| The Problem With Music - by Steve Albini |
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Please note that this article was written with the American music industry in mind. There are some obvious differences to deals in the UK. Managers don't get paid percentage cuts from gig income, or any other income, in the UK for a start, and labels here pay recording costs as part of the debt. |
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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 s**t. 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 A&R guy 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 s**t 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 s**t. 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 [not much older than 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 New York 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 bloke 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 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 '95? Didn't we have a blast.
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.
The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question as 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 maths that will explain just how f**ked they are: These figures are representative of amounts that appear in record contracts daily. There's no need to mess around with the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
Video budget: $30,000
Band fund: $15,000
Tour expense (5 weeks): $50,875
Record company income:
The Balance Sheet: This is how much each player got paid at the end of the game.
The band is now 1/4 of the way through its contract, has made the music industry more than 3 millon dollars richer, but still owes the label $14,000. The band members have each earned about 1/3 as much as they would working in a shop, but hey, 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 the bands you & your friends admire are probably this f**ked too! By Steve Albini |
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So are you still sure you want a major deal?
Why not do it yourself, or with a small indie? |