In the Shadow of Itunes

July 3, 2007 9:19 AM

What is a fair amount for an independant label to pay artists?

I'm in the process of starting up a small-run vinyl-only label that caters to the collectors on the fringe of musical tastes.

The label is interested in making enough money to continue putting out releases, having enough revenue to take chances on deserving unknown artists and of course fairly compensating the artists. Fair compensation (or *any* compensation) is actually rare in the small-run sphere.

posted by melt away to Media & Arts (9 answers total)

Given the state of affairs in the music business, I think fringe artists might be less concerned about a "fair amount" and more concerned about transparent accounting/timely royalty payments. After all, a fringe artist isn't going to collect huge piles of money, so they're doing it for other reasons, and if your label is acting in an honest and forthright manner regarding that compensation (regardless of the actual amount involved) that will likely help you land talent.
posted by davejay at 9:30 AM on July 3, 2007

Early in Touch and Go records' history, they did hand-shake 50/50 deals with artists. I believe they still do 50/50 deals between artist and label, but actually have written contracts due to the Butthole Surfers debacle.
posted by rabbitsnake at 9:30 AM on July 3, 2007

Compensate the artist/licensor at pressing time with some vinyl to sell themselves. For the life of the project, maintain a log of expenses vs income, and split the profits (if any) 50%.

Curious to know how small is small-run?
posted by omnidrew at 9:31 AM on July 3, 2007

Back when I worked at a midsize indie label (about 5 years ago) we did a 50/50 profit split on distributor/mailorder sales. The bands kept touring & merch income, less our costs.
posted by myeviltwin at 9:39 AM on July 3, 2007

The amounts of money will be fairly small and most of these artists will probably not even be expecting any compensation - but I would like to give it to them anyway. Beyond the fairness of the deal, I think it would also help provide motivation to the artists to assist promotion of the releases.

I've thought about doing 50/50 on profits but wasn't sure how common that is or was.

The runs will be 100+ copies, more for the more popular artists.
posted by melt away at 9:40 AM on July 3, 2007

As long as you do the right accounting, you can split the profits however you want. You're going to want to make sure you pay the royalties right, though - if you're doing 50% of profits, you won't have to worry that you *didn't* pay the correct royalties, but without proper accounting, you may open yourself up to be sued later by the artist for royalties they weren't paid...officially.

Make sure that when you do make payments, you calculate the proper royalties (either stautory rate of 9.1 cents a song, or whatever you contract for), and put them in a separate heading. These are calculated in each copy produced, so if you're only doing runs of 100 to 200, you're only going to pay $8.00 to $16.00 in official royalties. Make sure this is a separate line item, though; it's just too easy to do, and if you get someone who gets crazy successful on your hands, a good habit to be into.

Oh, and regarding no contracts...this is perhaps the dumbest idea, at any time. People always like each other at the start, and neither wants to do a contract because "It's against the spirit of the music." Whatever. As someone mentioned above, the Butthole Surfers debacle is one of many shining examples of why you get things in writing, for everyone's sake and piece of mind.

IAN(Y)AL, IAN*Y*L, consult competent council in your area.
posted by plaidrabbit at 9:59 AM on July 3, 2007

50/50 is historically standard for indie labels (at least the ones I have been familar with)
posted by statolith at 11:09 AM on July 3, 2007

What was "the Butthole Surfers debacle"?
posted by Artifice_Eternity at 4:59 PM on July 3, 2007

http://www.google.com/search?q=touch+and+go+butthole+surfers

http://en.wikipedia.org/wiki/Touch_and_Go_Records

I wouldn't trust Gibby Haynes any farther than I could throw him. As for Corey Rusk ... a lot of very cool people would go to the end of the earth for him.
posted by intermod at 8:27 PM on July 3, 2007