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Tiberian Vocalizations: Cormorant’s Arthur Von Nagel Gives You The Anatomy of a Record Contract

Please join us in welcoming our latest musician columnist, Cormorant’s Arthur von Nagel. He’ll be writing for us from time to time and we’re happy to have him on board! Enjoy his inaugural column… and don’t forget that you can stream Cormorant’s new album, Metazoa, right here.

When I was sixteen and stupid (and weren’t we all?), I had this silly idea that when you form a band, the ultimate goal was to get signed.  Once you’re signed, you’ve made it.  Cascades of money gush from the pockets of your fans, you score the covers of Time, Atlantic Monthly, Rolling Stone and Home & Garden, you’re given the master key to the Playboy mansion, and, of course, you get to quit your day job.  Now, not to say this isn’t all 100% true, but since then I’ve been able to witness this mythical beast known as a “record contract,” and she’s quite a bit hairier than I once thought.

She looks like this, minus the unfortunate puritan censorship of her naughty bits [Editor’s note: you can click on any of the below images to enlarge them.]:

That’s a lot of bullshit compacted into three pages.  Now while those of you with law degrees may be masturbating furiously at this very moment, when I first saw this monstrosity, I was repelled.  To lift an expression from Gilbert Gottfried: what most bands dream of their whole careers in actuality has the sex appeal of a school bus fire.

And that’s fine.

What matters with a record deal isn’t so much the style, but the substance.  So let’s set our Babelfish translators to “Legalese” and attempt to shave away the bearded layers of this noble yet perplexing creature.


Here the contract is establishing its “Me Tarzan. You Jane.”  Notice that “The Artist” in the eyes of the label is not the band as a whole, but a lone representative signing for the group.  Also note that with all the necessary personal information, it looks a hell of a lot like a job application, and that’s because that’s what it is.  The band is agreeing to become employees of the label.  So if you want your boss at your day job to fuck off, now you’re agreeing to have a second boss.  Of importance is the word “performing,” because the more we little circus monkeys play live and tour, the more the label can take advantage of free advertising.  Unless you happen to introduce yourself as Garm, Fenris, Varg or John Lennon, refusing to play live while bound to a contract is bound to get you dropped.  Also, just so it’s clear, the contract makes sure the artist understands that the label is the one sitting at the grown up table doing BUSINESS while the artist is eating crayons with the other children.


Blah blah blah Websters definition circa 1953 yadda yadda antiquated music terms.  But wait!  What’s this I see?  “’Territory’ shall mean and include all countries throughout the world?” Well that’s interesting.  Imagine you’ve just signed to a Japanese label, without any offices in North America, and they throw in this gem of a clause.  Well too bad for you if you’d like to limit the Japanese label to exclusive rights of the sale of your album in Asian and Oceanic markets only, and then sign to a separate US label to handle your stateside business, because you’re on lockdown.  Of course, the hypothetical Japanese label, without any significant business connections in the USA, and a less developed understanding of that market, will have a harder time selling you there (Vince comments on that very subject here).  What they’ll usually opt to do instead, is to license the rights to your music to a North American label, who can then concentrate its efforts on its own geographic area.  That sounds great and all, but what it really means is there’s one more middleman between the artist and the money being earned from the artist’s music.  So basically the Japanese label is sub-contracting the work in foreign markets to another company and of course the band will be losing out on more royalties.

“Exercises its option?”  Sounds great!  Unfortunately, sometimes when you put two good things together, it becomes a bad thing, like chocolate and steak.  In this case, when a label exercises its option in a contract, it means they’re extending your signing period, whether you want in or not.  And you must deliver however many more albums they’ve stipulated, under the exact same terms as your initial deal, or you get sued for breach of contract.  Since labels only exercise options when it’s clear to them the band is a cash cow, in sports terms, this is like LeBron James winning MVP but being forced to accept rookie pay for another year.

I don’t know why people spend $250 an hour for lawyers to read these contracts when the contract itself already beats you over the head with the theme.  EXPLOITATION, EXPLOIT, EXPLOIT, EXPLOITING, EXPLOITING… sounds like an ESL class on the Amistad.  You’d think a document designed to make the musician sign their souls away as quickly as possible would employ more delicate, diplomatic language, but this one very directly orders you to bend over and smile about it.  I can’t fault honesty.  So if it’s not clear, this section is enumerating all the rights to your music you will be losing, that is to say, all of them.  The contract doesn’t sugarcoat it, and in fact repeats the same “we own you” statement four times in the first sentence.  Of particular importance to the label are the exclusive rights to the album’s master copy, from which all reproductions of the music are made.  This way, when the label inevitably drops the group, or the band signs elsewhere, the first label still is the only one legally able to reproduce copies of the band’s older material.

The “or refrain from using in good commercial practice as it elects” line is especially troubling if you’re in Ulver or Celtic Frost and plan to mutate your sound drastically with every release.  If the label decides it can’t properly market your weird new album, it could just eat the recording costs (or bill you) and opt not to release it.

This happened infamously with stoner-doom legends Sleep, who, after the massive underground success of their demo-cum-album Holy Mountain, had inexplicably signed to London Records, then home to the likes of Salt N Peppa.  To celebrate their arrival in mainstream legitimacy, Sleep decided it was a grand idea to compose a one-song, 60-minute ode to reefer lovingly entitled Dopesmoker.  When Sleep had finished their opus, they sent the recording to the label suits, who promptly laughed their asses off and asked where the real album was.  Sleep told them they weren’t joking, and that WAS the album.  London Records refused to put it out, and sent the band back into the studio again.  They returned with a svelte 52-minute jam called Jerusalem.  The label balked and dropped the band rather than “waste” any more money on anti-commercial junk.  Both Dopesmoker and Jerusalem were released after Sleep broke up, and today are considered metal classics.  The albums are also a historical document of watermelon-sized testicles on the band’s part.

Oh joy, recording costs.  Thankfully the mystic Pro-Tools Genie has wished away the massive budgets of yesteryears (at the cost of “that analog sound” depending on who you ask), but still, if you’re hoping to spend a couple weeks in a quality studio, you’re looking at a $5000 bill, and that’s not including the producer.  The price is not that bad honestly, but what makes it laughable is what lately constitutes the “Advance due to The Artist.”  For most labels, real advances are a thing of the past.  Unless you’re on Century Media, Roadrunner, or equivalent, you can expect recording budgets of less than $3000, and that’s if you’re lucky.  This particular contract offers an awe-inspiring ZERO DOLLARS for the advance: not uncommon.  One guess who then makes up the difference between the recording costs and the actual advance out of their own pockets.

You could opt to record in your own house, but that’s a whole separate set of costs for computers, boards, mics and software, and frustrating amounts of “learning the hard way.”

At the very least the label asserts all costs for promotion.  That’s their job after all.  But this doesn’t preclude the band hiring its own publicist, which I recommend.  What the label will expect to be paid back for includes:

So now your hypothetical $3000 budget begins to look a hell of a lot smaller.  Before we were just talking about the recording costs (where you’d already have to cut corners), but now you have to squeeze in the graphic designer and artist bill as well?  No wonder most metal album artwork sucks so hard.  Of course you’ll need promo shots for all that press the label is going to score for you, so now you have the choice of handing your brother an iPhone and looking grim in front of a brick wall, or you can hire a professional and pay a few hundred bucks.  As to that music video you’ve always dreamed of, does Call of the Wintermoon ring any bells?  As fucking awesome as that video is, you are not Immortal, and you are not frostbitten enough to pull it off without looking like a false.  So unless you just happen to be a recording engineer with a tricked out studio, and your girlfriend just happens to be a world-class photographer, and your aunt’s mother-in-law’s dog happens to be a genius film maker who can create something brilliant on an anemic budget (it can be done!), the costs are going to be coming from YOU.  And if you have all that along with a publicist and a tour manager, you don’t really need a label anyway.

Oh yeah, and then any money the label does offer you upfront comes right out of your royalties, so don’t expect to see any money for at least a year, if ever.

Single album deals are the best.  It means you put out one record, reap the benefits of the label’s promotional machine, and then you’re free to get the hell out or seek better terms if you’ve sold well.  Unless you’ve just inked a miraculous multi-million dollar deal, the shorter your terms, the better off you are.  Now just be careful you’re not going to get pegged with one of those forced contract extensions….

“One independent consecutive irrevocable options to extend the Term each for a period of two year…”

Oh.

Here the label is covering its ass in case some Armageddon happens and you/the label can’t deliver a finished product in a timely manner because you’re busy being sodomized by the Antichrist.  You know they’re serious about it because they’re whipping out the French legal terms.  Be careful though, because even if you’re on the run from zombies and/or labor unions, you better find a bomb shelter with a recording studio quickly because you only have a three-month grace period.


What the fuck did I just read?

Indemnification means you’re forfeiting your right to claim damages or expenses against the label.  Now I might just be in shock here, but I do believe I read that in case of a dispute The Artist is responsible for the label’s legal fees.  This clause is a protection against you ever suing them.  And if you do sue them, it’s in writing that they can freeze your royalty checks (not that it’s likely you’ll be earning any regardless).

Remember when I said you didn’t need a lawyer?

You need a lawyer.

This is all reasonable.  If I ran a label I’d make sure my artists appeared for promotional sessions too.  Don’t be an idiot and refuse to promote your material properly.  With that said, don’t be an even BIGGER idiot and lose your receipts for your costs associated with said promo.  It says in black and white that you’ll be reimbursed for your costs.  Now from a practical standpoint, there’s no way of knowing just how quickly that is.  Are they going to hang on to your money until their next accounting period?  Are they going to absorb the cash you spend into your debt to them?  The contract doesn’t make this clear.  Regardless of how and how soon they pay you, don’t just send the receipts to the label: make copies of them.  Your invoices can very easily get “lost in the mail.”

I don’t know about you, but at my day job, I get paid every two weeks.  The label however, will pay you twice a YEAR, if they pay you at all.  This is a big “if.”  I’m acquainted with band that signed to a big name metal label, and over the course of their career there sold over 10000 albums.  They have yet to see a cent.  Now this isn’t the label’s entire fault.  They’re a business, and they need to make a profit.  Since the label is essentially a bank with the added services of distribution, management and promotion, it’s only fair they recoup their investment.  In the money chain, they’re in the middle of the line after the stores and distros, so it’s understandable it takes them a bit longer to figure out their accounts, and it’s possible they’re getting screwed as well.  But that doesn’t change the fact that you as the artist are last in line for handouts.  And you must remember that any money spent on you by the label can and will come out of your royalties.


Bankruptcy: one of the few ways a band will ever regain control of its master recordings.  Bands, just pray for another financial crisis, and you’ll have the rights to your own music back in no time.

TELEGRAMS?  Do these even still exist?  I consider this detail indicative of the state of the music industry as a whole.  No wonder Internet file sharing scared all these record label geezers so badly.  They’re still trying to figure out how to program their Betamax players.


The label can license out your material to anyone it wants, and you have zero say in the matter.  Don’t like it?  That’s too bad because by signing this contract you’re allowing the label to extend its terms to any person or organization.  So while you don’t have access to your master copies, the label can give out your music to anyone BUT YOU, and you don’t even get to authorize it.

I don’t think I noticed a single comma in this whole contract.  So despite the tenuous grasp of punctuation and grammar, it still puts the onus on the band to understand the gobbledygook they’re reading.  Hire a good lawyer who’s fluent in run-on sentences.

As to legal issues, while we’ve already established that suing the label is a near-impossibility because of the legal costs incurred, if you do dare to enter litigation, you must be careful when the company is from another state, or – God forbid – another country.  As a foreigner, you will lose.  Beyond the court aspect, just the travel costs are prohibitive to most people.

I.e.: you’re screwed.

If you’re not going to sell like crazy (in metal terms), these numbers are almost unimportant, because you won’t be making any money anyway.  After glossing over the unsurprising $0 dollar advance for the first album, and yawning at the industry-standard 15% of wholesale price per unit sold, notice the extremely surprising addendum of “after copy sold numbering 500.”

What.

So the band is paying for the recording, mixing, mastering, artist, and graphic design 100% out of pocket, NOTHING came from the label up until that point.  And then the label, who hasn’t yet spent a dime, once the master copy is in their grubby little mitts, tacks on this clause stating that the band has to sell a completely arbitrary 500 copies before they earn back any of the money they’ve spent.  This should be a crime.  I hate to say it, but most metal albums on small labels barely even sell 500 copies their first year.  And if by some marketing genius the record does move more than 500 units, the band is earning a paltry 15% of wholesale, which usually comes out to about 85 cents per unit sold.

Calculator time.

Assuming the band as a whole spent a realistic $8000 on the complete production of the album, two weeks recording, name producer, mixing time, mastering, artwork and all, here is what they will earn from album sales with this contract:

100 copies sold: $0

500 copies sold: $0

501 copies sold: $0.85

1000 copies sold: $425

2000 copies sold: $1275

5000 copies sold: $3825

10000 copies sold: $8075

 

So.  Under this contract in our likely scenario, for a band to simply break even with album sales, they will have to sell TEN THOUSAND COPIES.  This is no easy task for a new group on a small label, much less a metal band catering to a niche and piracy-friendly audience.

Here are some sales numbers for huge groups and they aren’t a hell of lot more impressive.

Factor in that most of these bands are splitting profits between 4-5 members, and you’re probably better off at your job at McDonald’s.

If the band sells quite a few copies, the label will want to extend their contract.  For the second album, the advance in this contract has jumped from nothing to a very generous…

$450.

That barely pays for mastering costs.  What makes it worse is the band is this time FORCED to pay for the next recording themselves, and if they can’t afford to deliver a completed master within that two-year extension period, they’re in breach of contract.  So the band must scrounge and save, and pray none of them lose their jobs, because they’re certainly not going to be able to afford to pay for the second album from sales of the first. And if they are able to put together the money, the band must of course pay back the pathetic advance with album sales at 15% wholesale, meaning once again they need to sell a little over 500 copies before they see any of their own money coming back to them.

The 30% of licensing and digital downloads is a great cut.  Unfortunately, 30% of nothing is nothing.  Most metal bands don’t get to license their music out at all.  After 20 years of making awesome music, Slough Feg finally made their first video game soundtrack with Brutal Legend.  Those opportunities are rare.  As to digital downloads, metal fans are very adept at piracy.  With a physical album release, at least there’s tangible media and artwork to attract the buyer and collector, but when the exact same product (MP3s) is offered for $10, and just as easily available for free, I can’t fault anyone for running a Google blog search.


DO NOT GIVE UP THE RIGHTS TO YOUR MERCHANDISE.

Ever.  Merch (and touring for larger bands) is the only real cash cow in the music business anymore.  Shirts can cost as little as $3-$4 a unit to print, and they get sold at around $15.  That’s a 500% profit.  It’s sad state of affairs, but financially speaking albums are promotional tools to sell t-shirts.  As I understand this particular clause, the band would still be permitted to print up their own shirts, simply that they won’t be able to license printings to any 3rd party.  And then the label offers 15% of profits from their own printings.  To me that is fair.  But if I’m reading this incorrectly and the band is not allowed to print its merchandise independently, that is a deal-breaker.  If you ever see a contract with terms that limit the artist printing his own shirts, or somehow the label takes a cut from self-printings, or merch sales while on tour, run away immediately.

DO NOT GIVE UP THE RIGHTS TO YOUR MERCHANDISE.

DO NOT GIVE UP THE RIGHTS TO YOUR MERCHANDISE.

DO NOT GIVE UP THE RIGHTS TO YOUR MERCHANDISE.


That incredible $450 advance for the second album now comes in 2 installments of 50%.  Lovely.  For the record, we recorded our newest album Metazoa at Sharkbite Studios in Oakland, and that cost us $375 a day.  So the first installment of this contract’s entire advance wouldn’t even cover a single recording day.

As mentioned in the first section, the label will designate a “leader” for the group, who signs for everyone else.  In this final section, the rest of the band members sign to accept that all payments will first go through the group’s leader, and that the label is blameless in matters relating to any friction this may cause.  This contractual separation of band members strikes me as unnecessarily politicizing.

~~~

In the end, this contract symbolizes a demeaning and outdated system.  I don’t understand why bands agree to this business model when the Internet makes it so easy for groups to promote and distribute themselves.  Labels still have a role to play, particularly in terms of touring and promotion, but this isn’t it.  With hard work, a band can earn a lot more money, and maintain their sense of freedom and self-respect simply by self-releasing their albums.  The numbers won’t be nearly as big, but the feeling of accomplishment, and, to be frank, the profits you can earn make it all worth it.  There’s still a stigma attached to being unsigned, but with huge groups like Radiohead and Nine Inch Nails foregoing labels and earning a fortune doing it, attitudes are changing.  Comparatively smaller metal bands like Giant Squid, Neurosis, and Wormed have put out their own material to great success.  I truly feel this is the wave of the future: an artist-run industry.  I see metal labels functioning more as collectives and business partners, a collaborative relationship rather than one based on oppressive and one-sided communication.

A man can dream.

-AvN

You don’t need a record deal to visit Cormorant on MySpace or to stream their new album, Metazoa.

Categories: Greatest HitsTiberian Vocalizations
Tags: Arthur Von NagelCormorant
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