Slashdot Mirror
Record Labels Looking for a Cut of Tour Revenues
Anonymous Coward writes "As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour. Now record labels are trying to get a piece of the action. 'Now the music labels, hungry for revenue from any source, are mulling over whether to make a grab for a piece of the tour biz. One company already has: In October EMI Recorded Music signed a deal with Brit singer Robbie Williams that gives the label a cut of the pop star's merchandise, publishing, touring revenue and sponsorship.'"
If the artists have accountants as good as the record labels they can surely manage to make a "loss" on all the tours after charging "consultancy" and "music services" etc, and having their own highly paid company of roadies, etc.
Give the record labels a taste of their own accounting!
blog.sam.liddicott.com
A lot of times, the label is putting a fair chunk of change into promoting the tour, booking the appropriate venues, and getting things done in general. I could see a decent tour costing the same as producing a CD, if not more when they go multinational.
Um, no.
The record label is putting a great deal of the Band's future earnings into promoting the band, mostly in promoting their CD sales, of which the band will receive $0.25-$0.50 per copy. Any promotion of the band, be it their CDs (the bulk of the promotion) or their tour is all charged to the band. In the end the recording companies, while taking the Lion's share of the CD profits (and now, soon, the touring profits as well), pays absolutely squat for promotion.
Hopefully this new development will encourage more bands to avoid the clutches of the recording industry and market direct, or use non-traditional channels such as mp3.com once was to reach their audiences. With luck this final act of hubris will be enough to kill those parisites dead, something that would be very good for artists and fans alike.
The Future of Human Evolution: Autonomy
True... Partly... the problem is the record companies see that they are no longer needed. Their main function was to act as a source of loans and to distribute music. Recording music is no longer expensive, and distribution can be done over the internet. Who needs record companies anymore?
Visualize the world of wine
Wow. That's good.
Did it ever occur to you that most bands starting out have less ability to dictate terms to a record label than people who are getting their first mortgage have with the bank? It works like this:
(label rep) : Here's our terms. Sign right there and we'll bring you onboard.
(band) : Hang on, we are a little unsure about this point here. Can we alter it?
(label rep) : Truth be told, I came to town to cut a deal with a band. If you don't like these terms, there are 3 other bands I'm talking to that I'd be just as pleased to go with.
At this point, the band either signs a draconian contract agreeing to give away God knows what, or the A&R rep walks and does business with someone else and the first band continues to play at dingy nightclubs ad nauseum. Fair? No. Life? Yes.
More here on exactly how that works and how bad the band is screwed.
Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing
How about "they offer the artist a chance to not have his career shot by reducing his radio air time, making sure they promote other artists better, or making him sign insane contracts ?" Is that worth signing for ? I doubt very much the record industry has genuinely something to offer that artists want to sign for. I'm even quite sure they don't even even have to say "or else" after saying "sign this" to an artist for the artist to comply.
In the '30s, there was a guy in Chicago who offered such "services" to local businesses.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
Soon labels won't sign an artist until they are guarenteed a cut of the tour proceeds, merchandice, etc... stuff that the artists usually took home all the profits on. I guess they figured out that they can't make all that much money by suing college students.
There are only 10 kinds of people in this world... those who understand binary and those who don't
Just because "many a Slashdotter" has pointed something out doesn't make that statement true.
Most musicians make more from CDs that sell enough to get past the break-even point (i.e., after the label has recouped its expenses) than they do from touring. (Note: I said "most" so put your Phish back in your trousers please.)
Touring expenses are enormous. Living in hotels 200 days out of the year? Not cheap, and you still have morgage/rent payments to make on your primary residence. The venue owners take a massive cut of the gate, and a large part of that goes to their expenses (insurance, union labor, security, etc.).
Touring for the large majority of acts is a break-even proposition at best. The exceptions are the Grateful Dead-like acts that can count on people who are willing to see a dozen of their shows every year and those "top-tier" arena acts (U2, Springsteen, Stones, et. al.) who can charge between $75 and $300 for a single seat. And those dinosaurs still make more from a CD (since they have name recognition and the label's not afraid of spending $1M to promote a low-risk release).
For the rest of the acts on tour, live shows are a means of promoting an album, thus a modest loss is an acceptable cost of doing business. No CD, no tour, unless they can take advantage of the economy of scale afforded by a multi-act tour (like Lollapalooza).
Touring is an extremely inefficient way of reaching listeners. Four to six weeks in the studio can produce a recording that millions will buy (and millions more will hear on the radio). To reach a million concert-goers, a band would have to play 50 nights of sold-out hockey rinks (20,000 seats), which with travel time and days off approaches three months on the road.
As for revenue streams, retail sales aren't the only source of income from a recording. There are royalties from airplay (heard any live cuts on the radio lately?), and from soundtrack and commercial uses. I wonder if you asked "any Slashdotter" what a transcription royalty was or the origin of mechanical royalties whether you'd get a correct (or even coherent) answer.
Finally, here's a quite from Robbie Robertson, late of the band The Band about touring:
Of course, I don't see what goes on here making a damn bit of difference with respect to the Byzantine construct known as the music industry. Any Slashdotter could tell you that much.
k.
"In spite of everything, I still believe that people are really good at heart." - Anne Frank
Is this as bad a deal as it appears? Notice that the guy voluntarily signed - in order for him todo that, they had to offer something that he felt was worth signing. Maybe promotional things, perhaps transportation costs, etc.
Hi there, Bob, it's me, Chuck, you know, your RIAA rep? Well, Bob, We at the RIAA would like to offere you a draconian contract to suck a little more blood from the wound, if you know what I mean... How's that sound?
No?
Oh, Bob, I'm sorry to hear that, we'll, I guess we'll just have to go without. Oh yeah, before I forget, there is just one little thing...
Remember that whole "five album deal" we made with you when you signed. Yeah, that one. Yeah, remember how in the fine print, it says you can't work with any other recording company until those deals are done? And remember that clause about how an album can't be released without our approval?
Well, you see Bob, it seems that you've only released three albums so far, so you still owe us two more. Now, the way I see it buddy, You're going to need our approval to get those last two out. Now, I can't speak for the rest of the group, but I like you a lot. However, there are a few of us who are saying.. well, saying that they don't think you've got what it takes to get your last two albums approved.
Yeah? Yeah, that's true, you COULD practice more, but Bob, the thing is, they think you just aren't a team player... I don't think they'd feel you deserve approval even if you were really good. Unless you could show us some of that RIAA team spirit...
Yes, Bob? Oh, no, Bob, without those last two albums, you can't work for ANY label, even your for youself. Nope, can't sing another lyric, legally at least. Ah, we'll I wouldn't advise singing Happy Birthday to your grandmother, see that would be a public performance, and all....
Oh, what's that you say? That draconian contract sounds fine to you after all? Oh, excellent! Oh wait a second, I think the RIAA percentages I quoted you before were off by, say, 20% (darn blurry faxes), but I'll have the revised copy sent to your trailer. Oh, I'm sorry, Bob, the line must be going bad, I could have sworn I heard cursing on the other line... It would be a shame if we had to.. oh, you didn't hear anything you say? Ah, so you agree? Right. 25%. Oh you heard 20%? Ah, that pesky line noise must have interfered... Or did I say 30%? That's a good boy, Bob. Yes you can come over later this afternoon and lick my car clean for me, that would be super.
ciao!