The Problem With Music
by Steve Albini
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 again, please.
Backstroke”. And he does of course.
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 signs 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 terms 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 laborer 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. 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. Anyways, it doesn’t cost them anything 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 7 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 great royalty: 13% [less a 1O% packaging
deduction]. Wasn’t it Buffalo Tom that were only getting 12% less 10?
Whatever. The old label only wants 50 grand, an 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 bold and 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 |
Off-line: |
$ 2,000 |
On-line 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 = |
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 million 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.
Steve Albini is an independent and corporate rock record producer most widely known for having produced Nirvana’s “In Utero”.
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