Musical Acts Questions

[Izulde]

I know there's the stereotype of a talent scout/record label owner (for smaller labels)/etc going to some small club and finding a talented, independent act, etc, but how authentic is that?

Also, what type of contracts does a band/singer sign initially? And what factors go into an overnight success with a debut album?

[Groundhog]

I know there's the stereotype of a talent scout/record label owner (for smaller labels)/etc going to some small club and finding a talented, independent act, etc, but how authentic is that?

I'm not "in the industry" or anything like that, but as a muso growing up I have lots of friends who either are or were involved in the industry in one way or another.

From what I've seen and heard, stuff like this may happen on occassion, but rarely. Much like every other industry, it all about connections.

I've seen so many excellent bands blow crowds away at small venues for years and years, only to wallow in obscurity until they "magically" get unearthed like 5 or 6 years later, usually because one of their friends bands makes it to the big time and takes them on tour as an opener.

Also, what type of contracts does a band/singer sign initially? And what factors go into an overnight success with a debut album?

I don't know the specifics for the contracts and it varies according to the popularity of the act, but from what I understand from a money perspective you earn a certain (small) percentage from album sales (more if you have song writing/lyric credits), but need to pay back the costs of recording the album and the other various expenses involved (which is a *lot*). Most of the income derived by acts is from touring.

I think musos are maybe a little more savy these days, but with the way contracts used to be written up sometimes it would take a long time for them to start making any serious money, regardless of popularity.

The length of the contract and the commitment (X amount of albums in X years) varies.

The major factor that goes into creating an overnight success is simply the amount of time and money spent by the record company in promoting your album or single.

[JetsIn06]

I know there's the stereotype of a talent scout/record label owner (for smaller labels)/etc going to some small club and finding a talented, independent act, etc, but how authentic is that?

Also, what type of contracts does a band/singer sign initially? And what factors go into an overnight success with a debut album?

I co-own and operate a very small label in New Jersey, Inner Voice Records (www.innervoicemusic.net) . We have been around for about two years, released our first album a little less than a year ago (July 06).

I can tell you that the strereotype that your talking about doesn't really happen to much. Our first signing, Hollywood Ave. (www.myspace.com/hollywoodave) was found online on myspace while we were just starting out, looking for our first act to sign.

Our second signing, That's Called Going For It (www.myspace.com/thatscalledgoingforit), was found a little differently. TCGFI is a solo project, created by the main songwriter and singer of Atlanta based band Like Clockwork. Like Clockwork was one of the bands we contacted initially, and was a potential first signing. We chose Hollywood Ave. over them mainly because of proximity to us, but then this past January, TCGFI sent us demos, which led to their eventual signing with my label.

I think the big reason that bands aren't found in the stereotypical way that you posted is because the chances of finding a band that way are much slimmer than finding a band online, or having them send you a demo. Most bands who can call a local promoter of a small venue can get on a show. They don't ask for a guarantee, they don't ask for gas money, they just want to play. So if they sell tickets, there is no downside to having them (unless you can replace them with a band which can sell more tickets.) So it's easy for below average bands to get onto shows at small venues, which means label owners and A&R reps going to these shows yields a very small percentage of potentially signable acts.

The other reason is that there are so many variables that go into signing a band, that their live show is only a part of the equation. Even if I do go to a small, local show, and see a band that absolutely blows me away, there are many other factors that go into their signability. Can they tour full-time? Can they tour at all? What's their fanbase like? What are the band members like? Have they previously toured, have they previously recorded an album? Obviously, these are just a few questions you would ask. Signing a band is an investment, and you don't invest a ton of money into something based on only one factor.

Those reasons lead me to my next point about contracts. A band signing it's first contract with a label is most likely getting completely screwed. This is actually the reason I started a label. I wanted to give bands a chance to actually have a fair contract, and have legitimate time and devotion spent on them to make them succeed.

A typical contract would be for 5-7 albums, which is absurd. That is way past the normal number of albums an artist will record...so they basically have you locked up for a large portion, if not all, of your music career, if they want you. They can also drop you whenever they want, and also never HAVE to release your album.

Recoupment is the real thing that will completely fuck over bands. There are fair ways to do it, and then there is the way that the majority of major labels, and most independent labels, operate. I will use the examples of money spent by my label on our first release, with numbers rounded slightly.

We pay $10,000 for the egineering, mixing, mastering, artwork, packaging, and manufacturing. 1,000 records are manufactured.

The band pays nothing.

They get an album without having to pay any of those costs. The band and label sell the album for $10, with all of the money going to us, the label.

All of this, basically, is the same with us and every other label. (Usually other labels will give the band that money in an advance, and then the band will use that money to record, promote, mastering, artwork, etc.) The one thing we do differently is promotion, but that is whole other topic.

So now the band has an album, the label has spent $10,000, the band has spent none.

So now the record is being sold for $10.

The way most contracts work, is that there is a term in the deal which defines what percentage of royalty payments the band will make on each album. For example, if you get 8% royalty, the band would make $0.80 per album. Herein lies the problem of recoupment. Another term in the contract states that those royalties will go to the label until their $10,000 they spent is paid back. The thing is, is that the $10 sale of the album doesn't go towards that, only the 80 cents does. So now, the band has to sell a whopping 12,500 albums to see a dime. The sad part is that most bands won't get 8%. Most first-contract bands will get 5%. So after those 12,500 albums are sold, and the labels $10,000 investment is paid off by the band, they will still only get $0.80 per album sold.

The way our label works, is that the band will make 50% royalties, and the entire $10 sale of the album will go towards the recoupment. So our band only has to sell 1,000 albums, and once they do, they'll start making $5.00 per album sold. Seems like a pretty good deal, huh?

I wish I had the answer to overnight success albums. :D

[Izulde]

Thanks for the info, guys :)

What info can you give me on promotion, JetsIn06?

And would it be realistic if one were to say that a nationally successful band comes out of a label that operates in an equitable manner similiar to what yours does?

[JetsIn06]

Thanks for the info, guys :)

What info can you give me on promotion, JetsIn06?

And would it be realistic if one were to say that a nationally successful band comes out of a label that operates in an equitable manner similiar to what yours does?

Promotion works in different ways with different labels. What I have learned in my experience is that the band usually ends up adding promotional costs of the label for the band to the recoupment tab. So then, the number of CD's sold has to go up in order for the band to see money. Obviously, good promotion will help sell albums.

In my label, so far we have ended up splitting the costs of promotion, out of pocket. So, the band will pay for half of the costs out of their pocket (rather than adding it to the tab), and the label will pay half. The reason we can do this is because the band doesn't tour full-time, so they have the oppurtunity to have another job/go to school etc. If they were a full time touring band, they may not have the money to pay for half of promotion.

In my opinion, promotion is the most important aspect, and the hardest aspect of running a label. We're always looking for cheap ways to get exposure, while still maintaining our integrity (E.G. Not spamming, not being obnoxious).

If you have specific questions, feel free to ask.

As for your second question, I can say that it isn't too realistic, but it is possible. The thing is, if the band gets to a point where they're about to reach national success, they will most likely want to move on to a larger label. The way our contracts work, is that the band and label have a three record deal, with an option after the first record. So if the band records an album and releases it through us, after two years, they have the option of staying on, or leaving. No questions asked. If they want to stay, however, we reserve the right to decline. Then they are contractually obligated to stay for two more records if they decide to stay, but we have the right to drop them.

So, if they record their first album and have a lot of success, they'll msot likely leave on good terms in order to persure a larger label that can provide them with a larger advance, better recording, more promotion, more tour support, etc., not to mention the label's name recognition.

It gets a little more complicated though, because let's say the band decides to stay after moderate success with the first album. The think our label will still be good for them, so they record a 2nd album and release it, and it blows up. They are obligated to stay, but as weird as this may seem, we may want to let them go, for a few reasons.

One....I feel like keeping them would be a disservice to them, and very unfair. They deserve a label that has the infrastructure to support them.

Two....A deal could be worked out with the new label since they are still under contract with you. Placing your label's logo on the new album is one example. A buyout is another example.

So...it's possible that a band could reach national success, but in reality our type of label is really a stepping stone towards that success.