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Face the Music Industry

The musician strums her final chord of the evening. After the applause dies down, she packs her equipment. That's when he approaches. Moments after the introduction the praise starts flying. Behind his back he anxiously fingers a contract. The musician nods in appreciation. The man looks a lot like her, dresses like her, and seems about her age. Eventually they sit and the man, an A&R (Artists and Repertoire) representative, buys her a drink.

He mentions record contracts, touring, and a surefire marketing campaign. Then he drops something on the table: the letter of intent. The musician doesn't understand all of the language in the contract, but she lifts the pen from the table. He tells her he knows what musicians hear about the industry and promises he won't allow her to become a victim of the corporate culture that has ruined mainstream music. She signs, unaware that she has just sacrificed her primary freedom: to sign a record deal with any other company. She now must sign with this company or pay thousands of dollars to be released from the contract.

It's an all-too-common scenario, and not surprisingly so. Most musicians don't want to bother with learning the ins and outs of the business side of the industry. After all, how much did Bob Dylan care about contracts, percentage points, and record sales? His lack of knowledge didn't seem to affect the outcome of his career. But remember that in Dylan's heyday contracts maxed out at about three pages. They now push past 100, featuring carefully crafted legalese. Today's musicians must be savvier to survive. Back Stage West has consulted with music industry experts to find out exactly when an artist should sign, what to sign, and how to get to the point of making that lucky decision.

Live or Memorex?

Many musicians struggle, not with what to sign (they should sign nothing without a competent entertainment lawyer present) but with how to gain the attention of the music industry. At a recent Talent Managers Association panel titled "Music Management and Promotion: Building the Career of a Recording Artist," industry attorneys, publicists, agents, managers, and record company executives argued the best strategies.

"The record companies I deal with —and I deal with them all—are looking for an act that's going to be a hit, whatever a definition of a hit is," said Jay Cooper, a renowned entertainment attorney who specializes in intellectual property issues. "Record companies by and large don't lead, they follow. They follow the style of an artist who is a hit. Somebody's taken a chance on somebody, and they become a star, and everybody else wants somebody else just like that." Cooper recounted how Madonna's unexpected success in the early 1980s prompted a number of record company executives to scratch their heads and say, "We need a slut." This kind of thinking has undoubtedly resulted in the barrage of carbon-copy boy bands haunting the airwaves since 1997.

But, like most trends, even the boy bands will eventually fade, prompting the industry to once again wonder what the next big thing will be. To ensure that it's you, first determine your genre. While most music biz experts strongly recommend performing live and building a fan base to draw attention, others recommend avoiding it if it's not one of your strong suits. John Loken, general manager of Ultimatum Music, a relatively small label, argued: "It depends on the type of act you're talking about. If you're talking about pop music, a live act's not going to be as important. How many people do you think have actually seen Britney Spears perform live?" Loken said pop acts gain popularity through carefully choreographed videos, mastered singles, and publicity. Rock bands rely more on their live performances.

Keith Sarkisian, the music vice president and talent agent at William Morris, said he prefers representing acts like Tool and Stone Temple Pilots who can sell concert tickets, not just albums. He recommends consistently playing the Mint, the Gig, 14 Below, the Barfly, or other popular industry hangouts around town. But artists should be careful not to play industry venues without a reasonable-size audience. "I've been to a lot of showcases for talent, and what they've done is try to get the A&R people there, but they forgot to bring in a crowd," said Jim Moore, a prominent entertainment publicist who heads his own public relations firm. "I've been in a lot of rooms where it's a great little band and I'm the only guy standing there." And without a following, a record deal can actually be a curse. After your first album fails, you become damaged goods. The record company will withdraw its financial support, refusing to sink further money into your band. So increase your odds of succeeding: create a fan base.

With labels frequently tracking the popularity of bands through their research departments, many know exactly how many fans a band draws in a local market. When a band sells 10,000 CDs based solely on the quality of its live performance, record companies feel compelled to invest in that band. "If it'll work for 30,000 people in Dallas, it'll work for 3 million people across the country," said Loken. But many artists don't have the patience to build a following. Without that foundation many shoot straight to the top, only to become one-hit wonders. So there's a lot to be said for developing your chops and comfort level onstage before you go for the record deal.

Talking Shop

Whether you're a performer or a great live act, at some point you'll probably need to establish some connections to get published. "I acknowledge that it's an extremely difficult problem," admitted Cooper, who used to be a successful studio musician. He recommends networking with other musicians around town and eventually meeting their managers and producers. You also should attend songwriting showcases staged by BMI and other distributors. Cooper said showcases are designed to help musicians make industry contacts.

Guy Blake, vice president of legal and business affairs for Warner/Chappell Music, said it's easier to tell musicians what not to do: Don't send unsolicited cassettes and CDs to major labels. "Don't bother," he said. "They're going to be returned to you." Blake instead recommends building a team around yourself, including a good manager, a reputable attorney, and a talented agent if you're a performer. If you surround yourself with smart businesspeople who have contacts at publishing companies, you're already a step above everyone else. "You need good representation to get in the door. You're not going to do it on your own. I'm cynical in that sense," Blake said.

Some executives, like Blake, recommend sending cassettes and CDs to attorneys—if you must send them at all. Although Cooper strongly disagrees with this tactic ("We're not supposed to be musically inclined; that's not what we're supposed to be about," he claimed), on rare occasions the lawyers do find tracks they enjoy and share them with their record-industry contacts. But generally lawyers who "shop" clients to their industry contacts burn bridges. Seasoned attorneys like Cooper refuse to shop, because they don't want to lose the contacts they've developed over the years by flooding them with tapes. "Nobody likes to say no, so instead of picking up the phone and saying, 'We don't like this tape,' they just don't take your call," said Cooper. An attorney who shops generally doesn't have anything to lose. After attorneys establish themselves, they usually stop shopping artists.

Up to the Majors… or Not

Let's say you've finally enticed record companies with your flagrant and obvious talent. In one corner you have the major label, in the other you have the independent. Although you've listened to that Ani DiFranco track about not selling out a thousand times, the label is promising fame and fortune and in all likelihood will have an easier time delivering than its independent counterpart. But the independent label promotes only six artists, while the major has anywhere from 40 to 200. Suddenly you're facing the most difficult decision of your life: majors or indies?

"Majors suck," said Loken. "The simple fact is, if you're not performing quarter to quarter, guess what? The entire staff's going to change. The caretakers you had at the company, the people who were your supporters, won't be there and you will be orphaned. You'll have a very hard time getting through the voicemail."

Loken argued that, while you must proceed with caution because some independent labels don't have the consistency or the financial backing of a major, a smaller label will probably spend more time focusing on publicity, touring, and the street marketing of artists. Independent labels, unlike majors, usually won't abandon ship if you don't explode onto the charts in two weeks. But if you decide to go the indie route, check the financial history of the company. Take note of who has signed with the label and succeeded and who has left the label dissatisfied. Also be wary of whether the indie will be swallowed by a major in the next few months.

Courtney Love and her band Hole decided to sign with a successful independent label, Geffen Records, in the early 1990s. Shortly thereafter Geffen was sold to MCA, which was sold to another company, until eventually Hole was working under Vivendi Universal Music Group's Interscope label, which, Love said, her band previously turned down for a deal. Cooper said that means Love is now technically signed under a waste management company in France. Love vowed to take on the record industry under the 1945 De Havilland Law, a state statute named after actress Olivia de Havilland, who challenged long-term movie studio contracts and won. Though the law specifically excluded musicians, Love planned to free musicians of long-term contracts and free herself of the current breach-of-contract lawsuit filed against her and band mate Eric Erlandson. In early June a Los Angeles judge threw out 11 of the rocker's 15 claims but left her to challenge record companies' abilities to sell artists' contracts without their consent.

With all of these legalities in mind, having a lot of anxiety about this decision only makes sense. Cooper advises picking your record company and your entire creative team the same way you select your doctor: Follow your instincts. "You make a judgment call, and you hope you're right," he said. "There is no magic wand to this thing. You don't know." Cooper added that, aside from enthusiasm and passion as mandatory prerequisites, the record company also should be willing "to kill" for an artist.

Contract Conundrums

If indeed you believe you've finally found a company that will "kill" for you and you sit down at the negotiating table and are offered a lump sum surpassing all of your wildest expectations to record an album and tour, you still must use caution. The record companies know that artists have very little knowledge about recording and touring costs. For that reason it's essential to have a top-notch entertainment lawyer spell it out for you.

Cooper said artists should understand how records are sold, how they're manufactured, how they're distributed, what it costs to manufacture and record an album, what producers cost, what engineers cost, what background musicians cost, and much more. "You have to understand all of these things because all of these have some effect on what's in the contract," said Cooper. In addition artists should personally know the head of the A&R department, the president of the company, and the head of marketing and sales. Only then should they discuss advances, royalties, and creative controls.

To protect themselves, artists can demand contractually obligated radio support, tour support, and a prescribed number of music videos to be produced for a specific amount of money. Artists can also insert a "key-man" clause, which in essence means if you're signed by the president of the label and he is fired or leaves the company, you're allowed to terminate your contract. These sorts of protections become especially essential with the major labels, where management frequently shifts and the person who promised you the world often leaves or is fired after a year.

But Sarkisian warned that even contractual protections offer no guarantees. "I've heard the guaranteed $50,000 tour-support speech a lot. When push comes to shove and nothing's happening, try to get $50,000 for tour support," he said. "It's really difficult." After dealing with this scenario repeatedly, managers now attempt to receive money for tour support before the record has been released, in order to protect the band.

On the other side of the negotiating table is the publishing company. Artists should never sell their publishing to their record company. Their record company and publishing company should function as a system of checks and balances.

What's the difference between a record and a publishing company, you ask? As noted in The 2000 Songwriter's Market, music publishers find and record songs. As musician advocates they function as song promoters, administrators, networking resources. They provide knowledge about the industry and access to personal contacts. In general, music publishers attempt to derive income from a song by recording tracks and licensing them for television and film. Publishers also handle copyrighting songs, collecting royalties for the songwriter, producing new demos of submitted songs, and administering and arranging foreign rights. Large publishing companies, like Warner/Chappell, handle these responsibilities through various departments: creative, copyright, licensing, legal affairs, royalty, accounting, and foreign. The creative department finds talented new songwriters and signs them. Frequently publishers work with songwriters, not performers. After recording the demo, they sometimes shop it around to well-known artists to find a buyer.

Record companies, on the other hand, record and release records, CDs, and cassettes. When you hear about an artist "getting signed," it's usually to a recording contract with a record company. The company often determines which songs should go on an artist's album and which songs should be released onto the airwaves. Record companies also provide recording facilities, producers, and accompanying musicians. The record company is also responsible for overseeing the manufacture, distribution, and promotion of new releases. The top five major labels or distribution companies currently are BMG, EMI, Sony, Warner/ Elektra/ Atlantic, and Universal.

Beyond the need to keep your record and publishing companies separate, whether to sell your publishing at all has become a hotly debated topic in the industry. Blake recommends selling the publishing if an artist believes the publisher loves his or her music. "The bidding wars have gotten to such a point today that publishers to a large extent, the majors, are paying stupid money for publishing," he said. "Just flat out stupid money that could never possibly be recouped."

Cooper, however, strongly disagrees. To Blake's chagrin, he called major record companies and publishers "banks" that own millions of copyrights and care little about nurturing an artist's career. "I believe in owning your publishing permanently," said Cooper. "As one songwriter client of mine once said, 'These are my children. Why should I sell them and give them away?'" Keeping your publishing results in long-term dividends, said Cooper. Artists who keep their publishing can earn from 12 to 20 times the net publisher's share if they themselves sell their catalogues for a multiple of earnings—a process that makes the multi-conglomerate music companies multibillionaires.

Promoting Yourself

Even before the record deal, artists should consider self-promotion. Moore argued that ticket sales and record sales boil down to basic marketing. Without a publicist, artists have a difficult time getting noticed. A talented publicist will manipulate the media's attention. For example Moore represented Garth Brooks at the beginning of his career. After learning that Brooks made a music video that portrayed images of domestic violence, he and his staff called battered women's shelters across the country informing them of the clip. Then he called his contacts at country music television stations, including the Nashville Network, and asked them to ban the video. They agreed. Moore then called the media protesting the censorship of the video. He created such an uproar surrounding the video that Gloria Steinem and Sen. Joseph R. Biden appeared on Nightline speaking about the taboos of domestic violence. Nightline then aired the "controversial" video. After that, everyone knew Garth Brooks' name.

On the flipside, Moore also represented N.W.A. One member of the rap group, Eazy-E, received an invitation addressed to his real name, Eric Wright, to attend a White House event for $15,000. The record company submitted the money. Moore then picked up the phone and called 60 Minutes, announcing that N.W.A. was going to the White House. "N.W.A. was not getting any record airplay, but we made them the No. 1 album in the country strictly through publicity and marketing," said Moore.

Contracts, publicists, majors vs. indies. It's a lot to think about if you're still just trying to get a good gig. Before you pawn your guitar in discouragement, remember that knowledge of the intricacies of the music business can only protect you and your art. True, you have a long and challenging journey ahead of you, but, unlike most artists, you now know to carefully research each decision because one wrong turn can ruin your career, or at least cause you a major financial headache. Despite all the intricacies of building a career, remember that succeeding in music is still a possibility. "I really do believe that good artists, incredible artists, you know, the cream, rises to the top, and you will be found out," said Sarkisian. BSW

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