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December 2, 2009 6:27 AM   Subscribe

Tim Quirk of Too Much Joy blogs about the royalty statement he received from Warner Bros. detailing their income from online sales, totalling $62.47. Via.
posted by waraw (63 comments total) 24 users marked this as a favorite

 
I've got him beat. I once received a quarterly BMI check (that's royalties for radio play) for one cent. No shit. They spent 25 cents postage (or whatever it was then) to send me a check for ONE CENT.
posted by flapjax at midnite at 6:34 AM on December 2, 2009 [10 favorites]


Apparently the $62 isn't enough to cover his hosting plan... server's torqued.
posted by jenkinsEar at 6:36 AM on December 2, 2009


The first asterisked footnote is the most interesting part.

server's torqued.

No it's not.
posted by mediareport at 6:42 AM on December 2, 2009 [1 favorite]


It's a good article. Quirk lays it out clearly, and it's written with a tone and attitude that ordinary folk can surely relate to.
posted by flapjax at midnite at 6:43 AM on December 2, 2009 [1 favorite]


server's torqued.

I got this the first time I clicked on the link:

Error establishing a database connection

Clicked again and the page opened. Maybe you just gotta keep trying.
posted by flapjax at midnite at 6:45 AM on December 2, 2009


It didn't work at first for me, but CoralCDN worked.
posted by a robot made out of meat at 6:50 AM on December 2, 2009 [1 favorite]


from the Tim Quirk link: So I was naively excited when I opened the envelope.

Hasn't he been in the music business long enough to know better?
posted by Slack-a-gogo at 6:56 AM on December 2, 2009 [1 favorite]


They spent 25 cents postage (or whatever it was then) to send me a check for ONE CENT.

So if I download a torrent of your music, I'd actually be saving BMI money.
posted by DU at 6:57 AM on December 2, 2009 [18 favorites]


I've got him beat. I once received a quarterly BMI check (that's royalties for radio play) for one cent. No shit. They spent 25 cents postage (or whatever it was then) to send me a check for ONE CENT.

Pfft. That's a joke.

I work in the Canadian government. There was a feeling that money was being wasted or not tracked properly when placing purchase orders with external companies. As a result, they complicated the process, requiring more signatures, more paperwork, more work from everyone, just so they could ensure "proper" tracking if the money.

The net result of all this is that now, if we want to order a $20 USB stick, we have to produce a purchase order that in the ends costs us many hundreds of dollars because of all the time spent on it.

Yay.
posted by splice at 6:57 AM on December 2, 2009 [4 favorites]


Woah, that was really interesting, thanks for making the FPP. And that first footnote was fascinating -- the fakey-fakey accounting involved in the music business would put the mafia's money launderers to shame.
posted by Forktine at 6:58 AM on December 2, 2009


See The Problem With Music by Steve Albini.
posted by jeffburdges at 7:00 AM on December 2, 2009


So much for the utopian ideals of the Internets doing away with the Industry's rapacious, feudal, parasitic relationship to music. On a 10% royalty the music publisher would have to make a %900 profit on a given album before the musician saw a dime. Jesus Christ.

Now that recording and distribution is so cheap, the only thing keeping the recording industry alive is inertia and monopoly power. I'm praying for the day it's replaced by a constellation of smaller industries (recording studios, music marketing and promotion, touring) that operate either via fixed-price or straight percentages of revenue from the musician's already-recorded-and-published-for-pennies music.
posted by xthlc at 7:03 AM on December 2, 2009 [1 favorite]


The net result of all this is that now, if we want to order a $20 USB stick, we have to produce a purchase order that in the ends costs us many hundreds of dollars because of all the time spent on it.

At least your USB sticks only cost $20. If you worked for the *US* government, you'd be required to order from an approved list of vendors, none of which sold USB sticks for less than $200.
posted by DU at 7:05 AM on December 2, 2009 [5 favorites]


L.A., what a great place!
posted by rikschell at 7:08 AM on December 2, 2009 [4 favorites]


Albini really needs to update that thing as a public service to everybody that still links to it. So much has changed since he wrote it. The sentiment would still be the same, but there are lots of new accounting tricks and twists that I'd like to see his take on.

I've been a fan of Tim Quirk since Green Eggs and Crack and I've always liked his approach to both the music and the music industry. Thanks for posting this - I sort of lost track of where he is now.
posted by Slack-a-gogo at 7:09 AM on December 2, 2009 [2 favorites]


Now that recording and distribution is so cheap

But marketing is still expensive.

I'm praying for the day it's replaced by a constellation of smaller industries (recording studios, music marketing and promotion, touring)

I am too, but the service that could be unbundled you left out is lending. The effective rates that money is lent from a record label's "bank" to the promotions dept. is usurious, but the risk is like a ninja mortgage.

Maybe the future of profitable bands looks like They Might Be Giants who seem to hire people (I'm guessing with real money, not points of future vapordollars) and do cheap marketing with a website, dial-a-song and word of mouth from a rabid fanbase. They know the name of the guy that books their shows & it's the same guy tour after tour.
posted by morganw at 7:14 AM on December 2, 2009 [3 favorites]


Internet radio was the real opportunity for independent unsigned artists, but the recording industry illegally charges internet radio stations even for music not owned by the industry.
posted by jeffburdges at 7:20 AM on December 2, 2009


I wrote a chapter in a book for O'Reilly back in 2001. Co-wrote, actually, I'm about a 1/25th author of that book. Like most tech books it's largely obsolete now, no one's buying it today. And my royalty balance is mildly negative, I think because of some optimism about initial sales or something.

Nevertheless I get a royalty statement every few months from O'Reilly. Detailing the 15 digital sales copies of the book, and the subsequent $0.05 in royalties I personally earned from my 1/25th share. Getting the statement always makes me laugh a bit.

Reading this article I now have much greater respect for O'Reilly's accounting. Because I have no doubt O'Reilly's statement is correct and fair and honest. And they're producing it without me having to make any special request or badger them. I doubt it's much harder to account for music royalties than book royalties. It's just that O'Reilly is nice to its authors, whereas the music industry treats its talent like crap.
posted by Nelson at 7:39 AM on December 2, 2009 [7 favorites]


On a 10% royalty the music publisher would have to make a %900 profit on a given album before the musician saw a dime.

The trick is that isn't 900% profit - there are still very real costs to be paid in there. The advance covers the recording time, engineers and mixing folks, cost to press and market the record, and whatever else they charge the band. The shady part is that the other 90% of an album DOESN'T cover this. Somehow, there is enough bureaucracy that needs to run, that 90% of the album goes to the label. There are middle people galore, but that many? The Steve Albini rant covers all this in gruesome detail.
posted by filthy light thief at 7:43 AM on December 2, 2009 [4 favorites]


On a 10% royalty the music publisher would have to make a %900 profit on a given album before the musician saw a dime. Jesus Christ.

That's not really a fair accounting of it. By Tim Quirk's telling, TMJ was fronted 400K of royalty, and it just means that they need to "earn back" all 400K before the company will send the musicians any further dimes.

The shame of this is not that arrangement, but that they do shoddy accounting for all but the "recouped" artists who are currently earning additional royalty checks. Granted, from the record company's perspective, it's 99.99% sure that TMJ will never be recouped, and why does it matter if they're at -394K or -384K, but Quirk's point is simply that it's their job to keep track, and they ought to do a better job.

It'd definitely suck to be closer to that break-even point and not be sure that the company's properly counting royalties, but it's still a matter or principle for Quirk, and they probably are screwing over other artists in this way.
posted by explosion at 7:50 AM on December 2, 2009 [2 favorites]


On a 10% royalty the music publisher would have to make a %900 profit on a given album before the musician saw a dime. Jesus Christ.

If the record company invests $1m in 10 different artists, 9 of which flop, the company isn't in profit until they've made $10m on the successful band. Seems fair enough to me.
posted by cillit bang at 7:52 AM on December 2, 2009


If you worked for the *US* government, you'd be required to order from an approved list of vendors, none of which sold USB sticks for less than $200.

Going for the cheap laugh, right? Don't let those pesky facts get in the way of a good snarky comment.
posted by fixedgear at 8:18 AM on December 2, 2009 [4 favorites]


It does seem, at its base, that what the record company that Quirk is doing is creating excuses for artists to never EVER be recouped. Even if a debt is chipped away at by tiny bits, there is still a chance that someday the account will flip from red to black as the royalties accrue. But if a company just flat refuses to even bother keeping track because they regard it all as chump change, then the red balance remains on the books forever and there is never any progress at all.

Over time, decades in a person's life, this could lead to basically screwing someone out of late-in-life royalty checks. Shame on the record companies for not actually doing what they are likely bound by contract to do, which is account for artist royalties and credit them to that artist's account. Even if it seems like the amounts are "rounding errors" to the corporations, to individuals every little bit toward actually receiving money earned can make a huge difference.
posted by hippybear at 8:26 AM on December 2, 2009 [4 favorites]


Grrrr. "that what the record company that Quirk is writing about is doing.."
posted by hippybear at 8:38 AM on December 2, 2009


Giving the music industry the benefit of one doubt (which they've more than squandered in many other ways; this is not a defense of the major label system), their accountancy practices were established and more or less formalized before the era of computer systems that could readily handle the complexity and volume of royalty calculations, so the standard practice of providing detailed calculations for the sure money-makers and handwaving the rest could have been a cost efficiency on par with not spending 25 cents to mail a penny royalty. Otherwise Warners et al would be paying more to the keypunchers needed for generating reports for everybody than to the artists receiving the statements.

These days, when having a tight, detailed reporting system doesn't cost significantly more than a handwavy one (the set up may cost significantly more, but the ongoing cost would not), excuses like those in Tim Quirk's story are harder to tolerate.
posted by ardgedee at 8:59 AM on December 2, 2009


It does seem, at its base, that what the record company that Quirk is doing is creating excuses for artists to never EVER be recouped.

The other interesting possibility he raises is that the industry is avoiding like anything actually fixing its accounting because if they did it would suddenly be revealed that they owed the recouped bands a whole lot more.

I happen to know someone who has one of these onerous technical obligations to a major label as a result of a near-miss brush with fame, and (seeing as how I'm not "inside" even the local indie music scene at all, it's just pure random association) it makes me wonder just how many people the majors actually have on this hook. It makes you think there might be a nice little class action suit in there somewhere...
posted by nanojath at 9:07 AM on December 2, 2009 [3 favorites]


That's not really a fair accounting of it. By Tim Quirk's telling ...

He says that on a CD that wholesales for $10 (that is, the label sells it for $10) only $1 of that applies to the band's debt. From his post:

* A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $395,214.71 after that $62.47 digital windfall), this doesn’t mean Warner “lost” nearly $400,000 on the band. That’s how much they spent on us, and we don’t see any royalty checks until it’s paid back, but it doesn’t get paid back out of the full price of every album sold. It gets paid back out of the band’s share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let’s say Warner Bros. spent something like $450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $10 each, they would have earned back the $450,000. But if those records were retailing for $15, TMJ would have only paid back $67,500, and our statement would show an unrecouped balance of $382,500.
posted by zippy at 9:13 AM on December 2, 2009



server's torqued.

No it's not.


Yes it is. Been trying for 15 minutes. Is there a cached version somewhere?
posted by anazgnos at 9:23 AM on December 2, 2009


Very interesting article; thanks for posting. Leave it to Steve Albini to get it 100% right, way back in 1993.

And Tim Quirk has a really awesome name. If I had that moniker, I'd love it if people called me QuirkXPress.
posted by porn in the woods at 9:33 AM on December 2, 2009


Coral cache works for me. Good read.
posted by goodnewsfortheinsane at 9:35 AM on December 2, 2009



And Tim Quirk has a really awesome name. If I had that moniker, I'd love it if people called me QuirkXPress.

I want to be Tim "Otter" Quirk.
posted by bakerina at 9:44 AM on December 2, 2009


Maybe the future of profitable bands looks like They Might Be Giants who seem to hire people (I'm guessing with real money, not points of future vapordollars) and do cheap marketing with a website, dial-a-song and word of mouth from a rabid fanbase. They know the name of the guy that books their shows & it's the same guy tour after tour

First let me say, I love TMBG and have been a fan since the late-eighties/early nineties, but if you think their marketing amounts to nothing more than "a website, dial-a-song and word of mouth from a rabid fanbase," you haven't been paying very close attention

TMBG is practically the house band for Disney's Mickey Mouse Clubhouse (and really, the Disney channel in general), and with their latest kids albums being released on Disney's own record label, I think it's ludicrous to suggest that their marketing is purely "word of mouth" in any sense anymore. And really, it never has been.

Dial-a-song is a neat service, and the fans (like myself) are certainly rabid, but in addition to those nice touches, they've had one label or another pumping cash into promoting their music since day one. You think those full-page ads for "Flood" in Magnet or Rolling Stone just ended up there by word of mouth? Do you think college radio stations just decided based on word of mouth to put their music into heavy rotation?

TMBG is a lot more closely involved in the day-to-day running of their business than a lot of artists are, and they employ a lot of cool, unconventional marketing strategies, but they could afford to because the traditional bread-and-butter promotional stuff (radio, press and tour promotion, advertising, retail promotion) has always been handled, just as with any other band signed to any significant label (indie or otherwise), by their label.
posted by saulgoodman at 9:49 AM on December 2, 2009 [1 favorite]


Most (all?) of the article copied, posted in another blog.
posted by filthy light thief at 10:20 AM on December 2, 2009


Also, http://www.toomuchjoy.com.nyud.net/?p=1397 might work (Coral cache is blocked at work).
posted by filthy light thief at 10:22 AM on December 2, 2009


If the record company invests $1m in 10 different artists, 9 of which flop, the company isn't in profit until they've made $10m on the successful band. Seems fair enough to me.

How about this hypothetical where all 10 of the artists flop, but the label makes money?

The label advances each band $100k. The label is now down $1M ($100k x 10).

Let's say each band generates $200k in sales as paid to the label.

The label keeps 90% of the $200k in sales, applying the remaining 10% to the band's advance.

So now the label has collected $1.8M, an $800k profit.

Now, here comes the fun part.

The label also keeps the remaining 10% of the $200k x 10, as none of the bands have recouped! By the label's accounting, each band has only earned $20k out of its $100k advance.

The problem is, without clear accounting for each band, the numbers can be anything the label wants them to be.

And without clear accounting, a label can say "9 out of 10" bands flop or even, in the above, "10 out of 10 bands", or whatever number they care to use, while at the same time making a profit on each band.

never mind that they wrote off those advances as losses, offsetting taxes, so the advances cost the label much less than $200k
posted by zippy at 10:34 AM on December 2, 2009 [8 favorites]


The documentary Gigantic: A Tale Of Two Johns is an outstanding overview of TMBG's career from the dirty beginnings up until about 2002. I heartily recommend it for anyone who has even a passing fancy with the band -- it's good enough to be very interesting even to non-überfans.
posted by hippybear at 10:35 AM on December 2, 2009


"King of Beers" by Too Much Joy pretty much ended up on every single playlist I ever made in college (or, for those over the age of 25: MIXTAPES). And as an author with some unrecouped books, I feel for him on the royalty statements. There's nothing worse than being THIS close to jumping into the black and not being able to for whatever reason.
posted by bitter-girl.com at 10:52 AM on December 2, 2009


The label keeps 90% of the $200k in sales, applying the remaining 10% to the band's advance.

This is what makes no sense to me. The advance is supposed to cover the costs, which need to be reimbursed. To do this, the publishing company... keeps 90% of all revenues for itself, pretending that what, this revenue has nothing to do with the band or album and cannot be applied to the advance? Wtf? If the band needed $x to record, produce and market their album, why the fuckity fuck do they need to pay that back 10 times over before seeing a damn cent?
posted by splice at 10:52 AM on December 2, 2009 [6 favorites]


If you see a record company executive, Warn a Brother
posted by Flashman at 10:55 AM on December 2, 2009 [5 favorites]


Wtf? If the band needed $x to record, produce and market their album, why the fuckity fuck do they need to pay that back 10 times over before seeing a damn cent?

Recording is cheap enough that any band, major or not, is able record using their own means....however musicians still do not have viable means of marketing such as radio, tv, etc, etc....so effectively musicians are PAYING the label to run their advertisement in the hopes that someday they will get that money back
posted by The1andonly at 11:08 AM on December 2, 2009


I'm going to link to my friend's website tentracks because it's a "take out the middle man" distribution model. too close to a self-link for the front page, but reading this article brings home the relevance of having that again...
posted by yoHighness at 11:11 AM on December 2, 2009 [1 favorite]


great article btw.
posted by yoHighness at 11:11 AM on December 2, 2009


I love Too Much Joy. I own their albums. Maybe I'll drop Mr. Quirk a check to make his digital royalties a nice round $70.
posted by davejay at 11:15 AM on December 2, 2009


You know, it suddenly occurs to me that bands starting their own (typically digital) distribution system to make money directly from their music is not unlike dumping extra principal into a mortgage from the get-go, a little every month.
posted by davejay at 11:19 AM on December 2, 2009 [2 favorites]


Although I had a vague idea, I never really knew the details about this sort of thing, so I'm somewhat surprised by how calmly everyone's discussing it.
I mean, am I misunderstanding it somehow, or is the whole situation as completely fucking ridiculous as it looks?
posted by lucidium at 12:06 PM on December 2, 2009 [1 favorite]


Back in 1992, when TMJ was still a going concern and even the label thought maybe we’d join the hallowed company of recouped bands one day, Warner made a $10,000 accounting error on our statement (in their favor, naturally). When I caught this mistake, and brought it to the attention of someone with the power to correct it, he wasn’t just befuddled by my anger – he laughed at it. “$10,000 is nothing!” he chuckled.

If you’re like most people – especially people in unrecouped bands – “nothing” is not a word you ever use in conjunction with a figure like “$10,000,” but he seemed oblivious to that. “It’s a rounding error. It happens all the time. Why are you so worked up?”


I'm pretty laid back, but can't say I wouldn't have got violent at this point if it happened to me.
posted by kersplunk at 12:07 PM on December 2, 2009


TMBG is practically the house band for Disney's

I got into TMBG's adult stuff after my mom sent my son No! (1st kids album) after she heard about it on NPR. No! was 2002 but wasn't Disney- that wasn't 'til Here Come the ABCs in 2005.

I'm thinking more about The Else and The Spine and the tours promoting them attended by adults. There were a *shitload* of 20-somethings at their show last month in SF and I don't think those folk listen to Radio Disney or have kids that do yet.

The documentary Gigantic: A Tale Of Two Johns is an outstanding overview of TMBG's career from the dirty beginnings up until about 2002.

One thing it mentions is them firing their record company while on tour in Japan because they couldn't get a day off to see the place, but were expected to do appearances. Flood was 1990 and I see they stayed with Electra/Warner until Mink Car in 2001. I suppose the momentum of Birdhouse, Istanbul and Particle Man might have kept 'em going from 2001 to 2005 when they didn't have major label representation.

--

What are dysfunctional musicians that make great art but can't show up on time or be pleasant to the emergent "musicians' service industry" supposed to do? Linger in obscurity? Be promoted by friends who turn out to be ripoff artists? Some of the problems of the industry might be inherent in what it does rather than the way it does it.

I don't expect a lot of good art comes from scatterbrained a-holes and maybe we'll get by without it but our lives might be richer if we got to hear from tortured artists that need "handlers." Van Gogh?
posted by morganw at 12:09 PM on December 2, 2009 [2 favorites]


In my head I'm putting this alongside last month's post about the revenue reality of a New York Times bestseller. Are there any situations in which being with a major is actually beneficial? (Assuming you're not Tom Clancy or Lady GaGa?)
posted by smartyboots at 12:27 PM on December 2, 2009


Are there any situations in which being with a major is actually beneficial?

It seems like there needs to be a (series of?) graphs here, detailing the ways which fame and money rise with being with a major, but also how the majors siphon away the money (although maybe not the fame, once you have enough of it) such that it would explain both Too Much Joy and famous people who end up broke.

You would also have to include the costs of being famous, like mental illness and drug abuse to help you deal with living in a fishbowl and seeing your used pizza boxes sold on eBay.
posted by emjaybee at 12:41 PM on December 2, 2009


I made more than that up front on my first song. !
posted by St. Alia of the Bunnies at 12:55 PM on December 2, 2009


Are there any situations in which being with a major is actually beneficial?

Speaking from the niche book publishing side of things...mmm, no. And I've been with the majors. In fact, I just asked a question of all the nice MeFi librarians and indie booksellers today that relates to my breaking away from the big publishers. It was helpful to be with a major when you, say, got free advertising in one of the mags they own, not so much so when you saw things happen like...

* publisher's PR person calls shop where you're going to do an appearance while chomping gum like a cow and being really, really unprofessional (said shop owned by friends, who bothered to tell me these things)
* publisher's PR person emailing (and not bcc'ing, but that's a pet peeve for another day) all their authors in that category ONE week before a major industry event just to, you know, see if we planned to go and if we maybe might want to do something with them...

etc etc. So for every dollar you "get" in promotion, etc, you'd spend it better yourself if you did your own marketing. I learned more about being professional and the whole DIY publishing ethos from the Simple Machines guide ca. 1990 than I ever did watching purported PR professionals do their job to get the word out about my work.
posted by bitter-girl.com at 1:03 PM on December 2, 2009


So if I download a torrent of your music, I'd actually be saving BMI money.

Kudos on a funny comment (faved!), but it's founded on faulty assumptions. Torrent downloads have nothing to do with public performance (radio play and TV usage) royalties.
posted by flapjax at midnite at 2:42 PM on December 2, 2009


Kudos on a funny comment (faved!), but it's founded on faulty assumptions. Torrent downloads have nothing to do with public performance (radio play and TV usage) royalties.


He would be saving money for BMI because they wont have to spend 25 cents to mail a 2 cent paycheck.
posted by The1andonly at 2:54 PM on December 2, 2009


If the band needed $x to record, produce and market their album, why the fuckity fuck do they need to pay that back 10 times over before seeing a damn cent?

Bands aren't very good at negotiating contracts.
posted by smackfu at 3:26 PM on December 2, 2009 [1 favorite]


hippybear: The documentary Gigantic: A Tale Of Two Johns is an outstanding overview of TMBG's career from the dirty beginnings up until about 2002. I heartily recommend it for anyone who has even a passing fancy with the band -- it's good enough to be very interesting even to non-überfans.

I have this on Actual Legal Disk, and I second your recommendation.

$10,000 is a rounding error? Has Max Bialystock heard about this scam? Somewhere along the line these numbers have to be reported accurately to someone, why can't they be reported to the musicians? I can't see how this question can be answered satisfactorily.
posted by JHarris at 4:01 PM on December 2, 2009


If the band needed $x to record, produce and market their album, why the fuckity fuck do they need to pay that back 10 times over before seeing a damn cent?

I've worked with bands who have contracts which provide them with (let's say) 12% of the suggested retail list price of an album for each copy sold. These figures are very rough, but they'll give you a clue:

suggested retail list price: $15.00
band's take (after recouping, of course): $1.80

However, the label only collects around $8.00 at the point it which it goes to a distributor and then to shops. So really, this means that what's left after the band gets its $1.80 is $6.20.

Let's say the manufacturing cost is really low - 60¢ for the CD and the case and inserts. This leaves $5.60.

But there's a royalty that goes to the songwriters and their publishers. There's a standard rate per song per copy sold, which is (I believe) 9.1¢. Labels sometimes impose a minimum number of songs they will pay this for. I usually see 12 as the minimum, but let's be conservative and go with 11. So the label pays out almost exactly $1.00 to the songwriters, which can be entirely the band's. (Though most bands make a deal with a publishing company, who typically get 25% of the proceeds. But it's possible for the bands to get it all, it's just that most feel that the bookkeeping is a hassle, and a good publisher can help score licensing deals for mobies, television, commercials, and so on.) This leaves $4.60.

Where does the $4.60 go? A lot of it goes for things that aren't recouplable - the label has to pay employees, maintain places of business, do general travel, buy supplies and so on. Some of it is "insurance," I'd guess you call it. A lot of bands will spend hundreds of thousands of the label's dollars and sell only a couple of thousand copies - so the label does incur deficits from a band. Some of it is profit. You'd be surprised at how much it costs to promote a single to radio through pluggers and whatnot - generally in the six figure range.

Many smaller labels have deals where *everything* is split 50/50. The recording, promotion, manufacturing AND profits. This can be a better deal. But it has downsides - generally, there's less promotion, recording costs are much, much smaller, sales tend to be lower (and so although you get a bigger share of the pie, there's less pie.) Some labels do a great job with this, then unilaterally decide to stop doing business, essentially screwing many bands who stuck with them past the point at which they could have scored giant deals with bigger companies. In other words, instability is a bigger issue. (Indie distributors go under a lot and therefore don't pay because they can't exist; this isn't as big a problem with the majors.) It may work for a band like Shellac. Wouldn't work as well for Susan Boyle.

Either way, it's largely a matter of chance. Albini's article is great, but he takes some liberties: I've never seen artists see some of the things made "recoupable" that he makes sound normal. (I'm sure it's happened, but he tends to present these as standard industry practice, when they're not really. He does skew some of the numbers in various ways to make his point more dramatic.) Few bands reach the level of success he mentions - a very few do reach higher levels and reap the rewards. And, there are bands who stuff a few hundred thousand dollars in their pockets, produce their own records and never sell a copy - they come out WAY ahead over the label, and there are more examples of this than you'd think. But you tend not to hear about them!

By Tim Quirk's telling, TMJ was fronted 400K of royalty, and it just means that they need to "earn back" all 400K before the company will send the musicians any further dimes.

The shame of this is not that arrangement, but that they do shoddy accounting for all but the "recouped" artists who are currently earning additional royalty checks. Granted, from the record company's perspective, it's 99.99% sure that TMJ will never be recouped, and why does it matter if they're at -394K or -384K, but Quirk's point is simply that it's their job to keep track, and they ought to do a better job.


That's the main thing; artists aren't really screwed by the deals per se - anyone thinking of signing one should have the suss to see through the egregious parts and should have a good lawyer - but rather that the labels are really awful about keeping track of details. And not just with finances. The Raincoats had to sue (or threaten to sue) to get the rights to their albums back from Geffen, because Geffen just assumed (wrongly) that they had perpetual rights. Many artists can't license their own out-of-print material from labels, because it may have originally been issued by a subsidiary label long ago, and the paperwork regarding ownership, royalties (etc) is missing. Lots and lots of master tapes and outtakes go missing through ineptitude, including masters and artwork for huge, multi-million selling releases.
posted by Dee Xtrovert at 4:41 PM on December 2, 2009 [9 favorites]


I don't understand how this isn't fraud and racketeering on a massive scale. The record companies may have millions of dollars of liability out there if they actually accounted for all of these sales -- are they accounting for that on their statements?
posted by empath at 4:55 PM on December 2, 2009


Also, I know guys that put their own stuff out on digital labels that make quite a bit more money than that from digital downloads. I honestly don't understand why on earth anybody would sign with a major label unless they offered you a shit load of money up front.
posted by empath at 4:57 PM on December 2, 2009


He would be saving money for BMI because they wont have to spend 25 cents to mail a 2 cent paycheck.

Umm... listen, The1andonly, every single piece of music I ever made could be downloaded by everyone and his sister in Kankakee, via torrent, pirate music site, recorded onto a wax cylinder from your grannie's rotary-dial phone, whatever, but BMI, which collects and distributes performance royalties from radio and TV usage would still be compelled to collect and distribute those performance royalties to BMI songwriters and composers such as yours truly. Do you understand now?

and it was ONE cent. ONE cent.
posted by flapjax at midnite at 5:33 PM on December 2, 2009


I honestly don't understand why on earth anybody would sign with a major label unless they offered you a shit load of money up front.

Well, this guy's band, who is complaining about the royalties, seems like they got $400k up front. For one record that didn't even go gold. That's not exactly a bad deal, and how many musicians would turn that down?
posted by smackfu at 5:49 PM on December 2, 2009


I don't understand how this isn't fraud and racketeering on a massive scale. The record companies may have millions of dollars of liability out there if they actually accounted for all of these sales -- are they accounting for that on their statements?

It'd cost a fortune to do all the accounting. Some bands are well accounted for, others not at all. Things slip through the cracks. Many bands still owe more than they'll ever be able to recoup. Most bands have contractual stipulations which allow them to "look at" the books and do some forensic accounting - at their expense. Obviously, this expense is very high, and not worth doing unless the amount you've been shorted is countable in tens of thousands or more. For a band that will never recoup - Too Much Joy being a likely example - you're only losing money by even trying to figure out how you're being shorted, since it's not "your" money until it amounts to an amount more than what you need to recoup.

In short, there are so many variables, differences in contracts and differences in accounting practices even from the same labels that a sort of class action is just laughable and will probably never happen - the expense would simply be too great relative to the rewards.

There's fraud, and a certain amount of racketeering, but it's not as organized or pervasive as you'd think. I know of a few artists who had their books examined and found that things like overseas royalties were credited to the band *including* the label's share. In other words, they owed the label more than the label thought! It an happen both ways, even if it's generally the label who gets the upperhand. Basically, as Tim Quirk says, it's the disorganization that's the real aggravation, not the idea of missing money per se.
posted by Dee Xtrovert at 7:14 PM on December 2, 2009 [3 favorites]


Today's Billboard Bulletin covers the story and they asked Tim what the reaction to the piece has been. Here's his reply:

"Kind of overwhelming. It broke our sad little site (laughs). I had to purchase some additional SQL connections from the host last night."


He also commented that he had nothing against the two people that helped him at Warner that he named in the post. Rhapsody (his employer) also issued a statement saying that Quirk's "views are his own and do not reflect those of Rhapsody management".
posted by Slack-a-gogo at 8:48 AM on December 3, 2009


One of the most important, maybe even the most important, clauses to make sure that your record contract includes—indie or major—is a biannual accounting audit open to both parties. That means that the record company has to be able to show ever penny spent on every expense, as well as every sale. Making sure that your contract allows you to use an outside firm—do not trust the accountants that the record company provides, just like you don't trust the lawyers that the record company provides in order to negotiate the contract, to act in your best interest. I have seen this in practice a couple of times, and it has earned thousands of dollars that would have otherwise been lost. In fact, a band I was friends with that had a brief deal with Sony gained more by insisting on regular audits than they gave up as the compromise regarding a longer incremental rate of royalty return.

Part of the problem is that bands are both over-impressed by the idea of getting major label contracts and totally naive regarding contracts, so they sign the first "standard" offer from whoever dazzles them.

(I will also say that while I argue for indies relentlessly, the dismissal of majors out of hand is pretty silly.)
posted by klangklangston at 5:42 PM on December 3, 2009 [1 favorite]


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