Record Labels Looking for a Cut of Tour Revenues 332
Anonymous Coward writes "As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour. Now record labels are trying to get a piece of the action. 'Now the music labels, hungry for revenue from any source, are mulling over whether to make a grab for a piece of the tour biz. One company already has: In October EMI Recorded Music signed a deal with Brit singer Robbie Williams that gives the label a cut of the pop star's merchandise, publishing, touring revenue and sponsorship.'"
Not surprising (Score:5, Interesting)
They just now figured this out? (Score:5, Interesting)
I thought a big part of the RIAA's argument is that the labels have to underwrite the promotion and some of the costs for the tours... If this is true, then shouldn't they have already been taking a cut from the tour profits? Maybe I'm wrong here. I'd check out the RIAA's site, but it appears to be down...
artificial scarcity versus real scarcity (Score:5, Interesting)
Re:Not surprising (Score:4, Interesting)
Also, note that the record label gets a percentage of the artist's earnings. This is a complete reversal of the record model, where the label gets it all, and the artist gets a precentage.
I don't think the sky is falling.
Turn this around (Score:3, Interesting)
The artists should start counting every single expense of a tour as promoting the album and demand credit for it.
Re:They just now figured this out? (Score:5, Interesting)
From what I have read this is not true. Most record contracts state that all/most costs related to marketing and distribution will be recouped from the artists cut of the CD sales, not the record companie's. Of course this means if the record doesn't sell well the record company doesn't get all that money back through the artist's cut... But it also means the artist will get nearly nothing.
I wrote a paper for school [vt.edu] on how I morally justify downloading mp3s which outlines the way most record contracts work.
Isn't this the greedy musicians' fault? (Score:5, Interesting)
Remember, we don't have Britteny Spears because she is a musician. We have Brittany Spears because a record company invested millions of dollars in creating her. It's only fair that they get a cut of the tour revenues she never would have had at all without their promotion.
In modern society, there is no reason to make a deal with the devil for fame and fortune - just call up EMI.
And Why Not? (Score:3, Interesting)
Perhaps the better question is: why have some of these engineered musical groups earned so much, when their popularity and following is almost entirely due to the label's efforts?
"But, why me?"
"Because you fit the suit."
-The Brady Bunch, "Johnny Bravo"
Independant (Score:4, Interesting)
This is the ONLY way that the RIAA will understand that we're not going to take their shit anymore.
Re:artificial scarcity versus real scarcity (Score:1, Interesting)
You're not stealing from the guy whose CD you copied. You're stealing from the seller of the CD, who now has lost their opportunity to sell you a second copy of that CD. There are two instances of their product out there, yet they were only paid for one. They've been illegally deprived of the money from the second sale. Outside of law school and its terminological hair-splitting, it's not unreasonable to casually call that situation "theft"; the net result is no different than if the vendor had been paid for two CDs, and someone broke into the till and took the payment for one of them back.
Outside of Star Trek, you can't just copy a widget when you want one, so the widget-maker won't lose that second sale. But intellectual property laws exist precisely because information is easy to copy. Scarcity isn't the issue; securing a return on creative effort is.
Standard practice (Score:5, Interesting)
Personally, I think it's a good thing.
One of the reasons that artists are skeptical of online distribution of their music is the fact that it has the precise effect of making record lables think of those songs as valueless (which they are) and instead focus on tangible things that people will pay for (e.g. a concert with merchandise).
Once artists and labels get used to this arrangement, though, there's no reason that the indy labels can't do the same, and then distributing the music cheap (or even for free) and making their money on the concerts too.
A "label" in the Internet age should be... what? My feeling is that it should be a clearinghouse... a packager if you will that records/collects the band's or artist's music, sees to its quality of recording, adds lots of indexable info and then gets it to all of the online distributors (iStore, mp3.com, etc) that will "retail it". Heck, they could just run a Gnutella farm with a web-site full of reviews and other "value added" indexing, and a client-side plugin for downloading. Boom, instant high-bandwidth music distribution, and as long as the client has some basic incremental checksum system so that it can verify it's getting the exact file that you selected, you can be sure you're downloading what you wanted. That adds ad revenue to the label's list of sources.
The margins on all of that are small to negative, but if they have an alternate source of income, then they can afford to do it, and there's really no reason that foobar label can't compete with EMI on equal footing.
And you wondered why the RIAA was deathly afraid of file sharing... it's not because they thought their members would lose money, but because they KNEW that it had to lead to a decision about the value of music that they didn't want to have to make, and ultimately killing this goose once and for all!
Greedheads (Score:2, Interesting)
Regarding Williams (a "pop star" I have no time for) EMI are taking a cut of his tours, merchandising etc but they've paid him, or are contracted to pay him, several millions of pounds over the next few years. When the deal was announced, Williams said, "I'm rich beyond my wildest dreams!"
He'd better not speak so quickly. Mariah Carey was rich too, until Sony dropped her.
Interestingly, Williams takes the attitude that Filesharing is a Good Thing. He actively encourages his fans to download his music.
An attitude shared by Snoop Dogg, Chuck D and Courtney Love. Shame Britney Spears doesn't know what time it is yet...
Grateful Dead (Score:5, Interesting)
There was just now a segment on ABC World News [go.com] about The [Grateful] Dead's new model for making money off music. They record their shows every night, take orders from fans at the show, have their audio man master it, ship it off for duplication on CDs, and have it in the mail to the fan within about three days.
Instead of the $1/album typically made by signed bands they make $8-$10 on the three-CD set that sells for $22. They've turned a quarter of a million dollars on the CDs from their performances at Red Rocks over the past couple of weeks.
Not mentioned at the link, but Peter Jennings added that the music companies don't like being cut out of the loop like that.
Re:What terms? (Score:5, Interesting)
Stan Lee made this mistake for Spider man, most ppl know to ask for a percentage of the revenue flow not profits.
But it would be soooo nice to see record companies blunder
Re:Who cares? (Score:5, Interesting)
My understanding is that what the labels often tend to do is sign a 'quick' pre-contract agreement that pretty much locks up the musicians, then starve them into signing.
Quick, nasty and effective. The trick for the musician is to actually pay attention before signing such 'quick and harmless' agreement in principles -- but the young and eager are often blinded by apparent opportunity.
CD sales decline NOTdue to economy (Score:3, Interesting)
So, if cd sales are dropping because of the bad economy, as
Re:Not surprising (Score:5, Interesting)
You should read Steve Albini's article The Problem With Music [negativland.com].
Here's the 1st paragraph:
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.
Re:I thought... (Score:5, Interesting)
Royalties are supposed to be paid when a song is performed. That royalty goes to whoever owns the copyright, which would be the artist if they were smart, or someone else if they voluntarily sold the rights to the song. It wouldn't include the artist performing their own song if they own the copyright.
I guess the new part is wanting a percentage of merchansing? Oh, and the article says sponsorship, too. Ouch. You mean you can't even sell out to Pepsi without losing a cut, now?
This comment makes it sound as if the labels are taking a cut without doing any work, like perhaps mafia protection money. Deals such as these are not extortion, but the record companies branching out into other areas of the entertainment business that have existed for years - merchandising; someone must make, market and sell the stuff - sponsorship; someone must produce the numbers and charts, seek out potential sponsors and sell the artist to them as a good marketing investment. This takes time, people and money.
Right now these things are going on (whoever got Led Zepp their $500,000 fee from Cadillac took a cut), record labels just want to enter that part of the biz. If the artist thought someone else could do these things better, they are free to work with them. I could see big labels being in a good position to excel in these areas as they have lotsa cash to work with and plenty of contacts.
Please notice that this article only discusses mega-huge acts. It could be a sound business move for a major artist and label to enter into all-encompassing contracts which cover recording, merchandising and touring, instead of bouncing back and forth between several companies. This type of deal probably wouldn't be effective with or for smaller acts.
Its a bad example (Score:1, Interesting)
Lots of slashdotters here, the ones who don't know what they are talking about and clearly have never strayed past POPular music think this is fine, because they see Eminem and Dr Dre ($50 Million US this year!) and guys/girls like this living it up. What they don't understand is that the bands that have popular followings but are not on MTV perpetually through the day are the ones that are going to cop the worst part of this. Most of these types of bands have far better music aswell.. Irony eh.
In summary I don't know that this article is really suggesting the right thing, Robbie Williams is probably an exceptional case here. It really would be the finally kick in the teeth if they did this to starving artists.
Artists vs Labels? WRONG, Labels vs Clear Channel! (Score:5, Interesting)
Currently, the way it works is that you have to schedule tours through Clear Channel for the most part. There are some local organizations who will properly get promotion and venue arrangements in place, but even then they have to usually give a cut to Clear Channel for the rights to promote someone. Anyone who's worked in a campus concert promtion board knows that you mostly have to pay off Clear Channel before an artist will schedule a date on their tour in your city. For big artists Clear Channel may get $100k up front, smaller ones maybe as little as a few thousand, but they get paid before a single ticket is sold. The venue then takes their cut of the gate, extracts the costs from the leftover and then gives the rest to the artist, and in some cases a cut of that goes to Clear Channel again, depending on how it was negotiated. Merchandise is usually only split with the venue, but it wouldn't surprise me to see some of it go to Clear Channel also.
There used to be a rate card published for clear channel's upfront fees for an artist, but I can't find it anymore and it may not have been a public site. It is very interesting to see how much it would cost a venue promoter to book an artist, as some of them make quite a lot of money just for showing up.
If anything, I'd see Clear Channel getting pissed before the artists, because at the very least this would give artists an option of who to let them promote their tour in the future. Clear Channel or their record label directly, either way the artist is going to drop at least %20 of whatever the gate is, so you can deal with the devil you know, or....
Re:Grateful Dead (Score:3, Interesting)
When I first got a taste of MP3's I said to myself, 'You know, there is some real money in recording a live performance and then offering it for sale almost immediatly at the close of the show.'.
It is this kind of thinking (and potential revenue) that the RIAA is missing out on with there constant whinning about piracy.
Artsits today really only have one source of revenue, live performances. The Dead are not my cup of tea, however I have always admired there attitude towards recordings and concerts. I wish someone I liked would get a clue.
I say that ALL LIVE PERFORMANCES should be recorded.
High Quality MP3's should be sold onsite (that is right, non-DRM MP3's) immediatly following the show.
Some people will buy, most will trade.
If you price it correctly (to be certain to cover bandwith and such) then regardless of how many or few sales you make you can be gaurenteed to profit on this model.
You can even complicate it a little and not hurt it too much, say offer lossless DRM protected software and MP3 (don't insult the user, keep it at 192k) for sale. There are people (especially people that attended that show) that will pay for the higher quality lossless recording.
This will make the fans happy. We will feel appreciated. Right now we feel stepped on.
It will also foster excitement for our chosen bands. Many, many people would make it there goal to collect as many concerts as possible.
And you just simply cannot beat this as a form of promotion for upcoming shows.
Not to mention upcoming albums. Throw in a new tune every now and then....
Re:Not surprising (Score:4, Interesting)
I pay you $20M if you give me 25% of your profits. I only win if you make more than $80M (thus recovering my $20M outlay and more for profit).
But if you made over $80M, then *you* lose 25% of all profit over over $80M.
If you make less than $80M, then *I* lose out, since my 25% cut won't even over my "investment", but you come out slightly ahead.
That sounds more like insurance for the artists than an investment. - You buy insurance from me in ase your tour makes less than $80M.
Now who do you think insurance policies REALLY benefit in the long run? And with the amount of money tours generate, that strikes me as a pretty stupid policy to buy because you'ld have to really bomb to make a decent profit or really, really good for me to make a decent profit.
Maybe it is more like "protection money"...
=Smidge=
I Wrote a Contract Tracking System for EMI... (Score:5, Interesting)
No seriously, I did help create a contract management system for EMI in the early 90's. Biggest piece of shit I ever worked on. No access to the subject matter experts (people who know what it should do), but plenty of "interpretation" from middle management types.
It was made clear to us that the only purpose of record label contracts was to fuck the talent and maximize label profits. Advances on publicity costs for tours to promote the album, holdbacks on royalties until the label had turned a profit, "equalization" so that profits from one album were siphoned off to pay "expenses" incurred for others.
On the other hand, there were stories about how the artists would occasionally score a victory. I think it was Dean Martin, beholden to his label for seven more albums, who showed up, dropped seven albums worth of shit tracks on the desk, and said "Ciao!"
And Christ, don't get me started about the VP who would grab us at the end of the workday and shanghai us to Flash Dancers (Manhattan tittie bar) to force us to charge hundreds on our credit cards which we billed as meal expenses.
Yuck, it's not just the talent who feel like we swam a river of shit for the music industry.
Ebay Scalping (Score:5, Interesting)
I should know I just bought 2 tickets to see a Radiohead concert for $200 bucks on Ebay.
Re:They just now figured this out? (Score:2, Interesting)
But the record companies are losing money. This is like screwing up a wet dream! So they now decide to screw the artists even more!
They need to change to a new business model. Promoting Artists should not be so expensive. Web sites and Internet Radio are inexpensive
The Music business will not get better until some of the major labels go under. It is a shame the record stores are going under first.
Here is a way to help the record stores and keep money out of the hands of the major labels:
Buy the CDs used. Copy - Then sell the CD back to the record store at a lower price.
Re:Grateful Dead (Score:3, Interesting)
Re:Not surprising (Score:3, Interesting)
Re:Not surprising (Score:5, Interesting)
bingo. remember that a "major" record label is, by definition, a label that owns its own distribution and promotion network (which is why you sometimes see albums with the indie label logo and a major's logo on the back. the major is the distro channel).
while this combo can be a good "package deal". it means that the artist is tied to one label for everything - the product, the promo, the distro. there's no shopping around.
witness the band "drive like jehu". originally they were headhunter, and indie from san diego, distributed by cargo (of montreal). their first lp did remarkably well, so they moved to capitol to get "better distro and promo". the second album was considerably different than the first and capitol decided that they didn't want to be involved with dlj anymore - so they killed the distro. three weeks after the release, the busiest hmv in my city had exactly one copy.
of course, dlj couldn't shop the product to another distro company. they'd signed a contract. in the end, the band broke up. (two of the members are in the hot snakes now... in case yr a fan).
so, the moral is this: if you sign with a major, they hold all the cards and can leverage release schedules, distro, promotional material &c. against you to force you to renogiate.
nb: dlj's contract stipulated that the vinyl release of that second lp could be done by headhunter. that was a pretty rare condition. but for a year it was the only way to get that album, in my city at least! nb also that the abovementioned album was eventually re-released last year by swami records - an indie.
Lots of flaws.. (Score:3, Interesting)
Anyway, to the flaws:
1. None of your quotes are cited properly (if at all). A rigorous marker (like myself) would return the paper at this point with a note along the lines of "Don't pull this stuff from your ass, show me where" though I'd probably phrase it more politely than that on the actual paper.
2. You haven't actually disproved the notion that file-sharing is the cause of lowered sales. You've provided a number of alternative explanations, all quite reasonable, but shown no evidence that any of your alternatives have any greater correlation to the sales drop than the record industries assertion of file-sharing.
3. You give no proof of the assertion that "the current downward trend in record sales would have to continue for 10 years for a loss of 4 billion dollars to occur." Nowhere in the paper have you stated a dollar amount of what the record industry actually lost. The only amount is the 4 billion they state which you dispute on the basis that you, personally, could not find corroborative evidence, in your vast research which encompassed.. let's see here.. eight citations all from the web. Bibliophobe, perhaps? Still, this is an English paper, so maybe we can let that slide.
4. Your blanket assertion that the DMCA is unconstitutional is on shaky grounds at best. If Lessig's argument that retroactive extensions applied directly to copyright are unconstitutional was not accepted, how will a law that says nothing about copyright terms at all likely be seen? If anything, this is more open, because there is nothing in the law that says companies cannot release some sort of "master key" that works once copyright is expired - and until they fail to do this once the copyright is expired, we can't say that the DMCA has prevented "limited times" from being expressed.
5. Again, you assert something about the record industry (namely the terms of their contracts) without providing any type of citation as to where exactly you drew the material from.
6. Don't piss around with numbers. If you're going to try and use numbers to back up your argument, you better be comparing apples to apples. So comparing a record contract that has various costs applied to it to a bar gig without also noting the various hidden costs there (transportation, accomodation, road-managers, merchandise costs, etc) is not exactly fair. Now, I'll readily admit that bands probably do make more, but by missing the details, you haven't shown it.
That's some of the basic flaws with specifics.
Looking at the whole thesis, the question immediately arises: What is the unjust law you are drawing attention to by your actions? Which law, specifically, does your downloading music protest? Have you informed those who might punish you for breaking the law that you are doing so, because if you haven't, it strikes that you are not willing to go by the words of MLK and accept the punishment. In fact, MLK was quite specific about that, it's not the act of breaking the law that's the protest, it's suffering the enforcement of it to draw attention to the injustice of the law.
Until you do that, you're not some moral crusader, so stop pretending. Leave the moral crusades for those, like MLK Jr, who had the guts to go through with it.
Timely lyrics from Rush (Score:2, Interesting)
With a friendly voice
A companion, unobtrusive
Plays that song that's so elusive
And the magic music makes your morning mood
Off on your way
Hit the open road
There is magic at your fingers
For the Spirit ever lingers
Undemanding contact
In your happy solitude
Invisible airwaves
Crackle with life
Bright antennae bristle
With the energy
Emotional feedback
On a timeless wavelength
Bearing a gift beyond price ---
Almost free...
All this machinery
Making modern music
Can still be open-hearted
Not so coldly charted
It's really just a question
Of your honesty
One likes to believe
In the freedom of music
But glittering prizes
And endless compromises
Shatter the illusion
Of integrity
"For the words of the profits
Are written on the studio wall,
Concert hall ---
Echoes with the sounds...
Of salesmen."
Re:Not surprising (Score:3, Interesting)
I know that there are a billion little labels how come one of them is not growing?
Something seems wrong here.
Re:I Wrote a Contract Tracking System for EMI... (Score:3, Interesting)
Not only that, but they can shelve an artist indefinately if they think he/she isn't marketable. That means they're in limbo with no album-income, and not allowed to go elsewhere because they're still in contract for X more albums.
Now that's slavery.
tipjars violate contracts (Score:3, Interesting)
Tipjars violate the "exclusive distribution" part. It would be pretty easy to show that "tipjars" are designed, form the start, to provide recompense to artists for otherwise illegal MP3 downloads, which means that "tipjar" is violating the record company's exclusive license to US (and, likely, euro) distribution.
Re:Lots of flaws.. (Score:3, Interesting)
I agreed with everything that you said except for this part. The greatest evidence that has been shown for file sharing causing the RIAA's revenue to drop is a loose correlation between the beginning of file sharing and the beginning of the sales dip. He's offering other correlations as a counterargument. When you're arguing against the idea that a certain correlation caused a specific problem by bringing up several other correlations that could reasonably have caused the problem, doesn't the correlation just have to be EQUAL, not greater? The RIAA's argument is nothing more than a correlation that could easily be a coincidence or could even be a boon to their business that is cushioning what would've been a larger sales drop created by their lousy business practices. It relies upon a lack of reasonable alternative correlations that could've caused the problem.
When the other side's argument is nothing more than the most reasonable assumption that anyone can offer at the time, I don't think you need concrete evidence to counter it, but rather just a reasonable doubt. The sales dip hasn't been thoroughly researched and given a concrete, factual cause yet because it is still relatively new, just like file sharing is. Therefore the discussion is a matter of theory vs. theory, not concrete, well researched fact vs. concrete, well researched fact.