By popular demand...
> 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.
>
