Monday, September 10, 2007

Record Deals Can Be Detrimental To Your Health

Allen Johnston – The Music Specialist

This past year I have had the privilege to speak at several different conferences, seminars and open mic sessions to fledgling and professional producers, artists, musicians and entrepreneurs. What I’ve found in approximately 90% of these people is their desire to obtain a major record deal and not become a business owner. I find this desire to be entirely counter productive, selfish and lazy; a major record deal is completely the wrong way to run your career.

Let me give you a few reasons why a major label deal is inappropriate.


Yes you can receive an advance against sales for your project. Based on what you do to get this project started, your advance could be as high as $450,000.00. But when do you receive any more money? You immediately start out in a position of OWEING the record label; they now own ALL of the rights to your music, your image, your web presence and you can not even make additional deals (licensing) on your music without the labels authorization. You are now tied into a deal for at least 3 years and the label makes ALL of the choices for you.

New label contracts now include ALL of your ancillary revenue sources. Endorsement deals, publishing income, web based income, merchandizing and even a portion of your touring monies.


Music is like bread, it is best when it is delivered directly from the oven hot, flakey and smelling sweet. Your music is now under the rule of the label so they determine which song to release as a single, when the album will be released, when & if you will have a video and who you should talk with for publicity. Please remember that the major labels DO NOT UNDERSTAND how to work a record in the streets, how to obtain and maintain the freshness of a new “hit” or even how to work your fan base. If they did they wouldn’t need to get music from unknown independents, they’d make their own.

The bottom line for labels is cash and now that ALL labels are run by accountants, lawyers or corporate executives there only concern is for the immediate future of the label. They have no concern for the artist and little or no understanding of the music.

Within the past year the music industry has amassed hundreds of job firings, downsizings and miss management issues. These changes within the workplace are to make the balance sheets look better, to stanch losses, and hopefully report profits. It has got nothing to do with whether these people were NEEDED, whether they had jobs essential to the company, what their track record was in assisting the growth of the artist or even how many records they sold, just what their salaries and benefits were. No longer are record people working records, we now have the dubious new program called OUTSOURCING. What I’ve found out about outsourcing is that it opens up new companies for the children and relatives of the major label executives, friends, family and business associates. In other words it is just another reason to extract more money from the artist under the heading of RECOUPMENT. So as an artist you can no longer go to the company and speak with someone concerning your project, but you can sit in a room and listen to a conference call about your project. Remember that outsourced companies have MANY clients so why should you become a priority? By the time you release a second album some if not most of these outsourced companies will not even be in business. So you have to find NEW people to work on your project.


Major labels became major by creating a distribution system that started with independent store owners and moved to chain accounts. Now there is a glut of product at the physical stores, fewer consumers are buying the lack luster hits and digital distribution is allowing artists to reach the consumer direct.

U.S. album sales dropped to 588.2 million in 2006—a 5% decrease from the 619 million copies scanned in 2005, and the first time since 1993 that the figure has slipped below the 600 million mark. In 2000, R&B moved nearly 200 million copies, accounting for 25.4% of sales, while the rap subgenre—which is included in the R&B total—itself scanned 107 million units, or 13.6% of album sales.Since then, album sales have declined 25%, but R&B is down 41.4% to 117 million units and rap is down 44.4%, with scans of 59.5 million units last year. To put it another way, R&B now accounts for nearly 20% of U.S. album sales, while rap now stands at 10% of album sales.

It is now easier and much more profitable to release your music online where you can receive ALL of the money


Why go into debt with the labels for a big budget video when the airtime available on television is drying up? Programming at the major video outlets is turning to reality TV and now is reflecting a difference audience structure. You can enjoy more views and create a larger fan base by making an inexpensive video and placing it on My Space & You Tube thereby going directly to the consumer. You just need a digital camera and Final Cut Pro, maybe even iMovie.

KFC (Kentucky Fried Chicken) has recently made a new commercial using footage from MySpace & You Tube. This has effectively saved them millions of dollars. No Ad Agency to pay, no actors, no unions only free footage from the consumers that enjoy there product. If they can understand the significance of it I know you can.


Just a few years ago having a record in power rotation at radio would mean hundreds of thousands of sales. Now a top 10 rotated record brings in 5 to 20 thousand units a week this is a long way from the multi platinum selling days of yester year.

The new avenues for music are Internet radio, mobile cell phone streaming and the ability to license your music.
If all you care about is money, sign with a major label. If you want all your money up front, instantly owe a corporation, and no longer own your creation, sign with a major. If you want to whore yourself out, do whatever it takes to sell your unimaginative, non creative, un original music, then sign with the major label. I hope you achieve your goal and get instantly rich, because after the car, the jewelry, the parties remember “you owe your soul to the company man”.

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