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Piracy Offers Heavy Metal a New Business Model
hessian writes "Despite being extensively pirated worldwide, Iron Maiden have managed to put themselves in the £10-20m for 2012. This means that despite the growing popularity of the band on social media, and the extensive and pervasive torrent downloading of the band's music, books and movies, the band is turning a profit. This is in defiance of the past business model, and the idea that piracy is killing music. In fact, piracy seems to be saving music in Iron Maiden's case. One reason for this may be metal itself. It has a fiercely loyal fanbase and a clear brand and identity. The audience identifies with the genre, which stands in contrast to genericized genres. It doggedly maintains its own identity and shuns outsiders. As a result, fans tend to identify more with their music, and place a higher value on purchasing it."
the majority of their money touring? Last I heard unless you made it through your first few record deals with your popularity intact and could re-negotiate you weren't making anything on record sales. Heck, at times you were paying the studio to sell your records in the form of loan interest.
No. The big pop acts make their money from record sales. Yes, it's true that early in their careers they tend to get a lower royalty rate than later on, but if their early albums are going multi-platinum, they make lots and lots from royalties.
(I should mention my source: I spent a while working for Universal Music Group, building a royalty calculation engine, and in the process talked extensively with several label account reps who'd been around for a long time. I spent lots of time with the guy who managed U2 for most of their career.)
The way the labels work is that for new bands they do give them with a moderately low royalty rate, meaning the band gets a fairly small percentage of each album's wholesale price. But that's not where they stick it to them. Where they stick it to them is in all of the other deductions and fees. Basically, every penny the label spends to promote the band is recorded and -- usually -- dramatically inflated. During the band's recording session, the label puts the band up in a swanky hotel (either owned or partially owned by the label, or with inflated prices and some kickbacks), provides a limo (owned by the label) to whisk them to and from, buys all their drinks and meals (and drugs and hookers), provides the sound studio (owned by the label) and engineers (employed by the label), etc., etc., etc., all at very inflated prices. Plus there's also all of the expenses around promotions, getting airplay, etc., and all of the touring expenses. Oh and typically there's also an advance on the royalties, cash paid to the band up front.
The labels tally up all of that stuff, with interest, and "recoup" it from the royalty payments that the band would otherwise be due. It's not uncommon for the recoupable expenses associated with an album to reach almost to seven figures. Combine that with the low-ish royalty rate and the band has to sell a lot of records, tapes or CDs to pay back what they "owe" before they ever see a dime. Most bands never do, because most bands don't reach the level of sales required.
There are some other tricks as well, such as "breakage". Back in the days when music was sold on shellac records (before nylon), it was common for a high percentage of records to break in transit. Since it was too hard to track what the actual percentage was, the labels just assumed a certain breakage percentage (10% IIRC) and deducted that from the retailer's price, and passed the deduction on to the artist, taking all of it out of the artist's royalties, not sharing the pain. When new technology came along, more durable nylon, and later very durable 8-track and cassette tapes and CDs, labels continued this practice, giving the retailers a free discount on the wholesale price and making the artists eat all of it. When questioned they say "oh, it's just a promotional discount, under the old name". And promotions are charged to the artist.
However, bands that really make it big do sell enough records to recoup, and start making big bucks on royalties. Later they get wealthy enough -- and smart enough -- that they don't take all of the extremely expensive handouts from the record labels. They have money so they don't need advances. They have their own cars and drivers and don't need limos. Maybe they use the label's studio and maybe they don't, but if they do they have lawyers and agents who negotiate more favorable terms. And they buy their own hookers and blow. So recoupment becomes less of an issue. And eventually they may even negotiate better royalty rates, though that's less common than you might think. The really big stars eventually just create their own labels and contract out distribution through existing la
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I'm an 80's metal head. I even played bass in a metal band up until 2009.
The Black album was an abortion, but I could forgive them for it.
3 main things drove me away from them.
First, they essentially released Cliff 'em All and then relegated Cliff to nothing more than a footnote. I went to see them on their black album tour and they played a half hour video before the show of which, I kid you not, 30-45 seconds at the beginning mentioned Cliff. The remaining 29 minutes made a point of excluding him. Even in clips of old shows and behind the scenes footage from those years they purposefully omitted anything that had him in it. To top that off they billed it as a 4 hour show and played maybe 1.5 hours and called it a night.
Second, Load of shit, and Reload of shit.
Third, and what was the final nail in the coffin was the Napster incident. For a band, who were where they were only because of bootlegging, to unleash the lawyers on their fans was the biggest kick in the balls, douche bag move I've ever witnessed from anyone in the genre. I wouldn't have heard or bought their albums, or gone to their shows had it not been for my cousin giving me a dubbed cassette tape of Ride The Lightning.
I vowed then that they would never see another dime from me, and they haven't and never will. I wouldn't piss on them if they were on fire.
I still listen to the Cliff era music, but that's the only music they ever put out really worth listening to anyway.
I'm all about Maiden though!