Major laymen meet major label

March 6, 2007 10:09 AM

Reasons for/against entering in to negotiations with a major label? Stories of effective and ineffective independent representation/promotion/publishing? Things to keep in mind during negotiations?

Without going in to too much detail, I'm part of a group that has been approached by a major recording company. What's at stake here generally is a scene that's relatively untapped in terms of mass-produced records.

Personally my inclination is to tell them to get lost. If they think there's a market for what we do, we should organize and make it happen ourselves, keeping control and profits within the community, rather than helping some record company rep climb the ladder by breaking a new market.

But that's just me- overall, I'd love to hear arguments for and against such relations, stories of successful grassroots artistic community building, promotion and publishing, stories of unsuccessful same, advice and guidelines for both major label negotiations and independent label founding (and I realize the two aren't necessarily at odds), and any other thoughts/resources you have to offer. Thanks!

posted by Slam I Am to media & arts (33 comments total)

Steve Albini says run away at full speed.
posted by saladin at 10:18 AM on March 6, 2007

Record labels are obsolete. Keep control and do things yourself - go the digital distribution route.
posted by afx114 at 10:19 AM on March 6, 2007 [1 favorite]

Thirding this suggestion. Clap Your Hands Say Yeah are doing an awesome job all on their own. Swell did it for many years before that. It CAN be done. Don't set yourself up to get hosed by the big guys.
posted by horseblind at 10:33 AM on March 6, 2007

A little background on myself to provide context - I've worked for Sony Music (pre-BMG meger), have worked for indie labels, have run my own indie label and currently work for a marketing firm that does tons of work with both independent bands and major labels. I've been in the business for 10+ years and counting.

That said, this is just my opinion, but I would say at least open up the conversation with them. It's never a good idea to turn down a potential opportunity based on its cover. You should evaluate ALL of your options and make an informed decision. Now, is a major label a good decision for all (or even most) bands? Nope. But I could tell you just about as many horror stories about bands on indie labels as I could of bands on majors.

The key issue is one you've already brought up - control. If you're independent you will retain more of your rights and ownership of your music as well as be able to claim a larger portion of the profits of your work. You will likely also have to be willing to take on more of the workload for promoting yourselves, will almost universally have less access to marketing (or marketing budgets) and MIGHT have a long climb to success. If you sign with a major - and are well supported by management (that's a big issue sometimes) - you will have much more marketing support and can break more quickly. You will also owe the label through the nose for the album recording and promotion and probably won't make any money until your album at least goes gold.

Which is the best for you? All depends on where the label is right now, their retail and marketing strategy and how good of a lawyer you have. No matter which direction you go you only have a 1 in 10 chance of making any money with your album (yes, really) so I would recommend choosing the option that you feel will best help you achieve your artistic goals. If you do that, and your music catches on, you'll be able to cash in via brand endorsements, touring, merch and potentially album sales.

I'm not an entertainment lawyer, but feel free to drop me a message if you want to do some Q&A. I'm happy to share my thoughts with you.
posted by tundro at 10:35 AM on March 6, 2007

Read these links. I know, it's a dumb google search. If you haven't done it yourself already, do it.

Realize that a LOT of people get screwed by recording contracts. I have a friend who for all intents and purposes cannot legally succeed as a solo artist without his work being taken over by a major because he remains contractually obligated to produce more records with a band that no longer exists. This only sounds crazy, it is the norm. Remember that even if your contract seems to grant ownership, creative control, escape clauses etc., this extends only to your ability to litigate that contract, and remember David Sims' cardinal rule: they will never give you enough money to successfully sue them. That link is to an essay about comics but many of the assertions apply to any kind of publishing.

But don't reject it out of hand. Recording companies, despite their many flaws, have access to huge resources.

If you are going to seriously consider this offer you need the assistance of a lawyer with relevant experience.
posted by nanojath at 10:42 AM on March 6, 2007

Just as a data point, that Steve Albini article is from 1993.
posted by ludwig_van at 10:45 AM on March 6, 2007

Personally, I wouldn't dismiss it out of hand, but I also think the age of the big record label is on the wane. In this age of easy distribution the two things a label can offer you that you might not be able to get otherwise is promotion and money. With both come many strings though.
posted by drezdn at 10:47 AM on March 6, 2007

my opinion.

Let me break it down this way:

1. Working outside the major label framework is a big commitment that can work for you in the long-term (and by long-term, i mean over the period of many years), but it requires that a lot of things turn out in your favor.

A record label will approach you once it feels reasonably satisfied that you have the following, in no particular order:

1. Do you have a fanbase?
2. Do you have a strong backstory?
3. Do you have any number of hits?
4. Do you look good / have a good work ethic?

Nowadays, labels have a solid yearly amount that they are willing to spend on advances. No more, no less. The A&R guy that scouts you, sure, he wants to get ahead. But at the end of the day, for the major labels, these decisions were made before you even showed up, and your success within the label (especially if you are a new band) will depend largely on the success of other bands within the label, and generally the amount of conviction people have around you that you will succeed.

We all know the royalty system is fucked up. These days, its a lot easier to not take it personally - advances are so small anyway, and its very hard for some majors to break music, depending on your genre and the label (look at EMI dropping the ball with urban music, Universal's huge success - despite the fact that no hip hop album broke the top ten in sales in 2006). if you think that for one second any of the top execs and the people that work for them dont look at you in terms of numbers, you have a long way to go to understand how the majors work (but, i assume you know this).

the cut you get out of your own sales if you go independent is without question significantly greater. but the name of the game right now is cross-promotion. thats how the majors market, thats how they promote, thats how they sell records. again, your success as an upcoming band depends on the genre. you're probably not going to get tour support, but if youre a "rock" band, touring is going to be the core of your success. so what benefit does an advance provide you with? covering recording costs? these days, recording costs are pretty low for independent producers, and chances are the majors will try to force you onto their own producer with a proven track record that may end up changing your sound in ways you don't approve. get into a stalemate with your producer, and you'll end up getting shelved by the label, with no way to record/distribute your records outside the parameters of the contract.

my long-term advice would be this: if you really want to succeed at the music game, embrace the success you have right now, but appreciate the long-term game that is going on. signing or not signing, its just one step. if you want to make a deal, make it a short one, and try to hold on to as much of your publishing as possible. the people that are in the position to make money nowadays who are "independent" are those that have an extensive catalog that they own the publishing/writers rights to (known as a "one-step") - a catalog that includes commercially successful music that is totally broadcast quality (check your suit at the door) - and that can parlay that to a bigger publishing company that is interested in making a long-term investment in your music and has the power and the incentive to place your music in movies, tv and commercials.
posted by phaedon at 10:49 AM on March 6, 2007

on preview: thats "one stop" not "one step".
posted by phaedon at 10:52 AM on March 6, 2007

A recent issue of Fast Company was forwarded to me by a friend that outlines (albeit tangentially) John Legend's success at working with the labels (p&d deals?) but doing his own marketing & promoting, managing his own touring (outsourcing it to another company that is closer to him than the label). This guy knows what he's doing, and he's a very good musician.
posted by phaedon at 11:00 AM on March 6, 2007

Merlin Mann's recent interview with John Vanderslice touched on some related issues. Worth watching.
posted by adamrice at 11:01 AM on March 6, 2007

Cool link. You should definitely do anything John Vanderslice says. Seriously.
posted by ludwig_van at 11:06 AM on March 6, 2007

Thank you all for the pointers so far, I'll be checking them all out/mulling them over shortly.

But I feel a need to reiterate: this isn't so much about one group or performer; at this point it's about a very specific scene, and they're wondering if it might represent a new market. Those of us involved in the pitch may or may not get approached for a deal. I'm approaching it as a potential community service at this point.

My concern is that the info this person has asked for would essentially give her/him an ability to navigate that scene and promote it according to interests that may or may not be in common with the artists. We may do a lot of work on a pitch to ultimately just get someone else a promotion.

At the same time it could mean greater audiences for a lot of people- and thereby newfound ability to self-promote.

Basically, how could a pond change if a big fish shows up?
posted by Slam I Am at 11:20 AM on March 6, 2007

I have been seeing ads for this site a lot lately- they help artists get on itunes without the help of a label. I think it's really cool if it works, and almost deserving a post of its own.

I think with mp3 blogs, myspace, and services like that one, the day is finally here when bands can break themselves off the internet without the help of a label. People have been talking it up for almost a decade, but now it's finally happening. maybe not huge Justin Timberlake success, but if you want to sell 50-100 thousand records, i think it can be done. Sure, mp3 blogs get most of their material from label publicists, but you can hire a publicist on your own without mortgaging your soul.

That said, it would be silly to not at least consider all your options, including the labels.

And don't listen to Steve Albini. That guy pretty much ruined music with his intentionally awful "low fi" productions. If you must take advice from a 90s producer, at least seek out Rick Rubin.
posted by drjimmy11 at 11:22 AM on March 6, 2007

you should totally tell them to get lost, i dont even understand the incentive to work with a label at this point. how's a label going to help you break a new market? you're pitching them an idea? they'll undercut you the first chance they get.
posted by phaedon at 11:27 AM on March 6, 2007

meh. my previous comment sucked, way too one-sided. i'm going to duck out, because the lack of specifics makes it hard to give good advice!
posted by phaedon at 11:30 AM on March 6, 2007

If you do decide that spreading the word on this scene is something you would like to facilitate, don't give it away for free. Charge the record company geek (RCG) a consultation fee for you time and access to your contacts, plus drag the reveal out over multiple sushi dinners, in which you let the RCG get to know a few individual members of said scene (and their appetites). Maybe nothing will come of any of it, but at least you and your friends will see some immediate benefits. Fish is brain food, and artists need to eat!
posted by Scram at 11:39 AM on March 6, 2007

My concern is that the info this person has asked for would essentially give her/him an ability to navigate that scene and promote it according to interests that may or may not be in common with the artists.

If these artists have any interests or values (other than money), run the other way. You must remember that these guys don't want to help your scene... or, at least, that's not their main motivation. They want to package this scene, market it, and reap the profits. Some people in the scene may get greater audiences and/or record deals, but it'll probably be record-company audiences and record-company deals on record-company terms, like it or not. Intangibles like community values and artistic merit usually aren't as important to major labels as advertising and profit are. Once the big fish is in charge, the atmosphere of the pond is likely to change in favor of the latter.

For example: they are asking you for valuable information, but it sounds as if they are not willing to pay you for it or even offer a deal in return for it. That's not the way to begin an honest business relationship, to say the least. Like Scram said, you have something they want, don't let them get it for free!
posted by vorfeed at 11:47 AM on March 6, 2007

I'd agree with phaedon that we don't have enough information to comment intelligently, but even still, vorfeed sounds on the money.

Major labels want to work with your scene in exactly the same way ExxonMobil wants to "work with" ANWR.
posted by adamrice at 11:52 AM on March 6, 2007

Slam I Am, something you have to realize is that asking about major labels on the internet is like asking for advice on being acquired by Microsoft. Even if it's in your best interest, all of the advice you're going to get is going to be "Run!"

All of the talk about labels being totally unnecessary and over are bullshit, and represent a really bizarro-indie provincial thinking. Major labels are a tool. For some people, they're the right tool. For others, they're a totally wrong fit. Even within the "major" continuum, there are boutique labels and differing levels of control and cash. And the Horatio Alger crap about Clap Your Hands Say Yeah et al is fantastic for the Pitchfork set, but really misrepresents the actual life of bands. (My "positive" experience on this would be how the Muzik Mafia folks from Nashville have become a really huge brand. It started out as a small, specific scene, and now Big and Rich are huge, along with Cowboy Troy, and about ten songwriters. I make no claims on the quality of their music, but they are a great model for major label success, and how to work within the system to the benefit of everyone involved).

So, couple things: First off, if you email me, I can give you more info. I understand that you have stuff going on that you don't want public, but I have a decent amount of experience regarding bands making the move to major labels (though I'll clarify— I'm a journalist, not a lawyer). I know bands that have gone to majors and done great, even without selling like Mariah Carey. I know bands that have gone to minor league labels (major affiliates) and done great. And I know bands that have gone and done everything on their own and done well. (I also know bands that have totally fucking tanked at all levels).

Second, there's never any real harm in looking. Just remember that you can say no at any time (it's like a date!). Feel free to communicate your reservations to the A&R rep (I assume that's who you're talking to); most A&R folks are actually human. Just don't be dazzled, don't be naive, don't be stupid. Major labels aren't the enemy any more than indie labels are (I've got a pal who's been in litigation for over six years with Vangaurd over songwriting credits for a long-defunct ska band). But they are a business, and you have to be canny.

So, yeah, please get ahold of me. I'm curious, and I'll bet that I can give you contact info for more people who have been in your shoes.
posted by klangklangston at 12:16 PM on March 6, 2007 [1 favorite]

Thanks, everyone. Despite my vagueness, I assure you this is really helpful. Keep 'em coming- in the meantime I'll be going through the suggested links; I'm sure more "best answer" marks will be made as needed...
posted by Slam I Am at 12:26 PM on March 6, 2007

And another question: what kind of money might an artist have to invest were they to get a deal with a major?
posted by Slam I Am at 12:29 PM on March 6, 2007

That depends entirely on their deal. Do you mean upfront costs? Or "advances" taken out of royalties (to pay producers, etc.)? Traditionally, upfront costs are handled by the label, but that tends to result in the band being totally fucked at the back end (that shiny new bass was not free). As for the second question, regarding overall investment, while it depends on your deal, the overall "investment" will run into the tens of thousands. That includes marketting, equipment, studio and producer costs, and myriad other dings (some bands get charged $4 per CD for supporting a "new technology"). That's all an investment, though one that's often undervalued by bands.
(Again, feel free to email)
posted by klangklangston at 12:55 PM on March 6, 2007

Besides the first Albini link, there a few others that first accompanied it:

Some of your friends are already this fucked
posted by barnacles at 2:22 PM on March 6, 2007

That guy pretty much ruined music with his intentionally awful "low fi" productions. If you must take advice from a 90s producer, at least seek out Rick Rubin.

Thanks for the laugh.
posted by dobbs at 2:26 PM on March 6, 2007

While they are courting you, get as many free meals, swanky hotels and airplane tickets out of them as you can. Whether you sign or not, it is likely the most "compensation" you'll ever get out of the deal.

But really, just look at it like a job interview. Someone has expressed interest in hiring you -- that is a nice thing and you should politely thank them for their interest. It isn't going to cost you anything to listen to what they have to say, and you aren't doing yourself any favors by slamming the door in their face. The simple act of having the conversation is a good experience (professionally speaking) for you to have, regardless of how it turns out.
posted by spilon at 2:36 PM on March 6, 2007

Slam:

Firstly, you should be investing nothing, once the label is at the table. Your investment so far has been your time, hard work, etc to get them there, not to mention whatever money you've spent. I'm pretty sure this is not what you're getting at, but if at any time they're expecting some money from you, that's a bad sign.

If you mean "invest" as in "what does all the crap cost that's tacked on to my advance?", probably not all that much. New equipment and and things of that nature (all personal property purchased for you by the label) may be tacked on, but may not be, depending on how tight your A&R guy is with companies looking to give away free stuff for promotion.

The normal shenanigans of major label deals is this: you agree to some sort of deal with the label - usually one album that's guaranteed release (and I'll qualify guarantee later on, but for now we'll say it gets out), along with a certain number of option periods - keep these as few as possible. If you're doing awesome, they'll want to resign you to more records, but if they fuck up and don't promote you correctly, the more option periods they have the more they can make your life a total hell later. Try for around 3, as I imagine they'll balk at less.

Next, there's publishing. Who writes the songs for your band? Do you have a publishing company? Are you already involved with someone like BMI, ASCAP or SESAC? Do you know how you want the royalties to be split? These are things you want to deal with now, regardless of whether you do this label or not. If you have no idea what I'm talking about, email me at the addy in the profile and I'll break it down further for you.

If you have a publishing company, they'll likely want to do a co-publication deal with you, which halves your income for the publishing. Fight this - it's half your money for your songs. If they won't budge, don't let them get any more than this; seriously, if they want full publication rights, tell them to take a hike. Publishing royalties go like this - the artist gets one payment of 9 cents (approx) a song, and the publisher gets another payment of 9 cents a song. This is also true with royalties you get from all TV, Radio, Movie and Commercials airplay or licensing deals, but they payments are usually higher, depending on what organization is representing you. They co-pub with you, they get half of the publisher's payment, or 1/4 of the overall money. They do the publishing for you, they get all of it, or half of the overall money. You will half your publishing income (which is is usually decent money, and doesn't count against your advance) if you don't do this. So, stick to your guns on this front.

As for actually recording the album, they'll probably put you on a line-item budget that's tightly controlled by whoever they get to produce you. Your buddy Sam, who's been tight with the band and helped you record all of your albums up to now, probably won't be at the controls, no matter how much you insist. It's a bargaining chip if you want it, but they're not likely to bite. This budget will be the first thing you'll have to pay off from record sales - you won't even begin to start paying off your advance until they break even on this. Try and keep it as low as possible, to keep the payback time low.

They will also deduct promotional copies from the records you get paid on, as well as give 1/2 credit to copies sold through their record clubs. These are small points, but things to look out for. See if you can get them to drop this part.

Then, theres the matter of tour support or promotion. Again, this usually gets tacked on before the advance and must be paid off before you see the first red cent from album sales. So, again, ask for as little as you can to get by. The good side of this is that often your tour income (ticket sales, merch, etc) isn't going to go towards your advance, assuming that it isn't all financed by the label. Touring is where most acts make the majority of their money, with merch making the second largest chunk. This money doesn't go to the label most of the time, but they may want to do some type of share on the merchandising of the band - they get to put out stuff with your name on it and keep the cash, putting half of it towards what you owe. Again, fight them on this if they try to pull it.

Last thing - either ask for the biggest advance they'll give you, or the lowest advance you can handle and still feel like you've done well. There are two schools of thought on this - your advance is non-recoupable, meaning that if you don't sell record 1, the money is still yours. On the other hand, the less you ask for upfront, the quicker you get yourself out of debt with the label and getting regular income free and clear. IMHO, if you've got a good touring act and fans that will buy merch, take a huge advance and hope for the best. Invest well.

That's about as brief as I can get - email me at the address in my profile if you want more info or advice. Just to let you know how I know this stuff, I worked for an indie distributor in Halifax, NS, along with having a BS in Recording Industry Management, and currently attending law school for intellectual property. I eat breath and drink this stuff.

Any decent lawyer will tell you what I told you. However, IANYAL and IAN*Y*L, so make sure to get competent council where you are as soon as you think things might get serious with these guys.

Good luck and congrats.
posted by plaidrabbit at 2:43 PM on March 6, 2007 [1 favorite]

Damn, forgot to talk about "guaranteed".

Your contract is going to require you deliver a master copy of a "commercially-viable" record. This is the label giving itself the ability to make sure you don't start doing polka albums once you sign the contract, instead of what they scouted you for. While this is an extreme example, it can be devistating to new artists to put out the best album they think they can get, only to have the label reject the master, saying its not "commercially viable." Artists like Fiona Apple (amongst many others I can't think of right off the top of my head) have been getting fucked by this for years, and it can keep all of your songs in limbo and the album in limbo for literally years, with no way to release the songs on your own - the label will own the master recordings and there will be an exclusivity clause saying you can't compete with them by selling your songs to someone else.

There's also the chance that if you turn in enough masters they don't like, they'll just put out the album and let it sink, investing no money for tour support or marketing. At this point, they'll not renew your next option and you won't get another dime from them, as all the income from the album will probably just go back towards your advance.

Try not to let this happen. There is NO WAY (unless they think you're the next Beatles) that they're going to remove this clause, so you'll just have to deal with it and try and work as well as you can with the producer, A&R and label execs.
posted by plaidrabbit at 2:51 PM on March 6, 2007

Don't go the tunecore route-- you can do all of that stuff yourself with very little effort.
posted by LGCNo6 at 3:26 PM on March 6, 2007

Stories of effective and ineffective independent representation/promotion/publishing?

This part really depends on the scene and the band. Most of my recent experience with the record biz is in extreme metal, where there are only a few "majors" and about a million small labels and distros (I run one of the latter). Most underground metal records are recorded at home or in a small studio, they are pressed at 500, 1000, or 2000 copies, and popular records get that way primarily via word-of-mouth. Most bands can afford the $1100 it takes to press 500 copies of a CD with cases (if you're a four-piece, it's just $275 each, easy enough to save over a year of writing and recording), so in this sort of atmosphere, the main reason to get an indie label is promotion and name recognition. You are essentially surrendering your potential profit in order to borrow the cash, trade/sales connections, and reputation of the label. Usually the deal is that the label pays for pressing and recording, and in return it gets to sell all of the records, save X copies for the band. Sometimes deals for merch and touring are worked out at the same time, but most often not. If the album is decent and the label is willing to hustle a bit with promotion, you're pretty much guaranteed to sell your 500 copies this way in two to five years -- faster if you or the label have a good rep or are willing to work at it. And obviously, if you think you can sell 50,000 copies of your record rather than 500, then labels in that range are going to be very different...

That said, there are many metal bands who press their own stuff and have built up a reputation on their own. Myspace, Ebay, message boards, compilations, internet radio, mp3, CDR demos, live shows, promo copies to zines, etc. are good and cheap ways to get the word out and sell your stuff. But like I said, it really depends on the scene -- this works for metal, but if it doesn't sound like what you're used to seeing, it may not work for you. The key is to look around at what bands like yours are doing... maybe internet singles are the big thing with your fans, or maybe it's merch like shirts, or the festival circuit, or an endless catalog of 7" singles rather than CDs, or whatever.

No matter what, the key to self-promotion in any market is to MAKE FRIENDS. It's basically the high-school clique writ large: what you sell partially depends on who you know and who you're good to, because those people will help by buying your stuff or spreading the word. The "ineffective" bands/labels tend to be the ones who make a lot of enemies, act like assholes, don't bother to make connections, or rip people off (or are just plain awful, but let's assume you've got some decent music going for you). It's best to assume that everyone you deal with will remember your actions forever -- and that goes for their ten best friends, too. Therefore, be friendly and open, be generous (especially whenever it doesn't cost you), be honorable in your dealings, and make good music. The rest will follow.

p.s. What plaidrabbit is saying sounds right to me with respect to the major labels -- half the advantage of doing it yourself is not having to deal with all of that! No matter what you do, keep an eye on the rights to your recordings. Most labels, even indie ones, will want exclusive rights to press and re-license your album. If you can manage it, it is very much worth keeping the rights yourself. History is full of great bands that got shafted by their label, up to and including not getting a penny in royalties, especially for represses or best-of comps, etc. Earache Records is infamous for this... some of their bands got exactly $0 after the initial advance, despite having popular albums.
posted by vorfeed at 3:34 PM on March 6, 2007 [1 favorite]

f you can manage it, it is very much worth keeping the rights yourself.

As much as this is a good idea, good luck for getting it. There are only a handfull of people who get to do this, and its still considered the holy grail of recording contracts. People like Ray Charles, Loretta Lynn, and other HUGE, MASSIVE artists with well proven track records MIGHT be able to get this. The best line to describe this is from the movie "Ray" - the exec from ABC records says, after Ray asks him for to keep the rights to his masters, "That's a better deal than we gave to Sinatra!"

You, as a new band, have a snowballs chance in hell of getting this with a major label. If this is a huge deal to you, and worth trading what a major can do to you to keep it, break the talks now.
posted by plaidrabbit at 4:12 AM on March 7, 2007

PROS OF SIGNING TO A MAJOR:
- Marketing budgets
- People with years and years experience reaching an audience. (You may thing your fanbase is 'different' and 'smarter' but they're really just another target market)
- If you care about physical product, majors have deep and wide distribution networks for getting your CD into lots of stores
- Pre-existing relationships with iTunes, etc
- People dedicated to making your record a success that you can blame if it flops

CONS OF SIGNING TO A MAJOR
- Contract negotiation
- Loss of some control of your music/message
- Possible "sellout" chants at your concerts.

Also, clap your hands say yeah were blogosphere/pitchfork darlings for months and months. Statistically, your band won't be, so I wouldn't use that as a metric for anything.

Basically, as with everything, it's a tradeoff. There are plenty of artists with cred who were/are signed to major labels, or indie arms of major labels (Peter Bjorn and John come to mind as a recent example).
posted by softlord at 5:22 AM on March 7, 2007

So... What happened?
posted by klangklangston at 11:37 AM on March 20, 2007