BitDepth#349 -August 2002

A 2002 BitDepth column about online digital marketing and promotion...
Dear Orange Sky...
BitDepth#349 was originally published in August 2002 in the tabloid newspaper, The Wire.

So far, you boys have done everything right. You’ve created great music and performing it with energy and enthusiasm, fed the media with a steady stream of free CDs, some of which seem to change weekly. You’ve worked the circuit, playing the big clubs, the small clubs and the large closets.

You’ve built a serious, committed following that loves your music, will travel to hear you play and talks about your work as if it were the most important thing in their lives.
Now it’s time to take the next big step, and all the big rock biographies say that’s hooking up with a major label and bringing your music to the world. Well, I’m a fan and I’m here to tell you that they are wrong. Hooking up with a big label will be the death of you and this is why.

In a brilliant dissection of the recording industry as it exists today on the website Salon, Courtney Love, sometime actress, widow of Nirvana’s Kurt Cobain and leader of the rock band Hole, explains just where those huge advances that get paid to bands go.

In Love’s brutal math (see Courtney’s math, below), a new band with a hit record earns nothing. This is the math that allows record companies to spend US$45m lobbying against online music distribution while simultaneously telling artists that they have no money.

At the height of his popularity, Prince would appear on stage with the word “slave” written on his cheek. Acts like Destiny’s Child and Toni Braxton, at the peak of their careers, declare bankruptcy. It isn’t because they spend money carelessly or smoke crack. It’s because their contracts are draconian and the only escape is the humiliation of acknowledging that they are broke.

Which brings me to the point of my letter.

Recently, the RIAA sneaked a clause into a revision of copyright law that essentially makes recorded works produced for a label "works made for hire". They have also worked to ensure that the copyright in recorded works will not pass on to your heirs.

There’s another way, and it has big recording companies scared. It’s based on the best elements of the Internet, and it’s only going to grow as bands get smarter and the web gets faster. A website has a one to many ones relationship that is unique in the history of artist-fan interactions. An Internet presence brings information, value and intimacy to the people who listen to you. Web word beats the best artist’s relations executives cold.

But you can’t do this halfway. You have to decide that you’re going to conquer the world one byte at a time and change your thinking from the big deal that makes you famous to the one million little deals that will make you famous and rich.

You’ve got to sample your work with web audiences, post clips of your concerts and videos, offer downloadable photos and biographies and sell the hell out of your CDs either on your own or through a retailer that’s sympathetic to small shops like PayPal and the Amazon Z-shop system.
You have to do this because the recording industry is Miss Havisham’s wedding cake. It looks pretty, but it’s old, stale and rotten to the core.

There is clear evidence that music traded on the Internet gets people interested in new bands, and buying CDs for music they won’t normally hear on the radio but big music doesn’t want to know about that. They want every song that gets played to register as a coin in their slot and to protect that river of cash, they will destroy the experience of listening to music to do it with “altered CDs” that won’t play in some players and computer systems.

The recording industry didn’t want reel to reel recorders, cassette recorders or DAT tape. Hell, they objected to listening booths in record stores on the premise that people would listen for free.
Have faith in your music and your fans. Make your money touring, selling quality merchandise and autographed CDs. Retire rich and happy, bouncing your grandchildren on your knee, boring them with road stories and let Sony, Warner and BMG find somebody else to cornhole.

Courtney’s math
• Band gets $1m advance on sales and 20% royalty on unit sales (generous).
• Band pays $100,000 for manager’s 10% commission, $25,000 each for layer and business manager, splits difference for living expenses, less tax.
• Band releases two singles and two videos ($500,000), pays for “radio promotion costs” ($300,000) and tour ($200,000).
• Riding a smash hit, the band sells one million CDs, earning $2m. Record company takes back the money the band owes them ($2m), makes $4m in profit. Band earns zero.

Janis Ian’s arguments against big label representation summarised
• The normal industry contract is for seven albums with no end date
• A label can refuse an album if they decide, using their own criteria, that the material is “commercially or artistically unacceptable”.
• The Controlled Composition Clause demands that singer-songwriters agree to be paid 75% of what the US Congress has demanded that labels pay.
• Since 1960, songwriter royalties have risen from US$.02 to 8 cents. Songwriters with hits from the 1960’s still get 2 cents.
• The label owns your voice as well as your product. If an album goes out of print, it dies if the label refuses to reissue it.
• America (unlike Europe, Japan and Australia) does not pay performance royalties to songwriters.
blog comments powered by Disqus