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.'"

Comments

Not surprising

[seinman]

I'm surprised it took them this long. I mean come on, there's a way for them to bilk the artist out of more of their earnings, and they didn't do it? That's not the recording industry I know!

Re:Not surprising

[Frymaster]

"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 ?"

bingo. remember that a "major" record label is, by definition, a label that owns its own distribution and promotion network (which is why you sometimes see albums with the indie label logo and a major's logo on the back. the major is the distro channel).

while this combo can be a good "package deal". it means that the artist is tied to one label for everything - the product, the promo, the distro. there's no shopping around.

witness the band "drive like jehu". originally they were headhunter, and indie from san diego, distributed by cargo (of montreal). their first lp did remarkably well, so they moved to capitol to get "better distro and promo". the second album was considerably different than the first and capitol decided that they didn't want to be involved with dlj anymore - so they killed the distro. three weeks after the release, the busiest hmv in my city had exactly one copy.

of course, dlj couldn't shop the product to another distro company. they'd signed a contract. in the end, the band broke up. (two of the members are in the hot snakes now... in case yr a fan).

so, the moral is this: if you sign with a major, they hold all the cards and can leverage release schedules, distro, promotional material &c. against you to force you to renogiate.

nb: dlj's contract stipulated that the vinyl release of that second lp could be done by headhunter. that was a pretty rare condition. but for a year it was the only way to get that album, in my city at least! nb also that the abovementioned album was eventually re-released last year by swami records - an indie.

They just now figured this out?

[taped2thedesk]

Umm... hello? They haven't done this already?

I thought a big part of the RIAA's argument is that the labels have to underwrite the promotion and some of the costs for the tours... If this is true, then shouldn't they have already been taking a cut from the tour profits? Maybe I'm wrong here. I'd check out the RIAA's site, but it appears to be down...

Re:They just now figured this out?

[mjmalone]

I thought a big part of the RIAA's argument is that the labels have to underwrite the promotion and some of the costs for the tours...

From what I have read this is not true. Most record contracts state that all/most costs related to marketing and distribution will be recouped from the artists cut of the CD sales, not the record companie's. Of course this means if the record doesn't sell well the record company doesn't get all that money back through the artist's cut... But it also means the artist will get nearly nothing.

I wrote a paper for school on how I morally justify downloading mp3s which outlines the way most record contracts work.

artificial scarcity versus real scarcity

[Thinkit3]

Ok, to the animals who don't get the "theft" thing, a concert has real scarcity. If I copy your ticket, both our asses can't sit down in that seat. A recording has only artificial scarcity. Copying your cd has no effect on you. So this is a good thing. Let them act as promoters.

Grateful Dead

[Black Parrot]

There was just now a segment on ABC World News about The [Grateful] Dead's new model for making money off music. They record their shows every night, take orders from fans at the show, have their audio man master it, ship it off for duplication on CDs, and have it in the mail to the fan within about three days.

Instead of the $1/album typically made by signed bands they make $8-$10 on the three-CD set that sells for $22. They've turned a quarter of a million dollars on the CDs from their performances at Red Rocks over the past couple of weeks.

Not mentioned at the link, but Peter Jennings added that the music companies don't like being cut out of the loop like that.

Artists vs Labels? WRONG, Labels vs Clear Channel!

[DMaster0]

The artists already give a cut to someone, and it's called the promoter. Currently, the big boy in the business is Clear Channel. http://cc.com/

Currently, the way it works is that you have to schedule tours through Clear Channel for the most part. There are some local organizations who will properly get promotion and venue arrangements in place, but even then they have to usually give a cut to Clear Channel for the rights to promote someone. Anyone who's worked in a campus concert promtion board knows that you mostly have to pay off Clear Channel before an artist will schedule a date on their tour in your city. For big artists Clear Channel may get $100k up front, smaller ones maybe as little as a few thousand, but they get paid before a single ticket is sold. The venue then takes their cut of the gate, extracts the costs from the leftover and then gives the rest to the artist, and in some cases a cut of that goes to Clear Channel again, depending on how it was negotiated. Merchandise is usually only split with the venue, but it wouldn't surprise me to see some of it go to Clear Channel also.

There used to be a rate card published for clear channel's upfront fees for an artist, but I can't find it anymore and it may not have been a public site. It is very interesting to see how much it would cost a venue promoter to book an artist, as some of them make quite a lot of money just for showing up.

If anything, I'd see Clear Channel getting pissed before the artists, because at the very least this would give artists an option of who to let them promote their tour in the future. Clear Channel or their record label directly, either way the artist is going to drop at least %20 of whatever the gate is, so you can deal with the devil you know, or....

I Wrote a Contract Tracking System for EMI...

[Brad the Informer]

...and all I got was this lousy t-shirt!

No seriously, I did help create a contract management system for EMI in the early 90's. Biggest piece of shit I ever worked on. No access to the subject matter experts (people who know what it should do), but plenty of "interpretation" from middle management types.

It was made clear to us that the only purpose of record label contracts was to fuck the talent and maximize label profits. Advances on publicity costs for tours to promote the album, holdbacks on royalties until the label had turned a profit, "equalization" so that profits from one album were siphoned off to pay "expenses" incurred for others.

On the other hand, there were stories about how the artists would occasionally score a victory. I think it was Dean Martin, beholden to his label for seven more albums, who showed up, dropped seven albums worth of shit tracks on the desk, and said "Ciao!"

And Christ, don't get me started about the VP who would grab us at the end of the workday and shanghai us to Flash Dancers (Manhattan tittie bar) to force us to charge hundreds on our credit cards which we billed as meal expenses.

Yuck, it's not just the talent who feel like we swam a river of shit for the music industry.