The Music Business

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Comment by Kurt/Yukki on July 27, 2009 at 4:06pm

Oh, and the thing I remember our lawyer saying to us when we'd protest or roll our eyes in disgust or freak ou, or whatever, was "I'll try to take some teeth out of it..." (the contract).

Comment by Kurt/Yukki on July 27, 2009 at 4:03pm

Kurt - how engaged were you with the Lavolta RCA deal? Did you understand the terms, and if not, did you want/try to?

I think we were actually pretty involved/ aware...At least as well informed as we could be. We had a really great lawyer, who actually understood us and the music business, but essentially, there just isn't much you can do, the contract is so favorable to the majors (or was at that time anyway). We had our lawyer translate as much of the jargon as possible. Basically, if you want to play with them, you have to relinquish a lot of control. We did get a lot of artistic control, but they still retain the rights to the music we recorded with them in perpetuity.

There's only so much you can do, unfortunately. However, the business is changing now and they've probably dug their own graves with a shovel made of greed.
:)

Comment by John P. Strohm on July 16, 2009 at 10:04am

That's cool, Jeb. I need to get you a better photo - that's me at my fattest and most out of shape, looking my worst! I've de-aged about five years since then. But the way it's laid out makes a lot of sense.

I like the idea of selling downloads with the money going to the artists, of course. I'd hope we could set the prices, because I'd want to set them LOW. The whole .99 per song thing is bogus IMO. If songs were priced in a sane way in the music biz, I think we'd see revenues across the board increase. I boycott iTunes whenever I can, and I like to buy direct whenever possible. I would make MFT my own DTF destination in a heartbeat (hell, I guess I already have).

Here's a good opportunity to write about my Twitter experiment, which has been interesting. I put out a tweet a few weeks ago that I have stuff up here (just one tweet), and it's increased downloads from my page exponentially. I was really trying it out to get a better sense of how Twitter is for getting out info, but it's really had legs. There was a spike right away, but they've continuted to move briskly through reposts, word of mouth, etc. If they were ten cents a song, I think it would have slowed down a bit but not much. I guess that's the next experiment, continuing to direct traffic here but chargning something nominal. I also had a number of fans ask if there's a tip jar, which might be a good idea - make it possible for people downloading tracks to pay what they want - sort of a micro version of the Radiohead model. I like that idea quite a bit.

Finally, regarding managers, I don't advocate making managers get formal education/certification. I think a lot of the music biz programs in colleges are good (some bogus), but they don't necessarily produce the sort of people that should be running the music biz. To me, that should be real fans and musicians, not breadheads and business plan dorks. I'm just shining a light on the fact that you can place more trust IN GENERAL on accountants and lawyers than self-styled managers because there are ethical standards and standards of competence that they have to adhere to, whereas managers have no baseline standards. But having said that, I'm not anti-manager. I work on a day-to-day basis with some fantastic managers who are highly ethical. And the best manager I work with (for a household name artist) is twenty years old, not company affiliated, and hasn't graduated from college. It's case-by-case, but artists should be aware.

Comment by David Schlabach on July 15, 2009 at 7:41pm

I've struggled with the idea of how to use this site to funnel money to bands directly.

I'll take cash, check or money order

Comment by Jeb Banner on July 15, 2009 at 6:39pm

sorry
http://beta.musicalfamilytree.org/band/john_strohm

Comment by Jeb Banner on July 15, 2009 at 6:38pm

I like the idea of formal training for band managers, you may be on to something there John!
It isn't very punk rock but who cares if it makes the bands more money.

I've struggled with the idea of how to use this site to funnel money to bands directly.

With the re-design we are playing with the idea of letting bands do digital downloads directly from their pages with the money going straight into their Paypal accounts.

BTW, it's coming along, here's your page John, still much to do but I like how the players are working. http://beta.musicalfamilytree.org/band/john_strohm

Comment by John P. Strohm on July 15, 2009 at 3:10pm

I'm troubled by artists placing everything in the hands of even capable managers. My biggest problem with managers IN GENERAL is that they don't have to be qualified or certified in any way. For example, artist attorneys have to be admitted by a state bar (which is fuckin' hard I tell ya) and business managers are almost always CPAs...even agents have to be licensed in many states. But artist managers - they can just be Joe Dude with an eighth grade education. That's troubling. Also, how do they typically get paid? A percentage of gross income. What does the artist make? Net. So the manager gets paid FIRST - typically 15 - 25%. Would I rather have 85% of net or 15% of gross? I dunno, depends what else is coming out of gross. If the lawyer gets 5%, the business manager gets 5%, the agent gets 10% of gigs, etc. etc. plus all costs, then there's often little left that you would call net.

I like to structure deals with managers when they jump on with established bands so that they essentially have to earn their percentage. If the band grossed an average of $250,000 per year over the past three years, and the manager is getting 15% of gross, then for the manager to get an option, they'd have to show at least $287,500 the following year so that the artist isn't actually LOSING money on the manager. I've seen some dead weight managers under long term contracts sucking money out of bands - plus some really fantastic managers that do way more than earn their commission. But I say make them earn their money. But never mind all that - artists should take the time to learn the business because you shouldn't place 100% trust in anyone in business except maybe immediate family. You go into things with a measure of trust, but you cover your ass. Giving the whole thing to a manager is NOT covering your ass.

Kurt - how engaged were you with the Lavolta RCA deal? Did you understand the terms, and if not, did you want/try to?

Comment by Kurt/Yukki on July 15, 2009 at 2:10pm

Col. Tom and Elvis probably served as a strong early example of the manager/ artist relationship. I think there are a number of factors that come into play. The first was that a business manager was needed because the talent didn't necessarily know the ropes and the manager would have a vested interest, ie. if the client does well the manager gets paid more. That relationship would be "leave the business to me...", leaving the artist to focus on what he or she does best. So, it would be a more specialized field. The manager would be paid to take care of the artist, personally and look out for them professionally and work out the contracts, whether they be bookings or recordings, all manner of business. Even today, ask any musician if they want to focus on the business aspect of their career, or if they like it, and I'm sure you'd get a huge sigh accompanying a look of disgust or deflation. But there were so many artists that ended up losing so much money on shady deals with managers and the record companies and booking agents, that, eventually, it was in an artists best interest to gain and hold as much understanding and control as possible of what's going on around them. Otherwise, who do you have to blame but yourself? As the music industry evolved, so did those relationships.Also, most of the musical entertainers, historically, have been young people with relatively little business experience, so you do what fits the bill.
Certainly, as bands got Mega, like Led Zep, they could get a manager, in Peter Grant, that was connected and could manipulate things to the artists advantage and capitalize on the money and interest and he doesn't have to concern himself with trying to win friends...Interesting development there. The artist is basically sheltered from any and all normality and has free reign to to nearly anything they want to. Period. That level of excess may have been preceded by a Geffen and some others, but that was a reflection of how the industry was developing.

Comment by John P. Strohm on July 15, 2009 at 12:07pm

It's a complicated issue but yes, of course. In the R&B/hip hop world, the artists (except superstars) get a pretty small piece of the pie. Producers are very handsomely compensated and often "furnish" the artist to the label, participating in up to 50% of the revenue for the life of the deal. They also frequently get a piece of the publishing. And if you look at the writing credits on those songs, there are often a lot of people claiming a portion of the collaboration, so whatever the artist keeps it probably pretty small.

Also there's the problem of crazy borrowing and spending, which is common among young artists of all genres. I remember what it's like to get handed a big fat check at age 22 for making records. You go a little insane, at once thinking you deserve it and that you totally don't deserve it so you better spend it before you're asked to give it back! If I got my entire annual salary in one check I'd probably experience something similar even today.

So yeah, shitty deal, no real financial planning (or encouragement of planning), people on the take, etc. etc. The flip side of Behind the Music exposing the realities is the fantasy world of MTV Cribs and shows like that. Some 19-year-old rapper on his first album showing off his Bentley and shark tank - it's insane. Only a tiny minority of recording artists make as much money as affluent professional people and usually only for a short time - you don't see folks coming out of medical school and buying 11 cars and 60" TVs that emerge from behind their gold plated bathtub. It's a fantasy, but it creates real problems for people who have absolutely no idea how to manage wealth.

Comment by Jake Petroff on July 15, 2009 at 10:59am

I'd say that VH1's Behind The Music and numerous reports of famous artists being broke etc.. probably helped fuel the desire to know the business side. It seems like these 24 hour entertainment channels and news shows are still a relatively new phenom but they've been here for over 20 years now. I'm still astonished that groups like TLC don't have a dime to show for their early work (ie the stuff that made them popular). In fact I think they still owed the label money after their third album and that's ludicrous. 4 time Grammy winners whose second album sells over 10 million copies should at least have something to show for that...don't you think?

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