1) How much?
What percentage do you make of the sticker-price of your CDs?
As the artist/singer, that's a tough one, because it depends on the contract, and also the sticker price. For instance, contractually I make a smaller amount on records that are priced "mid-line", cut-outs, singles, cassettes, compilations... well, you get the idea! It also depends on the era; my first contract, with Verve (now Polygram) had a royalty rate of 2%. Current royalty rates are 12-20%. Generally, figure that if I was completely paid back, there were no new charges for shipping/ distribution/ advertising/ travel/ phones/ faxes/ artwork/ publicity/ promotion/ manufacturing etc etc, I would make around $1-$2 on a list price of $17.98. Alas, that never happens, because records get high list price only when there's a lot of promotion behind them. On mid-line (you buy it for $12.98), my take drops to around 85 cents, and on down the line.
As the songwriter, I make less if I write the songs - then the record company invokes a 75% clause, where they only pay the songwriter/recording artist 75% of the Congressionally set statutory rate for writing/publishing the song. Their original argument, around 10 years ago, was that artists who insisted on recording their own songs cut the chances of a hit record, because the record company couldn't recommend potential hit songs for them to record.
Also, if you know, how much of that price is going to pay for advertising, studio time, et al., and how much is pure profit for the record companies?
Almost impossible to determine; you'd have to know the advertising budget, studio budget etc. On my CD Breaking Silence, which is owned by Morgan Creek throughout most of the world, I paid for the entire record myself, so there were no recording costs. We've sold about 100,000 of them worldwide. I haven't seen royalties.
Do you not find it strange that a 2-hour DVD, with commentary, subtitles, and extra scenes, can be sold for less than $10, while few audio CDs are that low priced?
I don't find it strange, I find it reprehensible.
2) Radio Station consolidation
When you entered the music business, radio stations were diverse. In the last few years, this diversity has disappeared. Do you have any comments on this?
Maybe it's all part of a great international conspiracy to deprive us of choice while driving us crazy with limited playlists of bad music? Maybe the conspiracy includes not just record companies (who benefit because it's much cheaper to sell a million copies of 1 CD by 1 artist than to sell a million CD's by a million artists to a million different people), but also radio stations (who may need that new refrigerator/trip to Cancun to meet a new artist/free lunch/widescreen TV for the office much more than you or I need good, varied music), and drug companies who are using the incredible psychoses derived from hearing a Backstreet Boys single three thousand times to push their drugs on us?
Seriously, diversity is something record companies can't afford anymore - not the majors, at any rate. I'd go to this article, posted at Linux Journal, which quotes a Newsweet article (July 15,2002) by Steven Levy saying "So why are the record labels taking such a hard line? My guess is that it's all about protecting their Internet-challenged business model. Their profit comes from blockbuster artists. If the industry moved to a more varied ecology, independent labels and artists would thrive--to the detriment of the labels, which would have trouble rustling up the rubes to root for the next Britney. The smoking gun comes from testimony of an RIAA-backed economist who told the government fee panel that a dramatic shakeout in Webcasting is "inevitable and desirable because it will bring about market consolidation." That's really it in a nutshell. "Market consolidation" means the less artists they have to promote, the less ultimate dollars they'll spend. The smaller the playlist, the greater the chance that audiences will buy something from that playlist alone - because that's all you'll be able to find out there.
3) Indentured Servitude
In one of your interviews, you mentioned that contracts with the music industry should be likened to indentured servitude (must produce X albums, but the label has the final say on if what you produce was acceptable). Why do you think so many artists willingly accept these terms? What can be done to promote contracts that are more fair?
Ah, you're into a two-fold problem here. Fold one is that the record companies hold all the cards; if you want to be famous, you have to go the mainstream route. If you want huge success, you have to go the mainstream route. If you want worldwide success, you have to go the mainstream route. And until we see our first Internet & Live Shows Only artist sell a million CDs without a label deal, the major labels will be the only mainstream route available. Don't quote Grateful Dead statistics to me - they're the exception, not the rule.
Fold two is that everybody wants to be famous these days, and enough is never enough. Let me use an example: in their mid-20s, my grandparents were thrilled to have a small refrigerator (without freezer) and gas stove with a tiny oven. The house had one TV. My parents assumed they were due a bigger fridge with freezer, four burner stove and three-rack oven, dishwasher, toaster, mixmaster etc. The house had two TV's. My generation went for all that, plus microwave, automatic coffee maker, food processor, and a TV for living room, bedroom, and kitchen. The next generation assumes they're due all of that, plus espresso machine, bread maker, etc. And there's a TV in pretty much every room.
It's the same with being famous. In my grandparent's day, you got famous if you were a criminal or a politician. Artists whose fame went beyond regional were really rare; worldwide fame, even for classical artists, was almost non-existent. Nowadays, with television and magazines making it seem like there are more famous people than not, every artist figures they, too, can get really, really famous. And they want the whole hog.
I think (musing on a personal note here) that's one of the benefits of my not being twenty any more, or even thirty. I'm painfully aware that I will never have another hit record; no label's going to invest that kind of money in me. (As an aside, the big Carlos Santana album cost $750,000 to make, and $1,500,000 to promote. That's a lot of money, and it wouldn't have happened if Clive Davis hadn't needed to prove a point after initially being "retired from active duty".)
Believe me, it took me years to get comfortable with that conclusion. But once I was comfortable, I could look around at my life and be pretty happy. Ten years ago I was still chasing the brass ring, waiting for my 16th platinum record to happen. Now, I'm thrilled that I can gig whenever I want, record what I want, and make a living doing what I love. I know it sounds disgustingly Pollyanna-ish, but there it is.
4) Life without RIAA
RIAA is evil. This is an established fact of life. What I'd like to know, from an artist's standpoint, is how SHOULD it be? Now you sign with a label that helps production and then calls you a hired hand and steals your music. How should it work, start to finish? What's currently broken that's stopping this? Do you have any ideas on how we can fix this for the artist, as a society? How can we get involved to help the artists?
Oh God... what a huge question! And unfortunately, impossible for me to answer. It should work so there's a fair contract on both sides; no one disagrees that record companies bear the brunt of the initial cost, everyone agrees that they deserve to make money. The question is - how much money, and at whose ultimate expense?
I don't know that you can blanketly call the RIAA evil. They wouldn't exist without support of the media conglomerates, remember. I agree that they're much, much more aggressive (nosy? greedy?) since Hilary took the reins, but ultimately it starts at the top. And the top is the buyer, the one with all the money.
How should it work? Gee, we should all be good friends, make our deals on handshakes, and always keep our word. That would be a good start. Seriously, I don't know. I do know that record companies have become way too big; there are arguably only five major labels left in the United States, and of those five, four are owned by people in other countries. I do think absentee landlordism is a lot of the problem; how can someone in Germany, or Japan, or Alpha Centauri for that matter, have any idea what consumers and artists in the US are feeling?
Another problem is the lawyers, who are paid for tying artists up as long and as cheaply as possible. And the fact that in the 70s, music became a "growth industry". Through the 50s and 60s, there were plenty of businessmen involved, but by and large they went into the music industry because they also loved music. Sure, they treated artists like shit in the main, but at least they were fun to work with. Somewhere around 1976/1977, you began seeing Harvard Business School grads going into record companies, and there was the death knell. That, and cocaine use by the executives, which made them fritter away their time engaging in pissing contests with one another. That's how these ridiculous artist advances got started. Whoever heard of an artist like Mariah Carey being dropped by her record company, and paid a zillion dollars to leave - only to turn around and get another zillion from another company?! It's absurd.
As to how you can get involved? start with getting political, and voting. Check your own representatives' voting records on issues having to do with this. Support live music, and buy your CD's at the shows - at least then some of the money will funnel right back to the artist!
5) How has the RIAA changed?
I'm curious - you're an artist who's been in the business for a number of (ahem) years. How has the RIAA changed since you signed your first recording contract?
Technically, the RIAA was formed in 1952 to "facilitate the technical standardization of records by bringing together engineers from member companies to develop the RIAA curve, a frequency response specification for optimizing the performance of phonographic playback systems." In other words, they were formed to make sure the science of recording was optimally used by all companies, in formats that everyone could play. In 1958, they decided to copy RCA/Victor's creation of a "gold record" (which they gave the Glen Miller Orchestra), and awarded the first one to Perry Como. When I was a kid, that was their entire job - certifying gold records. There are a lot of rumors about back-door dealings in that process, by the way, none of which I'll go into here, but most of which are on the Internet.
With the advent of Hilary Rosen, the RIAA took on a whole new gamut of "problems", and began holding themselves out as defenders of intellectual property rights/defenders of artist's rights/defenders of record company rights (choose one). And that's what they are now - defenders of various rights they determine are important for the good of the mainstream record industry. Unfortunately, just like defense attorneys, they never ask whether their client is guilty - they just try to get him the best deal possible.
One huge change is the amount of things the RIAA control, and the way they exercise that control. For instance, in order to buy a copy of one of my gold/platinum albums in Nashville as a gift for someone, I have to go to one store that's "licensed" by the RIAA to produce those. That's the only store in Nashville, believe it or not, and they're usually backed up several months (not to mention that the first run is always wrong, and has to be re-done. Once they even spelled my name wrong.) When I asked a friend who owns a framing shop why she didn't try to get an RIAA account, she looked into it, and was told they had to apply. The person they spoke with didn't think they would be approved, because they weren't "the type", and he warned them that it would cost $5,000 a year for the privilege, as well as their having to fulfill a minimum amount of orders. They'd also have to be re-approved yearly. In other words, whoever drops the most sugar in the lemonade, gets to have a lemonade stand.
Another huge change is the money involved. When I was 15 and first nominated for a Grammy, I went to the award show with Arlo Guthrie, and all the industry people were saying "Gosh, if we could just get some radio coverage..." A gold record was one that sold 50,000 dollars worth of units. It was a much, much smaller business, and consequently the stakes were much lower. Now, the record industry is where the movie industry was in the early 60's, and the stakes are huge. Witness Rosen's salary, over seven figures, not counting perks. Well worth lobbying for things she may not agree with!
6) What about the future?
I don't think many can argue that the overall experience of downloading/ripping/burning music is still prohibitive to many. People will still buy CDs and whatnot because the current technology does not allow for immediate, complete, high-quality copies to be made. In that way, modern filesharing is very much like sharing tapes. This, in my opinion, does help artists.
However, let's take a look into the future. Let's say that technology has evolved to the point where one can transfer complete, same as CD-quality albums in less than a second, and imprint them onto CD (or whatever the current technology is) in even less time. One click allows me to fully reproduce Janis Ian's latest release - liner notes & all. At that point, should artists be worried? Or, to put it more generally, should artists always permit the reproducing of their works?
Lots of different questions in there! Let's see... yes, I think artists should be worried. Artists should always be worried about something; it's good for our work.
If you can transfer complete CD-quality albums quickly and easily, then reproduce all the artwork, somehow get it on the CD, have the labels come out perfectly-sized to fit a blank CD box, etc etc? Well, then maybe people will really start selling their CD's on line. Maybe the entire business paradigm will move to online distribution. For that matter, online production is only a few clicks away; I can go realtime with Pro-Tools and be working with my engineer in LA right now, making the next album. It's not as much fun, but it's do-able.
I think, as I said in my follow-up article, that the music industry is going to have to provide more and better content in its CDs. Maybe CDs all become DVDs, and you get not just the music, but interviews, concert footage, games, whatever. I don't have the answer.
I do know that in my own opinion, you can't stop file-sharing. Therefore you've got to come up with a better alternative.
7) RIAA Attitude to all this
What has been the RIAA's or labels' attitude about your online pieces regarding the "biz"BPO/ and have you received threats (legal or otherwise) for speaking so candidly about it?
Stunned silence? annoyed silence? loud and angry silence? Hilary is a very bright woman, one might even say brilliant, and a savvy politician. She sent me a lovely email telling me that while she disagreed with a number of things I said, she admired my writing style.
As to the labels, I've heard from numerous executives, secretaries, and everything in between, saying they agree with me but want to remain anonymous for fear of their jobs.
About the only other fallout is that I was supposed to be on a panel at the NARM convention, and one of the "big five" said that if I appeared, they wouldn't come to the convention.
But as I said in an earlier answer, I know I'm not going to get a major label deal, I know I'm not going to have a hit record, and I know I have nothing to lose. So I don't really care, as long as people keep listening to my music.
8) Can Artist Retain Copyright and Still Make a Living?
How practical or common is it for an artist to retain copyright to their own material? Is there a financial incentive to do that? Does a wish to retain copyright of recorded material have an impact on your chances of signing with a "mainstream" label?
Do you mean the record master, or the publishing rights? That's a big difference. And remember for purposes of this discussion that writers still get 50% of the income, even when they don't own the copyright. The publisher gets half, and the writer gets half. You can't (at least, not legally) sell your writer's share.
I own the copyright on about half my songs. I had to buy my catalogue back when I was 21, but as time has proved, it was well worth it. I own the copyright on about half my records, but that's only because I had a brilliant lawyer for many years (Ina Meibach), and because I've been making records "just for the fans" that didn't fall under my contracts.
It's not common, unfortunately. And sometimes not unfortunately! Imagine you're a beginning songwriter; you have no money unless you work a day job. Someone offers to support you for three years if they can own your copyrights for that period. Not only that - they'll pitch your songs, trying to get other artists to record them! I think that's a pretty fair deal, personally. After three years, you can leave, hopefully with some success under your belt. And you'll write more songs.
In terms of records, it's a bit different, just because of the length of time they tie you up. Most publishing contracts are for 1-5 years, with an option at the end of each (sometimes mutual, sometimes just the publisher's). Record contracts are always tied to the production and release of material. There's no way to sign a 7-record deal and get out in 5 years, or 7, or even 10, unless they're willing to let you go.
In both instances, the buyer "owns" the material forever. However, as a songwriter, the buyer never owns more than half of my income. With a record, they do.
Is it practical? depends on the circumstance. It's not for me, but I earn enough to afford a business manager who tracks all of that, makes sure I get my royalties around the world, etc. I'm also savvy enough to check my statements, and I notice when a country is under-reported, or a song is missing. It takes up a lot of time, though.
Would it affect your signing with a major label? Absolutely. There's no way, if you're not a huge success already, you're going to own your own master recordings and get a label deal. And most of the time, you'll have to give up at least 50% of your publishing. All that is incentive to the label, to sign you.
9) FBI files on you?
Your site has some material that implies you were the subject of FBI investigations. Could you tell us more about that? Was it related to your early work regarding interracial relationships ("Society's Child", 1966), or something else?
No. In fact, I was a little miffed that it wasn't! The files were started about a year before I was born, when my Dad (a chicken farmer at the time) went to a meeting in South Jersey about the price of eggs. (No, I'm not making this up.) Then my Mom made the mistake of attending a Civil Rights Congress meeting about voting rights. Then they had the gall to open a summer camp that advertised itself as "multi-cultural and interracial". That was the main reason.
Your tax dollars at work...
10) What do record companies offer artists today?
by Just Jeff
Not too many years ago, widely distributing recorded music took expensive equipment and cost a lot of money. Only a large record company could do it. Artists had little choice but to sign their life away to a major record company.
Today, distributing recorded music costs next-to-nothing. Yet the price of recorded music has never been higher. What does a record company offer an artist today? What can a record company do for an artist that the artist can't do herself? Are artists beginning to realize this on their own?
A lot. Really.
Start with distribution and manufacturing. Joe Shmo uses the same manufacturer/distributor as Radiohead. Both their records are "released" the same week. Radiohead order two million, and run out in a month - they need more, right away! Joe orders 5,000, and runs out in a month - he needs more, right away!
Who do you think is going to get their records in time? Whose records are going to get into the shops first?
Distributing doesn't cost next-to-nothing, alas, and won't in the foreseeable future. Just think of all the record stores, online companies, etc in this country, and imagine trying to make sure your record is in all of them - and in every city you gig in. Then think about coordinating that worldwide. It's a nightmare. Sign with a distributor yourself? Sure, except there are only two or three major distributors in America, and they don't want you if you can't guarantee reasonable sales (say, 35,000 or more). It's not worth the warehousing and trucking for them. And even if they take you, you're still the one who has to make sure the records are in the stores!
Add to that making sure radio stations have the records x 50 states, or times 20 countries.
So there is a lot they can offer, in addition to paying the upfront costs. Look at it from my viewpoint? Windham Hill picked up my option. Two years later, they asked if I would leave. They paid me enough "departure bonus" money to easily make my next record. So I thought, hey, I'll make it, own it, sign a distribution deal. Until I started looking into it.
Now I'm talking with 3-4 smaller labels, working on a licensing deal - they get it for 5 years, they deal with distribution, promotion, publicity, all that stuff. I get a really good royalty rate, keep the overseas rights completely, and get my US rights back in 5 years. A whole lot easier!
There are two other things a record company can offer an artist that are next to impossible to get on your own - perks, and serious fame. I've had #1 records in pretty much every western country in the world, as well as Japan, and let me tell you - it's really big fun. Forget about the fabulous suites hotels give you for free, the automatic bumps up to first class on planes, the Rolex watches from grateful promoters. Think about the kick of playing to 25,000 people a night.
Think about getting to see parts of a country most Americans can't get into in the first place! I've gotten to go places in Japan that only royalty go to normally, amazing old places. I've gotten to meet people I'd never ordinarily get to meet; kings and queens, novelists, Pulitzer Prize winners, artists I've dreamed of meeting. I've gotten to watch 35,000 people in Holland sing harmony with me. Those sort of perks, that sort of fame, is something that right now (for better or for worse), you can only attain with a label behind you.