Forgot your password?
typodupeerror
Music Media

Record Labels Looking for a Cut of Tour Revenues 332

Posted by michael
from the blood-from-turnips dept.
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.'"
This discussion has been archived. No new comments can be posted.

Record Labels Looking for a Cut of Tour Revenues

Comments Filter:
  • by mrjive (169376) on Friday July 11, 2003 @07:11PM (#6420520) Homepage Journal
    ...major corporations want more money.

    Full story tonight at 11
    • What terms? (Score:5, Insightful)

      by samjam (256347) on Friday July 11, 2003 @07:19PM (#6420593) Homepage Journal
      If the artists have accountants as good as the record labels they can surely manage to make a "loss" on all the tours after charging "consultancy" and "music services" etc, and having their own highly paid company of roadies, etc.

      Give the record labels a taste of their own accounting!
      • Re:What terms? (Score:5, Interesting)

        by beta21 (88000) on Friday July 11, 2003 @07:37PM (#6420745)
        As much as I'd love to belive that I don;t think that will happen.

        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
      • by Gherald (682277)
        How about we just count the entire music industry a "loss"? Would everyone please just STOP LISTENING TO MUSIC?

        This would solve all our problems. No RIAA, no lables, no artists, NO MUSIC!

        Then Slashdot would be free of all this "Evil RIAA" mumbo jumbo and we can get on to discussing IMPORTANT things, such as the up and comming, breathtaking new release of awk !
        • Re:What terms? (Score:4, Insightful)

          by Aadain2001 (684036) on Friday July 11, 2003 @08:30PM (#6421083) Journal
          But then the RIAA will just blame the complete lack on music sales as overwhelming proof that the online piracy threat is real and that they should be allowed to hack into peoples' computers and blow them up if they feel like it. This would be a bad thing!
        • Re:What terms? (Score:4, Insightful)

          by Melantha_Bacchae (232402) on Saturday July 12, 2003 @10:13AM (#6423476)
          Music is a part of our culture. We shouldn't let the RIAA take that from us.

          Instead, we should take music away from the RIAA. The technology for production and promotion is here, today. Make music outside the RIAA, heck, outside any label if you want to. Buy music from indie artists and honest indie labels. Create a new music industry apart from the RIAA and its members, and watch them shrivel and blow away.

          It is the artists and the people that must be free.

          And the RIAA sharks with their decades of enslaving artists and gouging their customers is evil.

          Bells are ringing: Mothra, Mothra! Every heart is calling: Mothra, Mothra!
          Come on, Tok Wira, these sharks have gotta pay! New Kirk calling Mothra, we need you today!
      • Re:What terms? (Score:4, Insightful)

        by letxa2000 (215841) on Friday July 11, 2003 @09:24PM (#6421379)
        If the artists have accountants as good as the record labels they can surely manage to make a "loss" on all the tours after charging "consultancy" and "music services" etc, and having their own highly paid company of roadies, etc.

        Agreed. And if they can't manage that, well, at that point I hardly feel sorry for the artists. The artists currently get shafted by the RIAA and yet they put up with it, but it's mostly tradition. If I were an artist and the RIAA bow told me, "Hey, not only aren't you going to make any real money off of CDs, we want a piece of your tour money" I'd well and truly tell them to take a flying leap.

        I keep wondering when the artists themselves are going to leave the RIAA en masse. It's becoming completely clear that these heavy rockers that preach rebellion are too much sheep to actually follow their own advice.

    • by Brad the Informer (676198) on Friday July 11, 2003 @09:38PM (#6421429)
      ...and all I got was this lousy t-shirt!

      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.
  • Not surprising (Score:5, Interesting)

    by seinman (463076) on Friday July 11, 2003 @07:11PM (#6420521) Homepage Journal
    I'm surprised it took them this long. I mean come on, there's a way for them to bilk the artist out of more of their earnings, and they didn't do it? That's not the recording industry I know!
    • Re:Not surprising (Score:4, Interesting)

      by Anonymous Coward on Friday July 11, 2003 @07:16PM (#6420576)
      Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing. Maybe promotional things, perhaps transportation costs, etc.

      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.
      • Re:Not surprising (Score:5, Insightful)

        by Rosco P. Coltrane (209368) on Friday July 11, 2003 @07:45PM (#6420817)
        Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing

        How about "they offer the artist a chance to not have his career shot by reducing his radio air time, making sure they promote other artists better, or making him sign insane contracts ?" Is that worth signing for ? I doubt very much the record industry has genuinely something to offer that artists want to sign for. I'm even quite sure they don't even even have to say "or else" after saying "sign this" to an artist for the artist to comply.

        In the '30s, there was a guy in Chicago who offered such "services" to local businesses.
        • Re:Not surprising (Score:3, Interesting)

          by jmccay (70985)
          The smart artists will tell the Record companies where to go, and then start marketing using the internet to market there products. They can promote their albums by using file swapping. They can pave the way for a new model of salling their products. The reality of the situation is that the record companies are obsolite!
        • Re:Not surprising (Score:5, Interesting)

          by Frymaster (171343) on Saturday July 12, 2003 @01:05AM (#6422182) Homepage Journal
          "they offer the artist a chance to not have his career shot by reducing his radio air time, making sure they promote other artists better, or making him sign insane contracts ?"

          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.

        • Re:Not surprising (Score:3, Informative)

          by valisk (622262) *
          Or maybe they offered him $80 Million upfront to sign a seven record deal and agree to take a cut of his future non Record label earnings as well as pay record promotional expenses out of their own pockets whilst Robbie agreed to produce the music in his own studio?
      • "Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing. Maybe promotional things, perhaps transportation costs, etc."

        In the article they say he got $20 million up front for a 25% stake in the revenues of upcoming tours. Sounds like a regular ol' investment to me and it also looks like both sides will make out nicely.

        The real danger is that they'll start sticking much worse deals to new acts who
        • Re:Not surprising (Score:4, Interesting)

          by Smidge204 (605297) on Friday July 11, 2003 @09:08PM (#6421300) Journal
          Maybe I'm missing something, but I don't see how both sides can "win" with that arrangement.

          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=
          • Re:Not surprising (Score:3, Informative)

            by Total_Wimp (564548)
            True, if the guy makes more than $80 million he'll have to give some of his profits to the record lable. But he gets $20 million dollars to invest as he pleases right now.

            Both sides win because the needs of each side are different. One side needs/wants cash quickly while the other side prefers more cash but is willing to wait for it.

            Instead of insurance you might want to think of it like an IPO. You're giving away some of your potential profits in exchange for instant cash; something not easily come by.
      • by clambake (37702) on Saturday July 12, 2003 @04:19AM (#6422846) Homepage
        Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing. Maybe promotional things, perhaps transportation costs, etc.

        Hi there, Bob, it's me, Chuck, you know, your RIAA rep? Well, Bob, We at the RIAA would like to offere you a draconian contract to suck a little more blood from the wound, if you know what I mean... How's that sound?

        No?

        Oh, Bob, I'm sorry to hear that, we'll, I guess we'll just have to go without. Oh yeah, before I forget, there is just one little thing...

        Remember that whole "five album deal" we made with you when you signed. Yeah, that one. Yeah, remember how in the fine print, it says you can't work with any other recording company until those deals are done? And remember that clause about how an album can't be released without our approval?

        Well, you see Bob, it seems that you've only released three albums so far, so you still owe us two more. Now, the way I see it buddy, You're going to need our approval to get those last two out. Now, I can't speak for the rest of the group, but I like you a lot. However, there are a few of us who are saying.. well, saying that they don't think you've got what it takes to get your last two albums approved.

        Yeah? Yeah, that's true, you COULD practice more, but Bob, the thing is, they think you just aren't a team player... I don't think they'd feel you deserve approval even if you were really good. Unless you could show us some of that RIAA team spirit...

        Yes, Bob? Oh, no, Bob, without those last two albums, you can't work for ANY label, even your for youself. Nope, can't sing another lyric, legally at least. Ah, we'll I wouldn't advise singing Happy Birthday to your grandmother, see that would be a public performance, and all....

        Oh, what's that you say? That draconian contract sounds fine to you after all? Oh, excellent! Oh wait a second, I think the RIAA percentages I quoted you before were off by, say, 20% (darn blurry faxes), but I'll have the revised copy sent to your trailer. Oh, I'm sorry, Bob, the line must be going bad, I could have sworn I heard cursing on the other line... It would be a shame if we had to.. oh, you didn't hear anything you say? Ah, so you agree? Right. 25%. Oh you heard 20%? Ah, that pesky line noise must have interfered... Or did I say 30%? That's a good boy, Bob. Yes you can come over later this afternoon and lick my car clean for me, that would be super.

        ciao!
    • Re:Not surprising (Score:2, Informative)

      by Chancer (246051)
      I mean come on, there's a way for them to bilk the artist out of more of their earnings, and they didn't do it? Robbie Williams signed an 80 million pound ($130,000,000) contract with EMI (bbc link: http://news.bbc.co.uk/1/hi/entertainment/music/26 7 3983.stm). For an artist who is virtually unknown in the US, that's enormous! I can only speculate that part of the contract included 'advances' on expected revenue from his tours... I know I'd rather have cash in hand than gamble on the vagaries of teeny p
      • Re:Not surprising (Score:3, Insightful)

        by digitalunity (19107)
        Note:

        Robbie Williams is not unknown in the US. He has had several singles released, several music videos made, and many albums sold. We 'mericans just aren't fanatic about him like them european folk.
      • Re:Not surprising (Score:5, Interesting)

        by chimpo13 (471212) <slashdot@nokilli.com> on Friday July 11, 2003 @07:57PM (#6420892) Homepage Journal
        It's probably done in the 80 million pound advance against future profits. I'm sure the labels will hold him liable if they don't make that much money off him. That's what they do.

        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:Not surprising (Score:3, Interesting)

          by Malcontent (40834)
          If things are that bad why aren't there more labels? The RIAA is evil and makes lots of money but couldn't an ethical record company be formed that makes less money but treats artists better?

          I know that there are a billion little labels how come one of them is not growing?

          Something seems wrong here.
  • by taped2thedesk (614051) * on Friday July 11, 2003 @07:11PM (#6420526)
    Umm... hello? They haven't done this already?

    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...

    • by mjmalone (677326) on Friday July 11, 2003 @07:18PM (#6420587) Homepage
      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...

      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.
      • Lots of flaws.. (Score:3, Interesting)

        by Kwil (53679)
        ..for a college level paper, you should receive a C at most.

        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 explanatio
        • Re:Lots of flaws.. (Score:3, Interesting)

          by DarkZero (516460)
          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.

          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 th
  • Who cares? (Score:2, Insightful)

    by SamBeckett (96685)
    No one is forcing the artists to sign a contract with record label X-- if they dont like the terms, find another record label who has terms you agree with. If none exist, well you are up the river without a paddle, but Juicy cranberries grandma!
    • by Lysol (11150) *
      I too grow tired of the bands that keep whining about everything. Put up or shut up! Esp. for the Madonna, Metallica and Radiohead types.

      Your time is almost... up.
    • IIRC, Sam, there are some musicians who have their own labels. Madonna comes to mind here.
    • Re:Who cares? (Score:5, Interesting)

      by Stephen Samuel (106962) <samuel AT bcgreen DOT com> on Friday July 11, 2003 @07:38PM (#6420754) Homepage Journal
      No one is forcing the artists to sign a contract with record label X-- if they dont like the terms, find another record label who has terms you agree with.

      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.

    • Re:Who cares? (Score:5, Insightful)

      by barc0001 (173002) on Friday July 11, 2003 @07:39PM (#6420761)
      Wow. That's good.

      Did it ever occur to you that most bands starting out have less ability to dictate terms to a record label than people who are getting their first mortgage have with the bank? It works like this:

      (label rep) : Here's our terms. Sign right there and we'll bring you onboard.
      (band) : Hang on, we are a little unsure about this point here. Can we alter it?
      (label rep) : Truth be told, I came to town to cut a deal with a band. If you don't like these terms, there are 3 other bands I'm talking to that I'd be just as pleased to go with.

      At this point, the band either signs a draconian contract agreeing to give away God knows what, or the A&R rep walks and does business with someone else and the first band continues to play at dingy nightclubs ad nauseum. Fair? No. Life? Yes.

      More here [arancidamoeba.com] on exactly how that works and how bad the band is screwed.

      • If your goal in life is to be a stinking rich "artist", "star" or whatever, then you'll have to sign a deal with the devil. It's as simple as that. I don't understand why you all have to victimize the gold diggers that they are.

        Musicians on the other hand, make deals with smaller, more sane companies (no I'm not talking about "indie" or whatever you Americans call anything that's not on Warner or Sony, there are a lot of smaller record companies not owned by big corporations).

  • Makes sense... (Score:3, Insightful)

    by Sheetrock (152993) on Friday July 11, 2003 @07:12PM (#6420540) Homepage Journal
    A lot of times, the label is putting a fair chunk of change into promoting the tour, booking the appropriate venues, and getting things done in general. I could see a decent tour costing the same as producing a CD, if not more when they go multinational.

    I don't think it's wholly inappropriate. I know we're paying more for CDs than we probably should, but the one has nothing to do with the other.

    • That's weird, I thought that was Budweisers job (or some other unrelated company I see attaching their names to some tours...)
    • What a crock (Score:5, Insightful)

      by FreeUser (11483) on Friday July 11, 2003 @07:21PM (#6420614)
      A lot of times, the label is putting a fair chunk of change into promoting the tour, booking the appropriate venues, and getting things done in general. I could see a decent tour costing the same as producing a CD, if not more when they go multinational.

      Um, no.

      The record label is putting a great deal of the Band's future earnings into promoting the band, mostly in promoting their CD sales, of which the band will receive $0.25-$0.50 per copy. Any promotion of the band, be it their CDs (the bulk of the promotion) or their tour is all charged to the band. In the end the recording companies, while taking the Lion's share of the CD profits (and now, soon, the touring profits as well), pays absolutely squat for promotion.

      Hopefully this new development will encourage more bands to avoid the clutches of the recording industry and market direct, or use non-traditional channels such as mp3.com once was to reach their audiences. With luck this final act of hubris will be enough to kill those parisites dead, something that would be very good for artists and fans alike.
    • Ipso Facto (Score:3, Insightful)

      by Speare (84249)
      A lot of times, the artist is putting a fair chunk of creativity into producing the disc, selecting the appropriate instrumentation, and getting things done in general. I could see a decent disc requiring the same creative effort as performing on stage, if not more when they go multinational.

      I don't think it's wholly inappropriate. I know we're paying more for concerts than we probably should, but the one has nothing to do with the other.

      (Artists work their ass off to create new music, and get left only

  • by Anonymous Coward
    If pirates had just bought the damn CDs instead of illegally downloading them, the record companies wouldn't have to do this. You caused this.
    • by mjmalone (677326) on Friday July 11, 2003 @07:22PM (#6420617) Homepage
      True... Partly... the problem is the record companies see that they are no longer needed. Their main function was to act as a source of loans and to distribute music. Recording music is no longer expensive, and distribution can be done over the internet. Who needs record companies anymore?
    • If pirates had just bought the damn CDs instead of illegally downloading them, the record companies wouldn't have to do this. You caused this.

      I wasn't going to say this... but I was going to raise the same issue. :)

      Seriously, I think the problem for many who get all of their music free from the net and haven't paid for recorded music in years (some of whom take great pride in that fact) is as follows. While you say that you don't want to punish the artists (and I believe you), and you hate and want to

    • No it isn't (Score:2, Insightful)

      by daveo0331 (469843)
      The goal of a corporation is to make as much money as possible for the shareholders. If the record labels think they can make more money by going after the touring revenues, they'll do it, regardless of what is happening on the CD side of the business.

      This would be like saying Major League Baseball is charging more for TV rights because ticket sales are down. Believe me, if MLB thinks they can milk more money out of the TV networks, they'll do it no matter how many people go to the games.
  • by Valiss (463641) on Friday July 11, 2003 @07:13PM (#6420546) Homepage
    ....the record labels are now requiring musicians to give up their first born in order to breed a new race of pop stars.

  • by Thinkit3 (671998) * on Friday July 11, 2003 @07:13PM (#6420547)
    Ok, to the animals who don't get the "theft" thing, a concert has real scarcity. If I copy your ticket, both our asses can't sit down in that seat. A recording has only artificial scarcity. Copying your cd has no effect on you. So this is a good thing. Let them act as promoters.
  • by Pompatus (642396) on Friday July 11, 2003 @07:14PM (#6420560) Journal
    At this rate musicians won't even worry about getting signed to a label. A couple friends of mine do quite well playing local gigs. Of course, here in New Orleans, live music is plentiful.

    Don't get me wrong, this wont happen anytime soon. I wonder, though, what the threshold is before it pays to stay home and play in your local club.
  • Don't the labels get a fee whenever a song is performed? (Some of which might be back to the writer, if the label feels like it...) Wouldn't that include the artist performing their own song?

    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?

    • Re:I thought... (Score:5, Interesting)

      by beaverfever (584714) on Friday July 11, 2003 @08:05PM (#6420945) Homepage
      Don't the labels get a fee whenever a song is performed? (Some of which might be back to the writer, if the label feels like it...) Wouldn't that include the artist performing their own song?

      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.
  • by mikeophile (647318) on Friday July 11, 2003 @07:16PM (#6420575)
    He was paid $20 million up front for the stake in his non-music revenues.

    Record companies are not the nicest people, but the spin on this submission is that they are somehow robbing the artists.

    There are enough things to berate the music industry over without having to fabricate injustice that isn't there.

    • He was paid $20 million up front for the stake in his non-music revenues.
      Record companies are not the nicest people, but the spin on this submission is that they are somehow robbing the artists.


      I remember Robbie screaming "I am filthy rich" at a press conference I saw on TV after signing this deal. Althouh I seem to remember Maria Carey that got paid to NOT make music. I wonder wich concert I have to visit to sponor that deal?

      I was just waiting for someone to post this exact comment about Robbie getti
    • Robbie isn't the problem. The problem is struggling artists, and mking it "normal" for the record companies to take one more source of revenue from them.

      No, no one is forcing the artists to sign a contract, but they really have little choice if they want to be professional musicians at this point.

    • Regardless of how well this artist was paid, the nasty part of record companies going for tour/merchandising is that now they have precident to demand it up front, as just part of any contract. This just about closes the noose on artists' ability to have a musical life outside of the record company. And where the record companies play the part of marketer promoter this time around, next time, they may be playing the part of manager. And once again, just try being a career musician without signing the con
  • by Valar (167606) on Friday July 11, 2003 @07:16PM (#6420577)
    This is what many slashdot users have been suggesting they do, so I don't understand the negative attitude all of the sudden. Remember the "they're going to have to change their business model" speech everyone was giving a couple of years ago? This is that change. Mind you, in typical record label fashion, they aren't going to mark down CDs any or ease off of the filetrading litigation, because that would still cost them *something*. That is the part everyone should criticize, that there is no quid pro quoa (spl?). Sure, they don't have to give their customers something in exchange no the markup on ticket prices we will no doubt see, but it might hurt them in the long run if they don't...
  • Oh, great. (Score:5, Funny)

    by Patik (584959) * <cpatikNO@SPAMgmail.com> on Friday July 11, 2003 @07:18PM (#6420581) Homepage Journal
    Now how am I supposed to actually support an artist I like? Just mail them a check?

    • Re:Oh, great. (Score:4, Insightful)

      by whig (6869) * on Friday July 11, 2003 @07:32PM (#6420703) Homepage Journal
      This is not such a bad idea.

      More artists should put up a website with a button that lets people contribute to them by the method of their choice, using PayPal (ugh) or whatever.

      Even if it's just a buck or two, think of it like a tip jar. You want your favorite artists to be supported, so support them.
      • You can't DO THAT. Why do you think Neil Young doesn't have a "tipjar?" And Tom Petty? And any other major label artist?

        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.

  • by ponxx (193567) on Friday July 11, 2003 @07:18PM (#6420583)
    I found this interesting from the article:

    > While music sales have dropped for three years in a row, from $13 billion to $11.5 billion in
    >2002, hurt by Napster-style digital piracy and a lackluster flow of hot new acts, the tour
    >business has climbed for four years straight, from $1.3 billion in 1998 to $2.1 billion last year

    So in total, money spent on music has gone down from 14.3 to 13.6 billion. A small change in a time of economic uncertainty. I imagine people will always spend a similar amount of money for entertainment, just the patterns of expenditure change. Ripping an MP3 off the net will never compare to a live performance.

    Similarly, movie studios don't have to worry. Seeing a decent movie on DivX makes me want to go to the cinema for the proper experience. LOTR, Matrix, ... just have to be seen on a big screen.

    Anyway, the studios should make money where the consumer wants to spend it, and stop whinging when their lack of innovation stops them from earning.

    Ponxx
    • how about the fact that artists are charging a shitton to see their shows? Tickets for DMB here are $51+. While I agree he tours a lot and is somewhat talented (I preferred his old stuff) I don't think that he's worth $51.

      In 1999 I saw him in Cincinnati for $27.50 who the hell decided that he was worth $25 more?
    • "Anyway, the studios should make money where the consumer wants to spend it, and stop whinging when their lack of innovation stops them from earning."

      From the article, clearly people have shifted spending money from buying cds to buying concert tix, as you say. So therefore, the economy isn't the reason cd sales are down. Given that music is no worse or better than before, decline in cd sales is looking more like a result of Kazaa, etc and cd burners. Justifying this by saying I don't have a legal alternti
  • Turn this around (Score:3, Interesting)

    by rossz (67331) <ogre@@@geekbiker...net> on Friday July 11, 2003 @07:18PM (#6420584) Homepage Journal
    Anything they can pass of as "promotions" is charged to the artists' potentional royalty payments. Oddly enough, this usually eats up ALL royalties due.

    The artists should start counting every single expense of a tour as promoting the album and demand credit for it.
  • by raehl (609729) * <raehl311 AT yahoo DOT com> on Friday July 11, 2003 @07:18PM (#6420588) Homepage
    If you're willing to sign away your profits in the future for that fat advance now, the only one to blame is you. On the other hand, maybe the only way to get anyone to listen to your crappy music is to get a major label to spend millions promoting it, in which case giving a percentage of the tour revenues you wouldn't be making without selling your soul to the record company is a good deal anyway.

    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)

    by dbretton (242493) on Friday July 11, 2003 @07:19PM (#6420590) Homepage
    These days, with very few exceptions, the biggest stars are all manufactured by the record labels anyway. The labels engineered many of these pop , or perhaps 'puppet', sensations that so many people go 'ga-ga' over.

    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"

  • require that all newly signed artists "provide" at least one healthy kidney (preferably but not necessarily their own) for sale to cover initial expenses, fees, lawyers, etc. Liver sections and spleens are ususally needed for video production. Hair cuttings cover per diems.
  • You make a deal with The Devil...

    I don't see this as wholly horrible. I mean, you aren't forced to sign that contract now are you? You can always do everything yourself, no contract required.
  • by dbretton (242493) on Friday July 11, 2003 @07:23PM (#6420633) Homepage
    Fuck the La-bels
    Fuck, fuck fuck
    Fuck the La-bels

    for all you Jay & Silent Bob fans.
  • Independant (Score:4, Interesting)

    by jonman_d (465049) <nemilar@@@optonline...net> on Friday July 11, 2003 @07:24PM (#6420641) Homepage Journal
    People, the answer is simple! VOTE WITH YOUR DOLLAR! CD-Baby.com [cdbaby.com] has a load of GOOD music, and not a dime of your money goes to the RIAA.

    This is the ONLY way that the RIAA will understand that we're not going to take their shit anymore.
  • This is not news. Labels have been digging their claws into concert revenue for years. When I was with the first Warped Tour, Sony was taking a 20% (if I remember accurately) cut from all Merch sales which dramatically reduced the artist's share since they didn't want to raise T-shirt prices for the fans. When you add a Bill Graham (west coast promoter) fee of 35% on top of this at the former Concord Pavilion, it was enough to cause all the performers (except Sublime) to pull all their merch from the boo
  • Even the major labels,unscrupulous as they are, will have their work cut out for them if they want to go up against the just-as-ruthless giants Ticketmaster [ticketmastersucks.com] and ClearChannel [salon.com].
  • Once upon a time, publishing was expensive and risky. Printing the manuscript of sheet music, or cutting the master for a record (old-style) and stamping a few thousand cost money. If they didn't sell, the entrepreneur who paid forthem lost money. So he was justified in taking a goodly slice when it came good.

    But publishing audio is now cheap and low risk. So it doesn't justify extortionate profits.

    But the artist had to work just as hard - or not - as s/he ever did. And deserves the rewards just as much a
  • Standard practice (Score:5, Interesting)

    by ajs (35943) <<moc.sja> <ta> <sja>> on Friday July 11, 2003 @07:28PM (#6420670) Homepage Journal
    I believe you'll find that this is the norm for all of the "manufactured bands" and "pop idols" that the industry created from scratch. Only the real artists get their own touring revenues, and the writing has been on the wall for them since the labels discovered that they could manufacture bands in just about any popular genre, not just bubblegum.

    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)

    by joshsnow (551754)
    Well, labels, who claim to promote and thus 'make' and artist, are simply greedy for more action.

    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 atti
  • by ad0gg (594412) on Friday July 11, 2003 @07:32PM (#6420705)
    "Bitch betta have muh money" while wearing a big hat with a feather in it
  • This is more foolishness from an industry already rife with fools. 99% of the marjor label artists out there already make nothing off of thier record sales to begin with-even artists that have sold half a million albums generally haven't seen a penny's woth of royalties, via a process called recoupment. Recoupment means that the artist has to make back the money out of thier own royalites that the record label puts up for startup costs, which is everything from the recording sessions, new instruments, ne
  • I have an idea. Pass a worldwide law that enslaves all musicians. They shall have no rights. They shall have no food. They shall be beaten and tortured on a regular basis.

    Of course, that's all being done behind the scenes. In public, they would be required to perform and make billions in revenue, all of which would, of course, go to the record labels. The musicians themselves would never see any profit of any kind from their work. But if it's not good, they'll be tortured. If it doesn't bring in a quota of

  • Don't sign it. Obviously these big stars arn't going to sign over any more rights to the record companies that they don't think they need or whatever.

    But it would be too bad to see some young bands sign this without knowing what it means, though.
  • Grateful Dead (Score:5, Interesting)

    by Black Parrot (19622) on Friday July 11, 2003 @07:36PM (#6420737)


    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:Grateful Dead (Score:3, Interesting)

      by sllim (95682)
      About 'effin' time.
      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
    • Re:Grateful Dead (Score:3, Interesting)

      by Zebbers (134389)
      and even then i bet the dead still allow fantapes too?
  • sweet (Score:3, Funny)

    by August_zero (654282) on Friday July 11, 2003 @07:36PM (#6420743)
    This is great news. Snot nosed little musicians owe all of their success to the selfless sacrifices made by the RIAA. All rock stars do is get drug habits, destroy hotel rooms, and go on "Behind the Music" after their careers are finished.

    Seriously though, wtf? i could sort of understand in the same way that I understand that evil mad scientists want to destroy the world sort of way, if there was any actual money in the process.

    All this is going to do is lead to pirated concerts. Bands will be kidnapped and forced to perform for free by angry fans.

  • by nerdup (523587) on Friday July 11, 2003 @07:37PM (#6420750) Homepage
    The most revealing part of the article to me was this:
    EMI officials say they are pursuing similar deals with other musicians, both superstars and new acts.
    Maybe Celine Dion can afford to have part of her touring revnue taken away, but what about smaller acts who likely walk onto the stage already owing the record company hundreds of thousands of dollars? So now the record companies want to start shaving money off the only place the musicians earn a living? Seriously, how will anyone be able to afford to be a musician?
  • by geekee (591277) on Friday July 11, 2003 @07:47PM (#6420825)
    "The concert business has never been bigger, in dissonant contrast to the recorded-music business. While music sales have dropped for three years in a row, from $13 billion to $11.5 billion in 2002, hurt by Napster-style digital piracy and a lackluster flow of hot new acts, the tour business has climbed for four years straight, from $1.3 billion in 1998 to $2.1 billion last year."

    So, if cd sales are dropping because of the bad economy, as /.ers claim, and not because of Kazaa, etc., then why have concert revenues been increasing over the last few years? The answer, cd sales are not down because of the bad economy, because then we'd see at least some correlation between concert sales and cd sales trends.
  • Correction (Score:3, Informative)

    by beaverfever (584714) on Friday July 11, 2003 @07:49PM (#6420835) Homepage
    As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour.

    Correction: As many a misinformed, incorrect Slashdotter etc., etc...

    Writing royalties are where artists make the big bucks.

    The idea that concerts and touring are the big money-makers is quoted fairly frequently, although it is the fantasy/excuse created and embraced by those who want, want WANT to believe that downloading free music has no ill effect on artists or performers.

    Yes, this is a bit of a digression, but let's keep the facts straight.
  • is this so outrageous?

    I don't get it all. Somebody signed a stupid contract, so what? And who cares about "artists" anyway?

    If it were musicians then maybe I could share you outrage.

  • I can't believe HE of all people (wasn't he the guy who did that video where that one guy tore off his skin and threw his muscles out to the crowd?) would sell out to EMI == Capitol. :E Oh well, one more company (EMI/Capitol) to boycott...

    -uso.
  • by Alizarin Erythrosin (457981) on Friday July 11, 2003 @07:57PM (#6420894)
    Soon labels won't sign an artist until they are guarenteed a cut of the tour proceeds, merchandice, etc... stuff that the artists usually took home all the profits on. I guess they figured out that they can't make all that much money by suing college students.
  • How Unfair (Score:3, Funny)

    by ocie (6659) on Friday July 11, 2003 @08:04PM (#6420941) Homepage
    That money rightfully belongs to TicketMaster.
  • by nurb432 (527695) on Friday July 11, 2003 @08:05PM (#6420952) Homepage Journal
    At some point they are going to piss off all the consumers, who will stop buying anything.

    They will also piss off all the musicians who will no longer join the *AA in the first place.

    This is just one more step towards that 'apparent' goal.

  • by leviramsey (248057) on Friday July 11, 2003 @08:37PM (#6421138) Journal

    Ten years ago, Metallica's original contract with Elektra (signed in 1984), expired and there was a lot of competition from every label in the business to sign them to a new contract (after all, their untitled 1991 album was well on its way to being one of the bestselling albums of all time, and its predecessors were storming off store shelves). Metallica and Elektra reached an agreement that basically made Metallica completely independent of the RIAA. The arrangement that was reached was the creation of a corporation E/M Ventures, with the four members of the band, their management (Q Prime), Elektra being the sole shareholders (IIRC, the breakdown was something like 22% Lars Ulrich, 22% James Hetfield, 16% Kirk Hammett, 10% Jason Newsted, 15% Q Prime, and 15% Elektra). Elektra transferred the copyrights on all the catalog recordings (1983-1991) to E/M as their investment, along with a record deal that would pay E/M Ventures royalties equal to 50% of the wholesale price (in other words about $4 to %5 per album, or $7 to $8 per double album), with no deductions for anything (all record production and promotion expenses would be handled by E/M). This deal only expires when a simple majority of the voting shares decides to terminate it and buy back Elektra's share.

    Elektra basically makes little to no money (apart from their share of E/M's profits) on the sale of a Metallica CD... all costs related to manufacturing and distribution are eaten by them. However, they're making this money with little risk; Metallica can put out basically anything and it will go platinum, simply on the strength of a rabid fan-base (much like Rush's, but probably at least twice the size).

    E/M owns all aspects of Metallica's business interests. The tours are done by E/M (or subsidiaries thereof). The merchandising revenues are to E/M. Thus, Elektra gets a cut of all those revenue streams, which are actually even bigger than the recording streams. Elektra also gets a cut of international record sales by Vivendi and Sony. Metallica gets out of this what effectively amounts to total independence from the system. Even if Elektra doesn't want to release something, they're obligated to manufacture and distribute it, otherwise they forfeit their share (for no compensation, through breach of contract).

  • by DMaster0 (26135) on Friday July 11, 2003 @08:41PM (#6421154)
    The artists already give a cut to someone, and it's called the promoter. Currently, the big boy in the business is Clear Channel. http://cc.com/

    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....
  • by ktakki (64573) on Friday July 11, 2003 @08:45PM (#6421176) Homepage Journal
    As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour.

    Just because "many a Slashdotter" has pointed something out doesn't make that statement true.

    Most musicians make more from CDs that sell enough to get past the break-even point (i.e., after the label has recouped its expenses) than they do from touring. (Note: I said "most" so put your Phish back in your trousers please.)

    Touring expenses are enormous. Living in hotels 200 days out of the year? Not cheap, and you still have morgage/rent payments to make on your primary residence. The venue owners take a massive cut of the gate, and a large part of that goes to their expenses (insurance, union labor, security, etc.).

    Touring for the large majority of acts is a break-even proposition at best. The exceptions are the Grateful Dead-like acts that can count on people who are willing to see a dozen of their shows every year and those "top-tier" arena acts (U2, Springsteen, Stones, et. al.) who can charge between $75 and $300 for a single seat. And those dinosaurs still make more from a CD (since they have name recognition and the label's not afraid of spending $1M to promote a low-risk release).

    For the rest of the acts on tour, live shows are a means of promoting an album, thus a modest loss is an acceptable cost of doing business. No CD, no tour, unless they can take advantage of the economy of scale afforded by a multi-act tour (like Lollapalooza).

    Touring is an extremely inefficient way of reaching listeners. Four to six weeks in the studio can produce a recording that millions will buy (and millions more will hear on the radio). To reach a million concert-goers, a band would have to play 50 nights of sold-out hockey rinks (20,000 seats), which with travel time and days off approaches three months on the road.

    As for revenue streams, retail sales aren't the only source of income from a recording. There are royalties from airplay (heard any live cuts on the radio lately?), and from soundtrack and commercial uses. I wonder if you asked "any Slashdotter" what a transcription royalty was or the origin of mechanical royalties whether you'd get a correct (or even coherent) answer.

    Finally, here's a quite from Robbie Robertson, late of the band The Band about touring:
    The road has taken a lot of the great ones...it's a goddamned impossible way of life.

    Of course, I don't see what goes on here making a damn bit of difference with respect to the Byzantine construct known as the music industry. Any Slashdotter could tell you that much.

    k.
  • Ebay Scalping (Score:5, Interesting)

    by aSiTiC (519647) on Friday July 11, 2003 @09:48PM (#6421470) Homepage
    No one tell the RIAA but the real money is in scalping tickets for insane prices on Ebay. There are people making a good amount of money by buying tickets as early as possible on web and turning around to get a premium after tickets are sold out.

    I should know I just bought 2 tickets to see a Radiohead concert for $200 bucks on Ebay.

All warranty and guarantee clauses become null and void upon payment of invoice.

Working...