Recording Deals In The Digital Age

cascadefx writes "There is a really interesting panel wrap-up over at the National Association of Recording Industry Professionals's website. The Incredible Shrinking Profit Margin panel discussion looks like it included some interesting discussion into the deals that are made with performers now that the rules have changed. These notes offer interesting (perhaps hopeful) business predictions about Britney Spears' career as well as answering the (new)-age-old question about just how much an artist makes off of an iTunes download. Check it out."

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[mpapet]

Site was very slow, probably /.'d Here's the text: The Incredible Shrinking Profit Margin Passion, anger, humor and realism are the order of the day at a lively NARIP panel on how major labels want more from artists and do less. One prediction: "Britney Spears is over." Reported by Scott G "Been there, done that, still doing it, but with new budget parameters." That seemed likely to be the summary of the National Association of Record Industry Professionals' (NARIP) "Incredible Shrinking Profit Margin" program, a look into how major labels are providing fewer services while attempting to grab a piece of artists' publishing, merchandising, touring and more. Boy, was I wrong. The session was funny, lively, controversial, cynical, hopeful and exciting. Before the session, it seemed that this topic would lead to a gloomy recitation of low sales figures. But the three panelists mixed facts and a fantastic amount of passion into their presentations - so much, in fact, that they would have goosed an audience even if they'd been discussing the phone book. Who's Who on the NARIP Panel: Participating in the discussion were Darryl Franklin (Business & Legal Affairs for Interscope, A&M, Geffen and DreamWorks Records), entertainment attorney Dina LaPolt (LaPolt Law) and Carol Peters (Peters Management Syndicate). Each has an excellent track record (see bios at the end of this story) and each brought a unique perspective to the evening's presentation. Negotiating a Record Deal: A prime attraction for this event was a mock negotiation of a major label contract for an up-and- coming band. Each panelist played himself in a hypothetical conversation. While this elicited excellent information and insights (along with much humorous banter), the hoped-for effect of the audience being a fly on the wall didn't always work because all three panelists kept stepping out of their mock negotiation with asides to the audience. The information was great; no one complained. In fact, NARIP President and panel moderator Tess Taylor rarely needed to ask follow-up questions, as the panel launched into responses in a freewheeling yet coherent onslaught of ideas, fee ranges and controversial deal points. Some selected gems: Franklin, on the ephemeral nature of the record industry: "Britney Spears as a pop artist is over." LaPolt, on the next big area for artist/producer/publisher/record company profits: Mobile phone rights. "Know the four parts of mobile phone rights: master, sync, image, and Java games." Peters, on the change from physical to digital sales: "Who is the traditional market for records? 14-24 year-olds. It's ironic, but the core record buyers are not buying records." Franklin, on the profit-taking of phone corporations when their services offer downloads: "Phone companies take 50% of all downloads." Another observation raised a few eyebrows: "The phone could replace the iPod." LaPolt, on fees that game companies pay to license songs: "They're tiny. Incredibly tiny. And it's inefficient. EA (Electronic Arts) will clear 60 masters, then use just 15 songs in a game, all at low rates. And they want to pay these low rates on a buyout basis, with no share of revenue, no points, and no step-deals." Peters, on the current state of affairs in the recording industry: "The record business right now is like musical 'Survivor'." Franklin, sending a warning to MTV: "There's a new video channel in town. Watch for Fuse TV." LaPolt, on the future: "There is new music coming, real diversity of music, and it will be a rebirth of the record industry." The Bottom Line: The LaPolt Law handout on "Traditional Major Label Royalty Computation" was itself nearly worth the price of admission as it revealed the formula used by record companies to retain a much higher amount of money than might otherwise be expected from the way the artist contract is worded. There's a reason major label artist payments are known as a "penny rate." In addition, the NARIP-supplied "iTunes Artist-Producer Royalty Calculation" sheet was fa

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[Dzimas]

The Incredible Shrinking Profit Margin Passion, anger, humor and realism are the order of the day at a lively NARIP panel on how major labels want more from artists and do less. One prediction: "Britney Spears is over." Reported by Scott G "Been there, done that, still doing it, but with new budget parameters." That seemed likely to be the summary of the National Association of Record Industry Professionals' (NARIP) "Incredible Shrinking Profit Margin" program, a look into how major labels are providing fewer services while attempting to grab a piece of artists' publishing, merchandising, touring and more. Boy, was I wrong. The session was funny, lively, controversial, cynical, hopeful and exciting. Before the session, it seemed that this topic would lead to a gloomy recitation of low sales figures. But the three panelists mixed facts and a fantastic amount of passion into their presentations - so much, in fact, that they would have goosed an audience even if they'd been discussing the phone book. Who's Who on the NARIP Panel: Participating in the discussion were Darryl Franklin (Business & Legal Affairs for Interscope, A&M, Geffen and DreamWorks Records), entertainment attorney Dina LaPolt (LaPolt Law) and Carol Peters (Peters Management Syndicate). Each has an excellent track record (see bios at the end of this story) and each brought a unique perspective to the evening's presentation. Negotiating a Record Deal: A prime attraction for this event was a mock negotiation of a major label contract for an up-and- coming band. Each panelist played himself in a hypothetical conversation. While this elicited excellent information and insights (along with much humorous banter), the hoped-for effect of the audience being a fly on the wall didn't always work because all three panelists kept stepping out of their mock negotiation with asides to the audience. The information was great; no one complained. In fact, NARIP President and panel moderator Tess Taylor rarely needed to ask follow-up questions, as the panel launched into responses in a freewheeling yet coherent onslaught of ideas, fee ranges and controversial deal points. Some selected gems: Franklin, on the ephemeral nature of the record industry: "Britney Spears as a pop artist is over." LaPolt, on the next big area for artist/producer/publisher/record company profits: Mobile phone rights. "Know the four parts of mobile phone rights: master, sync, image, and Java games." Peters, on the change from physical to digital sales: "Who is the traditional market for records? 14-24 year-olds. It's ironic, but the core record buyers are not buying records." Franklin, on the profit-taking of phone corporations when their services offer downloads: "Phone companies take 50% of all downloads." Another observation raised a few eyebrows: "The phone could replace the iPod." LaPolt, on fees that game companies pay to license songs: "They're tiny. Incredibly tiny. And it's inefficient. EA (Electronic Arts) will clear 60 masters, then use just 15 songs in a game, all at low rates. And they want to pay these low rates on a buyout basis, with no share of revenue, no points, and no step-deals." Peters, on the current state of affairs in the recording industry: "The record business right now is like musical 'Survivor'." Franklin, sending a warning to MTV: "There's a new video channel in town. Watch for Fuse TV." LaPolt, on the future: "There is new music coming, real diversity of music, and it will be a rebirth of the record industry." The Bottom Line: The LaPolt Law handout on "Traditional Major Label Royalty Computation" was itself nearly worth the price of admission as it revealed the formula used by record companies to retain a much higher amount of money than might otherwise be expected from the way the artist contract is worded. There's a reason major label artist payments are known as a "penny rate." In addition, the NARIP-supplied "iTunes Artist-Producer Royalty Calculation" sheet was fascinating because it answers the question all artists on iTunes keep as