You Definitely Don't Want A Record Deal
By Chris Standring
I'm pretty much done with record labels.
I finally learned my lesson last weekend. The playing field has
finally been leveled.
Before I get into my rant, I should say that there still is a
place for record companies, but they are not for most of us. If
you win American Idol or even get into the top five finalists,
then sure, sign a record deal. Use the machine to make you famous
for 15 minutes. You're a puppet after all, not an artist. That
machine is absolutely right for you. But if you are an artist
or want any kind of longevity, a career perhaps, then think again.
Record companies are going out of business by the week. The question
you need to now ask yourself is, "Do I want to be signed
to a record company that will be out of business this time next
Retail stores are going out of business. We have lost The Wherehouse,
Blockbuster, Tower, Virgin?. Who is left??? All other stores are
small Mom & Pop stores and then there are the electronic stores
and bookshops like Circuit City, Borders. Walmart etc. and most
of these stores are very selective with the product they take
in. So it looks like dedicated CD stores will be gone in no time.
I walked into "Second Spin" in Sherman Oaks, California
a few days ago, a pretty big store. The first thing I said to
the girl at the counter was "Am I really the only person
in this store?". She said "Yes, it's been like this
for a while". Ouch!!!
But here's the real kicker that did it for me...
Last weekend I did a two day stint out of town with an ensemble
I am presently on the road with called "Jazzmasters".
We did a show in Sacramento, then Palm Springs the following day.
Sacramento was a completely sold out show. About 1500 people who
couldn't sit still. After the show CDs were selling like crazy.
There were 3 artists on the bill and we all just about ran out
of product. I personally sold 41 CDs. My record label were there.
In fact they were taking care of selling the product.
I have to purchase my merchandise at $8.00 per CD. A ludicrous
price, but believe it or not, major labels charge their artists
even more than this. At that price, the labels make each unit
'royalty bearing', which basically means that all royalties will
be paid to all folks who have a hand in the pie, be it a publisher
or artist royalty. The way labels justify it is that they are
selling the albums to their artists at wholesale price. The problem
is that most artists have two other commissions to pay before
money goes in their pocket. At every venue I play at, the house
or promoter will usually take at least 15% and can up to 25% (occasionally
30%) of the sale. So before I have paid my manager commission
on record sales (which now comes from my royalty checks, not from
direct sales on the night, otherwise they get paid twice), I have
been pretty much percentaged to death!
Here's how the numbers ran:
I purchased 50 CDs from the label at $8.00 per CD. That's $400.
I sold 41 CDs and gave 15% to the house. $615.00 gross came in
from all sales. House took $92.00. My label handed me $63.00 in
cash! Actually it should have been $122 but we'll see if I see
So the point is, it's a joke. I said to my label rep, "You
have to admit this is a total and utter embarrassment isn't it?"
There is no reason why labels can't discount merch to their artists
and still keep the product royalty bearing. An hour after the
show signing CDs and for what!!??
But the real point is that it must stop now, and the good news
is that it totally can.
I am recording a new album now and I am at a crossroads. I either
sign a new deal with a label that is prepared to be respectful
to the artist (good luck with that Chris) or do a 'pass-through'
distribution deal with a label where they take a percentage of
sale only. I become the label. I manufacture. I promote. I spend
money on radio promotion and print ads but I make all the money.
That's not to say that I won't be paying out a good whack of money
to make it all happen but it just makes more sense to me now.
If you want to play in the big leagues and compete then money
is involved. You bat in the league you are comfortable with.
And with that, I suggest you ask yourself where you expect to
make your money in the real scheme of things. If it is from touring,
and let me tell you that at the independent level, this IS where
you will make money, then make a smart decision about your future.
You probably don't need a record label. Unless of course you are
going for next year's American Idol contest. If so, good luck
|| Chris Standring
is the CEO and founder of A&R Online (www.aandronline.com).
He is also a contemporary jazz guitarist presently signed to
Ultimate Vibe Recordings. For more info on Chris' recording
career go to his personal website at www.chrisstandring.com
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