The music-business...really

Gotta LOVE this ...more music biz reality.

10/23/2003
Log By Mark Van Cleave
© 2003 MVC


Aside from the colorful language, Courtney does have some interesting points
to make...

Courtney Love Does The Math
 
By Courtney Love (Courtney Love's speech to the Digital Hollywood
online entertainment conference, given in New York on May 16.)

Today I want to talk about piracy and music. What is piracy? Piracy is
the act of stealing an artist's work without any intention of paying
for it. I'm not talking about Napster-type software.

I'm talking about major label recording contracts.

I want to start with a story about rock bands and record companies, and
do some recording-contract math:

This story is about a bidding-war band that gets a huge deal with a 20
percent royalty rate and a million-dollar advance. (No bidding-war band
ever got a 20 percent royalty, but whatever.) This is my "funny" math
based on some reality and I just want to qualify it by saying I'm
positive it's better math than what Edgar Bronfman Jr. [the president
and CEO of Seagram, which owns Polygram] would provide.

What happens to that million dollars?

They spend half a million to record their album. That leaves the band
with $500,000. They pay $100,000 to their manager for 20 percent
commission. They pay $25,000 each to their lawyer and business manager.

That leaves $350,000 for the four band members to split. After $170,000
in taxes, there's $180,000 left. That comes out to $45,000 per person.

That's $45,000 to live on for a year until the record gets released.

The record is a big hit and sells a million copies. (How a bidding-war
band sells a million copies of its debut record is another rant
entirely, but it's based on any basic civics-class knowledge that any
of us have about cartels. Put simply, the antitrust laws in this
country are basically a joke, protecting us just enough to not have to
re-name our park service the Phillip Morris National Park Service.)

So, this band releases two singles and makes two videos. The two videos
cost a million dollars to make and 50 percent of the video production
costs are recouped out of the band's royalties.

The band gets $200,000 in tour support, which is 100 percent
recoupable.

The record company spends $300,000 on independent radio promotion. You
have to pay independent promotion to get your song on the radio;
independent promotion is a system where the record companies use
middlemen so they can pretend not to know that radio stations -- the
unified broadcast system -- are getting paid to play their records.

All of those independent promotion costs are charged to the band.

Since the original million-dollar advance is also recoupable, the band
owes $2 million to the record company.

If all of the million records are sold at full price with no discounts
or record clubs, the band earns $2 million in royalties, since their 20
percent royalty works out to $2 a record.

Two million dollars in royalties minus $2 million in recoupable
expenses equals ... zero!

How much does the record company make?

They grossed $11 million.

It costs $500,000 to manufacture the CDs and they advanced the band $1
million. Plus there were $1 million in video costs, $300,000 in radio
promotion and $200,000 in tour support.

Read the rest of this article here...

http://www.markvancleave.com/MVClogs_id.php?id=35

Supply & Demand:

There is an infinite supply of worthless hacks filling the thousands of music stores & coverband bars nationwide willing to strike any bargain for even a miniscule shot at unlimited free ass & grass.

There is a limited demand for said hacks.

Alternately, there is an extremely limited supply of corporate muckety-mucks capable of successfully foisting annoying talentless whiners like Courtney Love on the general public.

I've got no sympathy for the artist/record company disparity; both parties make it pretty good on the deal.

-r

courtney had an article written about this as long ago as 2000 i think for salon.com

i have a had time bringing these types of points up when im talking to someone about the music biz because they never listen. its almost like arguing with a conservative.

I've got no sympathy for the artist/record company disparity; both parties make it pretty good on the deal.

I have to agree with this to some extent. Its common knowledge how so many band have been screwed around by major labels that to blindly sign on the dotted line without a good lawyer is just stupid. I've got a friend who's trying to figure out his options right now in exactly that situation. Sign with a big label and probably get fucked, or stay indie and struggle indefinately.

I agree totally.

Check out Steve Albini's number crunching on the take home pay for the average working "indie" band at the end of the year.Basically,you make as much as the average 7-11 clerk.

Search Google for Steve Albini if you are considering joining the Industry.It ain't promising unless you treat it like a job,8 hours a day.

Steve is cool because he will only charge a set rate to engineer your recording,whether it's Jesus Lizard,Nirvana,or Plant And Page.He's the real deal.

"Basically,you make as much as the average 7-11 clerk."

Of course, we're talking averages here, so that's intentionally misleading. The kabillion bar bands puttering around in their roadie's uncle's VW bus all summer long trying to pay off the credit cards they maxed out at Music Emporium don't really balance with the 30-40 acts that get a Bubbling Under chart each year.

"Sign with a big label and probably get fucked, or stay indie and struggle indefinately."

My point is not that artists should seek better contracts from the start; that's a given. (Odds are that most will never get a good offer, anyway.)

My point is that the disparity is common knowledge, & IMO not unfair. If you, as an artist, can produce your product, bring it to market, garner the attention of millions of potential buyers, & successfully market it ON YOUR OWN, then by all means you should get the lion's share.

If not, then you should consider yourself lucky that some suit picked you over the other jillion people who would happily be a rock star FOR FREE.

-r

djdb,

Maybe I should have a bit more clear.I'm talking about signed bands on major labels,not top 40 bar bands.Have you read the Albini article?Do check it out.

Sign to a major?Sure,why not?If one has done the research and truly beleives and stands behind what they are producing,I say get the focker out there!The time is always nigher.To sign and maintain artistic control is the catch.