Peter M. Thall's book, “What They’ll Never Tell You About the Music Business- the Myths, the Secrets, the Lies (and a Few Truths), is an easy to read, but comprehensive work that uncovers little known facts vital for any musician serious about their career. Thall worked for Simon & Garfunkel, Pat Benatar, The Cars, and many others.
Thall makes the point that in the book publishing industry a writer gets paid when the books start selling, but that is not the case in the record industry.
Artist Loses in Many Unusual and Unfair Ways
If an artist negotiates a typical royalty of 12 percent, and sells 100,000 copies, he or she should get around $2.00 per sale. Of that $200,000, at least $100,000 will go back to the label for recording costs, then the producer has to be paid, even before the artist.
To make things worse, according to Thall, the artist only gets 85 percent of the royalty because of non-existent breakage. The deduction goes back to the days of 78 rpm records, which did have a certain number of damaged product, but CDs rarely are returned
Charges for “Packaging” are Needless
Then there is the packaging, that is another 25 percent deduction, also going back to the larger and more complex packaging for large vinyl records, hardly needed now for tiny CDs.
In the past, up to 30 percent of all records went through record clubs, which people growing up in the 1960’s and 70’s may remember, but are now rarely seen. But the deduction is still taken taken.
Then there is the 25 percent taken out for “packaged digital downloads,” though there is no packaging whatsoever for a digital download. But it remains.
Artists are Charged for Developing CD Technology Without Justification
Then you have what is called “new technology concession,” and that is an allowance for research and development to help the record companies keep up with the newest in mediums to capture music. Yet the Dutch division of Philips developed the CD on their own, and little further development is needed.
Thall goes on to detail other deductions always unfavorable to the artist. And unbelievably, the attorney for the artist cannot demand open accounting, as the label is not obligated to divulge or audit their books, unlike other industries that are far more transparent.
Legal Representation Critical for Musicians
With these daunting facts, the artist is required to have excellent legal representation, but few do. Many don’t have the finances to hire someone until it is too late, and few entertainment lawyers can invest their valuable time for unknown artists.
In the end, many musicians thrive without record labels, and use the abundant resources available to self-publish and sell their CDs and downloads at a far great profit, and stay debt-free.
Many of the bands you might see that get record deals could be so heavily in debt to their label they never make money. Others stagnate with many others on the roster because no one pays attention to them and nurtures their career over a long period of time.
In the end, if you get signed, make sure to get good legal help before signing any deals, because there are so many ways to get cheated.
Sources
- Thall, Peter M, What They’ll Never Tell You About the Music Business-the Myths, the Secrets, the Lies (& a Few Truths), Billboard Books, 2005, 340 pp. ISBN 9-780823-084456
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