scenes that you could make a decent living without having to do big tours and such.

 

My main point is that for all the people saying there's no more money to be made in music so we might as well all pack up our tents and go home, new models are emerging and I think the "patron of the arts" model is not only likely, but has an historical precedent that worked in the past. And it wouldn't just be the Apples of this world, although they'll pay the most bucks. A smaller upstart might find some really hot act, and leverage that into recognition for the company they would never have received otherwise.

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Uh, when they say the "entire universe", do they mean our Hubble sphere, the extended universe beyond that, or any of the various possible multiverse scenarios that so many physicists and cosmologists believe probably exist? Which one of Max Tegmark's universes are they referring to? How can they hold someone's doppelganger in a parallel universe responsible for what was signed by a different version of them somewhere else?

 

I think they might have a difficult time trying to get that one enforced. ;)

 

 

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they mean the entire totality of physical existence...known and unknown; and if they thought they could bring spiritual beings to court, they would go after the rest too...they are lawyers, after all...if there is money to be had...they will be there, briefcase in hand.

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My main point is that for all the people saying there's no more money to be made in music so we might as well all pack up our tents and go home, new models are emerging and I think the "patron of the arts" model is not only likely, but has an historical precedent that worked in the past.

 

This is true, but only a small handful of artists had patrons. Everyone else who played music did it for the enjoyment of themselves, their families, and friends, and had another way to make a living. Today we have the National Endowment for the Arts that gives a few musicians grants for doing what they do. Japan has National Treasures, a similar program. And we have Kickstarter and similar "group patrons" that works for some.

 

I wouldn't miss 99% of the people trying to make a living with music today if they all stopped releasing commercial products, but that's not a very popular opinion. Most people would miss the opportunity to hear something they've never heard before, particulalry if they don't have to pay for it.

 

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This is true, but only a small handful of artists had patrons.

 

Actually that's kind of point - that the patrons will work mostly with the big acts, with a few exceptions.

 

I wouldn't miss 99% of the people trying to make a living with music today if they all stopped releasing commercial products, but that's not a very popular opinion. Most people would miss the opportunity to hear something they've never heard before, particulalry if they don't have to pay for it.

 

People are always sending me music, which I definitely appreciate. Few of those make it past the initial listen, however the ones that do make it worth listening to the other ones.

 

 

 

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Who? Me? Maybe a little...:wave:

“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side.” H.S. Thompson

...what an optimist!

 

And I have some experience with lawyers, too...:rolleyes:

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People are always sending me music, which I definitely appreciate. Few of those make it past the initial listen, however the ones that do make it worth listening to the other ones.

 

Couple that with your sense of taste and extraordinary knowledge about music, and you're officially way over-qualified to be an A&R rep. ;):wave:

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Couple that with your sense of taste and extraordinary knowledge about music, and you're officially way over-qualified to be an A&R rep. ;):wave:

 

 

Then again, no one has offered me hookers and cocaine. So, my ability to be an A&R rep has never been tested properly.

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I used to do A&R for majors and larger indies. I'm friends with a lot of music business attorneys and find the characterizations above inaccurate, to be kind and generous. It's the old story of "if we don't know much about it, and it didn't go our way, then it's bad." Blaming attorneys for the ills of the music industry's exploitative model is like blaming surgeons for the problems of the healthcare industry. Most of the music attorneys I know are ethical, direct, and do their job at a high level. That job is advocacy for their client. For every Stan Polley there are a hundred Richard Grabels or Matthew Kaplans or Rosemary Carrolls.

 

It's worth saying that if you are asking for someone else's money to be invested in you (which is exactly what an artist development contract of any kind is), you ought to be grown up about it. That means learning to read and understand a contract, or competently delegate that duty.

 

As far as business models, your "patron of the arts" model ignores a colossal reality: at the heart of "vibrant local scenes" there was already a strong patron of the arts. That patron was called "alcohol sales," cleverly disguised as "club goers." Those with experience know very well that straight edge bands were given Sunday afternoon for financial reasons, not deference to curfews.

 

The industry that cratered was the recorded music industry, not the live music industry. We can look at Live Nation and the rise and fall of Clear Channel's radio dominance and debate it, but at the end of the day people still want to go to bars and hear music and throw back a few. When you look at the underlying cashflow of sub-superstar musicians, that was always the currency, and still is.

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I know it's fashionable to trash lawyers, but I can't fault them in my case.

 

The attorneys that our manager hired when we were "almost famous" certainly seemed to be ethical and acted in good faith. They negotiated, ran the numbers from what the record company was offering wit, and enough experience in the business to make high, low and moderate projections to our manager, and in the end gave us their best advice, our manager discussed it all with us and when we held out for more money in the contract, Motown quit talking.

 

I can't fault anyone for that, and don't know if life would have been better or worse for me if we signed at the lowball price. It doesn't matter, it's water under the bridge.

 

But I'm still playing music, I own my own house, other than car payments I'm not in debt, and living a very happy life.

 

The future of making money in the music business for 99% of us has always been gigging.

 

Insights and incites by Notes.

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I used to do A&R for majors and larger indies. I'm friends with a lot of music business attorneys and find the characterizations above inaccurate' date=' to be kind and generous. It's the old story of "if we don't know much about it, and it didn't go our way, then it's bad." Blaming attorneys for the ills of the music industry's exploitative model is like blaming surgeons for the problems of the healthcare industry. Most of the music attorneys I know are ethical, direct, and do their job at a high level. That job is advocacy for their client. [/quote']

 

First off, I appreciate your taking the time to comment. However I don't think anyone's solely blaming attorneys for the ills of the music industry's exploitative model; my Craig's List was a satirical column that poked fun at everyone, including myself from time to time.

 

It's worth saying that if you are asking for someone else's money to be invested in you (which is exactly what an artist development contract of any kind is), you ought to be grown up about it. That means learning to read and understand a contract, or competently delegate that duty.

 

Interesting you should say that. When I was young, I did indeed delegate that duty to entertainment attorneys. I am still owed royalties from multiple companies for records sold in the 60s, 70s, and 80s. The cost of recovering those royalties, in terms of a lawyer's time and my time, would exceed the amount of the royalties. There's also evidence that the accounting given to us of record sales was questionable. I can understand significant amounts of records falling through the cracks (e.g., shoplifters, damage, etc.) but the production run quantities less returns didn't come close to what was represented as sales.

 

In the mid-80s I started negotiating my own contracts. The first few I did I took to an entertainment lawyer who had been highly recommended. She looked at what I'd negotiated and said "Honestly, you don't need me." I've negotiated all my own book and record contracts since then, and have had no problems getting paid, and getting more favorable terms than the professionals. To be fair, my experience with entertainment lawyers was primarily in the 60s and 70s, when the music business was very different and much more "wild West." These days, public companies have to be a lot more transparent about their accounting than the family-owned labels of the 50s and 60s.

 

While of course there are ethical lawyers, there are some really bad apples. I did my part in helping get one in New York disbarred. Then again, he deserved it.

 

What people don't understand is that there is no such thing as a standard contract. A lawyer can ask for anything, but so can you. I get author's contracts that are downright stupid in all their provisions. I cross 'em out left and right, add in my own clauses, and re-submit. 9 times out of 10 I get what I want. I realize it's an adversarial situation in that their job is to get the most favorable terms possible for their company, but still, I can't help but think some of those provisions are included with the assumption that the person signing the contract won't know any better.

 

As far as business models, your "patron of the arts" model ignores a colossal reality: at the heart of "vibrant local scenes" there was already a strong patron of the arts. That patron was called "alcohol sales," cleverly disguised as "club goers." Those with experience know very well that straight edge bands were given Sunday afternoon for financial reasons, not deference to curfews.

 

I didn't connect the two. The Patron of the Arts element I see as licensing, sponsoring tours, including bands in commercials (e.g., Apple), etc. The demise of local club scenes is a complex subject, but some of it was the introduction of drug laws that made clubowners liable if people did or sold drugs within the club. I feel that was why dance music never took off to the same degree here as it did in Europe; people who wanted to open dance clubs here found the liability issues too daunting.

 

I was at clubs in the 60s where the payoffs were occurring to the cops and I saw cash change hands. I saw Teddy at Steve Paul's the Scene in New York, a major club, get roughed up by the mob and be out of work for a week. The de-evolution of the live music scene is a complex topic. Most of the working musicians I know in Nashville don't bother with clubs, they do private corporate gigs for parties, product launches, etc. Alcohol may have been the patron of the arts in the past, but the money for them is with the corporate gigs.

 

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Trashing attorneys is of course a favorite pastime for folks. Fair or unfair - most people don't care if they're having fun or nursing a grudge. But then again, attorneys make fun of attorneys, too - so there you go.....

 

The thing is, musicians are exploited in a systemic way. Part of it is supply and demand (always more supply than demand - now there is pretty much infinite supply.) Part of it is the naivety of musicians in general when it comes to business and deal-making. Part of it is simply tradition - the "standard contract" is justified because it's, well, standard. And part of it is good ol' fashioned lying and cheating and screwing people around by not paying them, breaking promises, finding legal loopholes, stealing from them, bullying them, and other such tactics.

 

Do you know any musician who does not have stories about being mistreated, lied to, generally screwed around where money is concerned? Businesses have cultures, traditional behaviors, for good and ill, depending. You can depend on the ill part in the music business.

 

Maybe it all stems from the dead simple impression that musicians are having fun when they perform. Which seems like reward enough to the public - why pay them for just having fun? I'll pay the plumber - fixing the sewer line does not look like fun. But the smiling, dancing, jiving musician?

 

Exploited people smile a lot, you ever notice that?

 

nat whilk ii

 

 

 

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I think artists in general are common targets for exploitation. Perhaps because many of us spend so much time and effort developing our art that we neglect to put the time in to learn the business side of things. After all a new song, a new painting, a new written page, a new poem or whatever is a lot more fun than accounting 1.01.

 

Just thinking out loud.

 

Notes

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