{"id":371,"date":"2003-09-12T12:45:38","date_gmt":"2003-09-12T20:45:38","guid":{"rendered":"http:\/\/www.amptoons.com\/blog\/archives\/2003\/09\/12\/how-record-labels-exploit-bands\/"},"modified":"2003-09-12T12:45:38","modified_gmt":"2003-09-12T20:45:38","slug":"how-record-labels-exploit-bands","status":"publish","type":"post","link":"https:\/\/amptoons.com\/blog\/?p=371","title":{"rendered":"How record labels exploit bands"},"content":{"rendered":"

In an earlier posting<\/a>, I wrote that one reason I have very little sympathy for the whining of major record producers about how Napster “steals” from artists is that, by and large, the money from record sales never goes <\/i>to the artists. Instead, the record companies use their overwhelmingly superior bargaining position to force artists to sign recording contracts which overwhelmingly favor the company.<\/p>\n

Will Baude<\/a> responded:<\/p>\n

While Ampersand may think that one shouldn’t use one’s market muscle to extract the terms the market will bear, I’m not so convinced. RIAA, remember, actually provides benefits to people with whom it signs contracts– our bajillion dollar entertainment industry is highly dependent on marketing and reduced transaction costs and lots of other things.<\/div>\n

I don’t disagree with Will that the RIAA (or, rather, the labels the RIAA represents) provides benefits to artists. I do think those benefits are ridiculously disproportionate to the value artists provide. Steven Albini<\/a>, best known for producing Nirvana’s “In Utero,” provides a useful description of both the process and the money.<\/p>\n

First, before a contract is ever signed, a “deal memo” is signed, stating that the band members and the label have agreed to sign a contract at some future point. What bands usually don’t realize is that once they’ve signed the deal memo, they have signed away all their options; they must <\/i>sign a deal with that label, which may or may not bear any resemblance to what was discussed when the “deal memo” was signed. And if they don’t, they will lose all rights to perform and record, potentially forever.<\/p>\n

Of course, a band could<\/i> just refuse to sign the “deal memo” until they talk to a lawyer… but the band knows perfectly well that there are a thousand other bands who would be thrilled<\/i> to sign the memo without making a fuss. Besides, they think, it’s just a memo – how binding could it be?<\/p>\n

But once a band signs with a record company, if they do well, then they’ll make tons of money, right?<\/p>\n

Not exactly. As Albini points out – and he provides the detailed numbers – in a typical case, virtually all the money goes to the label, not to the artists. For instance, if the artists grosses $3 million dollars, that translates to $750,000 of profit for the record label. How much does a band member get? $4031.25.<\/p>\n

But not really. Because the band is also $14,000 in debt to the record company. So for a deal which gave the label $750,000 profit, the band profits approximately $5,000. Put another way, after all expenses are accounted for, and everyone but the band and the label has been paid, of the remaining money 99.4% is paid to the label; the remainder is paid to the artists.<\/p>\n

And that’s if the band did really, really well.<\/p>\n

(Remember that, the next time someone tells you that when you illegally download music, the person being hurt is the artist. As David Draiman<\/a>, lead singer of Disturbed, says, the RIAA is fighting for corporate profits, not to help artists).<\/p>\n

And that’s not the end of it. Because the band has signed away ownership of their own work, forever. So in ten or twenty years time, when the band is no longer hot enough for a major label to bother with, maybe the band members could make a little bit of money by selling self-published CDs of their songs. Too bad – the label owns the copyright, and will keep the songs out of print forever rather than letting the artists self-publish.<\/p>\n

Do I think that makes it not stealing to illegally download music? No. But if our goal is to increase justice in the recording industry, there are many more important fights than protecting the labels’ right to prevent people from hearing artists’ music.<\/p>\n

    \n
  1. For instance, work-for-hire laws (the legal fiction which allow labels who have never created anything to become the legal “creators” of music) should be abolished entirely. Nothing the labels bring to the negotiation process justifies taking creatorship of the work away from the artists.\n<\/li>\n
  2. There should be a legal limit – say, four months – on how long a band can be held in limbo because an agreement cannot be reached – especially before the labels have actually paid out a single cent, but have only signed a “deal memo.” If a band and a label can’t reach agreement, the just thing for them to do is part ways – not for the label to legally push the band out of existence.\n<\/li>\n
  3. It should not be legal for labels to use contracts and copyright as a way of keeping music out of print and unavailable to consumers indefinitely. This practice doesn’t benefit consumers, doesn’t encourage creativity, and goes against the original purpose of copyright laws.\n<\/li>\n
  4. Exclusive publishing agreements – in which an artist agrees to publish not only a current album, but all future albums, with a particular label – should be abolished. These publishing agreements are anti-competitive; they give the labels the right to negotiate with as many artists as they want, while artists are robbed of the right to shop around and get the best deal the market will offer them.\n<\/li>\n
  5. More generally, all of the applicable rights that Scott McCloud proposed for cartoonists<\/a> ought to be legally secured for all creators working with publishers or labels. By no means will doing this rob labels of their ability to make a profit; but it will rob labels of their ability to take such a disproportionate share of the benefits and profits away from artists.<\/li>\n<\/ol>\n

    I’m just spitballing ideas here – perhaps some of the specific proposals wouldn’t be so great in practice. My point is, if our concern is eliminating injustice in the recording industry, the deprivations of Kazaa really shouldn’t be that high up on our priority list. Compared to how labels screw over artists, Kazaa is unimportant.<\/p>\n

    Isn’t it wrong to use the law to alter the balance of power in negotiations? No, I don’t think so. Minimum wage laws, for example, prevent employers from using their greater negotiating power to force people to work for a dollar an hour (in the US, at least). The recognition that vastly unequal negotiating positions lead to unjust outcomes, and in some cases ought be legislated against, increases fairness in the marketplace..<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    In an earlier posting, I wrote that one reason I have very little sympathy for the whining of major record producers about how Napster “steals” from artists is that, by and large, the money from record sales never goes to … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[91,62],"tags":[],"class_list":["post-371","post","type-post","status-publish","format-standard","hentry","category-free-speech-censorship-copyright-law-etc","category-popular-and-unpopular-culture"],"_links":{"self":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=371"}],"version-history":[{"count":0,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/371\/revisions"}],"wp:attachment":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}