Napster - Good versus Evil

(Note this article was written in 2000, before Napster was brought down by the RIAA)

"To Napster, or not to Napster.. that is the question.... I am not opposed to fans sharing music on a one-to-one basis. Artists used to share their music even before Napster or the internet was around. A few cds here and there to generate fans, attract interest, just be "sharing" and artistic, is all good. .. "  A written dialogue compiled by gilli moon, published in the July 2000 issue of Songsalive! Songnotes! - with major guest appearances and anecdotes by recording artist, Courtney Love, attorney Josh Leopold, Bruce Wallace, Songsalive! Member, and famous producer/engineer Steve Albini.

Gilli: To Napster, or not to Napster.. that is the question.... I am not
opposed to fans sharing music on a one-to-one basis. Artists used to share
their music even before Napster or the internet was around. A few cds here
and there to generate fans, attract interest, just be "sharing" and
artistic, is all good. What I don't like are companies like Napster
"pretending" that they are on the artist's side, and not taking the
responsibility for pirated music. They just put the responsibility in the
fans' fault for downloading it without knowing if it's illegal. Fans will
just be fans. They want to listen to music. And the internet has generated
MORE sales in records by the accessibility of MP3s and the like. But
Napster-like companies HAVE to pay for the opportunity to even SHARE the
music to a wide audience. Radio, clubs and retail outlets, just to name a
few, ALL pay fees to play and distribute music in whatever form they like
(public performance license through Ascap, BMI). So too should internet
companies. Fans, we love you as much as you love our music. But where you
GET your music must go through a system so that us artists are duly
compensated. We don't ask for much, just our legislative rights as
intellectual copyright owners of the music. Somewhere along the line the
SONGWRITER and ARTIST need to be duly paid for their SERVICES, just like any
other service provider - doctor, lawyer etc. Stop abusing us and our
kindness in providing  beautiful music to the world. Appreciate our service
and PAY UP.

You can have your say (instructions at end of article), but before, have a
read of this.... It might amuse you, it might disgust you, you may have
heard it all before.

One day, after hearing all the controversy so much I nearly puked, I logged
on to the infamous Napster site and checked out the Napster Digital Music
Forum, to find that mutiny inside was already at force. I will begin by
sharing with you a live chat that took place:

Topic posed, June 14, 2000: The Recording Industry - how are us the fans the
evilness that pirates music we don't even know is unauthorized 

Some music junkie: i am pretty mad. how the hell was i supposed to know that
the metallica songs were unauthorized. plus i didn't even download the ones
they didn't want downloaded. big GRR. that left me napster-less for too
long. i don't think its fair to ban people for liking a certain type of
music and wanting to listen to it. we are not evil and don't devise to
download music just to not pay for it. i feel that if i was a music artist
id be overjoyed if people were downloading my music and I was reaching out
to all those people. its not the money or sales which counts, but that
people are listening to what you have to say and what you want them to hear.
That's what i think counts most.

A songwriter bites back: You said: "i feel that if i was a music artist id
be overjoyed if people were downloading my music and i was reaching out to
all those people. its not the money or sales which counts, but that people
are listening to what you have to say and what you want them to hear. that's
what i think counts most." Yeah well,.. then you go and take guitar lessons
for 15
years, reach into the depths of your soul as you learn how to craft a song
that can bring 30,000 people in one arena to tears. Go crazy trying to make
yourself known to any record company out there so that you can get a
recording contract. Travel 16 hours a day for 5 years in a van full of
equipment and 4 other guys that smell like ass. Sell your computer to make
your rent payment. Miss out on the first few years of your new baby's life.
Get screwed by everyone who wants to steal and usurp your rewards, and then
come back and post again. Let's see how "overjoyed" you'd be to find out
that people were listening to the fruits of all that effort without
supporting you with a couple f..... bucks. You, as a listener, owe your
favorite artists EVERYTHING,... they owe you nothing. Least of all "joy", at
how un-supportive a fan you really are. They give you something more
precious than diamonds, and you're going to complain about how it costs you
a few bucks?!! That's f...... sad.

Another music junkie: Yeah they should be joyed. I work part time and am a
fulltime student. I can't afford a $20 song. (one good song on a CD) I don't
burn songs onto a CD. I don't steal songs. I have most of the songs already
on Cd. And If I like them I go out and the CD. But If I only like that one
song then that is my choice. While it is on my WINAMP probably 10 people
hear it. Cause I share it with people from all over North America. I don't
need you or anyone else telling me I am stealing music. Cause If I spend $20
on a Cd that only has one good song how many people will I tell not to get
that CD? all my friends. Then if one of my friends likes it I will probably
sell my copy to them for $5. Trust me I am sure someone who spends all that
time devoted to a business would rather have good reviews than bad. And that
what its about. It doesn't matter if a record company spends $1 BILLION on
promoting the record you only really believe people who have heard more than
the one song that gets overplayed on the radio.

Another muso: So?! Buy a radio. Invest in some blank tapes, like everybody
else. You sure do give your "taste" in music a lot of weight. Trust ME;
there isn't an artist out there that gives a shit what YOU and your FRIENDS
think about their records. Not to crush your ego or anything. Secondly, you
do whatever helps you sleep at night. As OB1 said "You must do what you feel
is right." If you feel like you're contributing to the artists that you're
listening to, then cool. You're better than 95% of the 10-million
freeloaders that use Napster.

Junkie: Well an artist should care what me and my friends think. cause we
are the ones that will pay for their music if we like it. and please in the
future come up with your own thoughts and don't just copy and paste other
peoples

Muso: Right, I'll be sure to send out the memo to all of the bands in the
world. It'll say: "Everybody has to remember to write music that BRIANN and
his FRIENDS will like. No more of this writing what you feel crap." How's
that? That should do it, right? DUDE, nobody cares about you and your f.....
friends!! You're not the center of the universe. How's that for an
un-original thought?

Junkie: MUSICFAN, if your as dumb as you seem you probably don't even
realize what percentages of that $20 goes to those <holding tears back hard
working artists. If your such a music/artists advocate then you are on the
wrong side of the fence ASS.

Muso: You expect the recording studios to work for free ... buy top of the
range equipment and produce crisp quality sound? Would you work for free?
Instead of focusing on the fact that buying music from shop is expensive
(which I think it is, too) surely the emphasis should be on getting artists,
studios, internet developers and listeners together. Improve the service
beyond any other which is currently available and set it all up with a
subscription system. Once digital audio is saved on a server, it's there
forever. No expenses for producing CD, delivery, retailers, fancy artwork
for the packaging, etc.,

* * *
Gilli: Where are we at? Fans of music are fighting with musicians.... Why is
this happening? Musicians loved fans and fans loved musicians. We need each
other. Yet we are fighting each other.

Bruce Wallace: You might find this interesting (maybe you've already seen
it). Courtney Love's speech to the Digital Hollywood online entertainment
conference, New York on May 16. A real eye-opener - for me anyway. I always
thought she was a bit dizzy, but she sounds pretty cluey. I was so impressed
I went out and bought her CD (Celebrity Skin - not bad). I was surprised to
find that it was the only copy in the record shop (a fairly large shop) and
it was hidden away in the Alternative section. (What the hell is Alternative
anyway? Who comes up with all these weird categories?)

Courtney Love takes on music for real :
The controversial singer takes on record label profits, Napster and "sucka
VCs."
<http://www.indyhits.com/newz.htm>

<http://www.holemusic.com/digihollywood.html/><http://www.salon.com/tech/fea
ture/2000/06/14/love/index.html?CP=SAL&DN=660/>

Some excerpts:

Courtney Love: 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. The company also paid $750,000 in
music publishing royalties. They spent $2.2 million on marketing. That's
mostly retail advertising, but marketing also pays for those huge posters of
Marilyn Manson in Times Square and the street scouts who drive around in
vans handing out black Korn T-shirts and backwards baseball caps. Not to
mention trips to Scores and cash for tips for all and sundry.

Add it up and the record company has spent about $4.4 million. So their
profit is $6.6 million; the band may as well be working at a 7-Eleven. Of
course, they had fun. Hearing yourself on the radio, selling records,
getting new fans and being on TV is great, but now the band doesn't have
enough money to pay the rent and nobody has any credit. Worst of all, after
all this, the band owns none of its work ... they can pay the mortgage
forever but they'll never own the house. Like I said: Sharecropping.

Our media says, "Boo hoo, poor pop stars, they had a nice ride. Fuck them
for speaking up"; but I say this dialogue is imperative. And cynical media
people, who are more fascinated with celebrity than most celebrities, need
to reacquaint themselves with their value systems. When you look at the
legal line on a CD, it says copyright 1976 Atlantic Records or copyright
1996 RCA Records. When you look at a book, though, it'll say something like
copyright 1999 Susan Faludi, or David Foster Wallace. Authors own their
books and license them to publishers. When the contract runs out, writers
gets their books back. But record companies own our copyrights forever.

The system's set up so almost nobody gets paid.

* * *
Courtney, cont.: Although I've never met any one at a record company who
"believed in the Internet," they've all been trying to cover their asses by
securing everyone's digital rights. Not that they know what to do with them.
Go to a major label-owned band site. Give me a dollar for every time you see
an annoying "under construction" sign. I used to pester Geffen (when it was
a label) to do a better job. I was totally ignored for two years, until I
got my band name back. The Goo Goo Dolls are struggling to gain control of
their domain name from Warner Bros., who claim they own the name because
they set up a shitty promotional Web site for the band.

* * *
Courtney, cont.: This opinion is one I really haven't formed yet, so as I
speak about Napster now, please understand that I'm not totally informed. I
will be the first in line to file a class action suit to protect my
copyrights if Napster or even the far more advanced Gnutella doesn't work
with us to protect us. I'm on [Metallica drummer] Lars Ulrich's side, in
other words, and I feel really badly for him that he doesn't know how to
condense his case down to a sound-bite that sounds more reasonable than the
one I saw today.

I also think Metallica is being given too much grief. It's anti-artist, for
one thing. An artist speaks up and the artist gets squashed: Sharecropping.
Don't get above your station, kid. It's not piracy when kids swap music over
the Internet using Napster or Gnutella or Freenet or iMesh or beaming their
CDs into a My.MP3.com or MyPlay.com music locker. It's piracy when those
guys that run those companies make side deals with the cartel lawyers and
label heads so that they can be "the labels' friend," and not the artists'.

Recording artists have essentially been giving their music away for free
under the old system, so new technology that exposes our music to a larger
audience can only be a good thing. Why aren't these companies working with
us to create some peace? There were a billion music downloads last year, but
music sales are up. Where's the evidence that downloads hurt business?
Downloads are creating more demand.

Why aren't record companies embracing this great opportunity? Why aren't
they trying to talk to the kids passing compilations around to learn what
they like? Why is the RIAA suing the companies that are stimulating this new
demand? What's the point of going after people swapping cruddy-sounding
MP3s? Cash! Cash they have no intention of passing onto us, the writers of
their profits.

At this point the "record collector" geniuses who use Napster don't have the
coolest most arcane selection anyway, unless you're into techno. Hardly any
pre-1982 REM fans, no '60s punk, even the Alan Parsons Project was
underrepresented when I tried to find some Napster buddies. For the most
part, it was college boy rawk without a lot of imagination. Maybe that's the
demographic that cares -- and in that case, My Bloody Valentine and Bert
Jansch aren't going to get screwed just yet. There's still time to
negotiate.

* * *
Courtney, cont.: Now artists have options. We don't have to work with major
labels anymore, because the digital economy is creating new ways to
distribute and market music. And the free ones amongst us aren't going to.
That means the slave class, which I represent, has to find ways to get out
of our deals. This didn't really matter before, and that's why we all
stayed.

* * *
Courtney, cont.: Since I've basically been giving my music away for free
under the old system, I'm not afraid of wireless, MP3 files or any of the
other threats to my copyrights. Anything that makes my music more available
to more people is great. MP3 files sound cruddy, but a well-made album
sounds great. And I don't care what anyone says about digital recordings. At
this point they are good for dance music, but try listening to a warm guitar
tone on them. They suck for what I do.

* * *
Courtney, cont.: A new company that gives artists true equity in their work
can take over the world, kick ass and make a lot of money. We're inspired by
how people get paid in the new economy. Many visual artists and software and
hardware designers have real ownership of their work.

I have a 14-year-old niece. She used to want to be a rock star. Before that
she wanted to be an actress. As of six months ago, what do you think she
wants to be when she grows up? What's the glamorous, emancipating career of
choice? Of course, she wants to be a Web designer. It's such a glamorous
business!

When you people do business with artists, you have to take a different view
of things. We want to be treated with the respect that now goes to Web
designers. We're not Dockers-wearing Intel workers from Portland who know
how to "manage our stress." We don't understand or want to understand
corporate culture.

I feel this obscene gold rush greedgreedgreed vibe that bothers me a lot
when I talk to dot-com people about all this. You guys can't hustle artists
that well. At least slick A&R guys know the buzzwords. Don't try to compete
with them. I just laugh at you when you do! Maybe you could a year ago when
anything dot-com sounded smarter than the rest of us, but the scam has been
uncovered.

* * *
Courtney concludes: I'm looking for people to help connect me to more fans,
because I believe fans will leave a tip based on the enjoyment and service I
provide. I'm not scared of them getting a preview. It really is going to be
a global village where a billion people have access to one artist and a
billion people can leave a tip if they want to.

It's a radical democratization. Every artist has access to every fan and
every fan has access to every artist, and the people who direct fans to
those artists. People that give advice and technical value are the people we
need. People crowding the distribution pipe and trying to ignore fans and
artists have no value. This is a perfect system.

If you're going to start a company that deals with musicians, please do it
because you like music. Offer some control and equity to the artists and try
to give us some creative guidance. If music and art and passion are
important to you, there are hundreds of artists who are ready to rewrite the
rules.

In the last few years, business pulled our culture away from the idea that
music is important and emotional and sacred. But new technology has brought
a real opportunity for change; we can break down the old system and give
musicians real freedom and choice.

* * *
Josh Leopold: Courtney is known for her intelligence, non? Here below is
Steve Albini's similar, but more cynical (and intelligent) rant. My motto
regarding the labels is "It is OK to hate, just don't blame."  No one makes
you sign on the dotted line - (except maybe the devil).

Courtney is not really one to complain - she forgets to mention the
important royalty stream known as publishing (you know, that stuff she
inherited from Kurt that makes her as rich as God).

Over time, publishing is worth more than the record royalty. Yes, there has
been some inflation, but it doesn't take a genius to see where the real
value of music is - not records, it is SONGS. The sad truth is that it takes
millions to market an artist.  Millions.  No one has that kind of money to
gamble on a record, let alone a new artist, and if they did, they wouldn't
know how to spend it.

I think artists in the U.S. have can't complain too much - they get the
biggest advances and sell the most records.  I am sure Courtney is in no
hurry to move to China or Russia to work as an artist there.

If Courtney wants to point the finger, blame really falls on the public for
having horrible taste!  They WANT N Sync and Britney!  Blame the stupid
public and all the artists who should NOT be making music (who should be
working as characters at Disneyworld in Orlando instead).  They waste all
the money that could be spent by labels on "good" artists.  And blame
American schools for not exposing kids to quality music.  And blame our
secular society because no one goes to church anymore, a place where people
used to gather to make music together every week.

Don't blame the record companies!  They are like the cops or the military.
When they are working against you, you really, really hate them.  But when
you need them, you are sure glad to have them, and there is no substitute. I
hate record companies, but I don't blame them - they are only doing there
job.  Who I hate more are movie companies, and TV companies - they generate
much more mindless crap than the record companies.  And whoever heard of a
world famous screen writer, or TV writer?

I liked Courtney better when she just did lots of drugs and didn't talk so
much. Napster is a legal issue, not a moral issue.  Artists should stay out
of it. Even if Napster is the coolest thing on earth, the law makes clearly
makes it illegal.  Unfortunately, all the discussions about Napster never
refer to law (because the law is crystal clear).  Some people swear that LSD
can improve your life (I do not agree) but that doesn't make it okay to go
around handing it out - that is similar to Napster.

The fact is, independent labels are really worse than the majors!  The
independent labels are truly the ones that screw artists. If you get a deal
with a Sony label (Epic, Columbia, 550, etc.) or Arista or Interscope, you
get a serious shot at success - you will get at least one (maybe more)
single full bore at radio and hopefully a tour, for sure. The other
Universal besides Interscope labels are pretty crappy, and Warner, forget
about it unless you have already sold millions.  Built To Spill have sold
more records on independents than on Warner.

At an independent label even if you get a $200,000 radio promotion budget,
it still doesn't mean your record will get in the stores, even if they are
BMG or UMVD distributed!  We didn't have any gold albums for almost a year I
was there, and it was because our music sucked (my personal opinion).  We
got tons of airplay but that doesn't mean anything if no one buys the
record, or worse yet, it is not in stores. Independent labels are more
retarded than the majors, and they pay less money and make worse deals.

The industry is a nightmare, the keys as an artist are
1) Have a live act you can make money off of
2) Write your own songs and keep as much of the publishing as possible and
3) Be a solo artist (hire your band members when necessary, just don't make
them partner to the deal)

Then you can make some money if you have the right team (attorney, manager,
agent, business manager).  Lawyer comes first, or else you will get screwed
by manager and agent.  Business manager and manager should come
simultaneously.  Then all three pool resources to find the best agent.
Agents are horrible and an artist doesn't need one until they are ready for
a real tour (real agents don't do clubs).

* * *
Gilli: Obviously, we are pointing the finger at the wrong people here,
right! It's always someone else's fault. Who's really to blame? The artists?
The copyright owners of songs who decide to hook up to the internet with
their mp3s? The record companies? And where is Ascap and BMI in all of this?
Surely the internet is just as powerful, if not more, as radio... who all
pay performance royalties. I received a letter from Apra this year saying
that Ascap "will not be distributing royalties for performances via
mp3.com..... there are just too many performances and not enough nicome
generated by the Internet licenses to make it worthwhile." Did you see how
much some artists get PayBack for Playback royalties on mp3.com? Up to
$250,000US a year. Nice chunck of change. I just don't buy that statement!
And Napster? How can we get them to pay up?

Josh Leopold: Napster is purely a legal issue, though.  So many people are
clouding the
air with personal opinion because they think it (Napster) is so cool.
Unfortunately it hurts the lawsuit, and the real underlying issues relating
to business.   Of course consumers want free music, just like they want free
anything.

But, if you understand copyright law, and the DMCA (which is the new law
Napster is trying to hide behind), you know they don't have a legal leg to
stand on.

The lawsuit is purely and simply a calculated business tactic, like the suit
over My.Mp3.com.  They know they are going to lose but they go to court so
they can settle.

* * *
Recently on Music Business Daily (internet zine) Michael Robertson, Chief
Executive Officer of San Diego-based MP3.com,  has been named "Executive of
the Year" by StopNapster.com, a controversial new web site that was created
to step up the war against online music theft. Sponsored by the Tabloids, an
Oakland, Calif. rock band, StopNapster.com ( http://www.stopnapster.com )
launched today as a comprehensive site that calls for the creation of
"Trojan Horse" MP3s as electronic counter measures, "Napster Bombs" that
undermine the integrity of illegal file sharing and also names Metallica's
Lars Ulrich "Artist of the Year" for personally kicking some 300,000 Napster
users off the service. Robertson is being honored in part for recently
signing a statement in support of a preliminary injunction against Napster
Inc., which is being sued by the Recording Industry Association of America
(RIAA) for wholesale copyright infringement. Robertson's support of the
RIAA's request for an injunction shows Napster not only harms independent
artists, small record labels and retail stores but also threatens legitimate
online music sites. Ironically, StopNapster.com's award comes shortly after
Robertson settled copyright infringement claims brought against his popular
MP3 portal by the RIAA.

* * *
Gilli: Yeah, but even without Napster and the like, artists have been in
deep shit without cyberspace!

Steve Albini: 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.

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. There'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, 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 math that will
explain just how f..........d 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: $ 4,031.25

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 f.....d.

* * *
Gilli: And the moral of the story is....
1. Only play music to your family and immortalize your one cdr for your
book shelf, or
2. Never sign a record deal, or
3. Sign a record deal and enjoy the fame and marketing but be prepared
to go bankrupt.
4. Promote all over the internet but be prepared to make no money
5. Risk all and perhaps become a millionaire
6. Don't believe anything of the above and keep doing what you're
doing.


It's time to have your say. Go http://www.songsalive.org/enotes#Songchat

(all quotes were given by permission or were floating freely on the
internet)

© 2000 gilli moon