So I've seen this article copied and pasted all over the internet (and ripped off shamelessly by courtney love) and I've always wanted an answer to a couple questions. Seeing that Steve posts here maybe this is the place.

So here's the article, the now famous "The Problem With Music"

http://www.thebaffler.com/albiniexcerpt.html

I have a more than a little familiarity with major label deals, though I don't work for one or anything silly like that. I think that a lot of the expenses in this story are very arbitrary and added to prove a point. For example "Drum, Amp, Mic and Phase “Doctorsâ€

I think he was just making a point.

manwithquestion wrote:But that's bullshit. In your example they sold 250,000 copies. Depending on the number of originals and who wrote them and how the band splits them it's not going to be too far from $200,000 payable from unit one. Maybe it's less because of a 50/50 split. OK, so that's 100k. And we're not even talking sync and radio money, which was smaller in 1993 than today but is hardly irrelevant.

That's real money. You didn't include it (even though a publishing advance is mentioned inexplicably) and I have to assume you didn't include it because it undercuts yor argument, which is shaky to start with. What's the rationale behind this omission?

I Admit that I didn't make the essay example exhaustive. Using your premise (50-50 split with publisher) I'll add a few other standard clauses (three-quarter statutory rate, 10 song cap) and do the math for you:

2.5 million accountable titles (250,000 copies x 10 song cap) x .066 (statutory rate) x .75 (three-quarter rate) x .5 (royalty split) = $61,000

less $20,000 advance = $41,000
less manager's percentage (15 percent) = $35,593.75
divided by four band members = $8898.44 per band member.

You're right. They would probably get that money, over the course of several accounting periods -- say 2 - 3 years.

You claim to be familiar with major label deals, yet you call this a "worst case?" We differ. I contend that the example deal is (or was at the time) representative in scale (if not specifics) of what most bands are faced with -- bidding-war bands notwithstanding.

There are certainly some contracts that read better in some areas, but I contend that most contracts offered to bands are either this bad or worse. Nit-picking over the specifics of any example will be unproductive, so I tried to make an example that couldn't be criticized as unrealistic. You don't spend money on drum doctors (and neither do I), but you might on a ProTools edit monkey or a string session...

It is worth noting that (of the mountains of criticism I've received after writing the article) no major label employee has argued that the contractual premises are unrealistic.

i heard husker du got a pretty good deal.

steve wrote:
I Admit that I didn't make the essay example exhaustive. Using your premise (50-50 split with publisher) I'll add a few other standard clauses (three-quarter statutory rate, 10 song cap) and do the math for you:

2.5 million accountable titles (250,000 copies x 10 song cap) x .066 (statutory rate) x .75 (three-quarter rate) x .5 (royalty split) = $61,000

less $20,000 advance = $41,000
less manager's percentage (15 percent) = $35,593.75
divided by four band members = $8898.44 per band member.

You're right. They would probably get that money, over the course of several accounting periods -- say 2 - 3 years.

You claim to be familiar with major label deals, yet you call this a "worst case?" We differ. I contend that the example deal is (or was at the time) representative in scale (if not specifics) of what most bands are faced with -- bidding-war bands notwithstanding.

There are certainly some contracts that read better in some areas, but I contend that most contracts offered to bands are either this bad or worse. Nit-picking over the specifics of any example will be unproductive, so I tried to make an example that couldn't be criticized as unrealistic. You don't spend money on drum doctors (and neither do I), but you might on a ProTools edit monkey or a string session...

It is worth noting that (of the mountains of criticism I've received after writing the article) no major label employee has argued that the contractual premises are unrealistic.

It's not a worst case contract, it's a worst case scenario. Perhaps in 1993 this was more newsworthy and you should get credit for exposing it. Nowdays everyone seems pretty aware that a major label deal is a shoot the moon -- you spend lots of money hoping to sell a million records. If you do then financially speaking often everyone makes out reasonably well. That's arguable but it's not the argument you're making, and I'd contend that many bands that are in the gold/platinum category clearly chose majors again when they have the choice while aware of the deal they're getting.

If you don't go anywhere then the label loses a lot of money that it invested in your band, while the band typically doens't take a financial loss. Which has some advantages.

For this you basically picked the one point where the lines cross -- where the band sells enough to be "successful" but not enough for it all to work out given the terms. Those band should be on indie labels in many cases, or strike more creative deals with majors or sub-imprints. The cookie cutter approach in this specific case kind of sucks for them. I would write lots more but Danny Goldberg already did and I'm sure you read it (Ballad of the Mid-Level Artist)

But I think you could have made this point more honestly... it's always bothered me every time I've gotten this essay forwarded my way with some "see bands don't make money from labels" intro. You made the numbers up and tweaked them until they worked out for you, instead of making a more nuanced arguement. Your response to me basically paraphrases as "well sure OK we could include it, but it's not really all that much more money so whatever"

Sure, and the five thousand dollar cartage and transport bill isn't much on its own either, though if you're paying $1000 a *week* for cartage (and what, limos, plane tickets?) for a 5 week lockout I'd be a little concerned. Well especially as its in addition to buying new instruments for the entire band (and then presumably driving around with them for sport judging by the cartage bill). And there's another 5 grand for renting equipment that I would presume doesn't mean instruments, since you spent a ton buying brand new instruments, and so on.

The point being that each of those isn't that much money either but you managed to figure out how to include them somehow with great detail. But the publishing (which many artists consider to be their primary source of income for the process of writing and recording songs) didn't make the cut.

Counting the hits and not the misses -- it's one of classic ways to make a fallacious argument. I expected better, especially in the Baffler, which is one of my favorite mags ever, a lone voice in the wilderness crying out against market fundamentalism and corporate hegemony.

Ah well... thanks for responding and I respect your opinion greatly, as much as I disagree with the way you framed this argument. And I'm guessing you've seen this before but here's a recent article on a related topic (why corporate music sucks) that I thought especially insightful if you're interested:

http://www.laweekly.com/ink/04/44/features-bemis.php

manwithquestion wrote:If you don't go anywhere then the label loses a lot of money that it invested in your band, while the band typically doens't take a financial loss.

Please give specific examples of when a major record company took a massive financial loss, and NONE of that expense was recouped from the band's monies.

Your quote is, amazingly enough, something I've heard from the mouths of many a "hip A and R rep" that Mr. Albini refers to in "The Problem with Music."

for what it's worth, I recall seeing Q-Tip from a Tribe Called Quest on an MTV special about the record industry and he broke down how much they made after taxes, video expenses, promo budget, managers, accountants, etc for the Tribe album "Low End Theory" which sold over 1 million copies over a couple of years and was generally considered a classic album in hip hop circles....It came out to about $30,000 for each of the three band members for essentially 3 or 4 years of work making and promoting it....that seems pretty in line with what Steve has been saying.

gcbv wrote:

manwithquestion wrote:If you don't go anywhere then the label loses a lot of money that it invested in your band, while the band typically doens't take a financial loss.

Please give specific examples of when a major record company took a massive financial loss, and NONE of that expense was recouped from the band's monies.

Your quote is, amazingly enough, something I've heard from the mouths of many a "hip A and R rep" that Mr. Albini refers to in "The Problem with Music."

No of course it's recoupable. The point being that the band typically does not lose money over the course of the process. They may lose time, lots of it, or money that they could have made had the done it differently, but they don't lose money, as evidenced by the fact that most don't have money to lose and still the process continues. They don't end up in "debt" the way they would if they borrowed money from their family or mortgaged their house or whatever to try to promote their own music.

Maybe I could put it more simply -- If you own a house and you get a record deal and you and the label spend a million bucks and you don't sell even one record, they don't come take your house. If you're a label and you do the same (collectively) they take your office building. Each party has different exposure to financial risk, and that's important.

Whatever - I'm not sitting here defending major labels and their often fucked practices. Steve pointed out something quite true, which is that getting signed to a major and even selling what seems like a lot of records is not necessarily a good thing, financially or otherwise. That's an interesting point and I think it's great. Maybe he could have made it without writing "There's no need to skew the figures to make the scenario look bad" and then promptly skewing the figures in a really obvious way. Would be a much more compelling discussion then methinks...

manwithquestion wrote:It's not a worst case contract, it's a worst case scenario. Perhaps in 1993 this was more newsworthy and you should get credit for exposing it. Nowdays everyone seems pretty aware that a major label deal is a shoot the moon -- you spend lots of money hoping to sell a million records. If you do then financially speaking often everyone makes out reasonably well. That's arguable but it's not the argument you're making, and I'd contend that many bands that are in the gold/platinum category clearly chose majors again when they have the choice while aware of the deal they're getting.

So, if you're already successful in the major label paradigm, then you will be successful in the major label paradigm. This tautology is hardly a revelation.

The article was intended to provide an example of how a band (I suggest that most bands) will not be better-off financially on a major label, even with a number of records sold that appears impressive on its face, and contractual terms that are not exploitive on their faces. Worst case scenario? Please. Look at the dozens of bands subject to the currently-popular belaying tactics: Kept in the studio indefinitely making the same album forever, and never getting it released. Racking up infinite debt, contractually bound to a label with no interest in them, unable to release anything, unable to tour, with no outside income -- that's a worse case.

If you don't go anywhere then the label loses a lot of money that it invested in your band, while the band typically doens't take a financial loss. Which has some advantages.

If you presume that the only possible outcomes are superstar or failure, then I suppose you're right. I don't make that presumption, because most of the music that has meant the most to me (and the world, maybe) has not been made by superstars, but by bands who were allowed to survive long enough for their audience to find them. In the "shoot the moon" model, bands who are not "successful" are destroyed or neutralized by many months or years of inactivity, and I think that's a poor prize for second place.

For this you basically picked the one point where the lines cross -- where the band sells enough to be "successful" but not enough for it all to work out given the terms.

Which is where most bands end up, I would argue.

Those band should be on indie labels in many cases, or strike more creative deals with majors or sub-imprints. The cookie cutter approach in this specific case kind of sucks for them. I would write lots more but Danny Goldberg already did and I'm sure you read it (Ballad of the Mid-Level Artist)

Yes, and I have had correspondence with him dissecting some of his misconceptions about the independent label stratum. My point remains: If you are not a superstar in the mainstream system (and the system only supports one or two such new-entrants in the superstar league a year), then you will remain unrewarded, and your band will probably be destroyed.

I would also take issue with the idea that sub-major imprints are "better," as their money stream is siphoned off in more places than a straight-up major label, and their administration is often shared or subordinate to the big label. Their attention to promotion may be potentially better (in cases like Reprise with a long-tenured discrete staff), but their significance has waned as more and more people are being given their own "imprint" labels as show ponies to reward administrative service (or, in the case of Fred Durst, rewarding the bad taste of the baggy-pants-and-goatee generation).

But I think you could have made this point more honestly... it's always bothered me every time I've gotten this essay forwarded my way with some "see bands don't make money from labels" intro. You made the numbers up and tweaked them until they worked out for you, instead of making a more nuanced arguement. Your response to me basically paraphrases as "well sure OK we could include it, but it's not really all that much more money so whatever"

I am stung by this accusation of dishonesty from an anonymous internet know-it-all. How will I sleep under such a shadow?

How, exactly, could I have made a generic example case without "making-up" the numbers? I wanted to avoid making any one contractual case an example, so I generalized about everything. Feel free to pick nits -- as you have -- but I think the experiences of countless bands have borne-out the broad strokes validity of my example.

Sure, and the five thousand dollar cartage and transport bill isn't much on its own either, though if you're paying $1000 a *week* for cartage (and what, limos, plane tickets?) for a 5 week lockout I'd be a little concerned. Well especially as its in addition to buying new instruments for the entire band (and then presumably driving around with them for sport judging by the cartage bill). And there's another 5 grand for renting equipment that I would presume doesn't mean instruments, since you spent a ton buying brand new instruments, and so on.

Having done it pretty regularly, I can attest to the cost of air-freight shipping a pallet full of band gear: $1500 or so round trip domestically, $2200 or so internationally. Ship two pallets and have a van drive them from the airport, and you've hit your cartage figure or gone over. Let the drum doctor have his collection brought to the studio piecemeal and you'll hit it. Blah blah example counter example blah. Again, I don't want to have to justify every line-item in the example (because I think the figures are unimportant and could just as easily be worse), but if you insist, I will. Because I value your critique, O anonymous internet know-it-all.

If you think bands don't buy new equipment with their "fund" money, you are being willfully naiive.

The point being that each of those isn't that much money either but you managed to figure out how to include them somehow with great detail. But the publishing (which many artists consider to be their primary source of income for the process of writing and recording songs) didn't make the cut.

I did include an advance figure from publishing, but publishing is another -- more involved -- discussion that has at least as many layers of complexity as record sales. If I include mechanicals, then I have to make assumtions about the songwriting and deals (and whether or not the producer insisted on co-writing credits), all of which would invite scrutiny from anonymous internet know-it-alls. If I include airplay, then I have to include plugger or independent promotions expenses, and their payment can be structured in many different ways. Whichever one I chose, some anonymous internet know-it-all would be able to suggest I wasn't honest because there would be another contractual option that wasn't considered.

I tried to keep the discussion on the basic transaction: Make a record, then sell it, and see who gets all the money.

Counting the hits and not the misses -- it's one of classic ways to make a fallacious argument. I expected better, especially in the Baffler, which is one of my favorite mags ever, a lone voice in the wilderness crying out against market fundamentalism and corporate hegemony.

Show me the great mass of bands who are well-served by the mainstream music business model, and I will recant the thing in full. I believe my position is realistic (or was at the time), and that most bands in the system are treated this poorly or worse. Prove me wrong and I'll eat my hat.

steve wrote:Look at the dozens of bands subject to the currently-popular belaying tactics: Kept in the studio indefinitely making the same album forever, and never getting it released. Racking up infinite debt, contractually bound to a label with no interest in them, unable to release anything, unable to tour, with no outside income -- that's a worse case.

This made me think of Fiona Apple, who is now about 25 years of age or so, and signed a contract with Sony when she was like 16. For the past year and a half/two years she has been battling with Sony to release her album "Extraordinary Machine", but they are telling her it's not commercial enough. They said she needs to change it, but I guess she is unwilling to do so, so it's just sitting.