The Problem With Music
by Steve Albini
(thanks to
negativland.com for the article)
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.
|
Advance: |
$ 250,000 |
|
Manager's cut: |
$ 37,500 |
|
Legal fees: |
$ 10,000 |
|
Recording Budget: |
$ 150,000 |
|
Producer's advance: |
$ 50,000 |
|
Studio fee: |
$ 52,500 |
|
Drum Amp, Mic and Phase "Doctors":
|
$ 3,000 |
|
Recording tape: |
$ 8,000 |
|
Equipment rental: |
$ 5,000 |
|
Cartage and Transportation: |
$ 5,000 |
|
Lodgings while in studio: |
$ 10,000 |
|
Catering: |
$ 3,000 |
|
Mastering: |
$ 10,000 |
|
Tape copies, reference CDs, shipping
tapes, misc. expenses: |
$ 2,000 |
|
Video budget: |
$ 30,000 |
|
Cameras: |
$ 8,000 |
|
Crew: |
$ 5,000 |
|
Processing and transfers: |
$ 3,000 |
|
Off-line: |
$ 2,000 |
|
On-line editing: |
$ 3,000 |
|
Catering: |
$ 1,000 |
|
Stage and construction: |
$ 3,000 |
|
Copies, couriers, transportation:
|
$ 2,000 |
|
Director's fee: |
$ 3,000 |
|
Album Artwork: |
$ 5,000 |
|
Promotional photo shoot and duplication:
|
$ 2,000 |
|
Band fund: |
$ 15,000 |
|
New fancy professional drum kit:
|
$ 5,000 |
|
New fancy professional guitars [2]:
|
$ 3,000 |
|
New fancy professional guitar amp rigs
[2]: |
$ 4,000 |
|
New fancy potato-shaped bass guitar:
|
$ 1,000 |
|
New fancy rack of lights bass amp:
|
$ 1,000 |
|
Rehearsal space rental: |
$ 500 |
|
Big blowout party for their friends:
|
$ 500 |
|
Tour expense [5 weeks]: |
$ 50,875 |
|
Bus: |
$ 25,000 |
|
Crew [3]: |
$ 7,500 |
|
Food and per diems: |
$ 7,875 |
|
Fuel: |
$ 3,000 |
|
Consumable supplies: |
$ 3,500 |
|
Wardrobe: |
$ 1,000 |
|
Promotion: |
$ 3,000 |
|
Tour gross income: |
$ 50,000 |
|
Agent's cut: |
$ 7,500 |
|
Manager's cut: |
$ 7,500 |
|
Merchandising advance: |
$ 20,000 |
|
Manager's cut: |
$ 3,000 |
|
Lawyer's fee: |
$ 1,000 |
|
Publishing advance: |
$ 20,000 |
|
Manager's cut: |
$ 3,000 |
|
Lawyer's fee: |
$ 1,000 |
|
Record sales: |
250,000 @ $12 =
$3,000,000 |
|
Gross retail revenue Royalty: |
[13% of 90% of retail]:
$ 351,000 |
|
Less advance: |
$ 250,000 |
|
Producer's points: |
[3% less $50,000 advance]:
$ 40,000 |
|
Promotional budget: |
$ 25,000 |
|
Recoupable buyout from previous label:
|
$ 50,000 |
|
Net royalty: |
$ -14,000 |
Record company income:
|
|
Record wholesale price: |
$6.50 x 250,000 =
$1,625,000 gross income |
|
Artist Royalties: |
$ 351,000 |
|
Deficit from royalties: |
$ 14,000 |
|
Manufacturing, packaging and distribution:
|
@ $2.20 per record: $ 550,000 |
|
Gross profit: |
$ 7l0,000 |
The Balance Sheet: This is how much
each player got paid at the end of the game.
|
|
Record company: |
$ 710,000 |
|
Producer: |
$ 90,000 |
|
Manager: |
$ 51,000 |
|
Studio: |
$ 52,500 |
|
Previous label: |
$ 50,000 |
|
Agent: |
$ 7,500 |
|
Lawyer: |
$ 12,000 |
|
Band member net income each: |
|
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".
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