Artists Screw Major Labels Too

It goes both ways.

There's a reason many major labels need so much control and resources. Sometimes it's the artists who totally take advantage of the deal.

As Lefsetz puts it:

That’s what you’ve got to know about artists. They’re desperate. They’ve only got one chance, one career, if they screw it up, they’re toast. Just ask Billy Squier… 

Recently, Pitchfork darlings The Death Grips recently were dropped from Epic Records after releasing their new album NO LOVE DEEP WEB for free download online, without any consent from Epic. The Death Grips even went so far as to post the legal takedown notices sent from Epic on Facebook, along with a string of vulgar taunts.

What do you think the chances are of another label offering to help pay for their next release? Considering how well-connected most labels are within the industry, it's also quite possible that burning this bridge will close quite a few doors with venues, promoters and managers as well.

"Sticking it to The Man" like The Death Grips did only increases the necessity of labels acting like "The Man".

Remember, labels are venture capitalists. The more "risky" their investments in bands, the more money they have to charge and restrict every band.

Major Label Math

Recently, rapper Chuck D sued his label, Universal Music Group, for unpaid royalties. According to the federal documents filed by his lawyer, for each 99 cent download on iTunes, Chuck gets 8 cents.

For reference, if he were to distribute himself through TuneCore he'd get 70 cents. That'd be like giving himself a raise 8 times his current salary.

Now is the golden age of indie.

Two Kids Spend $100,000, Disappointed They're Not Famous

Over at Time's "Entrepreneuerial Insights" section, the brothers that form the band Two Lights write an op-ed about how their music career has cost them $100,00 so far and it's really hard, man.

Quoth the band,

"What meets me backstage is nothing like what I pictured. No fountains of champagne, no elegant lounges. It's just as dingy as the venue itself, with a printed sign taped to the star's dressing room door. The band is hanging out on a couch that someone obviously found on the street, and there are some catered snacks that look like they could have come from the NYU dining hall I try to avoid.

It occurs to me that if any part of me is doing this for the good life, I should let that go."

They then go on to elaborate on their expenses, ending with:

In short, the School of Rock is expensive. Then again, class can be a lot of fun, and some of the homework is pretty cool. And of course, if we do graduate — if we make it in the music business — we'll soon be earning a lot more money than even doctors and lawyers. Or so we tell ourselves...

Surprise! It's almost as if we make music for the love of it, shocking!

Lefsetz does a much better job of dissecting the article than I would.

1. If you think backstage was lavish back in the pre-Internet heyday, you were never there. Maybe in New York and L.A., but rarely there either. Just a ton of cold cuts, potato chips and beer on ice. As for who was there? A ton of hangers-on, who believed if they could just be close to the icons, they’d be cool.

2. Training. Irrelevant of whether you need music and voice lessons, complaining about the price is like me bitching how much it cost to go to college and law school. At today’s price, my college is $200k for four years. Add three years of law school on top of that and this guy is bitching about fifteen years of piano and guitar lessons for 30k? (And oh yeah, I had those too!)

3. Rehearsal. We all need an office. And if you’ve got no money, make it in your home. And if that’s too noisy, move where it’s cheap and you’ve got some space, like back to Maine. You don’t have to live in the metropolis anymore to make it. The Internet is everywhere.

3. Gear. As everyone online is saying, you spent $500 to move a piano? How’s the gas mileage on that Lamborghini? Either get an electronic keyboard or buy something used or rent. Don’t put the lifestyle in front of the success.

4. E-mail blasts. You wasted a grand. I ignore that stuff, and so does everybody else. We get hipped to quality and success by our network, we hate self-promoters/hypesters.
I could go on and on but you not only get the point, you know the story as well or better than I do.

It’s a long way to the top if you wanna rock and roll.

And you don’t make it by complaining, you make it by knocking them dead. And you can do that on a Japanese guitar as well as a Les Paul. Talent is much more important than equipment. These guys are just being ripped off by an old system which is trying not to die. They’re being bitten by hucksters the same way you get ripped off on the street by the guys playing three card monte.

Laughable.

P.S. If you’re so damn great, why do you have only 98 Twitter followers?

Lessons From Louis CK's MIllion-Dollar DIY Experiment

For those of you who missed it, on December 10th Louis CK released a self-produced, self-financed comedy special for a $5 download on his own website. No restrictions, other than asking you "please don't pirate this."

He made a million dollars in ten days, no middlemen required.

Louis C.K. said he was shocked as he watched the orders come in -- and then began to feel guilty about the amount he'd netted.

"I've never had a million dollars all at once. I grew up pretty poor and I was like, this is not even my money," he said. "This is just a five-dollar impulse that 220,000 people had, and now I have it. And I felt uncomfortable about having that much money."

So Louis C.K. set aside $250,000 to cover the cost of the expenses of producing the special, then doled out another $250,000 in bonuses for his staffers.

He then donated $280,000 to five charities: The Fistula Foundation, The Pablove Foundation, charity: water, Kiva and Green Chimneys.

"I was going to [donate] $100,000, but it's like blackjack -- I just kept dishing it out," he told Fallon.

That leaves $220,000 left over.

"Some of that will pay my rent and will care for my childen [sic]. The rest I will do terrible, horrible things with and none of that is any of your business," Louis C.K. wrote in a statement posted on his website.

He's not the first artist to make a killing without a label, this just serves as more proof that you can make it on your own. Radiohead's In Rainbows made the band more money than they've ever made for a record even though it was a pay-what-you-want record.

1 Direct-to-fan sales mean cheaper products AND more money going to the artists.

For a large company, $1,000,000 is break-even. For a DIY artist, it's a smash hit. Rembember $18 CDs back in the 90s? Each CD you bought from a third party only returned cents to the band.

I don't know about you, but I'd rather keep my first million.

2) Fans will pay for great art from the artists they love.What with all the crap the MPAA and RIAA are throwing about to justify the Protect IP Act and Stop Online Piracy Act, you'd think people will only pay for art when they're forced to.

Nope.

As the video game distribution platform Steam has shown, making legitmate purchase a better experience for consumers opens their wallets.

Piracy is a service problem.

Louis CK allowed you to download and watch his video using any platform you wanted.

He didn't even bother copy-protecting the video.

He didn't have to.

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"I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say 'Fuck you' to this decaying business model." - Thom Yorke

Major Labels Don't Care About Their Artists Or You

Despite what their emotional ads say, the RIAA's attempts to police the internet are not about protecting artists' work; they want only to create a legal structure where they alone benefit. This is about an old business model resisting change.

Remember, record labels are venture capitalists, not patrons.

Pro-Piracy website TorrentFreak describes UMG's campaign to shut down the website MegaUpload:

MegaUpload is currently being portrayed by the MPAA and RIAA as one of the world’s leading rogue sites. But top music stars including P Diddy, Will.i.am, Alicia Keys, Snoop Dogg and Kanye West disagree and are giving the site their full support in a brand new song. 

It's almost as if the artists and labels have different interests, gasp!

Here's the video in question:

Block This from TorrentFreak on Vimeo.

UMG forced YouTube to take down the video. No surprises there.

But wait, there's more!

The video is legally owned by MegaUpload as part of a marketing campaign. 

Wait, so Universal can shut down videos simply because it doesn't like the message? I thought copyright-infringement laws were put into place to help me as an artists?

Would it ruffle your feathers if a major label tried stealing royalties from an independent artist? Does it surprise you that the same people who wrote the SOPA act are entertainment lobbyists?  Are you shocked that the head of the MPAA used the great firewall of China as a shining example for a way to help artists?  (Ai Weiwei would disagree.)

It was never about protecting artists. It's about labels defending their competitive advantage through any means necessary, legal and otherwise.

When an argument rests heavily on an emotional appeal, be very certain you understand who actually benefits from the agreement.

UPDATE:Megaupload sued UMG. UMG reveals that it has an agreement with YouTube that it can issue takedown notices for ANY video without any proof of ownership.

The video is back on YouTube.

How to Sell Out Properly: Update

The Economist just put out an article describing the new function of A&R staff at major labels, and covers a few familiar ideas along with some new ones.

With less returns to album sales, labels want to reduce the risk of their investments:

One is by outsourcing the discovery and promotion of artists to television. Sony Music was quick to realise that singing competitions such as “American Idol” and scripted shows such as “Glee” were a uniquely powerful means of touting artists, especially in America where most radio is local. As The Economist went to press, Scotty McCreery, an “American Idol” winner, was perched atop Billboard’s album chart. Earlier this year Universal Music signed a deal with “The Voice”, a new competition show.

An even better way of reducing risk is to bet on acts and albums that have already hit the jackpot. Mr Joseph describes himself as “fairly obsessed” with what is known as catalogue A&R—repackaging old albums. Universal has done splendidly with new editions of the Rolling Stones’ “Exile on Main Street” and Nirvana’s “Nevermind”. Next month it will release anniversary editions of The Who’s “Quadrophenia” and U2’s “Achtung Baby”. The 30-, 40- and 50-somethings who buy such records have more money than teenagers, and are less likely to pirate music.

TV compeitions are playing the lottery and catalog A&R is recycling old major label material. Both of these methods are about major labels trying to sustain the old business model as long as they can.

"Getting signed" isn't as lucrative as is used to be, either. Average first-album advances are stagnant, with increasing demands on rights.

Those longed-for record contracts, when they finally appear, are seldom lavish. Robert Horsfall, an artist manager at Sound Advice, says the normal range for a first-album advance in Britain has been stuck at £75,000-150,000 ($119,000-237,000) for many years. And record companies increasingly demand a slice of live-music and merchandise revenues. Bidding wars for talent have become rare, partly because there are fewer record companies. There may be fewer still when EMI is sold, as is expected soon. Small wonder that a few artists, having reached the point where they could get a record deal, decide to go without.

Is there any doubt that a huge part of being a successful band is being a solid small business?