Members Sir Scrooge Posted October 1, 2009 Members Posted October 1, 2009 Let's imagine that you've got a deal with a major label. You got your contract and it basically says that you gotta make 1 album. The label will pay for the studio work, the promotion, the touring. (or maybe not the touring but let's just say so for the sake of the thread) The label invests 200K$ on you for the said album (or maybe not? I don't know the rates, but let's imagine that they believe that you're the next Justin Timberlake and invest that amount). Will you be in debt to the label if your album sells 100K$? That is, let's imagine the album flopped and you haven't sold enough. Will they suck the rest of those 100K$ from you during the years to follow when you're gonna be working a day job, like a normal bank does for credit?
Members Silent Heart Posted October 1, 2009 Members Posted October 1, 2009 Let's imagine that you've got a deal with a major label. You got your contract and it basically says that you gotta make 1 album. The label will pay for the studio work, the promotion, the touring. (or maybe not the touring but let's just say so for the sake of the thread)The label invests 200K$ on you for the said album (or maybe not? I don't know the rates, but let's imagine that they believe that you're the next Justin Timberlake and invest that amount).Will you be in debt to the label if your album sells 100K$? That is, let's imagine the album flopped and you haven't sold enough. Will they suck the rest of those 100K$ from you during the years to follow when you're gonna be working a day job, like a normal bank does for credit? Well, no. The essence of the difference is that with a loan from a bank you must repay everything that they give you upfront, whereas in a typical arrangement with a record label you don't have to repay anything they gave you upfront.
Members Poker99 Posted October 1, 2009 Members Posted October 1, 2009 If they can prove you did something wrong and didn't respect your contract, YES, they will go after you for every penny you own them.
Moderators daddymack Posted October 1, 2009 Moderators Posted October 1, 2009 Typically where bands get in trouble is the 'advance' money the label offers them to live on while they are recording. Too often a couple of band members mistakenly assume this is 'free money' and start doing stupid things like throwing lavish parties, traveling and living like rock stars. When the $ starts coming in off the sales of the record, and after the record label gets its cut, sometimes those band members wind up still in the hole!The production costs are typically borne by the label.
Members Sir Scrooge Posted October 1, 2009 Author Members Posted October 1, 2009 Typically where bands get in trouble is the 'advance' money the label offers them to live on while they are recording. Too often a couple of band members mistakenly assume this is 'free money' and start doing stupid things like throwing lavish parties, traveling and living like rock stars. When the $ starts coming in off the sales of the record, and after the record label gets its cut, sometimes those band members wind up still in the hole!The production costs are typically borne by the label. Wait so you mean that if the contract stipulates that the band gets 100K for the album the label sometimes gives extra money to live on? it would be logical for this to be a fixed rate not "as much money as you want so you can spend it like a rockstar", like maybe 2 grand for the whole process of recording for each member? :poke:
Members Blackwatch Posted October 1, 2009 Members Posted October 1, 2009 I was taking to the father of a kid who's band got signed to Columbia. The kids were opening for The Counting Crows and bands in that league, and he talked the kids into taking $5000 a piece and $1800/month instead of a huge signing bonus. He was telling me that they made no real money but they had a blast living like rockstars and they at least had enough money to live while on tour. I'm not sure how they handled the recording costs and such but it sounded like a smart way to go.....
Members Ronan Murphy Posted October 2, 2009 Members Posted October 2, 2009 Its very different from a bank loan. The bad side for the artist is that in a traditional deal if you have a 15% deal with the label, if you got an advance of 100,000, every time your album sales made 1 dollar 15 cents of that would go to pay off your debt. You would receive your first royalty check when that 15 cents of every dollar added up to $100,000. If you have not reached that threshold by the time you start your second album, your debt from the first album is added to your debt from the second. It is not uncommon for an artist to have album that sold over 100,000 copies but not received a royalty check from the sales of that album. The good side for the artist is that in the traditional deal, when the artist and label part ways, the debt is wiped away free and clear with no impact on the artists credit rating.
Members happyhugout Posted October 2, 2009 Members Posted October 2, 2009 Typically where bands get in trouble is the 'advance' money the label offers them to live on while they are recording. Too often a couple of band members mistakenly assume this is 'free money' and start doing stupid things like throwing lavish parties, traveling and living like rock stars. When the $ starts coming in off the sales of the record, and after the record label gets its cut, sometimes those band members wind up still in the hole! The production costs are typically borne by the label. Agree, A friend of mine signed to an indie label that was funded by a major label. It was a 4 album deal. The band recorded the albums as per the agreement, but the costs compared to profits did not tilt in the favor of the label. They are trying to break even and pursuing him and the band. I couldn't have said no to the deal he signed. The music is very much not universal. Risk on both ends, but they have the money to chase their lost money.
Members Matximus Posted October 2, 2009 Members Posted October 2, 2009 I say who cares. You gotta record deal. Enjoy the ride and worry about it later.
Members BlueStrat Posted October 2, 2009 Members Posted October 2, 2009 Yep, there is a difference. Banks are offering loans, while record companies are making investments. Just as if you make an investment and it goes bad you aren't entitled to a refund of your initial outlay, neither is a record company.
Members BlueStrat Posted October 2, 2009 Members Posted October 2, 2009 I say who cares. You gotta record deal. Enjoy the ride and worry about it later. No offense, but this kind of thinking is why so many bands end up broke and basically untouchable by another label after they get butt raped. They ought to care, and they ought to have enough business sense to explore all their contract options and hire a good entertainment lawyer before they sign anything.
Moderators daddymack Posted October 2, 2009 Moderators Posted October 2, 2009 I say who cares. You gotta record deal. Enjoy the ride and worry about it later. Well..I see Blue Strat replied, but look at the other side...you got a record deal...do you want to keep it? The ride can be pretty short if the label decides yo uare not performing your side of the contract. So you better 'worry about it' every day until you start making income....
Members Matximus Posted October 2, 2009 Members Posted October 2, 2009 Record companies are evil!! The music business is corrupt!!! They'll fleece you!!! Protect your art!!!! Yawn... It's saying your balls are going to sweat through your jock if you go jogging in Florida in July. Or you'll get fleas if you nap in Rover's doggie bed. If you're dumb and lucky enough to get a first-time record contract, make sure you stock up on lube and jaw bits. You're clearly gonna get screwed.... Take Pearl Jam, some of the smartiest and savviest dudes ever before they signed with Sony back in the 1990s. Stone tells NPR they've made scant cash on the 70 million records - 70 million!!! - records they've sold around the world. They make most of their dough from touring. http://www.npr.org/templates/story/story.php?storyId=112962358&ps=cprs
Members BlueStrat Posted October 2, 2009 Members Posted October 2, 2009 Take Pearl Jam, some of the smartiest and savviest dudes ever before they signed with Sony back in the 1990s. Stone tells NPR they've made scant cash on the 70 million records - 70 million!!! - records they've sold around the world. They make most of their dough from touring. http://www.npr.org/templates/story/story.php?storyId=112962358&ps=cprs You are right. However, without the clout of a company like Sony, Pearl Jam would likely never be in the position they are in to make kind of money they make touring.
Members Scafeets Posted October 3, 2009 Members Posted October 3, 2009 The old business model of a record deal was critical for covering production costs because it was often a huge and unattainable resource. Tour support is rapidly vanishing for all but the most elite of new artists.However, there are things that a record company can and should still bring to the table.Expertise in production -- real A&R work like pairing artists with producers and writers, can make the "product" better. If there's one factor that makes so many self-produced CDs sound so bad, it's the fact that no one is telling the artists when a song, or take, or overall recording, isn'y up to par.Expertise in sales, marketing and distribution. Very, very few bands have a clue as to how to market themselves. If I was looking for a label deal, my questions would be about how much they are ready to commit to investing in these areas.I have heard of several small-time labels and wanna-be production companies that are presenting contracts that structure advances and even production/marketing costs as loans. This is why every artist needs an entertainment industry lawyer to make sure that whatever deal gets signed is an investment and not a loan.
Moderators daddymack Posted October 3, 2009 Moderators Posted October 3, 2009 You are right. However, without the clout of a company like Sony, Pearl Jam would likely never be in the position they are in to make kind of money they make touring. and oddly enough, it proves the industry has changed its paradigm over the last two decades. In the 60s/80s, you toured to promote record sales, and typically barely broke even on the road. Now you have to make your nut on the road.
Members Matximus Posted October 3, 2009 Members Posted October 3, 2009 You are right. However, without the clout of a company like Sony, Pearl Jam would likely never be in the position they are in to make kind of money they make touring. Oh yeah. No doubt. For sure. But still, it clearly drives them mad that they pretty much gave it all away to Sony with that 7-record deal. I mean, they were still getting bent over after they became Pearl Jam, biggest band in the world at one point. They should have had more leverage. And these guys knew what they were doing! They were pretty seasoned. Half the band had another deal with a Universal subsidiary before it all went to hell when their singer died. Record Labels are like Goldman Sachs, right? Bloodsucking squids on the face of humanity, or whatever. Still. I'd say most people'd be willing to shoot their grandma in the kneecaps for a deal...
Members Scafeets Posted October 3, 2009 Members Posted October 3, 2009 Record companies are evil!! The music business is corrupt!!! They'll fleece you!!! Protect your art!!!! Yawn... It's saying your balls are going to sweat through your jock if you go jogging in Florida in July. Or you'll get fleas if you nap in Rover's doggie bed. If you're dumb and lucky enough to get a first-time record contract, make sure you stock up on lube and jaw bits. You're clearly gonna get screwed....Take Pearl Jam, some of the smartiest and savviest dudes ever before they signed with Sony back in the 1990s. Stone tells NPR they've made scant cash on the 70 million records - 70 million!!! - records they've sold around the world. They make most of their dough from touring. http://www.npr.org/templates/story/story.php?storyId=112962358&ps=cprs The Pearl Jam story is pretty unique and certainly not a blueprint for how to make a living in music. That 70 million sales figure includes a lot of authorized bootlegs, too. This is the band that decided to record every night of a tour and release 72 different CDs in one year. They gave away thousands through their fan club, then sold the rest pretty much at cost. So, maybe their first 3 releases were profitable for the band and the record company. But everything after that was probably a war of wills between band and label. This, along with refusing to make singles, videos, etc. did not make them popular with their record company, and the label probably lost a ton on the last 4 records. And a 5-year war with Tickmaster might have been the right thing to do, but it cost the band a lot of money. Bottom line: The CBS star-making machinery got them to a wide enough audience that they could afford to do things their own way. When they were broke, they went back to the well -- this time Clive Davis and his new label -- and they did it his way: Videos, meet and greets, TV appearances, high-profile venues, etc. And now they're a money machine again. I'm not buying the "record company {censored}ed us" story from them or most other bands. Having read more than my fair share of label contracts, and having signed a few, I would say there's enough greed and ignorance to go around for all concerned.
Members Scafeets Posted October 3, 2009 Members Posted October 3, 2009 and oddly enough, it proves the industry has changed its paradigm over the last two decades. In the 60s/80s, you toured to promote record sales, and typically barely broke even on the road. Now you have to make your nut on the road. That model was already in place in the 70s. Bands like the Allmans, the Dead, Zappa, Little Feat and hundreds of others did very well live while making comparatively little in record sales.
Members Silent Heart Posted October 3, 2009 Members Posted October 3, 2009 Bottom line: The CBS star-making machinery got them to a wide enough audience that they could afford to do things their own way. When they were broke, they went back to the well -- this time Clive Davis and his new label -- and they did it his way: Videos, meet and greets, TV appearances, high-profile venues, etc. And now they're a money machine again. Yeah, I was fairly astonished to see Eddie "we don't like promoting ourselves" Vedder in a Target commercial hawking the latest PJ album.
Members Casey Posted October 9, 2009 Members Posted October 9, 2009 The old business model of a record deal was critical for covering production costs because it was often a huge and unattainable resource. Tour support is rapidly vanishing for all but the most elite of new artists. my band didn't get a huge advance by any means but part of it is still a tour budget. I guess I don't know how all other bands get it, I could ask our lawyer but our advance is split up into three parts. For instance, part of it is a recording budget that we can't touch until we have our producer locked down. Another part is a touring budget that we can't touch until there is a label-approved tour.
Members Casey Posted October 9, 2009 Members Posted October 9, 2009 They were pretty seasoned. Half the band had another deal with a Universal subsidiary before it all went to hell when their singer died. seasoned? I was talking to Goldie (A&R that signed them) and he made it sound like even though the old band was signed, they were freshly signed and hadn't known much in the way of labels at that point.
Members Matximus Posted October 9, 2009 Members Posted October 9, 2009 seasoned? I was talking to Goldie (A&R that signed them) and he made it sound like even though the old band was signed, they were freshly signed and hadn't known much in the way of labels at that point. Yeah? That's really interesting. Something clearly happened. Maybe they're just a bunch of big whiners. In all the press around the new record all Stone and the others do is dis their old label for taking all the money they earned selling records.
Members Casey Posted October 9, 2009 Members Posted October 9, 2009 oh im not doubting that. You know there's really no telling. there's something about the phrase "sold my soul for rock n' roll" that applies here I suppose.
Members RickGoetz Posted October 11, 2009 Members Posted October 11, 2009 Record companies are evil!! The music business is corrupt!!! They'll fleece you!!! Protect your art!!!! Yawn... It's saying your balls are going to sweat through your jock if you go jogging in Florida in July. Or you'll get fleas if you nap in Rover's doggie bed. If you're dumb and lucky enough to get a first-time record contract, make sure you stock up on lube and jaw bits. You're clearly gonna get screwed....Take Pearl Jam, some of the smartiest and savviest dudes ever before they signed with Sony back in the 1990s. Stone tells NPR they've made scant cash on the 70 million records - 70 million!!! - records they've sold around the world. They make most of their dough from touring. http://www.npr.org/templates/story/story.php?storyId=112962358&ps=cprs I think "Scant cash" to Pearl Jam is a relative term. The label absolutely made more than they did but the risk and the money came from the label. This is no different than the deal a Venture Capitalist would offer a start up in terms of ownership. Where it gets dicey is the artist having to recoup the advance before getting paid. All kinds of crazy {censored} gets billed to artists and it's hard to get a clear accounting statement. And to echo an earlier statement - without Sony - no touring business, no merch, no performance royalties from airplay, no synch fees...no Pearl Jam brand.
Recommended Posts
Archived
This topic is now archived and is closed to further replies.