One of the reasons I wanted to start this blog is because I believe most musicians/artists know very little about the music business and I want to do my part to help change that. You don’t have to have a degree to be a rock star, you simply declare that you want to be one and Poof! you’re on your way. For this reason, I believe most don’t bother learning about the business beyond what they are learning from videos, documentaries, live concerts and other barely-scratching-the-surface media. Let’s change this so we can take control over our careers and make more informed decisions and always be in a position where we’re dealing with reality instead of these falsehoods that we are constantly being inundated with.
THANK GOD FOR MOSES!
I have to give kudos to record producer/author Moses Avalon who’s written a couple books I’ve read (and re-read), “Confessions Of A Record Producer” and “Million Dollar Mistakes.” His books are a real dose of reality and a must-read for anyone who’s looking to sustain a career in music. A very interesting observation he makes in his book “Million Dollar Mistakes” is the fact that, as a society, we know very little about what it costs to produce an album or a music DVD or to put together a concert tour for an artist. But we do know that it costs hundreds of millions of dollars to make a film like The Titanic or the Terminator movies. The film industry spends millions of dollars every year making sure you are very much aware and knowing this makes us laugh at the nominal ten dollars we are charged to go to our local theatre and see a movie. Conversely, the music industry spends nothing educating us about the cash value of making and delivering their product. And to make matters worse, think about many of the music videos that are created to promote artists’ music. They often depict artists as being quite affluent with images of fast cars, even faster women and men, lots of bling, etc. to help portray an image that appeals to the masses in hopes that it will stimulate CD sales.
A lot of musicians I've dealt with are shocked to learn what it costs a major artist to produce a full-length album and that many artists who seem to be doing very well financially are actually living below the poverty line. On average it costs about $250,000 to make a record and that money comes out of the artist’s pocket (it’s recouped through the artist’s share of royalties received from CD sales/downloads, publishing, merch, etc.). If an artist has a gold or even a platinum selling album, (gold is 50,000 units in Canada and 500,000 in the U.S. and platinum is 100,000 units in Canada and 1,000,000 in the U.S.) they can still be un-recouped with their label.
In short, if you don’t go out of your way to educate yourself about this complex business, you’ll continue to know very little. What you don’t know can hurt you. Make sure you know what you are getting into and where you are going with it. I think it’s very important to aspire to great things, but don’t disillusion yourself and set yourself up for disappointment.
WHAT HOLLYWOOD HAS TAUGHT US ABOUT THE MUSIC INDUSTRY
Here’s a little excerpt right out of Moses Avalon’s “Million Dollar Mistakes” that I thought was great. It’s just a direct comparison of what we’ve seen in the movies and on television and what the actual reality is. Please visit Moses at his web site as well and check out his blog entitled, "Moses Supposes." Enjoy!
http://www.mosesavalon.com/
http://www.mosesavalon.com/mosesblog/
HOLLYWOOD'S MUSIC BUSINESS vs THE REAL MUSIC BUSINESS
HOLLYWOOD:
Artists record their albums and sing in the same room and at the same time as the band.
REAL:
Not since 1965. Vocals are almost always recorded in separate sessions. You're lucky if the singer shows up at all for tracking the instruments.
HOLLYWOOD:
No bar, backstage area, or social situation is too informal for the signing of a binding, long-term recording contract. Lawyers need not be present for these meetings. It's all about trust.
REAL:
Contracts take months to negotiate. No respectable label would ever let an artist sign a contract without legal representation. It could void the entire deal.
HOLLYWOOD:
Record executives all have the same interior decorator who lines the back walls of their office with platinum records, shag carpet and a fully-stocked bar.
REAL:
At big labels, the office of a major label A&R executive is about 10' x 14' and has little more than a desk (covered with CDs) and a stereo. He gets a window if he's had a good year.
HOLLYWOOD:
Hit songs are usually recorded in a single take, after which the producer yells, "Cut, that's the one, baby!"
REAL:
If only it were true. It usually takes many hours and many overdubs. For most of the process the producer is not present. It's done by the engineer as per the producer's instructions. The artist is rarely there for most of the process.
HOLLYWOOD:
Albums are recorded and then released a few days later.
REAL:
They sit on the shelf for months before the marketing department decides whether or not to release them at all.
HOLLYWOOD:
Artists go from a one-bedroom flat to a mansion shortly after their first album hits the charts.
REAL:
It takes about two years before royalties are paid from a first hit. During this time, artists do not usually quit their day jobs. Some manage to negotiate a "special advance" that pays rent on their current flat.
HOLLYWOOD:
Every female pop star is an unstable bitch who verbally abuses her staff and clings to her amphetamine-pushing manager like a long lost father.
REAL:
Most successful female artists participate significantly in their business matters. They don't have time for drugs, especially if they are mothers, as many of the ones over twenty-seven are.
HOLLYWOOD:
Tour buses are pimped-out rides with bathrooms that never fail. When picking out a tour bus, extra sleeping space is allotted for groupies, who are inevitably picked up along the way.
REAL:
Most are so cramped that there is barely room for the act itself. In fact, unless it's a very successful act, the "bus" is usually a van.
HOLLYWOOD:
Every pop star comes from a working-class home where mom is a simple-minded suburban housewife and dad just sits in a chair and listens to an old television. Both can't wait for the day when their kid will give up this "music thing" and go back to dental school.
REAL:
It's amazing how many successful pop stars come from money. After their run, many do retire to a family-owned business--software development, media, entertainment, oil, feminine hygiene products--or live off their trust fund.
Monday, August 30, 2010
Tuesday, August 24, 2010
DO YOU HAVE A BAND AGREEMENT? Part 2
DO YOU HAVE A BAND AGREEMENT? Pt 2
So here's part 2 of the Internal Agreement blog. I'm basically just scratching the surface on many of these points to bring some awareness to you about what needs to be addressed and why. If you're going to act on this then I'd recommend digging deeper into it with an attorney or maybe you can ask me specific questions and I'll be glad to share everything I know. I should make a disclaimer though: I am not a lawyer by any stretch, so this is, in no way, proper legal advice. Seek out an entertainment lawyer. Lol
DIVIDING THE CONTROL FOR DECISION MAKING
Control is a different matter from songwriting splits and the way the partnership is divided up percentage-wise. The amount of control a member has over decisions can directly correlate to his or her percentage of the partnership but it doesn’t have to. Many times there’s a ‘key member’ or two within a band and it’s common for them to get two votes while a non-key member gets one vote. This can help to avoid a deadlock where there are an equal number of votes on either side of the fence. If you do split things equally among a band that has an even number of members where a deadlock is possible, make sure to assign the job of breaking the tie to a third party like a manager or an attorney. Whatever you do, don’t make it the gf/bf of one of the band members because things will get ugly. Lol
OTHER DETAILS TO CONSIDER
How many votes does it take to fire a band member? A majority vote or a unanimous vote?
How many votes does it take to hire someone like a manager, agent, or attorney?
What if someone wants to quit the band? Generally if someone’s unhappy in the band, it doesn’t make any sense to force them to stay through a contract. If you’re in the middle of a tour, however, you can’t walk away from the promoter and if you’re signed to a label you can’t leave the record company.
Things can get pretty crazy here so pay attention! If you’re signed to a label and there’s a ‘key-man’ clause in the contract and he or she wants to leave, the label has the right to just drop the band all together and carry on with the ‘key man’ as a solo artist. There will also be a clause in the contract that will state that the label gets first crack at the departing member’s solo career. So they would have to refuse the solo artist before he or she had the right to shop anywhere else. This is where things can get sticky. They may also decide that royalties earned by this solo venture will be used to replenish the band’s deficit (if the account is unrecouped). This can also work the other way; if the key man’s solo career is a bust and the remaining members of the band have kept things rolling along successfully, the label has the right to dip into the band’s earnings to replenish the solo artist’s account. Please, don’t shoot the messenger!
What if a member dies or becomes disabled? In this case, there’s usually a ‘buy-out’ and you’re treated as though you quit the band or were fired.
What happens after you’re fired or you quit? You will keep your percentage of the work that you were involved in when you were in the band (record/songwriting royalties, royalties for DVDs or television shows, etc). For future activities that you are not involved in, you get nothing.
If the band has accumulated a lot of equipment that it owns collectively then you’ll get bought out of your share of these hard assets. ‘Hard’ assets are any physical things that you can touch and feel as opposed to ‘intangibles’ (the band name, record deals, etc). Generally they’ll calculate the book value of all the hard assets and buy you out based on your percentage of the total.
THE PAYOUT
Your percentage of the total book value of hard assets is paid out to you over a period of two years. This protects the remaining members from having to come up with a huge chunk of cash immediately. If you were owed $25,000 (25% of $100,000 worth of equipment) you would receive $6,250 six months after your departure from the band, another $6,250 in twelve months and so on until the entire $25,000 is paid.
CONFLICT WAIVER
When you are ready to sit down with an attorney to go over the details of a band agreement, you should understand that if the whole band is dealing with only one lawyer, there’s a built-in conflict of interest. It means that the lawyer is representing two or more clients that are on opposite sides of the fence. So it’s unethical for the lawyer to take sides under these circumstances. He should bring this to your attention so you can determine if you’d rather choose to have every member seek independent counsel or just go ahead with one lawyer for all. Quite often bands will use one lawyer to just act as a secretary to draft up what the band has agreed upon among themselves. In this case the lawyer will get you to sign a Conflict Waiver which states that you are aware of the conflict of interest and are willing to go ahead anyway.
So here's part 2 of the Internal Agreement blog. I'm basically just scratching the surface on many of these points to bring some awareness to you about what needs to be addressed and why. If you're going to act on this then I'd recommend digging deeper into it with an attorney or maybe you can ask me specific questions and I'll be glad to share everything I know. I should make a disclaimer though: I am not a lawyer by any stretch, so this is, in no way, proper legal advice. Seek out an entertainment lawyer. Lol
DIVIDING THE CONTROL FOR DECISION MAKING
Control is a different matter from songwriting splits and the way the partnership is divided up percentage-wise. The amount of control a member has over decisions can directly correlate to his or her percentage of the partnership but it doesn’t have to. Many times there’s a ‘key member’ or two within a band and it’s common for them to get two votes while a non-key member gets one vote. This can help to avoid a deadlock where there are an equal number of votes on either side of the fence. If you do split things equally among a band that has an even number of members where a deadlock is possible, make sure to assign the job of breaking the tie to a third party like a manager or an attorney. Whatever you do, don’t make it the gf/bf of one of the band members because things will get ugly. Lol
OTHER DETAILS TO CONSIDER
How many votes does it take to fire a band member? A majority vote or a unanimous vote?
How many votes does it take to hire someone like a manager, agent, or attorney?
What if someone wants to quit the band? Generally if someone’s unhappy in the band, it doesn’t make any sense to force them to stay through a contract. If you’re in the middle of a tour, however, you can’t walk away from the promoter and if you’re signed to a label you can’t leave the record company.
Things can get pretty crazy here so pay attention! If you’re signed to a label and there’s a ‘key-man’ clause in the contract and he or she wants to leave, the label has the right to just drop the band all together and carry on with the ‘key man’ as a solo artist. There will also be a clause in the contract that will state that the label gets first crack at the departing member’s solo career. So they would have to refuse the solo artist before he or she had the right to shop anywhere else. This is where things can get sticky. They may also decide that royalties earned by this solo venture will be used to replenish the band’s deficit (if the account is unrecouped). This can also work the other way; if the key man’s solo career is a bust and the remaining members of the band have kept things rolling along successfully, the label has the right to dip into the band’s earnings to replenish the solo artist’s account. Please, don’t shoot the messenger!
What if a member dies or becomes disabled? In this case, there’s usually a ‘buy-out’ and you’re treated as though you quit the band or were fired.
What happens after you’re fired or you quit? You will keep your percentage of the work that you were involved in when you were in the band (record/songwriting royalties, royalties for DVDs or television shows, etc). For future activities that you are not involved in, you get nothing.
If the band has accumulated a lot of equipment that it owns collectively then you’ll get bought out of your share of these hard assets. ‘Hard’ assets are any physical things that you can touch and feel as opposed to ‘intangibles’ (the band name, record deals, etc). Generally they’ll calculate the book value of all the hard assets and buy you out based on your percentage of the total.
THE PAYOUT
Your percentage of the total book value of hard assets is paid out to you over a period of two years. This protects the remaining members from having to come up with a huge chunk of cash immediately. If you were owed $25,000 (25% of $100,000 worth of equipment) you would receive $6,250 six months after your departure from the band, another $6,250 in twelve months and so on until the entire $25,000 is paid.
CONFLICT WAIVER
When you are ready to sit down with an attorney to go over the details of a band agreement, you should understand that if the whole band is dealing with only one lawyer, there’s a built-in conflict of interest. It means that the lawyer is representing two or more clients that are on opposite sides of the fence. So it’s unethical for the lawyer to take sides under these circumstances. He should bring this to your attention so you can determine if you’d rather choose to have every member seek independent counsel or just go ahead with one lawyer for all. Quite often bands will use one lawyer to just act as a secretary to draft up what the band has agreed upon among themselves. In this case the lawyer will get you to sign a Conflict Waiver which states that you are aware of the conflict of interest and are willing to go ahead anyway.
Saturday, August 14, 2010
So here's the first official blog on this page. I've split this one up into two parts, so there'll be more on this next week. Please feel free to add anything or ask any questions. I hope you get something out of it. Enjoy!
DO YOU HAVE A BAND AGREEMENT? PART 1
The first thing any band is going to think about when they first get together is creating music and getting it out there via live performances, sound recordings and videos. The one thing most bands neglect to think about is the business side of things which, unfortunately, can have some serious consequences.
The first and most important issue a band should tackle is drafting up an internal agreement that outlines the finer details of this complex business relationship that has been entered into. The fact that this kind of thing so often gets ignored is perhaps a big part of why most bands are unsuccessful at the end of the day. They don’t bother dealing with these important business issues and subsequently send a strong message to themselves and others that what they’re doing musically or otherwise really isn’t that important. Don’t be like this. If you think you’ve got what it takes then start taking your music career very seriously and you’ll notice how you and everyone else around you will begin to act accordingly. It always starts with you.
YOUR BAND NAME
One of the first and most important things you have to look at regarding your agreement is your band name. Who owns it? What happens with the name if:
The band breaks up?
The singer leaves the band?
The main songwriter leaves the band?
A member who doesn’t write songs leaves the band?
Half, or more than half of the members leave?
There’s an infinite number of ways these issues can be dealt with but it’s ultimately up to the individuals involved to decide how things are going to be. In a situation where one or two members are clearly contributing more than the others, it can be common for those members to maintain ownership of the name and also to have control over important decisions that need to be made creatively and business-wise. If everyone involved is contributing a relatively equal amount of work toward the project then things can be a little more complicated. You can decide that as long as a majority of the band members are still together, they can continue using the name. If there are four members and two of them leave to start something new and the other two begin a new project as well, who can take the name? There’s an even number of members on both sides of the fence. This is where things get sticky; if there’s no written agreement on the table then now is the time to do it when everyone is getting along and thinking clearly. If there’s nothing in writing then the government will decide that it is an equal partnership and every one of you has the non-exclusive right to use the name in any of the above scenarios. This sounds pretty ridiculous doesn’t it? The only thing more ridiculous would be the legal cost involved in cleaning up that mess. Figure it out NOW!
PERCENTAGE SPLITS
Next on the chopping block is splitting up the proverbial pie (if there is a pie to be split that is). The first order of business is to understand the potential revenue streams that exist for you. Here’s a few of the obvious sources.
CD sales/digital downloads
Touring income
Merchandising
Songwriting/publishing royalties
It’s important to understand these revenue streams because how the money gets divided may differ depending on which source we’re talking about. For example, you may have uneven percentage splits for songwriting royalties depending on who contributed more to the song in question and conversely, you may have equal splits when it comes to touring based on the idea that everyone is putting their energy into bringing the rock to the kids night after night. Again, however you decide to divide things up is totally up to you. Anything goes.
Whenever this subject comes up, I always feel that unless someone in the band is doing absolutely nothing to contribute except playing their instrument, that things usually work out the best when it’s an even split. When you look at a band like KISS it’s easy to see that Paul Stanley and Gene Simmons are the ones driving that bus, but in the beginning with the original four members, they all got an equal cut of record sales, merchandising and touring (songwriting royalties are quite often subject to who wrote what but they can be split equally as well). If it didn’t go that way quite possibly one or more members may have gotten their nose out of joint and the band’s rise to success would’ve come to an abrupt halt. When we look at KISS’ career in hindsight it’s easy to see they would’ve all been BIG losers. Remember, a smaller percentage of a big pie is quite often much better than a bigger percentage of a small pie.
DO YOU HAVE A BAND AGREEMENT? PART 1
The first thing any band is going to think about when they first get together is creating music and getting it out there via live performances, sound recordings and videos. The one thing most bands neglect to think about is the business side of things which, unfortunately, can have some serious consequences.
The first and most important issue a band should tackle is drafting up an internal agreement that outlines the finer details of this complex business relationship that has been entered into. The fact that this kind of thing so often gets ignored is perhaps a big part of why most bands are unsuccessful at the end of the day. They don’t bother dealing with these important business issues and subsequently send a strong message to themselves and others that what they’re doing musically or otherwise really isn’t that important. Don’t be like this. If you think you’ve got what it takes then start taking your music career very seriously and you’ll notice how you and everyone else around you will begin to act accordingly. It always starts with you.
YOUR BAND NAME
One of the first and most important things you have to look at regarding your agreement is your band name. Who owns it? What happens with the name if:
The band breaks up?
The singer leaves the band?
The main songwriter leaves the band?
A member who doesn’t write songs leaves the band?
Half, or more than half of the members leave?
There’s an infinite number of ways these issues can be dealt with but it’s ultimately up to the individuals involved to decide how things are going to be. In a situation where one or two members are clearly contributing more than the others, it can be common for those members to maintain ownership of the name and also to have control over important decisions that need to be made creatively and business-wise. If everyone involved is contributing a relatively equal amount of work toward the project then things can be a little more complicated. You can decide that as long as a majority of the band members are still together, they can continue using the name. If there are four members and two of them leave to start something new and the other two begin a new project as well, who can take the name? There’s an even number of members on both sides of the fence. This is where things get sticky; if there’s no written agreement on the table then now is the time to do it when everyone is getting along and thinking clearly. If there’s nothing in writing then the government will decide that it is an equal partnership and every one of you has the non-exclusive right to use the name in any of the above scenarios. This sounds pretty ridiculous doesn’t it? The only thing more ridiculous would be the legal cost involved in cleaning up that mess. Figure it out NOW!
PERCENTAGE SPLITS
Next on the chopping block is splitting up the proverbial pie (if there is a pie to be split that is). The first order of business is to understand the potential revenue streams that exist for you. Here’s a few of the obvious sources.
CD sales/digital downloads
Touring income
Merchandising
Songwriting/publishing royalties
It’s important to understand these revenue streams because how the money gets divided may differ depending on which source we’re talking about. For example, you may have uneven percentage splits for songwriting royalties depending on who contributed more to the song in question and conversely, you may have equal splits when it comes to touring based on the idea that everyone is putting their energy into bringing the rock to the kids night after night. Again, however you decide to divide things up is totally up to you. Anything goes.
Whenever this subject comes up, I always feel that unless someone in the band is doing absolutely nothing to contribute except playing their instrument, that things usually work out the best when it’s an even split. When you look at a band like KISS it’s easy to see that Paul Stanley and Gene Simmons are the ones driving that bus, but in the beginning with the original four members, they all got an equal cut of record sales, merchandising and touring (songwriting royalties are quite often subject to who wrote what but they can be split equally as well). If it didn’t go that way quite possibly one or more members may have gotten their nose out of joint and the band’s rise to success would’ve come to an abrupt halt. When we look at KISS’ career in hindsight it’s easy to see they would’ve all been BIG losers. Remember, a smaller percentage of a big pie is quite often much better than a bigger percentage of a small pie.
Wednesday, August 11, 2010
Welcome To My Blog
Hey everyone! I've set up this new blog with the intention of sharing information with you on a frequent basis and to encourage feeback from anyone interested in the topics and discussions here. As the title suggests, this blog will be about all kinds of things relating to the music industry. I hope to educate musicians/artists on important topics relating to the business and recording realms and I hope to learn more myself as well.
I've blogged a bit in the past but I'm relatively new to the blogging world so I'm hoping to improve my blogging etiquette as I go along. Any advice from you would be appreciated. Also, when it comes to this whole internet thing, I'm a little out of my element so I'm not great when it comes to setting up sites and dealing with html and all other forms of web speak, so bare with me.
I will be posting my first official blog on this site within a couple days so make sure you check back soon. I'm very curious and excited to see where this goes, so thanks for taking the time to read and I sincerely hope this contributes to your musical endeavours!
Sean
I've blogged a bit in the past but I'm relatively new to the blogging world so I'm hoping to improve my blogging etiquette as I go along. Any advice from you would be appreciated. Also, when it comes to this whole internet thing, I'm a little out of my element so I'm not great when it comes to setting up sites and dealing with html and all other forms of web speak, so bare with me.
I will be posting my first official blog on this site within a couple days so make sure you check back soon. I'm very curious and excited to see where this goes, so thanks for taking the time to read and I sincerely hope this contributes to your musical endeavours!
Sean
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