Truth Of The Music Industry: Meet Mottola and Cohen

Before this next installment of this series exposing the dark underside of the music industry, there's one question that needs to be answered: why?

The answer is that it needs to be done. Because, I for one, am sick of the latest popstar of the week being shoved down my throat by greedy record company executives. Talented, legitimate artists sit out, in many cases without record deals (and if they do, they are far from fair deals) while raving egomaniacs like Simon Fuller and Tommy Mottola make people "stars by committee".

Stunts like the Spice Girls answering an add with "no singing or dancing talent required", and Tommy Mottola making a star of his annoying ex-wife Mariah Carey, and the endless stream of flavour of the month "rap" and "r&b" artists is unacceptable to me. And in this blog, I aim to point out why.

Two articles looking at some of the big sharks in the pool - Lyor Cohen and Tommy Mottola.

The New York Daily News writes about how Mottola is on his way to manufacturing another pop star. Some background, he was apparently fired - sorry, asked to leave - Sony Records, soon after the Michael Jackson press conference. After losing US$100 million or more for 2 years running (that's nearly a quarter of a billion dollars over 2 years) and 'chosing' (pushed, not walking) to leave, he promptly got hired by another record label. And people wonder why record sales are slumping, and why the majors are bleeding money.

Anyway, about his new plastic diva...

First there was Mariah, Celine, Shakira, Beyonce, Thalia and now - Vera.

Former Sony Music chief Tommy Mottola wants to craft his next female superstar. This time it's bridal fashion queen Vera Wang.

Mottola is working with his friend Wang on a home design TV show. The new couple is already pitching it to TV nets, insiders said. "He's trying to 'diva' her," a source said.

Mottola knows TV. He produced a reality show for VH1 last year called "Destination Diva." And Wang's empire has evolved far beyond bridal gowns to everything from flatware to martini shakers.

Wang is one more project for Mottola. He also is running a music label, Casablanca Records, and a talent management company - whose clients include pop stars Usher and Marc Anthony.

Read the whole story here

And, yes, Beyonce and Usher are just as manufactured as Mariah - even manufactured by the same guy.

The next takes a skeptical look at former Universal Music big-wig Lyor Cohen jumping ship to Warner Music, which was recently sold off by AOL - Time Warner. It's taken from the China Daily:

I have to say I'm pretty stupefied by the way the new Warner Music Group has announced the arrival of Universal's Lyor Cohen to their fold.

I told you some time ago that Cohen's contract at Universal would not be renewed and that he was leveraging himself to go to Warner's. In fact, Cohen himself made the announcement months ago to Newsweek's Johnnie Roberts. I mean, when Universal saw that item, did they think he was staying?

More importantly, did they want him to stay? The Warner press releases say they offered Cohen $50 million to come on over and steer their rudderless ship.

Coincidentally, $50 million is the amount of money Universal will have to pay TVT Records because of a court judgment that Cohen interfered with TVT's business. In court, Cohen lied or misrepresented the facts of the case constantly and inconsistently.

Since then, his acts like Ja Rule and Ashanti have turned out to be flashes in the pan. Nevertheless, this is who the new Warner Music Group thinks should guide them out of their fog.

At the same time that Cohen mounts the Warner machine, the new rumor is that his successor at Island/Def Jam will be Arista's recently ousted Antonio "L.A." Reid.

Are you enjoying this? For years, the Hollywood movie studios played this same game, with fired execs moving from one post to another as the movies got worse every year and the execs built bigger and bigger palaces for themselves.

Now the record business, which is in the middle of its own duck-duck-goose game, is headed in that direction. Witness the zillions made by Tommy Mottola and friends while so many actually talented artists have no label deals.

Quick, everyone switch places! Maybe it will work this time!

Here is the music business as it stands today. I saw the lead singer from Train on the "Today" show last week trying to sing some awful, unmemorable, non-melodic "song" with just a keyboard player.

The vocals were so far off-note and off-key that I thought dogs might go off their leashes in Rockefeller Center and barrel through the Art Deco doors, knocking over the security guards on their way into the glass-enclosed studio.

At the same time, record execs wonder why they're being laid off this week, and why album sales have disappeared. Hello?

Read the rest

My thoughts on the issue exactly.

Meanwhile, according to Newsweek, Antonio Reid is taking over Cohen's old job. Note in their puff - piece the term "lanched the careers". Especially in the case of Pink, "launched the career" almost certainly is a polite way of saying "the guy behind the manufacture of..."

Antonio “L.A.” Reid quickly emerged as the top candidate. Reid is one of the industry's top talent spotters, having launched the careers of OutKast, Pink and Toni Braxton, among others. But he was fired earlier their month as CEO of BMG’s Arista label, which posted losses of more than $100 million last year. Doug Morris, chairman of Universal Music Group, is said to be negotiating with Reid now for an unspecified post.

Cohen, who wasn’t immediately available for comment, is one of music’s most bankable stars outside of the recording booth. Helping execute the vision of Russell Simmons, hip-hop’s pioneering entrepreneur, he has ridden the dominance of rap music almost to the top of the industry. Together, he and Simmons established Def Jam Records, now part of Universal Music Group, as one of one of the industry’s premiere labels, launching superstar acts from the Beastie Boys, LL Cool J and Public Enemy to Jay-Z, DMX and Ludacris. And in recent years, as boss of Island Def Jam, Cohen has also compiled an enviable record in rock, signing new hit acts like Sum 41 and Saliva.

At the same time, however, his aggressiveness has landed him in a mountain of legal troubles stemming from a dispute with an independent label, TVT Records. Last year, Cohen was on the losing end of a lawsuit filed by TVT accusing him of unsavory tactics, including fraud. Although later reduced by more than half, the initial judgment was $132 million; Cohen himself was personally liable for some $54 million. An appeal is pending.

And another legal cloud hangs over Island Def Jam because of its co-ownership of The Inc. (until recently Murder Inc.), the rap label that is home to Ja Rule and Ashanti. Federal authorities are investigating the label for alleged financial ties with an imprisoned drug kingpin.

Controversy and all, Cohen remains one of the few executives with a bankable track record in an industry that has all but derailed.

http://msnbc.msn.com/id/4045638/

Bankable track record - I told you this was a puff piece! Still, it provides some background on the immense challenges facing the music industry today.

Truth Of The Music Industry: Meet Max Martin

Ever wondered why pop songs all sound the same? Probably because they were all written by the same guy... Meet Max Martin.

The millennial heir to Sweden's tradition of frothy, incessantly catchy pop, Max Martin wasn't an international star like ABBA, Roxette, or Ace of Base. But as a songwriter and producer, Martin spearheaded the late-‘90s teen pop revival by crafting a ubiquitous string of worldwide hits for Britney Spears, N Sync, and the Backstreet Boys, among many others. Martin was born Martin Sandberg on February 26, 1971, and grew up in the suburbs of Stockholm; as a teenager, he sang in several bands before forming a glam-style metal band called It's Alive with his friends. Performing under the name Martin White, he subsequently dropped out of high school to pursue music, a decision that paid off when It's Alive landed a record deal with producer Denniz Pop's Cheiron label. They recorded an album and toured Europe in the early ‘90s, but the real importance of the deal turned out to be that Martin began to indulge his secret love of pop music by collaborating on songs with Pop, who became his mentor.

In 1992, Martin was hired as a house writer/producer at Cheiron, and spent a couple of years learning the ropes; meanwhile, Denniz Pop found international success producing Ace of Base's blockbuster The Sign. Pop also renamed his protégé Max Martin, which he thought sounded “poppier" than Martin White. Their first production collaboration was the Rednex track "Wish You Were Here" in 1995, and they both worked on Ace of Base's second album The Bridge shortly thereafter, as well as with artists like 3T, Army of Lovers, and Leila K. Their big break came when Jive contacted the Cheiron team about working with a new act, the Backstreet Boys. Skeptical about the chart chances of a boy band, Martin and Pop nevertheless masterminded the group's debut album; it initially flopped in the U.S., but caught on all across Europe. In 1997, the Backstreet Boys were relaunched in their home country, this time with considerable success; Martin was involved in writing and producing the American hits "Quit Playing Games (With My Heart)" (his first big hit in the U.S.), "As Long as You Love Me," and "Everybody (Backstreet's Back)." Also in 1997, Martin co-wrote and co-produced Robyn's international dance hit "Show Me Love."

In 1998, Pop and Martin worked on the debut albums by boy bands 5ive and *NSync, including the latter's hit "I Want You Back." Unfortunately, later that summer, Pop died of cancer. leaving the Cheiron studio in temporary disarray. Martin eventually took over musical leadership and found a new primary partner in writer/producer Rami, who joined him for Britney Spears' debut album ...Baby One More Time in 1999. The title cut became Martin's first American chart-topper, and he also worked on one of the follow-up hits, "(You Drive Me) Crazy." In fact, 1999 was a banner year for Martin; he also worked with Celine Dion ("That's the Way It Is") and Bryan Adams, and helmed the Backstreet Boys' follow-up album Millennium, which was the year's best-selling album worldwide and produced hits in the Martin tunes "I Want It That Way" and "Show Me the Meaning of Being Lonely," among others. With his tunes dominating the airwaves, Martin took honors as ASCAP's Songwriter of the Year in 1999, an achievement he repeated in 2000 thanks to his work on Britney Spears' Oops...I Did It Again album, the Backstreet Boys' Black and Blue, and his co-write of Bon Jovi's "It's My Life." At the end of 2000, Martin closed down the Cheiron studio and its supplementary songwriting teams, and opened up a new facility -- still in Stockholm -- in tandem with Rami; their first major project was Spears' third album, 2001's Britney. ~ Steve Huey, All Music Guide

Original from over here

Truth Of The Music Industry: Meet Simon Fuller

Okay, so far on The Amish Blog I've looked at the indy system, and how what radio plays is not based on merit, but rather what record companies are willing to pay for a particular artist. It's time to take another poke at the cess-pool that is the modern music industry to dredge up another party responcible for the pollution of popular culture. I'm talking about Simon Fuller.

Now if you haven't heard of guys like Simon Fuller and his ilk, I'm really not that surprised. His fortune was earned by manufacturing popstars; he was the manager behind the Spice Girls, S Club 7, and he's the guy running the Idol shows in front of the camera. For the record, Simon Cowell is nothing but a puppet that appears on camera, while his namesake - Fuller - gets the real control (and paycheques).

Here's an article that appeared in a number of newspapers, including the Portsmouth Herald. Italic text is theirs, emphasis mine.

Simon Fuller: the Svengali behind ‘American Idol’

By Anthony Breznican
AP Entertainment Writer

Simon Fuller is no professional singer. He does not dance and he doesn’t play an instrument. Yet there he is - collecting a fortune at the top of the pop charts.

As creator of the "American Idol" franchise, Fuller manages every aspect of the careers of Clay Aiken, Ruben Studdard, Kelly Clarkson and all other instant "Idol" celebrities.

But Fuller earns far more than the typical 15 to 20 percent that most managers keep from their clients’ gross earnings. As the "American Idol" phenomenon launches its third season Jan. 19 on Fox, Fuller’s franchise is raising questions about exploitation and the price of fame.

Fuller says that as the primary imaginative force behind these artists, and the one with the connections to transform Clarkson from struggling Texas waitress to pop diva, he deserves a larger percentage of their earnings.

"If you think of Andrew Lloyd Webber, if he creates ‘Phantom of the Opera’ he owns it. He hires Michael Crawford to take the lead. Crawford doesn’t get a cut of ‘Phantom of the Opera,’ and no one questions that," Fuller said. "My deals are the best in the world. I create ‘Phantom of the Opera’ and then say to Michael Crawford, ‘Let’s be 50-50 partners, or 60-40 - whatever the deal is."’

Fuller, a 43-year-old British music mogul, is the longtime manager of Annie Lennox and former manager of the "Spice Girls," whose world-conquering "girl power" image he takes credit for creating. Fuller first launched the "Idol" concept in Britain, where it was known as "Pop Idol," and then transformed the franchise into a worldwide phenomenon.

In an interview last summer, he described many of his "Idol" relationships as "partnerships" in which he receives from 25 to 50 percent of all earnings. The Sunday Times of London estimated that Fuller earned about $44 million in 2002 and $60 million in 2003, second to Paul McCartney’s $67 million on last year’s list of highest-paid entertainment figures.

It’s unclear how much the "American Idol" stars have taken home for their work. But in 2002, the first "Pop Idol" winner Will Young collected an estimated $750,000, according to the Sunday Times.

Fuller’s company, 19 Entertainment, oversees not just the recording deal for "American Idol" stars, but also controls merchandising, touring, sponsorship and movie deals.

Fuller promises top "American Idol" contestants a management contract with 19 Entertainment and a prearranged recording contract: with RCA Records in the case of Clarkson and Aiken, and J Records for Studdard. Both RCA and J are Bertelsmann Music Group companies run by Clive Davis, an industry legend who engineered the creation of Whitney Houston, the Grammy-winning comeback of Santana and the breakthrough of Alicia Keys, among others.

"Most artists working on the old-fashioned model, how do you keep track of your publisher, your record company, your merchandise, your sponsorship agent, your touring agent? There could be 10 different people dealing with different areas of your life," Fuller said. "This is one-stop shopping."

But Gary Fine, a Los Angeles-based entertainment attorney, advised one client not to participate in the first "Idol" series after examining the contestant’s contract. Fine does not condemn Fuller’s deals, but said he would not recommend them for everyone.

"If I had an artist whose music was quirky and might take time to develop, then Simon’s organization is not the one I would recommend getting involved with," he said. "On the other hand, if I have a client whose primary interest is fame and fortune, then Simon’s organization is certainly worth considering."

The deal Fine saw also required "Idol" winners to participate against their international counterparts in the "World Idol" show - for $1,400.

Another section of the "American Idol" contract Fine disclosed described the aggressive image manipulation the performers must agree to, stating that the show "may reveal and/or relate information about me of a personal, private, intimate, surprising, defamatory, disparaging, embarrassing or unfavorable nature, that may be factual and/or fictional."

More independent-minded performers might balk at the way Fuller fashions a performer’s image (such as Aiken’s metamorphosis from geeky gawker to slim slickster). Fuller also tells them what to perform and where, like Kelly Clarkson and "Idol" runner-up Justin Guarini’s movie flop, "From Justin to Kelly." (That film, like 1997’s "Spice World," was written by Fuller’s brother Kim.)

And stardom is not guaranteed: Guarini’s album sold poorly, and he was subsequently dropped from RCA.

The final contracts between Fuller and his current batch of "Idol" stars have not been disclosed, and Fuller refused to discuss specific details of the arrangements. He said performers are free to hire their own lawyers to oversee the deals.

Fine isn’t sure that would make much difference. The contract he saw was non-negotiable and "gave so much power and control to Simon and his organizations that there would be little a lawyer could do to prevent certain things from happening."

Is there a way for the performers to get better deals? Maybe. They could work their way up through small clubs, make contact with talent scouts and spend years trying to get the attention of managers who have far less clout than Fuller.

Yet when a manager takes such a huge piece of a novice performer’s earnings, it’s hard for some not to view that deal with skepticism.

"It unfortunately takes two for exploitation," said Jayne Wallace, spokeswoman for the American Federation of Television and Radio Artists. "And in the U.S. music business, people are so desperate to get in they’re willing to sign everything away."

She would not comment specifically on Fuller’s practices, but said generally "most artists would sign a bad deal to get the break."

When it came to the Spice Girls, Fuller sees himself as the one holding the short end of the stick, insisting that his work made them a success.

The Spice Girls broke in 1996 after being recruited by an audition ad that read, "No singing or dancing experience necessary." Fuller was fired in late 1997 amid a power struggle with the singers. Six months later, the group fell apart.

"I’d be lying if I didn’t say there was an element of satisfaction about it," Fuller says now. He has made peace, however, with Emma "Baby Spice" Bunton and Victoria "Posh Spice" Beckham, who have rejoined with his management firm to launch their solo careers.

"With the Spice Girls, I was the partner, I was the sixth member of the group," he said. "More than that, I was the leading light in the group, but it was never reflected contractually because I was just the manager."

The "partnerships" he forges with talent now, he said, prevent him from being dumped.

Ruben Studdard told The Associated Press last summer that he had no complaints with Fuller, and described him a helpful career-shaping force who watched out for his well-being.

In an interview with Rolling Stone, however, Studdard wondered if "American Idol" had taken advantage of the contestants, citing commercials they filmed for free as part of the broadcast.

"Without the show, we wouldn’t be recording artists," he said. "But we did a lot of commercials, dawg. ... We were exploited but not exploited. It just taught us a lot about the business. ‘American Idol’ is what we like to call a crash course on the entertainment industry."

http://www.seacoastonline.com/news/01152004/it/70505.htm

With this in mind, take another look at the earlier article. "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. Anyway, it doesn't cost them any thing if it doesn't work. 15% of nothing isn't much!" Simon Fuller doesn't take the 15% that left each member of our hypothetical band with $4,031.25, while the record company took $710,000 and the manager $51,000. Simon Fuller takes anywhere from 25% - 50%

Simon Fuller: another (big) part of the joke the commercial music industry has become.

Welcome to my Blog!

Hey everyone, and welcome to my blog.

Below are three posts based on fairly good articles on the music industry, and how it opperates. On this site, I'll post stories on whatever I feel like, whenever I feel like it. Some will be personal, some will be excerpts from sites and articles I like, some will be deep, some won't. One big issue that will be addressed a lot here is the state of the music industry, though other issues - politics, news, etc., will also get touched on here.

Enjoy!

Truth Of The Music Industry: How much are your favourite artists getting paid?

Here's an interesting article about exactly how much money your favourite artists are probably getting paid by the major labels. Click the title for the original article.

the problem with music
by steve albini
excerpted from Baffler No. 5

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 it again, please. Backstroke."

And he does, of course.

I. A&R Scouts

Every major label involved in the hunt for new bands now has on staff a high-profile point man, an "A&R" rep who can present a comfortable face to any prospective band. The initials stand for "Artist and Repertoire," because historically, the A&R staff would select artists to record music that they had also selected, out of an available pool of each. This is still the case, though not openly.

These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave. Lyle Preslar, former guitarist for Minor Threat, is one of them. Terry Tolkin, former NY independent booking agent and assistant manager at Touch and Go is one of them. Al Smith, former soundman at CBGB is one of them. Mike Gitter, former editor of XXX fanzine and contributor to Rip, Kerrang and other lowbrow rags is one of them. Many of the annoying turds who used to staff college radio stations are in their ranks as well.

There are several reasons A&R scouts are always young. The explanation usually copped-to is that the scout will be "hip" to the current musical "scene." A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences.

The A&R person is the first person to make contact with the band, and as such is the first person to promise them the moon. Who better to promise them the moon than an idealistic young turk who expects to be calling the shots in a few years, and who has had no previous experience with a big record company. Hell, he's as naive as the band he's duping. When he tells them no one will interfere in their creative process, he probably even believes it.

When he sits down with the band for the first time, over a plate of angel hair pasta, he can tell them with all sincerity that when they sign with company X, they're really signing with him and he's on their side. Remember that great, gig I saw you at in '85? Didn't we have a blast.

By now all rock bands are wise enough to be suspicious of music industry scum. There is a pervasive caricature in popular culture of a portly, middle aged ex-hipster talking a mile-a-minute, using outdated jargon and calling everybody "baby." After meeting "their" A&R guy, the band will say to themselves and everyone else, "He's not like a record company guy at all! He's like one of us." And they will be right. That's one of the reasons he was hired.

These A&R guys are not allowed to write contracts. What they do is present the band with a letter of intent, or "deal memo," which loosely states some terms, and affirms that the band will sign with the label once a contract has been agreed on.

The spookiest thing about this harmless sounding little "memo," is that it is, for all legal purposes, a binding document. That is, once the band sign it, they are under obligation to conclude a deal with the label. If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength.

These letters never have any term of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes. The band cannot sign to another label or even put out its own material unless they are released from their agreement, which never happens. Make no mistake about it: once a band has signed a letter of intent, they will either eventually sign a contract that suits the label or they will be destroyed.

One of my favorite bands was held hostage for the better part of two years by a slick young "He's not like a label guy at all,' A&R rep, on the basis of such a deal memo. He had failed to come through on any of his promises (something he did with similar effect to another well-known band), and so the band wanted out. Another label expressed interest, but when the A&R man was asked to release the band, he said he would need money or points, or possibly both, before he would consider it.

The new label was afraid the price would be too dear, and they said no thanks. On the cusp of making their signature album, an excellent band, humiliated, broke up from the stress and the many months of inactivity.

II. There's This Band

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. Anyway, it doesn't cost them any thing 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 10 grand] and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about.

Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but he'll work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasn't done bad either: 50 grand for the Babes and 60 grand for the Poster Children—without having to sell a single additional record. It'll be something modest. The new label doesn't mind, so long as it's recoupable out of royalties.

Well, they get the final contract, and it's not quite what they expected. They figure it's better to be safe than sorry and they turn it over to a lawyer—one who says he's experienced in entertainment law—and he hammers out a few bugs. They're still not sure about it, but the lawyer says he's seen a lot of contracts, and theirs is pretty good. They'll be getting a great royalty: 13% [less a 10% 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 fucked they are:

These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is 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
Offline: $2,000
Online 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: $710,000

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 millon dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.

The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige.

The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.

Some of your friends are probably already this fucked.

Truth Of The Music Industry: More On Indies

Here's a story originally shown on ABC News in the US. It's not as good as the Salon story in the post below, but it's still interesting nonetheless...

Harrison's CD, recorded for a small label, got good reviews from several local critics and on the Internet; but he and his producer, Jeff Robinson, have been unable to translate that success into play over the airwaves.

"People think Matthew Harrison sends his CD to all these radio stations and they say, 'Yeah, this sounds good. I'm going to play it,' " says Harrison. "It doesn't work that way."

The way it does work, they say, is that those with big bankrolls are the ones who get most stations just to listen to their music.

"It seems like now, [for] corporate-owned radio stations, it's not about the music so much as what compensation they are getting for playing the records," says Robinson.

Industry critics call it pay for play, and they say it's happening throughout the music business.

And the industry itself is apparently responding to the criticism. A coalition representing everyone from singers to record labels and consumers is expected to release a statement Friday acknowledging the problem, and asking the Federal Communications Commission to ban compensation in exchange for the playing of certain records.

Read the "Joint Statement on Current Issues in Radio" here.

"The system is crooked," says Jerry Del Coliano, who publishes Inside Radio. "You pay for access to radio stations and it's basically legalized payola."

"Payola" was outlawed in 1960, after a number of disc jockeys were charged with taking bribes from record companies to play their songs.

"In those days, you could learn to love a record that had a $100 bill on it," says Del Coliano. "If it had a $200 bill on it, … the disc jockey says, 'So nice, I'll play it twice.' "

Since it's now illegal for radio stations to take money directly from record companies in exchange for airplay, they have found a loophole in the law by using middlemen. Record companies say they're being forced to pay independent promoters, so-called indies. The indies then pay the radio stations, buying access to get the songs heard. And it's all legal.

"You look at the radio and they got the same 30 records circulating. These 30 records are paid for, and the minute you stop hearing a record, that means that records not paid for anymore," says Chuck D, a rapper with Public Enemy. "It's a different type of payola."

Getting the Party Started

According to documents obtained by 20/20, Work Records, a now-defunct division of Sony Music, paid indies more than $400,000 in one year after Fiona Apple's song "Criminal" got nationwide airplay.

The price tag for Jamiroquai's CD? More than a quarter-million dollars in fees paid to indies for weekly retainers and in bonuses for getting airplay, according to documents.

Even for a monster hit that would seem to need no help getting played — like Pink's "Get This Party Started" — the record label still gets a hefty bill from indies, according to Hilary Rosen, president and CEO of the Recording Industry Association of America.

"There's this sort of implied fear that if you don't play the game with them, you're not going to be able to be at the table," she says. "Maybe the next time you've got a record you want the stations to consider, they won't."

Artists like Harrison and Robinson say that since they don't have a seat at the table, radio stations aren't even considering playing their CD.

"They're not even listening to it because we're not going through an independent radio promoter," says Robinson.
http://abcnews.go.com/sections/2020/2020/2020_payola_020524.html

For more info on indies, read the article below...

Truth Of The Music Industry: Pay for play

Here's an excerpt of an excellent article on the US Music Industry, originally published at Salon.Com. Be sure to read through, and check the link (and bookmark the link) at the bottom.

By Eric Boehlert

March 14, 2001 | Does radio seem bad these days? Do all the hits sound the same, all the stars seem like cookie cutouts of one another?

It's because they do, and they are.

Why? Listeners may not realize it, but radio today is largely bought by the record companies. Most rock and Top 40 stations get paid to play the songs they spin by the companies that manufacture the records.

But it's not payola -- exactly. Here's how it works.

Standing between the record companies and the radio stations is a legendary team of industry players called independent record promoters, or "indies."

The indies are the shadowy middlemen record companies will pay hundreds of millions of dollars to this year to get songs played on the radio. Indies align themselves with certain radio stations by promising the stations "promotional payments" in the six figures. Then, every time the radio station adds a Shaggy or Madonna or Janet Jackson song to its playlist, the indie gets paid by the record label.

Indies are not the guys U2 or Destiny's Child thanked on Grammys night, but everyone in the business, artists included, understands that the indies make or break careers.

"It's a big fucking mudball," complains one radio veteran.

At first glance, the indies are just the people who grease the gears in a typical mechanism connecting wholesaler with retailer. After all, Pepsi distributors, for example, pay for placement in grocery stores, right?

Except that radio isn't really retail -- that's what the record stores are. Radio is an entity unique to the music industry. It's an independent force that, much to the industry's chagrin, represents the one tried-and-true way record companies know to sell their product.

Small wonder that the industry for decades has used money in various ways to influence what radio stations play. The days are long gone when a DJ made an impulse decision about what song to spin. The music industry is a $12 billion-a-year business; today, nearly every commercial music station in the country has an indie guarding its playlist. And for that right, the indie shells out hundreds of thousands of dollars a year to individual stations -- and collects a lot more from the major record labels.

Indeed, say many industry observers, very little of what we hear on today's radio stations isn't bought, one way or another.

The indie promoter was once a tireless hustler, the lobbyist who worked the phones on behalf of record companies, cajoling station jocks and program directors, or P.D.s, to add a new song to their playlists. Sure, once in a while the indies showed their appreciation by sending some cocaine or hookers to station employees, but the colorful crew of fix-it men were basically providing a service: forging relationships with the gatekeepers in the complex world of radio, and turning that service into a deceptively simple and lucrative business. If record companies wanted access to radio, they had to pay.

In the 1990s, however, Washington moved steadily to deregulate the radio industry. Among other things, it removed most of America's decades-old restrictions on ownership. Today, the top three broadcasters control at least 60 percent of the stations in the top 100 markets in the U.S.

As that happened, indie promoters became big business.

Drugs and hookers are out; detailed invoices are in. Where indies were once scattered across the country, claiming a few dozen stations within a geographic territory, today's big firms stretch coast to coast, with hundreds of exclusive stations in every major format.

In effect, they've become an extraordinarily expensive phalanx of toll collectors who bill the record company every time a new song is added to a station's playlist.

And the indies do not come cheap.

There are 10,000 commercial radio stations in the United States; record companies rely on approximately 1,000 of the largest to create hits and sell records. Each of those 1,000 stations adds roughly three new songs to its playlist each week. The indies get paid for every one: $1,000 on average for an "add" at a Top 40 or rock station, but as high as $6,000 or $8,000 under certain circumstances.

That's a minimum $3 million worth of indie invoices sent out each week.

...

According to the FCC, there's nothing wrong with a radio station's accepting money in exchange for playing a song. The payment only becomes payola -- and illegal -- if the station fails to inform listeners about the cash changing hands.

But stations, of course, are reluctant to pepper their programming with announcements like "The previous Ricky Martin single was paid for by Sony Records." Besides that, stations want to maintain the illusion that they sift through stacks of records and pick out only the best ones for their listeners.

The secretive, and at times unseemly, indie system has been in place for decades. Rock radio pioneer Alan Freed was convicted in 1960 for accepting bribes in exchange for playing records. (What became known as the payola laws were passed as a response soon afterward.) More recently, legendary indie heavyweight Joe Isgro battled prosecutors for nearly a decade over payola-related charges before they were dismissed in 1996.

Isgro's tale of money, drugs and the mob was told in "Hit Men," Fredric Dannen's revealing 1991 book about the world of independent promoters and the extraordinary power they wielded over record companies.

Amazingly, says one radio veteran, "nothing's changed since 'Hit Men.' The cast of characters is different, but nothing's really changed."

One major-label V.P. agrees: "It's only changed color and form, but in essence it's the same. It's nothing but bullshit and operators and wasted money. But it's very intricate, and the system has been laid down for years."

Some in the increasingly sophisticated and global music business wonder if the time has finally come to break free from the costly chains of independent promotion. After all, no other entertainment industry vests so much power and pays so much money to outside sources who do so little work. Yet just-released figures indicate music sales were soft last year. Will record companies have the power, or the nerve, to walk away?

"Labels claim they're trying to cut back on indies, but everybody just laughs," says one radio veteran, who has both programmed stations and done indie promotion work. (He, like most of the people interviewed for this story, asked that his name not be used.) Adds another veteran: "Labels are pissed off and want to cut back, but they're powerless to do anything about it."

"The labels have created a monster," agrees longtime artist manager Ron Stone. Nevertheless, Stone views indies as an important insurance policy for his clients. "I never want to find out after the fact that we should've hired this indie or that indie. I want to cover all the bases.

"Because you only get 12 weeks for your record to get any traction at radio. After 12 weeks the next wave of record company singles come over the breach and if you don't have any traction you get washed away. But now it's become even more complicated and expensive because of consolidation. It's a high-stakes poker game."

Playing off record industry insecurities, indies have been winning this poker game for decades.

...

"The truth is, you could making a handsome living, and have a gigantic house in Greenville, S.C., for instance, if you have just six exclusive stations there," explains one industry veteran. (Arbitron ranks Greenville as the 61st largest radio market, with a metro population of 750,000.) "You could gross between half a million and 1 million dollars each year. That's with no staff -- just a couple of phones and a fax machine. Because somebody is going to pay you $1,000 every time one of those Greenville stations adds a song. And that $1,000 is just the average. Columbia records may be dying to get a single on, so they say, 'We'll pay you $2,500 for this add.'"

Do the math: six stations in a market like Greenville adding three songs a week, 50 weeks of the year. That represents about $900,000 worth of invoiced adds. If the indie is paying each station $75,000 a year in "promotional support," that leaves him with $450,000.

But that's just the beginning. There are additional sources of indie income, including retainers, "bill-backs" and "spin maintenance." Along with being paid on a per-add basis, some indies earn a retainer (roughly $800 a week) just to call stations on behalf of a song. Bill-backs are essentially second invoices -- to cover "promotional purposes" -- that indies send to record companies on top of the one for the add. If the add cost $2,000, the indie often sends a $1,000 bill-back invoice as well.

Meanwhile, the cost of the add covers just that: getting the song added to the playlist. If labels want to increase the spins (or number of times a song is played each week), that costs money, too. "There are spin programs you can buy," explains one record company source, such as "$4,000 to make the song top 15 at the station."

In the past, if indies wanted to increase their billings by getting stations to add more songs, they could employ "paper adds." Stations would notify labels that a song was on the playlist so the indie got paid, but in reality the single never got spun. Today, however, all key radio stations are monitored electronically by a company called Broadcast Data Service, which gives labels a detailed readout of actual airplay. Paper adds no longer pass the test.

The solution? A so-called lunar rotation.

"I've got one station that during crunch time in September and October, when every label is desperate for fourth-quarter adds, will do eight adds a week for four weeks in a row at $2,000 a pop," says one label source. That's 32 added songs -- and $64,000 in indie invoices -- for just one month. But the station's playlist could never support that many new songs. (With today's tightly controlled playlists, any new song is a risk that can cause listeners to switch to a channel with an older and more comforting hit.)

Most of these new "adds" are played only in the early-morning hours, or in the "lunar rotation." They are detected by BDS, but don't really affect the station's playlist or ratings.

For record companies, indie costs can be staggering. Just to launch a single at rock radio over several weeks can cost between $100,000 and $250,000 in indie fees. What exactly do labels get in return? "I'll be damned if I know," says artist manager Stone. "It's bizarre." (Labels can sometimes get artists to pay the indie promotion costs, but not always.)

Regardless, the No. 1 rule of radio promotion is that the indie always gets paid. Even if rock programmers discover a good song by a new band on their own, and add it to their playlists because they like it, the station's indie gets paid for it.

Even if someone at Universal Records persuades a pop station to play Nelly's new single "Ride Wit Me," the indie gets paid. Even if the song is a sure hit that needs almost no promotion, like Aerosmith's latest, "Jaded," the indie gets paid. "Either way the invoices arrive and you pay, in the interest of keeping everybody happy," says one former programmer.

The fear is that if a label tangles with an indie over billing, he could torpedo the label's next project by bad-mouthing a new single or keeping it off the air until his previous invoice is paid.

As messy as the relationship can be, the third-party arrangement between labels, indies and stations is crucial for appearance' sake. Today, indies pay stations for "access," not airplay. At least in theory.

"Everyone says indies don't force stations to add records. That's ridiculous," says one rock programmer who has worked in a Top 10 market. "Because [if there is friction] the indie will get on the phone with the station G.M. and say, 'Look, your P.D. has not been cooperative over the last few months on adds I need.' The G.M. either says to the indie, 'Our relationship is about access, not influence,' or he caves. Most G.M.s cave and have a word with the P.D.: 'Look, we have $100,000 a year riding on this relationship with our indie.' Then suddenly -- bam -- a song you know the P.D. hates shows up on the air."

"Record companies say, 'We're not doing anything illegal; we're just paying indies to promote the records," says another programmer. "And indies say we're not doing anything wrong; we're just helping market a radio station. Everybody toes the company line on this.

"But indies are like money launderers; they make sure record company money gets to radio stations, but in a different form."

Read the full story

Okay, this is my first post; a test. More coming soon!