John P. Strohm is a transactional entertainment and intellectual property attorney with the firm Johnston Barton Proctor & Rose LLP . John’s practice focuses on the representation of musicians, songwriters and independent record labels. Prior to becoming an attorney, John was a professional musician and producer for over a decade. He performed and recorded as a member of several notable alternative pop/rock acts, including The Lemonheads and Blake Babies.

 

The first recording agreement I had the pleasure of signing as a recording artist was a typical, label-friendly, multi-option contract. The anemic royalty, based on the “suggested retail price,” was further depleted by container deductions, deductions for so-called “free goods,” and paid on only 90% of net sales to account for records damaged in shipping (as they often were in the dark ages of shellac discs).  In essence, it was a scam, though a scam that had evolved and had become accepted as industry standard.  I had no idea how lousy the financial terms were for my band at the time. When I finally learned enough about the business to understand the deal terms, I felt duped and angry at our attorney for failing to adequately explain the contract to my band.

I felt much better about the terms of my next deal: a handshake agreement with a startup indie to split all profits from any releases 50/50. We didn’t address territory, ownership of the masters, mechanical royalties, what constitutes the label’s “costs,” or even exclusivity between artist and label. Not surprisingly, we eventually had to fill in some of these terms under somewhat less amicable circumstances.

Now that I spend most of my time representing artists and labels in recording agreement negotiations, I have realized that my experience reflects the two basic types of recording agreements in the late 1980s/1990s industry. On the one hand, majors and some independents insisted upon very formal, generally label-friendly and traditionally-structured deals, and on the other hand certain independent labels offered rather informal net profit split agreements, which were often verbal agreements striving to provide the antithesis of what was widely regarded in the indie community as the outmoded major label-style deal. Both of these models have flaws, and both basic structures exist today, albeit often in slightly more evolved forms.

The challenge that enlightened indie labels, career-minded artists, and counsel for both face today is how to structure and draft a workable written agreement that retains the independent spirit and intrinsic “fairness” of the aforementioned handshake deal. This article is the first of several I will write about net profit split recording agreements; future articles will focus on certain specific issues that are briefly addressed in this introductory piece. Below I will summarize certain key terms that should be considered and addressed in any such agreement.

Ownership of Master Sound Recordings

The question of ownership of the master sound recordings is a key term in any recording agreement. The trend today with independent labels is toward record companies licensing the exclusive rights in master recordings from artists instead of owning the copyrights in the underlying masters. Nevertheless, often a first draft of the contract – even in net profit split deals – is structured so that the label owns the masters. Thus, retaining ownership becomes a key negotiation point. Typical license terms for master recordings range from five to thirty-five years.

Significantly, under United States law any transfer of ownership of sound recordings must be in writing and signed by the transferor to be effective. Thus, any verbal agreement that purports to transfer ownership of masters is void. Furthermore, any license agreement with respect to sound recordings must be in writing or is terminable at will by either party. In a recent federal case, the Butthole Surfers won on appeal in a suit against Touch and Go Records to terminate a verbal license agreement with respect to numerous valuable albums recorded by the band. As such, it is enormously important for any label to insist upon a signed contract for any recording agreement.

Controlled Compositions Clause

In recording agreements, songs that are written in whole or in part by the artist are called “controlled compositions.” Traditionally, labels pay the writers of controlled compositions a royalty – referred to as a “mechanical royalty” in exchange for the writer granting a license to the label to sell recordings of the composition.

The typical approach under net profit split recording agreements to the controlled composition clause is that the artist waives mechanical royalty payments with an acknowledgment that mechanicals are a part of the artist’s share of the net profits. This becomes problematic for the artist/writer because publishers often rely on mechanicals as a guaranteed revenue stream. Without a mechanical royalty stream, the writer/artist is less marketable to publishers. It is often favorable to the artist to establish a separate, recoupable mechanical royalty stream to address this problem.

Definitions of “costs” and “advances”

In net profit split agreements, the difference between “costs” and “advances” can be unclear and confusing. Generally, costs are broadly defined to include all expenses of the label with respect to a project except general overhead. Sometimes, however, labels pass through general overhead expenses to artists on a pro-rata basis.  Costs are recouped “off the top” from the first sale. It’s important to note that the definition of recoupable costs under a net profit agreement can be far broader than a traditional royalty model. As such, the “fairness” of the net profit split can prove somewhat illusory.

In contrast, advances are generally understood to be monies that have been advanced to the artist, which the label recoups solely from the artist’s share of royalties once the label has recouped all costs. It is in the artist’s interest to have as many expenses as possible treated as costs that are shared by artist and label.

Non-Traditional Revenue Streams

The newest model for recording agreements, the so-called 360 deal or all-in deal, can pose problems for artists. It’s no secret in the music industry that it is becoming increasingly difficult for labels to sell sound recordings.  As such, labels may justify commissioning non-traditional revenue streams in their recording agreements, such as touring, publishing and merchandise by citing the generosity of a 50/50 net profit split. Whether or not these emerging deal structures make sense in any particular situation requires a factual analysis.  Depending on the strength of the label, existing fan base of the artist, and other issues, an all-in deal may benefit the artist. Nevertheless, there are many situations in which the all-in deal primarily benefits the label.

Conclusion

As the mainstream music industry struggles to find a new paradigm in the digital age, the indie business is quickly evolving – often to the artist’s advantage.  In the coming months, I will provide more in-depth analysis regarding the points mentioned above and others in future blogs. Please keep in mind, however, that any agreement transferring or licensing copyrights in sound recordings should be in writing, prepared by an attorney with music industry experience, reviewed by competent counsel, and signed by all parties. While I very much appreciate the spirit and intentions with which net profit deals are generally approached, it is crucial to carefully consider and review (and execute a writing with respect to) the material terms of these contracts.

Loren Weisman is an accomplished music producer and drummer based in Seattle, Washington. Having worked on over three hundred albums, Loren has also worked on numerous television, film, video game and radio productions, from New York to Los Angeles, Boston to Seattle. Loren is the founder of Brain Grenade Entertainment LLC , and the author of the Freedom Solutions Recording Plan. Loren has also written The Artist's Guide to Success in the Music Business, a book to help independent musicians achieve self sufficient and sustainable success coming in early 2010.

 

You need to professionally present yourself, your music and your career.  Your recording, promotion, marketing as all your soliciting materials and legal materials need to be done the right way. A strong professional package and promotional presence goes a very long way while a fake or weak presence will hurt you more than you know. Too many bands out there are trying to paint a picture they can't live up to and it is hurting much more than helping them.

Everyone wants to look a little more pro and a little more together than they actually are. Presentation is key, but the problem lies in the fake presentations that just don’t balance out. While you are trying to look a little sharper, stronger and better, you are actually doing exactly the opposite.

Think about what impresses you and why. Then think about what is considered strong in the industry. Think about what is impressive on a more professional and business level. Lean towards a mix of something in the middle. There are artists out there that brag about the cars, the jewelry, the money and the fame before they make it. They have major labels or investors that are giving them all the materials they are bragging about.

Now, when you talk about your “ride” being the best but you are sporting a broken down Toyota, this sends a negative message. The other artist you are emulating has the label or investors behind him to basically live up to the hype. You, on the other hand, are failing miserably.

It’s the same when a majorly invested artist brags about their sales and profits. There is a marketing campaign behind some of these artists that in turn will make these sales actually meet the hype. Now, for most people, when they talk about all the sales and are barely scraping by, it does not look strong.

You want to stand out, you want to appear professional, while at the same time showing your own personality to an industry that is full of copycats and liars. Yes, there are molds and templates, parts of which can be beneficial, but do you really want to be just another copycat?

For example …In the “do you really want to be that guy or that girl?” category..

Do you really want to take the promo shots of you on the phone?

Come on! How many poser looking people take shots of themselves on the phone looking like they are doing business while trying to pull off a “cool” pose at the same time? I don’t care if you are an artist, a manager, a label rep or anyone else, taking a picture of yourself on the phone is overused, overdone and only makes you look like a poser.

You really want to do that?

Instead….

What about shots of you on a typewriter, with a bullhorn, giving off the town crier vibe or something a little more original that might give off that cool business sense you are trying for, but adding a touch of something different.

Do you really want to be that asshole with the excessive bling?

The jewelry shots: because that is so original. It is so overdone. At one point, it was impressive, but now it's gone completely over the top.

You really want to do that?

Instead..

Go minimal, try something else clothing or accessory wise. Try something that will make your picture look like yours and not the carbon copy of a hundred thousands of others.

Do you really want to be the guys surrounded by the girls…like EVERYONE DOES?

What about all the scantily clad women around the artist? Because again, no one has ever seen thousands of these pictures.

You really want to do that?

Instead..

Come on, have your picture, image or ideas stick out from the bland and repetitive. Maybe go opposite and have a bunch of old men around you. I know, a little weird, but still, a touch different. 

Do you really want to be the band or artist to brag, put down and over talk?

Think of all the overly hyped intros of songs and all the shit talking in the blogs, on the websites and on the networking sites. So very unoriginal and so very annoying.

I am the best!

No one can touch me

We don’t sound like anyone.

All the girls want to be with me, all the guys want to be me.

 

You really want to do that?

Instead..

How about coming across confident and assertive without being arrogant.  That would be a serious breath of fresh air. Show and showcase your ability through the ability and not through trash talking, overhyping or, worst of all, putting other people down.

Do you really want to be the liar with the fake music business?

There are way too many people out there making one of the biggest mistakes you can make: claiming to run a label, a management group or be an agency when they actually aren’t.

People out there calling themselves CEO’s that are not even incorporated are trying to look all cool and hip, but to the industry, they look like morons. People implying that they have these intense and immense organizations that are looking to sign artists or have contacts to all the major labels put up a grat deal of red flags to the industry professionals. While a couple girls and a few fans might think it is cool. You are actually hurting yourself and your chances.

First off, the upper level industry may shy away from you thinking that you are either a real organization that will only make it harder to work with you and add additional middle men and additional trouble. Or they may take a quick look and realize that you are not a real company at all, losing you their respect.

Finding out whether or not a company is real is very simple.  All you have to do is go to the attorney general's website for that state or run a national search with the name of the company. As soon as it does not come up, you immediately have started up in fifth gear with the bad impression.

You really want to do that?

Instead..

Tell the truth or start an LLC, a small company or a sole proprietorship. Make it legal. Make your words match the facts and help make you look like a true pro, regardless of where you are.

 

Conclusion

 

It's funny how sometimes what we think is making us look really good or really professional is actually doing the exact opposite. What is lame to you when you are making fun of someone for doing any of the above is probably just as lame if you look in the mirror and realize you are doing the same lame thing yourself.

 

Take the steps to stand out as professionally as you can, as creatively as you can and as originally as you can. Use the ideas that work, but add your personal touch to them. In an industry where it has all been done and seen before, the more you can alter, adapt and add to anything and make it a bit different than others, you will display the truest level of professionalism and show how you are more than many by your actions and your truths instead of your lies and your fake presence.

 

© 2009 Loren Weisman

www.braingrenademusic.com

 

Watch out for Loren Weisman’s book “The Artist's Guide to Success in the Music Business” coming soon.

 

 

Martin Atkins has a 30 year career in the music business that includes touring with the bands Public Image Limited, Killing Joke, Ministry, Nine Inch Nails and Pigface, owning an independent record label celebrating its 20th anniversary with over 350 releases, and is an instructor at Columbia College Chicago teaching The Business of Touring, Applied Marketing, and Indie Label Management. He is also the author of the book Tour:Smart and a founder of Revolution Number Three - a school where students learn IN the business, not ABOUT the business.

It turns out that Nike is right.  You can JUST DO IT.  If, when faced with a less-than-ideal situation, you find yourself immediately getting defensive or rolodex-ing the million reasons (and people) who are responsible for your lack of action, movement forward, success, or blowjob - then STOP.  Stop everything. 

 

If you’re on this path the next thing that is going to happen is that I am going to start telling you motivating stories of triumphs without budgets, greatness without cash, groovyness in the face of everything.  You’ll start retreating and reinforcing your position that all you need is a manager, an agent, a producer, and several budgets (because now you have the hang of Microsoft Excel and can make a silly wish list pie in the sky budget why not make a few more!)  We’ll go back and forth.  Me, trying to convince you that the solution to everything lies within you, and you blaming everyone but yourself.

 

Well...., I'm not doing that any more.  No, I'm not giving up on you but I’ve come to realize that my time is better spent helping the few that get it (or at least a bit of it) rather than smashing myself in the face with a recently stolen parking meter. 

 

The glorious part of that is the amazing flower that blossoms and brightens the half dug up, oil slicked concrete pock marked car park (not the orchid that blooms in the temperature controlled hydroponic environment).  The other way of saying that (literally in a less flowery style) is:  triumph in the face of adversity!  Sounds like something you'd print on a coffee mug and recite over the cappuccino machine on a bright sunny morning, doesn’t it?  Like, “Triumph in the face of adversity - who wants the last blueberry bagel?" 

 

Actually, it’s a phrase that’s going to be much more useful in the very pits of a lonely, stark, harsh reality-check bio-hazard hot tub, bubbling with despair, defeat, and hopeless sadness.  Any fuckhead can survive an on-stage “catastrophe” of a broken string and waffle into the bar afterwards and recap in horrifying microscope detail: "...And that’s how I managed to clip on the strap right before the middle G on Dave’s bass solo!” 

 

No one really tells the story of, “....and that’s how I avoided killing myself in the middle of a really bad period of my life.”  It’s easier to share the epic tale of “How I Survived a Broken Guitar String” than it is talk about the “deep stuff.”  That is, I suppose, a weird part of all this too.  Music is a very powerful force in each of us.   People commit themselves to sounds, bands, and entire movements.  Sometimes (more often than we might think) the people making that music are awash in a sea of emotions and problems of their own unknowingly helping others whilst sometimes not emerging from the tunnel themselves. 

 

We are equipped with instructions, advice, and guidance that is at best flawed, but more often non-existent, misguided, deliberately obtuse or cloudy.  It sometimes feels like giving a soldier about to land in Afghanistan instructions for Pac-Man or a DVD episode of Dr. Phil to play to the enemy.  Maybe it’s like giving a shuttle pilot the ignition key, the location of the GO! button and nothing else......a fucking blender comes with more meaningful instructions than the desire to create a career in music or art.

 

So, yes, clearly, I “get-it.”  I’ve lived it.  I’m still living it.  I'm fond of saying, “it’s not rocket science” and much of it isn't.  It is a lot lot lot of hard hard work that you can do - easy peasy.  Then, of course there’s the other stuff.

 

The good news is that if you start doing the hundreds of easy tasks ahead of you, you might grab the tenacity, ingenuity, sense of humor, and resilience you are going to need for so many of the other not-as-easy things.  The bad news is...   Actually, there isn't any bad news right now - unless you want to make some up for yourself.

 

Coming to these conclusions on my own in the last few weeks has really helped me.  I met some amazing folks at Unconvention in Manchester a few weeks ago.  I’m still doing consulting, but I’ve put together a few other packages to make myself accessible to those of you who are ready to work.  Contact me if you want more info on that.

 

And for those of you who need a little bit more structure, maybe revolution number three is the place for you.  It’s a school that I’m starting. 

 

And, lastly, a new Pigface album just dropped.  Along with it comes some CD release parties, gallery shows, and all kinds of wonderful-ness. 

 

So, not the usual “ten ways to play drums faster!’ tips this week, more of an introspective, philosophical thing – but that’s the way it goes…….

 

See you on the road.

 

Upcoming dates:

 

Saturday, June 27 - Chicago IL

Time TBD Martin Atkins DJ set / Pigface CD Relase Party at Vampire Night at Lucky Number Grill 1931 N. Milwaukee Ave. Chicago, IL 60647

FREE ADMISSION if dressed like a vampire or $5 at the door.  more info: http://www.myspace.com/vampirenightchicago

 

Friday, July 10th - Baltimore, MD.
The Metro Gallery, Baltimore.  Martin Atkins Gallery showcase.  Showcase/sale of his artwork.  1700 N. Charles St.; Baltimore, MD 21201 sarah@themetrogallery.net
8pm to 11pm, Doors open at 7pm.  Free wine from 7pm to 8pm.

Saturday, July 11th - Baltimore, MD.
Orpheus, Baltimore.  Pigface CD Release Party.  Martin DJ Set from 11pm to 12am.  More details to come.  1003 E. Pratt St.; Baltimore, MD 21202.

 

Peers, Friends & Fans

It’s one of the most memorable scenes from “This Is Spinal Tap” and marvelously summed up the prima donna cock-rock superstar.  Tap’s guitar player, Nigel Tuffnell, draws his managers attention to the buffet plate back stage, complaining about the size of the bread, and that he can’t make a sandwich with tiny bread – “It’s a disaster!” he squeals like a 5-year-old.

Rightly or wrongly, the mythos exists that being in a “successful” band means being waited on hand and foot, being lord over all you survey (labels, partners, peers and fans) and that hissy-fits and difficult behavior can be excused because you’re an “artist” – some would even say that being difficult is a pre-requisite of being a true artist.
 
The truth is that working in music is essential working with people.  Despite the appearance that a musician has single-handedly conquered his particular domain, there is a subtle and intricate network, usually numbering into the hundreds of people, who’ve all played their part in propping up this particular house of cards.  

If you operate under the assumption that success in this industry can be achieved by you alone, you’ll probably last as long as one of Spinal Tap’s drummers.

And this applies to music businesses, too.  Working as a label or promoter is such intensive work that it can be far too easy to become absorbed with your work, never looking up or taking time to see if there’re other businesses or individuals involved in similar or possibly complimentary activities.

With that in mind, I think we can divide the types of people that really matter into 3 groups.

Peers:  

These include artists, songwriters and other music businesses.  The myth exists most strongly here – other businesses are the “competition”. (for the sake of this piece I’ll call all artists & music enterprises “businesses”).  They might steal your ideas.

In today’s music business, I think we need to blow this thought out of the water.  Ideas are so numerous people are giving them away.  Whatever the idea, it’s the execution, not the idea , that matters most.

Not only that but interaction with other businesses is begun in the spirit of co-operation with the goal of mutual benefit or the achievement of common goals.  

Of course you need to work with people you trust, with companies who share your outlook and ethos – but pulling down your shutters to the outside world because the chance exists that things may not turn out well is a sure path to failure.

Get out to networking events or start your own.  Anything that gets your peers into a room together, talking to as many people as possible is of benefit.  That was a main motivating factor behind UnConvention Belfast (and, I believe, Un-Convention in general) as well as the now-monthly Northern Ireland Music Industry Meetups in Belfast that followed on from UnConvention.

It’s not a question of competition or stealing ideas.  It’s simply a question of optimism (think of what we could achieve together!) versus pessimism (they’ll abuse my trust and betray me somehow).  Where do you stand?

Friends:  

These include bloggers, interviewers or radio – anyone who, for whatever reason, is interested in your music and is taking the time to talk to you about it.

Research the company behind the interview, find out who listens or comments on the content but above all else be enthusiastic.

I’ve heard so many stories from people in radio where the rock ‘n’roll ethos is so prevalent (among established and emerging acts alike) that the band or songwriter treats the interviewer with indifference, or worse, with “don’t-you-know-who-I-am?”-style contempt.  

The truth is, no matter how successful you are, every person you interact with as a business has the potential to change the game for you and your endeavors.  The problem is that there’s no way to tell who that’ll be – by acting like a Rockstar you’re basically destroying any chance that one of these people will help you in the future.

Fans:  

I’ve talked quite a bit about how to treat your fans, but the basic tenet to understand is that they have as much control over your success as any writer from Pitchfork or WOXY.

The amount of times I’ve seen bands treat their audiences with contempt is beyond count and, although disasters like Wavve’s recent meltdown in front of an audience of potential fans at Primavera are rare, there’re plenty of other missed opportunities.

Most bands will say “thanks for listening” after a show, but are they really thankful?  If they are, how are they showing it?  How about writing an email the day AFTER the show to thank attendees, including a demo of the new track you just wrote?  Or making sure fans leave with some music as a tangible “thank you”?

The goal in all of this is that the next time you’re working on a new business idea / have a tour to promote / playing a show in someone’s town, you’ve earned the loyalty of people you interacted with the last time you were there.
 
Do you think you’ll have that loyalty if you run step-by-step through the Rockstar playbook?   

I’d say if you toss aside the Rockstar shit, if you act with genuine enthusiasm, humility and with a sincere recognition that it’s a privilege to work in music, you’re much more likely to have that loyalty.

 

John Doe is the founder of the seminal Los Angeles punk group X, a solo artist and actor. John answers questions from our community members in the WWJDD? blog. Photo by Autumn de Wilde.

A Question from Donna in Princeton, NJ

Hi John, 

I love your blog. I'm a writer and this morning I was thinking about how I strive to reach this ideal with my words...this fantasy vision inside my head...I'm wondering if that's what you have inside your head when you write a song and which of your songs come closest to that vision? I'm also wondering, what do musicians talk about when they get together? Different venues? Life on the road? Management? I've found that writers talk more about business than art, but maybe that is different with the people you know? 

Thanks for your time, 

Donna

WWJDD?

Hey Donna,
  To answer "what do musicians talk about" totally depends on what genre yr referring to.  From my experience it usually revolves around other tours, preposterous situations, war stories, diva demands, amazing venues, bragging about how many states-countries-gigs completed in the shortest number of days, etc. Only musicians who know each other well will ask advice on business matters but that does happen. There also is a fair amount of exchange regarding other bands, records or performances so that people are informed or turned on to something worthwhile; new or old.  Then I suppose there are others who just talk about drugs, food & sexual conquests or how much they spent on "bling".
  I've found that attempting to realize a "vision" is usually disappointing.  I tend to begin w/ a moment or thought & let it become what it's going to become as it takes shape & hopefully is complete. Here it's best to know when something is "done" & when it needs more attention to be the best song it can.  I'll take a certain piece of writing & elaborate on that or some music that has stayed w/ me for a while & complete that. That's specific to writing a song or piece of music.  Then there is a whole other layer of creative process that happens during recording. This involves the beauty or trials of working w/ other players, singers, engineers, producers & finally mixing; etc.  This is where the "vision" thing can get particularly contentious.  It seems more rewarding to allow room for the unexpected to make the piece better than what you might've envisioned.  Expectations are most often impossible to realize.
  I hope this helps.
and as always, thanks for writing,
yrs, JD

If you have questions for John Doe about music, the music business or life feel free to email them to wwjdd@knowthemusicbiz.com.

For more information on John Doe check out theejohndoe.com or YepRoc.com .