Apparently Warner’s physical album sales increased last year!
This week we discuss the advantages and disadvantages of major and indie labels. Which one is best for you depends on the type of music you make and the sort of benefits you want from it.
- Major labels open you up to huge amounts of funding. You will have high quality production and worldwide distribution networks at your disposal as well as a budget for world tours and worldwide promotion. On top of this you will potentially receive a large personal advance.
- Major labels can provide you with invaluable connections within the industry at large.
- The size and reputation of the major labels means they have clout within the music industry and gives you opportunities not available with an indie label e.g. magazine interviews/features.
- Major labels have specialised departments. You will have a promotion department, a distribution department etc working for you, all experts in their field.
- If your record isn’t a success, chances you’ll be dropped. The majority of artists are dropped from a major label after the release of their first album (that is to say of you even get as far as having your record released!)
- You will usually have to assign your rights to a major label and lose creative control. They want to shape you to be commercially viable.
- Because the label is taking the huge financial risk, your royalty rate will probably be smaller.
- A major label is a business and you are a product. With a major label you could be in danger of losing your artistic integrity.
- The staff may not even like your music and, even though you have a specialised department working for you, if they aren’t an expert on your genre they may handle you and your fan base the wrong way.
- You retain the rights to your music so have the opportunity to do what you want with the song.
- The label signs you because they’re fans of your music and have faith in your artistry, allowing you to retain your integrity.
- Due to a smaller staff-base and roster, closer personal and working relationships are more likely to occur than on a major label.
- The contracts usually have terms that are attractive to you.
- Indie labels have much smaller funds than the majors. This means you may have a smaller recording and CD manufacture budget and a smaller personal advance. Also, many indie labels don’t have their own distribution networks and must use others e.g. Metal Blade distribute through Sony.
- The fact that all the label’s work happens under one department means you don’t have experts working for you in sectors such as marketing, distribution, promotion etc.
- The fact that indie labels are smaller in the industry than the major labels and have less clout means you may have a smaller chance of getting your voice heard so extra promotion may be required from you.
Hopefully these ideas will help you consider whether your music is best suited to a major or indie label. Understanding the advantages and disadvantages of both can help you decide where your music is best placed in the market.
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More updates coming soon!
The major record labels control the majority of wealth in the recording industry. However, they have seen a noticeable decline in the past decade due to declining music sales, piracy and self-releasing artists. Here is a brief history of the major labels over the past 25 or so years…
The Big 6 (1988-1999)
In this decade the music industry was still healthy. The Big 6 consisted of Warner Music Group, EMI, CBS (which actually became Sony Music in 1991), BMG Music, Universal Music Group, and Polygram (a merger of Phonogram and Polydor).
The Big 5 (1999-2004)
In 1999 Polygram was absorbed into Universal Music Group. So, between 1999 and 2004, the majors consisted of Warner Music Group, EMI, Sony Music, BMG Music, and Universal Music Group.
The Big 4 (2004-2008)
Sony and BMG merged to form Sony BMG (very creative…) to form, along with Warner Music Group and EMI and Universal Music Group, the Big 4.
The Big 4 (2008-2012)
Between 2008 and 2012 the Big 4 remained intact apart from the fact that Sony bought BMG to form Sony Music Entertainment.
The Big 3 (2012-Present)
As of 2012 EMI is no more. Universal Music Group acquired EMI (apart from two of EMI’s subsidiaries, Parlophone and EMI/Virgin Classics, which were acquired by Warner Music Group) and the Big 3 was formed.
As of 2012 the major labels are:
- Universal Music Group
- Sony Music Entertainment
- Warner Music Group
Of course, as well as the majors there are the independent labels. Here are a few well known ones:
- Rough Trade
- Metal Blade
- Fool’s Gold
- Fat Possum Records
So, as an artist, which is best for you? Major or independent?
Next time I will discuss the advantages and disadvantages of both.
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Here are just a few important terms in the management contract…
- TERRITORY The countries the management contract covers is important to consider. The manager will probably want to represent you for ‘the world’ for the simple reason they get more commission and complete control over their ‘master plan’. Of course, this is fine as long they can represent effectively throughout the world. For this they must have knowledge of foreign markets, especially the US. Do they have an office in the US? Or, will they be travelling there. And, If so, who’s paying for the flights? If their knowledge of the US market is not up to scratch then consider a territory such as ‘the world outside of the US’.
- ACTIVITIES COVERED Will the manager cover all aspects of your career or just music? There are several examples of musicians crossing into the world of acting. Does the manager have experience in this field? Would you be better off finding an agent or manager who works specifically in that area? This is important to make clear when discussing the contract.
- KEY-MAN PROVISIONS Make sure the contract says the manager must spend a reasonable amount of time working for you. It may be useful to consider whether they manage any other acts and how many when negotiating the contract. Another thing you can do is include a ‘key-man’ clause which can come into effect if the manager isn’t representing you sufficiently. This gives you the opportunity to end the contract if the manager’s not pulling their weight.
- LENGTH OF CONTRACT The amount of time the contract runs for varies. It could be open ended i.e. it comes to an end when one party’s had enough. However, most commonly, it runs for a 3-5 year term. IMPORTANT: as an artist NEVER sign a contract that has no end date.
- ALBUM CYCLES Sometimes the length of a contract is determined by album cycles. A contract can last for one or more album cycles. An album cycle starts from the writing of the first songs and ends when the last piece of promotion work is done. Sometimes a contract may say, for example, it lasts for two album cycles or three years, whichever comes first.
- ENDING THE TERM EARLY If both parties want to end the contract early an agreement can be reached on the manager’s share of future income earned by the artist. This is called post-term commission. In this case a ‘sunset clause’ can come into effect which allows the manager to earn some commission after the contract has ended (because of all the hard work they put into you getting this far). How long should they continue to earn this commission? Normally 20% for the first 5 years then 10% for the next 5 years.
Of course there is much more to a management contract than these 6 points but they are important to consider when negotiating a contract.
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Why have a manager? Here are a few reasons…
- Promotes your band in the wider industry
- Can offer creative involvement in all aspects of your career
- Organises your life and career
- Helps you get a record/publishing deal
- Liaises with record and publishing companies
- Negotiates deals
- Negotiates changes in contracts
- Helps with getting video and recording budgets
- Helps with getting tour support
- Gets you opportunities (e.g. gigs, festivals, television appearances, sponsorship)
After you’re comfortable in the live circuit and have a decent following the next thing to do is find a manager. A manager can be invaluable in getting a record deal and will hopefully have experience in the wider industry. Here’s a few tips to find a manager.
- DIRECTORIES Directories, such as Music Week Directory, provide a list of managers and their acts. This is a good starting point as you can find managers who have experience in a field similar to yours. However, directories are not in depth enough and any information you find needs to be backed up by other sources.
- MUSIC MANAGERS FORUM (MMF) The MMF was founded in 1992 by music managers and membership costs £100 per year. It works in the interest of its members nationally and internationally and negotiates better deals. The MMF publishes a directory of its members and can put you in touch with any managers you are interested in. It is important to understand MMF membership doesn’t mean the manager is any good or relevant to your career.
- RECOMMENDATIONS It’s useful to get recommendations from those who have worked with the manager or know them by reputation. This can include bands who have worked with them, other managers, and other people in the music industry. It is important to take both positive and negative comments into account when deciding on the manager.
- LAWYERS AND ACCOUNTANTS Lawyers and accountants have good knowledge of the reputation of managers and can put you in touch with them. They can also tell you how much work the manager has on and whether they’d actually have time for you. It’s also important to understand a lawyer may be biased towards or against certain managers.
- A&R CONTACTS This can be a great source of information on managers and, again, can put you in contact with them. Lots of A&R people won’t deal with an artist until they have a manager, especially one with a proven track record.
- MANAGERS Sometimes a manager will approach you directly. However, before signing a contract with them it is important to do some research into them.
- SOCIAL MEDIA It can be useful to analyse the manager’s reputation through social media. What contacts do they have in the industry?
To start off with, here are a few points to consider to promote your band and get on the road to fame and fortune.
- A GOOD BAND NAME This helps create your ‘brand’. Yes, if you want to make money out of your music, you must consider your band as a brand. Choose a name that reflects the image and message your band conveys. Also, create an imaginative logo that ties in with the theme of the name and, most importantly, your music.
- CREATE A GOOD QUALITY DEMO Hire out a local studio and producer, or do it yourself if you’re able and have the right equipment. Put the best track first and make sure it has an immediate impact on the listener. A&R people have A LOT of music to listen to so your music has to stand out from the beginning. Make sure the name of your act and contact number are on the CD’s and your email address is attached to mp3 submissions.
- SEND YOUR DEMOS INTO LABELS This method isn’t nearly as effective as it once was. Labels receive thousands of demos from unsigned acts and most major labels refuse them unless they are requested. Still, it’s worth a try but don’t expect much.
- GIG REGULARLY Due to ever dwindling album and single sales, live performance has become an important source of income for artists. If you can’t pull it off live, you won’t get signed. Gigs are also a great place to sell merchandise so make the most of it while you’re there. They’re also a great environment to network in…
- NETWORK This is one of the most important things you can do. Talk to everyone. Get people’s phone numbers and email addresses; you never know who’s going to be a useful contact in future.
- LIVE IN LONDON OK, it’s a big ask if you live in John o’ Groats but if you live or gig regularly in London you are more likely to get discovered than anywhere else in the UK. Most A&R people are situated in London and are, therefore, more likely to see your band play. However, they will venture out of the capital to other major UK cities.
- ONLINE PRESENCE Make the most of social media. From Facebook to Twitter, this is the most effective way to engage with your fans. Major radio stations and record labels now rely on social statistics to know which artists to associate themselves with. Furthermore, several artists have been discovered through YouTube, most notably… umm, Justin Bieber.
- LOOK FOR A MANAGER A good manager can be invaluable in getting a record deal, but more about that next week!
Welcome to my music industry blog Music Business Basics. I aim to explain the basic concepts of the music industry to young artists trying to promote themselves or their band effectively but may not understand where to start or what to look out for.
I will post weekly articles/fact files covering subjects including promotion, record labels, music publishers, live music and many more.
The first one, Getting ‘Discovered’, will be posted today.
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