So You Wanna Be a Rock 'n Roll Star... In The
By Paul Ungar, MusicDish.com
As one of my esteemed colleagues remarked recently,
"There's only about three deals out there and two of 'em are going
to the winners of 'American F%#@-ing Idol'!"
it's not quite that bad, but the "traditional" music business is
changing very quickly in a number of significant ways that directly
affect an unsigned artist's ability to obtain a "traditional" record
deal via "traditional" means (e.g., "demo shopping" and "showcasing",
The fact is that despite the number of really talented
artists out there, there are fewer and fewer "major" and "major
indie" record labels and further, the remaining labels are only
signing a small number of "major" deals with new artists. This is
due in substantial part to the tremendous costs incurred by the
big companies in "breaking" new acts - one of my major label clients
spends an average of between US $1.5 and $2 Million on each of its
new bands (most of which the bands don't see except as a "red" balance
on their royalty statements!) including production, manufacturing
and - most importantly - on promotion and marketing costs.
A big reason for these high costs is that today music
is marketed not only through the "traditional" channels (e.g., radio
and "live" appearances), but also through television (e.g., MTV,
BET, VH1, etc.) as well as through major mass media corporate marketing
campaigns. All of that adds up to a lot of money invested but despite
the increased amount spent by the labels, most of them nevertheless
continue with their historic (and not-so-great) ratio of only a
very few successful bands out of the total number of bands signed.
Compare that to 20 some-odd years ago when I first
started practicing entertainment law when the labels literally signed
hundreds of artists each year to small "singles" deals - if you
had 1 decent R&B tune, for instance, you could get signed to a big
label like Atlantic Records for about $5,000 and then they'd release
your record in 1 or 2 regional markets and spend about $20Gs on
radio promo, etc. The theory was that out of all of those artists,
something would "stick to the wall" -e.g., one of them would turn
out to be Aretha Franklin - the labels could afford to do it that
way and that model worked pretty well for them.
But nowadays, given the millions required to be invested
in promotion and marketing, even the biggest companies don't have
enough money to sign 500 bands a year at those levels of spending.
Couple this with the current general malaise and confusion throughout
the industry - losses in sales which are resulting in corporate
shrinkage and implosions - mergers, downsizing, mass firings of
staff, pairing down of artist rosters, etc. plus, add in on top
all of that the still unresolved problems surrounding digital downloading,
piracy, etc., etc. - many execs that I know have that stunned "deer-in-the-headlights"
look, not exactly sure where the whole shebang is going and most
of them don't seem to be much in the mood these days to risk their
ever more increasingly tenuous job situations on signing lots of
In any case, one big result of all this is that the
labels are very, very selective - to put it mildly - about signing
new artists. For example, one of my major label clients only signed
one - that's right - one - new band during all of 2003 (versus over
the past four or five years, they were signing about two new bands
per calendar quarter or about 8 -10 new bands a year to fairly sizeable
deals). And they have a big A&R staff who see a lot of pre-screened
very good bands... Still, they only signed - I'll say it again -
one - new band all of last year!
(P.S. - Rather than signing bands, they spend most
of their time, money and effort "maxing" out their proven multi-platinum
successes every which way they can think of for as long as they
can - licensing masters by their superstars into movies, TV shows,
commercials, "tie-ins" and other product endorsements (my personal
contractual favorite - personal hygiene products), karaoke, computer
games, other "new media" exploitations, whatever, etc. - the risk/reward
ratio with an established artist is way more favorable in their
minds than investing a couple of million dollars in a brandy new
act - particularly in these uncertain times).
So you're in a great band ...what do you do to get
signed, given the ever-shrinking number of deals and the tremendous
competition out there? (Quick - how many good unsigned bands do
you know in your area? Probably a lot!). The sad truth is no matter
how good you are, just based on the numbers alone - lots of bands,
hardly any deals - the odds are against any one particular project.
But here are a few "real life" stories that not only should offer
a lot of hope, but hopefully will get you thinking:
A small label client of mine in the "dance" music
field signed an act and released a CD single, which had a UPC bar
code. The VP of the label was one of the biggest DJs at one of the
biggest clubs in New Jersey and a well-known radio personality.
He also was well connected with other top "dance" DJs in Brooklyn,
Manhattan, Queens, etc. and with the program director of the main
"dance" radio station in the NYC Metro area. Using promotional resources
in a cost effective way in one key regional market for this genre,
my client mounted a relatively inexpensive but highly successful
marketing campaign that resulted in sales of about 35,000 units
of the CD in less than three weeks. Shortly after achieving such
sales, I received a phone call from the president of a "dance" label
affiliate of one of the big "majors" and the conversation went something
"Hey there, Paul, we monitor SoundScan and this hit
our radar screens bigtime and we want the act. So what do you want?"
Since I'm not a mind reader (but I'm a real good and very seasoned
negotiator...), I replied in partial jest, "What do I want? I want
a billion dollars and I want to be your boss. But seriously, since
you're interested in my client's intellectual property and I'm sure
you have some thoughts and potential plans in mind, why don't you
make me an offer?" "OK," he replied, "How about $150K for the first
album?" Having discussed this very possibility in advance with my
client, I said, "Nope, not enough." Then he asked, "How about $250K?"
Again, I replied "Nope." Finally, he said, "How about $350K?" Then
I said, "I'll speak with my client and get back to you...." Just
like that, in about 10 seconds, he went from $150,000 to $350,000
for album #1. Just like that...
One of my major label clients got into a bidding war
with another "major" label over a band whose self-released CD within
one week had "SoundScanned" 5,000 units. They also had obtained
a UPC barcode on their CD and further, they hired a well-respected
and well-connected professional publicist to place some reviews
in some key "brick-and-mortar" "fanzines" as well as in a number
of "hip" "on-line" publications and otherwise to "create a buzz"
on the band. That band got signed to a very nice deal.
A band that I represent was the #1 downloaded band
on several major Internet "download" websites for more than two
weeks in a row. I received a call from a "major" label representative
who told me that their staff monitors these sites and they "noticed"
the band's position ("We're #1!"), and they were now very, very
interested in the band. We're still talking...
What's the point? The point is that these labels called
me - not the other way around. They called me because my clients
were able to get their attention by creating real sales - both "brick-and-mortar"
units that were recorded by SoundScan (because my clients got a
UPC barcode) as well as through digital downloads recorded on major
"download" websites - that were monitored by their "in-house" staff.
They called me because today the labels are looking more and more
to the "outside" for "test market" results (unlike the "old days"
when the labels "test marketed" their own products through lots
of small deals as described above). And when my clients demonstrate
real results - real money generated - the labels call me, and then
I'm much more able to parlay the situation into a more favorable
result for my clients.
How did my clients generate their sales? Well, unfortunately,
it's not just about whether you have a good band. As I said before,
there are a lot of good bands out there and not a whole lot of deals.
A lot of it is about marketing and promotion, which doesn't necessarily
have to cost a lot of money. But you have to expect to spend some
money on promotion and marketing if you want to successfully compete
- particularly with all the unsigned bands and "indie" labels who
are out there spending money actively promoting themselves.
On one extreme, a press agent colleague told me that
any time any of my clients wants a two page article in a magazine
like "People," together with a nice color photo and any story angle
you want, he'll do it for a fee of about $35,000 and you're in.
Do you really think it's a coincidence that Joe Blow & the Schmoes
is on the cover of The Rolling Stone this week, on Howard Stern
this morning, Jay Leno tonight, "Good Morning America" tomorrow
morning, Letterman tomorrow night, etc. plugging their movie/record/book
which will be released the day after tomorrow? Of course not...
it's the result of another mega-corporate advertising campaign to
grab buyers' attention and their cashish.
Can you compete with that kind of advertising? Probably
not, unless you're independently wealthy. But scale it down a bit.
After all, one of the great contributions of America to Western
Civilization is: "Advertising Works!" The idea that you can simply
start a band, write and record some good tunes, put up a website,
submit a demo and then get signed - the modern equivalent of an
old Mickey Rooney/Judy Garland teenage fantasy showbiz movie ("Gee,
We're All So Talented So Let's put on a Play in the Barn and Get
Discovered and Live Happily Ever After, Etc...") - sorry if I'm
dating myself - anyway, it's exceedingly naive - particularly in
these uncertain times.
But bands are still getting signed. And I'm seeing
somewhat of a resurrection of "development" situations (read: "small",
"look/see" and - what-do-you-know - "singles" deals - once again
illustrating the cliches "the more things change....", and "what
goes around...."). But, seriously folks, I've seen the best results
- e.g, read: bigger deals - when a good band independently generates
sales through not necessarily expensive - but almost always very,
very inventive - marketing as illustrated by the final lesson for
today - a true story from the very annals of rock 'n roll history:
The manager of the classic rock band Kansas got them
signed to a "major" label by going around a college campus where
the band was going to be playing and advertising "Free Beer" at
the gig. Well, several thousand students showed up (most of whom
had probably never even heard of Kansas before but who definitely
heard about the free beer). Several hours into the gig, the manager
brought an A&R guy from the record company into the club who witnessed
a kick-ass performance by the band in front of thousands of screaming
"fans." Kansas got signed shortly thereafter.
Now, I'm not advocating giving away alcohol to underage
college kids - after all, I'm an "officer of the Court" in three
states - well, the main point about that "free beer" is: it wasn't
"free" and it didn't materialize out of nowhere. Somebody thought
it up and, yes, somebody paid for it. Did it have to cost a zillion
dollars? No. Did it cost something? Yes.
So the moral of the story is that you have to be more
than "good" - you also have to be creative and willing to spend
at least some bucks if you want to generate sales. And most important,
those sales that you work so hard to generate need to be able to
be monitored by the labels. So investigate getting a UPC barcode
for your CD (yes, it costs some money, but not a lot...) and also
investigate selling your CD through channels that are hooked up
to SoundScan as well as via the "download" websites.
Maybe instead of selling your album length CDs at
your gig, you give away a promo CD single together with a coupon
for $1 off your album if they go to "Mom & Pops' Record Store" which
is hooked into SoundScan and where you've got your product for sale
at a special "insider" price. Or something like that... Then maybe
you'll get that call that could make your dreams come true. And
maybe if they offer you a $200G advance and you've already sold
35,000 units at $7 or $8 wholesale a unit and you do the multiplication
and then divide by the number of your new potential "partners,"
you might find yourself "re-thinking" the whole affair anyway.
by the MusicDish
Network. Copyright © Tag
It 2004 - Republished with Permission