Following on from yesterday's posting about dodgy dealings and the labels, this post from another Lefsetz newsletter mailing caught the eye:
Also anonymously:
When it comes to unabated thieves, lets not leave out Wolfgang's Vault.
They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.
My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.
Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.
Here's the mailing in full...
There is some good information in the notes and some incorrect information from the personal statements, the anger is more than justified. The movie business started in the U.S. The film studios owned the theatres and the publishing companies. The studios determined it made no sense for them to pay performance royalties from films and music they owned and played to audiences to their writers if they weren't forced to. In Europe, it was different. The societies were paying all writers and publishers for public performances of music from films and sending checks to all writers and publishers including the U.S. But the other countries got no reciprocity from the U.S. The other countries have been and remained totally pissed off. The black box, which is cloaked as somewhat of a mystery has a simple explanation. It one of many manipulations devised to balance the fucking the foreigners were getting from the U.S. Side note, the worldwide societies pay out 11 billion dolla
rs annually. Have you ever heard of "broadcast
mechanicals"? It only occurs in Europe and is another retaliatory move to balance the scale for no U.S. theatrical performances.
Deep Throat
______________________________________
Bob,
I noticed around 18 months ago that there were NO digital earnings on ANY of my royalty statements from EMI/Capitol, granted the sales had dwindled and the (3) records I am speaking of were done between '89-'96 before downloads and streaming were the norm but they did have a considerable amount of sales during their heyday. Other companies such as Warners and Sony had added digital earnings to my statements automatically. I sent emails and called the EMI/Capitol royalty department consistently during that 18 month period. I was told that the company neglected to add digital earnings to my contracts. I was finally informed in February of this year that the digital earnings had been added to my statement. This past July I finally received a statement for ONE of these records that included digital earning, but only retroactive back to 2009. There was a substantial payment amount but I am still asking "what about before 2009" and what about these other 2 LP's I have been inquiri
ng about! I no longer use an accounting firm and I'm sure that if I did that this exclusion of digital earnings would have NEVER been noticed! I would like to mention that the royalty department NEVER returns my calls or emails and it's only when I get a representative live on the line that I accomplish anything!
Artists-producers beware! Check your statements carefully! DIY Baby!
Bob....if you mention this in your letter...please withhold my name since I am still dealing.......thanks.....
______________________________________
Also anonymously:
When it comes to unabated thieves, lets not leave out Wolfgang's Vault.
They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.
My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.
Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.
______________________________________
Hi Bob,
There is no question that record companies and the greed of their corporate leaders deserve the majority of the blame for their terrible reputation and the severe downturn in their fortunes. And when someone really examines what happen with an unprejudiced eye, I'm certain they will trace the downfall of the business to the late 1960s when Wall Street began its inexorable march toward taking over the American music industry.
In the interest of balance, however, I feel compelled to provide a snapshot of the other side of the coin here. Not every record company story is tale of woe, filled with creative accounting and the exploitation of musicians and producers. Take my story for an example.
I joined the A&R staff of Epic records, then owned by the CBS Corporation, in the summer of 1976, and I worked for the company until it was sold to the Sony Corporation in the 1980s, when I took the offered parachute and went independent again. I rose to the position of Vice-President of A&R, West Coast, and every day I worked there was an adventure. I wouldn't have traded it for anything.
Mostly, it was the people: Gregg Geller, Becky Shargo (now Becky Winding), and Larry Hamby were the three I worked most closely with, but everyone at the company was great, and I remain friends with most of them. I had the privilege of interacting with some legendary record people - Bruce Lundvall, Ron Alexenburg, Steve Popovich and many others, way too numerous to mention. I also had the great fortune to produce some wonderful artists - Boston, Charlie Daniels, Michael Murphey, Angel City, and quite a few others. In addition, I participated in soundtrack projects such as "Urban Cowboy" and "Footloose."
And while I'm sure there was some financial bullshit going on, it wasn't happening to me. I was very well paid. Not only did I receive a very competitive salary, but I received full royalties on anything I produced, and I still get royalty checks to this day. My business manager, who scrupulously examines my statements, has never found a discrepancy. I also had a generous expense account and the freedom to follow my instincts and take a chance on unknown artists, some of which did not pan out very well. No matter - the company stayed with me. No doubt, the fact that I was lucky enough to have some hits was a factor in all this, but that would be true in any company environment. In addition to the work I did for CBS, the company was also generous enough to recognize that I had been a fairly active independent producer before I worked there, and they gave me permission to produce one artist outside Epic every year I was there. I used this permission to work with both Little Ri
ver Band and Quarterflash. I still get my full royalties on those projects as well.
The parachute I got when I left was unbelievably great, and when I turned 65, I received a huge check for my full pension.
I have no idea whether my story is atypical or not, but it is true, and should be considered in the final judgement.
Best,
John Boylan
______________________________________
ASCAP, with its motto that it is the protector of the writer, whereas bmi protects the broadcasters, is as guilty as anyone of defrauding writers.
Firstly, they developed and copywrote a system that allows them to track any song played digitally. Yet they still pay the writer on a "survey" of any given region of the country during a certain time period. When you ask them why not pay us per play, they say their units pay out too highly so they couldn't afford to do that. Huh? Why not just lower what each play is worth and pay everyone for exactly how often their songs are getting played.
Secondly, they are notorious for paying "matching funds" to writers, under the guise of "advances" to keep writers from bolting to BMI. Now we all know this is standard practice so why mention this? Because under their agreement with the justice department they are not allowed to give matching funds, as they are not allowed to compete as if they were a private business. So they give writers advances with a wink, saying don't worry, these are matching funds, we won't ask you for this money back.
But then, sometimes they give out too many advances and their accountants wave a flag and say we have to start recouping on writers or we'll get busted by the justice department. So they start collecting on the writers matching funds, often years after they've been given them. I'm sure those writers would have bolted to BMI if they knew that was coming down the track.
I know a number of writers who have co-written on a song, are all ASCAP members and yet they were paid different amounts on the song. I'm not referring to one of the writers being BMI and one ASCAP. Im referring to them all being ASCAP.
You can't audit them. There's no transparency.
I could go on and on. Although they do so much to help writers otherwise, their financial department is scamming the writers. They're as bad as anyone else
Name withheld
______________________________________
Bob-
I managed a band signed to Columbia Records that released its debut album in 2004. The album had a 2+ year cycle- and sold over 1.3 million copies-- a large majority of which were actual cds not downloads- and spawned the most played rock song of the year for 2005- which last time I checked was still the longest charting single in active and modern rock radio history ( 65 weeks and 42 weeks in the top 20 respectively). The album ended up having 3 #1 active rock and 3 top 10 alternative rock radio singles.
for 1.3 MILLION record sales- we received $14.500 ( I think the exact total was $14,345.00) in royalties. 1.3 million x $7.00 appx per disc to retail = $9,100,000 of income ( appx ) on the album- and we received less than $15,000.00.
we spent a LOT of money on a forensic accountant- $40,000 that we earned touring-but the label had a receipt for every single penny of the deductions the claimed they spent- even though most of them were unapproved by the band---and were not the kind of deductions that could be disputed........... monies spent on so called indie promoters in out of the way unimportant markets..... promotions we had never heard of or approved and other questionable "marketing campaigns" the label swore they actually paid for but we never saw the benefits of totaled MILLIONS of dollars.
during the accounting process we were told by someone at the label there that they thought that we- by asking them to account for where our royalties went- were "nickle and dimeing" and "were creating ill will with those who did so much to build your career that is making you a ton of money on tour and from your PRO"
I responded that we EARNED that money- just like we earned a lot more than $15,000.00 in royalties - but was given the cold shoulder by all we dealt with on this matter- and quite frankly put on the labels shit list for our next release because we had the audacity to ask why we were being screwed so royally by the label.
The next release sold appx 15% of the first release and got barely a fraction of the attention the first release did from the promotions and marketing departments. To add further insult to injury the sales department only shipped 100 cds to the bands home town for the week of its release-one of the few markets we were receiving airplay in - even though their debut had sold THOUSANDS in that market.
Less than 6 months after its release we asked for- and received- our release from the label because it was pretty obvious they were not doing anything to promote the band and quite frankly it was humiliating to have people who were HUGE fans telling us they had no idea our record has been out for months because their radio station - stations that played songs on the first album THOUSANDS OF TIMES- had yet to mention the new release or play the new singles even though all three singles from the first album were still being played.
I won't go any further into this horror story here. But every time I hear someone talk about how the major labels have unjustly earned a bad reputation for being dishonest in accounting to their acts I tell them this story..... and not one single person has continued to defend the majors after hearing it.
I will end by saying that THIS situation was one of the main reasons we no longer work together- as they thought it was me being inept instead of the system being corrupt that caused them to be so grossly underpaid.
Even though I gave some pretty big clues about who the band is out of respect to them as individuals I didn't want to mention their name - but I don't mind mentioning mine.
Thanks a lot and keep up the amazing work Bob.
Chris " Hot Rod" Long
Chris Long Mgmt
Los Angeles
______________________________________
The only label that will think about an artists everyday of every year is one the artist owns!
Thanks for 'keepin em honest'
Nona Hendryx
______________________________________
I had to join in to add this little bit
most musicians would be likely to be easy to rip off, because the truth is that most of us, if given an offer something like "you can go in the studio, make records, and be in the music business" we would have probably asked "How much is it" and "can I put some of it on my dad's credit card?" because the truth is we wanted it so badly that we didn't even think of the consequences.
I am saddened when I hear all these people who got their music and talent stolen, but the revenge is to keep going and one day get to say "THEY STOLE TOO SOON".................... like the Stones.
Peter Noone
______________________________________
if u r @ a showcase & their r other labels there & u have a manager u more than likely suck & can hardly play urr instruments ...but u will get 2 b on late nite t.v looking @ urr shoes playing urr one weak ass song...then back 2 college 2 finish urr degree & off 2 medical school or maybe u can open a subway sandwich shop....believe me what u guys r talking about has absolutely nothing 2 do w/ music.....pete anderson ....get in the van
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Warner owns a Christian record label in Nashville, Word Entertainment, that is doing 360 right. They have an in-house booking agency as well as a merch company that services their artists. It's a great model that nobody else in town has been able to replicate.
Kyle Johnson
______________________________________
Bob - my landlord is demanding a percentage of my recording career because I have a studio and take a home/office deduction. He's calling it a "360 deal."
I believe I can negotiate that he has to wear my t-shirt at least weekly when he walks his chihuahua. I'm calling it "social marketing."
I'm a little sad that it's a chihuahua, because it kind of confuses my "branding" but I guess I should have had some foresight before I
signed the contract.
Plus, I hear the latin market's on the upswing in the States.
I'll keep you updated on this legal debate from the frontier of the
music industry.
Mike Errico
______________________________________
I worked in the business for 40 years on both sides of the table (artist and label). Now retired, I teach a course in Legal Issues in the Music Business at USC Law School.
As I walk my students through a basic record deal, I come back to the the same theme: every time a record label or publisher promises to do something there is a "take-away: clause that negates the thing that is promised. For example, an artist signs a one album deal. You would think this means that the company has to allow you to record an album. Yes, but,he contract will specifically say that the record company is not obligated to record that album, instead they can terminate the deal, usually by paying little money. If the album is recorded and the artist has a "release" guarantee, the contract provides that the album does not have to be released. And so it goes. Some record companies have clauses that say that no matter how great your royalty underpayment , you can't terminate claiming this underpayment is a material breach!!
This raises the one question I would like someone to raise in court (and the one I always pose to my class): is a record contract illusory? The problem is that the only people who can afford to bring this suit are so successful, their contracts are not illusory. As for the rest, a record label can effectively tie an artist up for two years and do nothing.
As for royalties, and, remembering that I've been on both sides of the issue, I never understood why royalty provisions have to be 25 pages long---and, when companies got around to transparent royalties, they still figured out ways to screw artists. Because of cutbacks, It takes three years to do an audit and when you try to settle, record companies say "We don't pay interest" meaning that after they get you to accept less than they owed, they don't think they should pay for the use of your money all those years.
While I do believe that major labels have done good things for some artists, that consistently are dismissed by your column and reader's e-mails, the fact is that the horror stories are true most of the time.
None of this was necessary. It simply got institutionalized and, like Topsy, "just growed". When I think of all the mistakes that record companies made (a two volume tome minimum), I think of the condemned man who has to dig his own grave before they put a bullet in his head and he falls in. As an old man, with no axe to grind, that's what happened to the record business; the graves are dug and everyone is waiting for the fatal shot.
And screw the publishers as well. "Swiss-Twisting" the Beatles (and everyone else), pulling off hide the salami manoeuvres in every country in the world sometimes with the help of corrupt foreign societies that operate on a supra-governmental level, honoring themselves more than Roman emperors and modern day "cult of personality" despots and, oh by the way, laziest pricks that ever drew breath except having ample time to attend extravagant dinners, usually at the writer's expense
There's a ton of reasons why all empires eventually collapse. The music business brought this all on themselves.
Respectfully.
Lance Grode
______________________________________
Please don't print my name if you use this, Bob, but let's just cut through all this nonsense. If the artists and managers were also about the music, instead of greedy in their own right for fame and the almighty dollar, they'd simply bypass the labels and do it themselves, using all the modern tools available out there, and partnering with the new companies offering more equitable revenue splits. The artists of yesteryear didn't have that option, what with the labels' distribution and information strangleholds, but the modern artist does and is therefore just as responsible for embracing change and trying to destroy the old paradigm. The know-how to do it is out there, so ignorance and laziness are no longer excuses. No artist who's really in it for the music, not the cash, and is willing to put in his/her 10,000 hours of woodshedding need sign with a major label - just the 'artists' looking for a possible fast-track to fame and fortune, and artistry be damned. This is
where the idealism we harbor as music fans smacks up against the cold hard reality: no one is innocent! It's a vicious circle and that's why all the players have been deadlocked for a decade, each desperately hanging onto their scrap instead of working towards a solution. Luckily, technology will eventually FORCE a solution, and that'll be that.
______________________________________
Bob:
What I am consistently gathering from the so-called music industry reminds me of the state of the steel industry in the 70's. Responding to market forces -- technology, energy, supply and demand, outside competition, etc. -- they commissioned studies to see possible solutions to their plight, all the while holding concern for stock prices, as well as their own positions and power.
The most forthright solutions addressed what was known as a "Greenfields" approach: building a new plant, using the latest tech and most efficient and effective practices, directed toward a desired result, while keeping their existing factories operating and their work force fully employed. It was an expensive proposition, but, in the long term, the best solution.
With the answer staring them in the face, what was their response? Not to invest, but to view this as expense. They took an alternative path, choosing, instead, to shut down sections of their operations and putting people temporarily out of work, while they retrofitted. The result? More expensive and less efficient operations.
The Japanese, on the other hand, were not so short-sighted. They adopted and embraced the U.S. studies, became even more competitive, and the rest, as they say, is history.
The U.S. industry (and lobbyist) response? More complaints about unfair trade practices, with the same old culprits, sometimes with new faces, and fingers pointing everywhere but at the mirror.
We -- the artists and representatives (the ones that are real creative advocates), service providers, and tech innovators -- are the new Japanese. It has now become our job to build the new models and show, not just how it can be done, but how it is.
David Kahl
MyGigNet, Inc.
______________________________________
Bob,
Re: "Anonymous Lefsetz reader"
This guy is probably in his 60's, and yes he probably signed a crap royalty deal, as they were back then, and who knows where the advance money went. And let's hope he's not serious about the living in a box riff. But he provides no details. What were those advances? And how many records were sold? And what was the royalty? Did he consider that maybe the record company IS faithfully paying per the terms of the deal that HE signed and he's simply not in the black?
What irritates me is the whine that royalties earned should not be deducted from amounts owing i.e. advances paid by the record company, that it's not ok to cross collateralize. In fact It's perfectly right to CC. Why should a record company pay out on a success while writing off a failure?
As for the girl artist, it's no surprise she never made a record. There is no "other 85% of the royalties." What there is is recording costs +
mastering + packaging + manufacturing + marketing + mechanicals - all the elements required to bring a recording to market.
I run a label in Canada. I write my own deals so I know exactly what's in them. I personally look at every royalty statement that goes out and I take pride in their accuracy and transparency. I feel good when I send an artist a cheque because it means we're both winning. Depending on the leverage of the artist i.e. their ability to sell records, I can pay between $1.60 - $2.00 per album unit in royalties. Every other penny goes to the items above, and if, at the end of the day, I didn't fuck anything up, and the record sells, I can make $2.00 per unit sold to pay myself. That's where the "other 85%" goes.
Our guy in his 60's bitches that he gets reams of royalty paperwork. That means he's being accounted to! And if his output is still generating money 40 years later then chances are the material has been released in multiple countries on umpteen compilations and reissues and configurations. So maybe the royalty accounting IS complicated and DOES require reams of paperwork. And a "huge artist" gets "40 cartons"? Nice problem to have!
If you are not being accounted to per the terms of the deal that YOU signed then do something about it. And if you are being accounted to, again per the terms of the deal that YOU signed, and you are in the red and not receiving royalties then acknowledge that YOU HAVEN'T SOLD ENOUGH TO RECOUP YOUR ADVANCES!
Some labels and their managers are not angels. Some are unscrupulous. Deals used to be incredibly one-sided (they're far less so now). But I don't believe for a moment that I'm the only guy out there dealing fair and square with my artists.
Kim Cooke
Pheromone Recordings
Toronto
______________________________________
If anyone thinks the Kobalt %'s are clear as day need to re-read their agreement. Maybe it's better than umpg but they are still taking more than people think.
Nick Velo
______________________________________
All this royalty talk reminds me of when I worked for the IRS for three months right out of college ... I earned about $10K, then was let go due to being an "Intern" and not permanently hireable due to a state hiring freeze. This was in '09 ... they still refuse to send me a W2 so I can get my proper tax refund ;) That alone taught me to trust no one, and never expect a refund ... I now claim all my exemptions to take the money now.
What's clear is in a bureaucratic agency, you can't trust anyone else to make sure you get what's yours.
Jonathan Sanders
Also anonymously:
When it comes to unabated thieves, lets not leave out Wolfgang's Vault.
They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.
My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.
Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.
Here's the mailing in full...
There is some good information in the notes and some incorrect information from the personal statements, the anger is more than justified. The movie business started in the U.S. The film studios owned the theatres and the publishing companies. The studios determined it made no sense for them to pay performance royalties from films and music they owned and played to audiences to their writers if they weren't forced to. In Europe, it was different. The societies were paying all writers and publishers for public performances of music from films and sending checks to all writers and publishers including the U.S. But the other countries got no reciprocity from the U.S. The other countries have been and remained totally pissed off. The black box, which is cloaked as somewhat of a mystery has a simple explanation. It one of many manipulations devised to balance the fucking the foreigners were getting from the U.S. Side note, the worldwide societies pay out 11 billion dolla
rs annually. Have you ever heard of "broadcast
mechanicals"? It only occurs in Europe and is another retaliatory move to balance the scale for no U.S. theatrical performances.
Deep Throat
______________________________________
Bob,
I noticed around 18 months ago that there were NO digital earnings on ANY of my royalty statements from EMI/Capitol, granted the sales had dwindled and the (3) records I am speaking of were done between '89-'96 before downloads and streaming were the norm but they did have a considerable amount of sales during their heyday. Other companies such as Warners and Sony had added digital earnings to my statements automatically. I sent emails and called the EMI/Capitol royalty department consistently during that 18 month period. I was told that the company neglected to add digital earnings to my contracts. I was finally informed in February of this year that the digital earnings had been added to my statement. This past July I finally received a statement for ONE of these records that included digital earning, but only retroactive back to 2009. There was a substantial payment amount but I am still asking "what about before 2009" and what about these other 2 LP's I have been inquiri
ng about! I no longer use an accounting firm and I'm sure that if I did that this exclusion of digital earnings would have NEVER been noticed! I would like to mention that the royalty department NEVER returns my calls or emails and it's only when I get a representative live on the line that I accomplish anything!
Artists-producers beware! Check your statements carefully! DIY Baby!
Bob....if you mention this in your letter...please withhold my name since I am still dealing.......thanks.....
______________________________________
Also anonymously:
When it comes to unabated thieves, lets not leave out Wolfgang's Vault.
They bought Bill Graham's belongings after he died. Included were many concert tapes that were originally intended to be played on the radio ONCE and discarded. That's what it said on the contracts we all signed 'way back then'. Wolfgang's Vault decided they could just put them out whether you liked it or not.
My favorite part was they sent you a really lopsided contract in their favor for each show, In the fine print it said that if this contract was signed by you, they had the right to apply it to ALL the other concerts they 'owned' by you. I quickly wrote them back and told them I would NEVER sign that contract. They said okay fine and then put my concert up for sale ANYWAY and just keep ALL the royalties for themselves. It is a concert I would never have approved for release to the public. If it was bootlegged off the radio back then, it probably wouldn't have bothered me.
Anyone that buys anything from them is supporting their abuse of the law and their colossal fucking nerve.
______________________________________
Hi Bob,
There is no question that record companies and the greed of their corporate leaders deserve the majority of the blame for their terrible reputation and the severe downturn in their fortunes. And when someone really examines what happen with an unprejudiced eye, I'm certain they will trace the downfall of the business to the late 1960s when Wall Street began its inexorable march toward taking over the American music industry.
In the interest of balance, however, I feel compelled to provide a snapshot of the other side of the coin here. Not every record company story is tale of woe, filled with creative accounting and the exploitation of musicians and producers. Take my story for an example.
I joined the A&R staff of Epic records, then owned by the CBS Corporation, in the summer of 1976, and I worked for the company until it was sold to the Sony Corporation in the 1980s, when I took the offered parachute and went independent again. I rose to the position of Vice-President of A&R, West Coast, and every day I worked there was an adventure. I wouldn't have traded it for anything.
Mostly, it was the people: Gregg Geller, Becky Shargo (now Becky Winding), and Larry Hamby were the three I worked most closely with, but everyone at the company was great, and I remain friends with most of them. I had the privilege of interacting with some legendary record people - Bruce Lundvall, Ron Alexenburg, Steve Popovich and many others, way too numerous to mention. I also had the great fortune to produce some wonderful artists - Boston, Charlie Daniels, Michael Murphey, Angel City, and quite a few others. In addition, I participated in soundtrack projects such as "Urban Cowboy" and "Footloose."
And while I'm sure there was some financial bullshit going on, it wasn't happening to me. I was very well paid. Not only did I receive a very competitive salary, but I received full royalties on anything I produced, and I still get royalty checks to this day. My business manager, who scrupulously examines my statements, has never found a discrepancy. I also had a generous expense account and the freedom to follow my instincts and take a chance on unknown artists, some of which did not pan out very well. No matter - the company stayed with me. No doubt, the fact that I was lucky enough to have some hits was a factor in all this, but that would be true in any company environment. In addition to the work I did for CBS, the company was also generous enough to recognize that I had been a fairly active independent producer before I worked there, and they gave me permission to produce one artist outside Epic every year I was there. I used this permission to work with both Little Ri
ver Band and Quarterflash. I still get my full royalties on those projects as well.
The parachute I got when I left was unbelievably great, and when I turned 65, I received a huge check for my full pension.
I have no idea whether my story is atypical or not, but it is true, and should be considered in the final judgement.
Best,
John Boylan
______________________________________
ASCAP, with its motto that it is the protector of the writer, whereas bmi protects the broadcasters, is as guilty as anyone of defrauding writers.
Firstly, they developed and copywrote a system that allows them to track any song played digitally. Yet they still pay the writer on a "survey" of any given region of the country during a certain time period. When you ask them why not pay us per play, they say their units pay out too highly so they couldn't afford to do that. Huh? Why not just lower what each play is worth and pay everyone for exactly how often their songs are getting played.
Secondly, they are notorious for paying "matching funds" to writers, under the guise of "advances" to keep writers from bolting to BMI. Now we all know this is standard practice so why mention this? Because under their agreement with the justice department they are not allowed to give matching funds, as they are not allowed to compete as if they were a private business. So they give writers advances with a wink, saying don't worry, these are matching funds, we won't ask you for this money back.
But then, sometimes they give out too many advances and their accountants wave a flag and say we have to start recouping on writers or we'll get busted by the justice department. So they start collecting on the writers matching funds, often years after they've been given them. I'm sure those writers would have bolted to BMI if they knew that was coming down the track.
I know a number of writers who have co-written on a song, are all ASCAP members and yet they were paid different amounts on the song. I'm not referring to one of the writers being BMI and one ASCAP. Im referring to them all being ASCAP.
You can't audit them. There's no transparency.
I could go on and on. Although they do so much to help writers otherwise, their financial department is scamming the writers. They're as bad as anyone else
Name withheld
______________________________________
Bob-
I managed a band signed to Columbia Records that released its debut album in 2004. The album had a 2+ year cycle- and sold over 1.3 million copies-- a large majority of which were actual cds not downloads- and spawned the most played rock song of the year for 2005- which last time I checked was still the longest charting single in active and modern rock radio history ( 65 weeks and 42 weeks in the top 20 respectively). The album ended up having 3 #1 active rock and 3 top 10 alternative rock radio singles.
for 1.3 MILLION record sales- we received $14.500 ( I think the exact total was $14,345.00) in royalties. 1.3 million x $7.00 appx per disc to retail = $9,100,000 of income ( appx ) on the album- and we received less than $15,000.00.
we spent a LOT of money on a forensic accountant- $40,000 that we earned touring-but the label had a receipt for every single penny of the deductions the claimed they spent- even though most of them were unapproved by the band---and were not the kind of deductions that could be disputed........... monies spent on so called indie promoters in out of the way unimportant markets..... promotions we had never heard of or approved and other questionable "marketing campaigns" the label swore they actually paid for but we never saw the benefits of totaled MILLIONS of dollars.
during the accounting process we were told by someone at the label there that they thought that we- by asking them to account for where our royalties went- were "nickle and dimeing" and "were creating ill will with those who did so much to build your career that is making you a ton of money on tour and from your PRO"
I responded that we EARNED that money- just like we earned a lot more than $15,000.00 in royalties - but was given the cold shoulder by all we dealt with on this matter- and quite frankly put on the labels shit list for our next release because we had the audacity to ask why we were being screwed so royally by the label.
The next release sold appx 15% of the first release and got barely a fraction of the attention the first release did from the promotions and marketing departments. To add further insult to injury the sales department only shipped 100 cds to the bands home town for the week of its release-one of the few markets we were receiving airplay in - even though their debut had sold THOUSANDS in that market.
Less than 6 months after its release we asked for- and received- our release from the label because it was pretty obvious they were not doing anything to promote the band and quite frankly it was humiliating to have people who were HUGE fans telling us they had no idea our record has been out for months because their radio station - stations that played songs on the first album THOUSANDS OF TIMES- had yet to mention the new release or play the new singles even though all three singles from the first album were still being played.
I won't go any further into this horror story here. But every time I hear someone talk about how the major labels have unjustly earned a bad reputation for being dishonest in accounting to their acts I tell them this story..... and not one single person has continued to defend the majors after hearing it.
I will end by saying that THIS situation was one of the main reasons we no longer work together- as they thought it was me being inept instead of the system being corrupt that caused them to be so grossly underpaid.
Even though I gave some pretty big clues about who the band is out of respect to them as individuals I didn't want to mention their name - but I don't mind mentioning mine.
Thanks a lot and keep up the amazing work Bob.
Chris " Hot Rod" Long
Chris Long Mgmt
Los Angeles
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The only label that will think about an artists everyday of every year is one the artist owns!
Thanks for 'keepin em honest'
Nona Hendryx
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I had to join in to add this little bit
most musicians would be likely to be easy to rip off, because the truth is that most of us, if given an offer something like "you can go in the studio, make records, and be in the music business" we would have probably asked "How much is it" and "can I put some of it on my dad's credit card?" because the truth is we wanted it so badly that we didn't even think of the consequences.
I am saddened when I hear all these people who got their music and talent stolen, but the revenge is to keep going and one day get to say "THEY STOLE TOO SOON".................... like the Stones.
Peter Noone
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if u r @ a showcase & their r other labels there & u have a manager u more than likely suck & can hardly play urr instruments ...but u will get 2 b on late nite t.v looking @ urr shoes playing urr one weak ass song...then back 2 college 2 finish urr degree & off 2 medical school or maybe u can open a subway sandwich shop....believe me what u guys r talking about has absolutely nothing 2 do w/ music.....pete anderson ....get in the van
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Warner owns a Christian record label in Nashville, Word Entertainment, that is doing 360 right. They have an in-house booking agency as well as a merch company that services their artists. It's a great model that nobody else in town has been able to replicate.
Kyle Johnson
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Bob - my landlord is demanding a percentage of my recording career because I have a studio and take a home/office deduction. He's calling it a "360 deal."
I believe I can negotiate that he has to wear my t-shirt at least weekly when he walks his chihuahua. I'm calling it "social marketing."
I'm a little sad that it's a chihuahua, because it kind of confuses my "branding" but I guess I should have had some foresight before I
signed the contract.
Plus, I hear the latin market's on the upswing in the States.
I'll keep you updated on this legal debate from the frontier of the
music industry.
Mike Errico
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I worked in the business for 40 years on both sides of the table (artist and label). Now retired, I teach a course in Legal Issues in the Music Business at USC Law School.
As I walk my students through a basic record deal, I come back to the the same theme: every time a record label or publisher promises to do something there is a "take-away: clause that negates the thing that is promised. For example, an artist signs a one album deal. You would think this means that the company has to allow you to record an album. Yes, but,he contract will specifically say that the record company is not obligated to record that album, instead they can terminate the deal, usually by paying little money. If the album is recorded and the artist has a "release" guarantee, the contract provides that the album does not have to be released. And so it goes. Some record companies have clauses that say that no matter how great your royalty underpayment , you can't terminate claiming this underpayment is a material breach!!
This raises the one question I would like someone to raise in court (and the one I always pose to my class): is a record contract illusory? The problem is that the only people who can afford to bring this suit are so successful, their contracts are not illusory. As for the rest, a record label can effectively tie an artist up for two years and do nothing.
As for royalties, and, remembering that I've been on both sides of the issue, I never understood why royalty provisions have to be 25 pages long---and, when companies got around to transparent royalties, they still figured out ways to screw artists. Because of cutbacks, It takes three years to do an audit and when you try to settle, record companies say "We don't pay interest" meaning that after they get you to accept less than they owed, they don't think they should pay for the use of your money all those years.
While I do believe that major labels have done good things for some artists, that consistently are dismissed by your column and reader's e-mails, the fact is that the horror stories are true most of the time.
None of this was necessary. It simply got institutionalized and, like Topsy, "just growed". When I think of all the mistakes that record companies made (a two volume tome minimum), I think of the condemned man who has to dig his own grave before they put a bullet in his head and he falls in. As an old man, with no axe to grind, that's what happened to the record business; the graves are dug and everyone is waiting for the fatal shot.
And screw the publishers as well. "Swiss-Twisting" the Beatles (and everyone else), pulling off hide the salami manoeuvres in every country in the world sometimes with the help of corrupt foreign societies that operate on a supra-governmental level, honoring themselves more than Roman emperors and modern day "cult of personality" despots and, oh by the way, laziest pricks that ever drew breath except having ample time to attend extravagant dinners, usually at the writer's expense
There's a ton of reasons why all empires eventually collapse. The music business brought this all on themselves.
Respectfully.
Lance Grode
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Please don't print my name if you use this, Bob, but let's just cut through all this nonsense. If the artists and managers were also about the music, instead of greedy in their own right for fame and the almighty dollar, they'd simply bypass the labels and do it themselves, using all the modern tools available out there, and partnering with the new companies offering more equitable revenue splits. The artists of yesteryear didn't have that option, what with the labels' distribution and information strangleholds, but the modern artist does and is therefore just as responsible for embracing change and trying to destroy the old paradigm. The know-how to do it is out there, so ignorance and laziness are no longer excuses. No artist who's really in it for the music, not the cash, and is willing to put in his/her 10,000 hours of woodshedding need sign with a major label - just the 'artists' looking for a possible fast-track to fame and fortune, and artistry be damned. This is
where the idealism we harbor as music fans smacks up against the cold hard reality: no one is innocent! It's a vicious circle and that's why all the players have been deadlocked for a decade, each desperately hanging onto their scrap instead of working towards a solution. Luckily, technology will eventually FORCE a solution, and that'll be that.
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Bob:
What I am consistently gathering from the so-called music industry reminds me of the state of the steel industry in the 70's. Responding to market forces -- technology, energy, supply and demand, outside competition, etc. -- they commissioned studies to see possible solutions to their plight, all the while holding concern for stock prices, as well as their own positions and power.
The most forthright solutions addressed what was known as a "Greenfields" approach: building a new plant, using the latest tech and most efficient and effective practices, directed toward a desired result, while keeping their existing factories operating and their work force fully employed. It was an expensive proposition, but, in the long term, the best solution.
With the answer staring them in the face, what was their response? Not to invest, but to view this as expense. They took an alternative path, choosing, instead, to shut down sections of their operations and putting people temporarily out of work, while they retrofitted. The result? More expensive and less efficient operations.
The Japanese, on the other hand, were not so short-sighted. They adopted and embraced the U.S. studies, became even more competitive, and the rest, as they say, is history.
The U.S. industry (and lobbyist) response? More complaints about unfair trade practices, with the same old culprits, sometimes with new faces, and fingers pointing everywhere but at the mirror.
We -- the artists and representatives (the ones that are real creative advocates), service providers, and tech innovators -- are the new Japanese. It has now become our job to build the new models and show, not just how it can be done, but how it is.
David Kahl
MyGigNet, Inc.
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Bob,
Re: "Anonymous Lefsetz reader"
This guy is probably in his 60's, and yes he probably signed a crap royalty deal, as they were back then, and who knows where the advance money went. And let's hope he's not serious about the living in a box riff. But he provides no details. What were those advances? And how many records were sold? And what was the royalty? Did he consider that maybe the record company IS faithfully paying per the terms of the deal that HE signed and he's simply not in the black?
What irritates me is the whine that royalties earned should not be deducted from amounts owing i.e. advances paid by the record company, that it's not ok to cross collateralize. In fact It's perfectly right to CC. Why should a record company pay out on a success while writing off a failure?
As for the girl artist, it's no surprise she never made a record. There is no "other 85% of the royalties." What there is is recording costs +
mastering + packaging + manufacturing + marketing + mechanicals - all the elements required to bring a recording to market.
I run a label in Canada. I write my own deals so I know exactly what's in them. I personally look at every royalty statement that goes out and I take pride in their accuracy and transparency. I feel good when I send an artist a cheque because it means we're both winning. Depending on the leverage of the artist i.e. their ability to sell records, I can pay between $1.60 - $2.00 per album unit in royalties. Every other penny goes to the items above, and if, at the end of the day, I didn't fuck anything up, and the record sells, I can make $2.00 per unit sold to pay myself. That's where the "other 85%" goes.
Our guy in his 60's bitches that he gets reams of royalty paperwork. That means he's being accounted to! And if his output is still generating money 40 years later then chances are the material has been released in multiple countries on umpteen compilations and reissues and configurations. So maybe the royalty accounting IS complicated and DOES require reams of paperwork. And a "huge artist" gets "40 cartons"? Nice problem to have!
If you are not being accounted to per the terms of the deal that YOU signed then do something about it. And if you are being accounted to, again per the terms of the deal that YOU signed, and you are in the red and not receiving royalties then acknowledge that YOU HAVEN'T SOLD ENOUGH TO RECOUP YOUR ADVANCES!
Some labels and their managers are not angels. Some are unscrupulous. Deals used to be incredibly one-sided (they're far less so now). But I don't believe for a moment that I'm the only guy out there dealing fair and square with my artists.
Kim Cooke
Pheromone Recordings
Toronto
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If anyone thinks the Kobalt %'s are clear as day need to re-read their agreement. Maybe it's better than umpg but they are still taking more than people think.
Nick Velo
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All this royalty talk reminds me of when I worked for the IRS for three months right out of college ... I earned about $10K, then was let go due to being an "Intern" and not permanently hireable due to a state hiring freeze. This was in '09 ... they still refuse to send me a W2 so I can get my proper tax refund ;) That alone taught me to trust no one, and never expect a refund ... I now claim all my exemptions to take the money now.
What's clear is in a bureaucratic agency, you can't trust anyone else to make sure you get what's yours.
Jonathan Sanders
