The SHYT These Record Labels Do

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Music marketing and business for independent musicians

Cliffs....so of course a lot of you music professors probably knew all of this shyt...but seriously WTF?!?!!!

• So apparently, record labels do all kinds of dirty shyt like offering somebody contracts JUST to put them on the shelf so that they don’t compete with other artists they were grooming!!!

• They also take all creative license away from artists to generate a generic sound for mass appeal and maximized profits.

• Music artists may only make like $24 for every $1000 in profit they generate from their music

• The contracts are awful and don’t help artists market themselves...
• Dumb archaic rules make creating a record hella expensive artists while lining the companies pockets.

Of course we all suspect shyt can go down like this but...SERIOUSLY?!

Why am I even shocked?

 

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1. A Record Deal Can Make COST A Fortune
When you sign a major label record deal, you are often signing away the possibility of making any money off of record sales. Seems kind of backwards, right?

According to TheRoot, for every $1000 in music sold, the average contracted recording artist makes about $23.40. For those of you keeping score, that’s 2.34% of gross. That sucks.

Is this because music is difficult to profit off of?

No.

Is it the format? No.

Is it the waning support of music listeners everywhere?

NO!

The average full-length record deal is literally a mile-long minefield of hidden costs, bullshyt fees, and recoup clauses from the 50s that were left in to screw you over. Don’t believe me?

This article from TechDirt touches on a clause that is common among modern record deal contracts: Breakage. In the days of vinyl, shipping music across the country could easily result in a few broken records. So, record labels charged artists a 20% “breakage” fee. That means that the record industry was claiming that 1 in every 5 vinyl records created would break in transit! I call bullshyt, but it gets a lot worse…

Obviously, vinyl is far more delicate than a cassette tape or a CD in a big plastic case. Even still, record labels continued to charge a 20% breakage fee when the industry largely shifted over to tapes and CDs. Luckily, streaming and digital downloads represent a majority of revenue now. So, the day’s of bending artists over barrels for a 20% breakage fee are over…

Oh wait, they’re not! Record labels still charge 20% fees for breakage and what they are now calling “digital breakage”.

Why? Because “fukk you“, that’s why.

Breakage, container charges, free goods, and “reserves”, are all recuperative clauses that get buried in long form record deal contracts. These clauses are engineered to perform one orchestrated task: confuse and exploit artists for almost 75% of their royalty rate. Notice I said “royalty rate” and not “revenue”. That’s because record deal contracts often allot only 10% of profit (if you’re lucky) as a royalty to the recording artist.

As if that wasn’t bad enough, this royalty rate is negatively impacted by the clauses we just went over. But it gets worse…

Credit: TheRoot


Your royalty is calculated out of profit – that is, any expense your record label deems necessary in the process of creating your album can be written off against your revenue. So, while you may only need your band mates and a good sounding room to record an album, your label will be saddling you up with songwriters, expensive studios, top producers, session musicians, and more just to make sure you’re making something that THEY deem to be marketable.

You don’t actually have much say in this process. You can’t just tell them you don’t need a songwriter so that you can keep more money. If your A&R says you need a songwriter, you’re getting a songwriter.

Now, pile all of those costs on top of your entirely recoupable album advance, tour support, and independent radio promotion (see: institutionalized bribery) and the chances that you will ever make any money off of your recorded music drop to a definitive 0%. In fact, you may end up OWING the record label money, even if you sell millions of albums.

But surely it’s worth it right? Because you couldn’t possibly market yourself online and make money all by yourself. A label is going to give you access to massive exposure and marketing strategies that can help you blow up worldwide…

Right?

Wrong.

 

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2. Getting Offered A Record Deal Is A “Catch 22”

Unless you are able to build a sizable following all by yourself, a major record label probably won’t be interested in signing you. If they do, your contract will be awful. Like, not-even-worth-a-meeting awful. Like, emailed-to-you-blank-without-a-conversation awful.

But, let’s say you do build that massive following (50-100k) and record labels come sniffing for your secret sauce. They’re going to buy you weed, take you to the Spotify offices, and tell you you’re the coolest fukkin’ guy/gal in the whole world. They’re going to make you feel like your time has arrived; all you’ve got to do is take it to the next level…

Can they help you take it to the next level? Yeah, totally. Unless, of course, you don’t think the best place for your music is down the throat of every man, woman, and child in America. That is, if your A&R likes your music enough to release it as is (spoiler alert: they won’t)…

Major record labels won’t help you market. Take it from this girl, who got big on YouTube, signed to a label, and then found herself telling her own label manager how YouTube works. Major record labels SUCK at marketing. They suck, suck, suck at it. Some managers are really good at it, but make no mistake: they are few and far between.

I know a lot of amazing marketers. I have had the privilege to speak directly to people who have helped companies generate billions of dollars in revenue. Their success rate when working directly with companies to improve their growth approaches 100%. Great marketing isn’t about hitting the lottery with a product, great marketing is all about creating relationships with messaging.

A lot of people confuse marketing with the broader subject of “communications”, but marketing is communication with a goal: to develop a deeper relationship with your prospective customer. So, what kind of relationships are major record labels developing?

Wham, bam, thank you Baja Men.

For the past three decades, almost 10% of all songs on the Billboard Top 100 were by one-hit wonders.

What does it say when a company can ship millions of units for its first product but can’t get anyone to buy the follow-up? Often times, in the music industry, that gets blamed on the inventor – the artist – NOT the company promoting the product – the major label. That is, when second albums flop, the labels assume that the artist just couldn’t produce another hit. They think nothing of the fact that they lost 1,000,000 customers.

They don’t adjust how they do things.

They don’t make improvements.

They just suck, suck, suck.

 

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3. The Record Industry Encourages Genericized Sounds
Anyone who is making money in marketing will tell you that the first thing you need to do is select a single, target market. Whether you have a product yet or not, your chances of marketing success fall dramatically when you try to market your product to an entire age group or gender.

This is a big reason why 99% of those signed to a major label deal are shelved. It’s also why most of the financial wins in the music industry are represented by some of the most forgettable music in the history of artistic endeavor. A product that “isn’t for everybody” is a marketers dream…

…and a major record labels worst nightmare.

Major labels aren’t looking to develop a business around a profitable product. That’s not specific enough. They are looking for blinding, obscene, almost nauseating levels of fame and success. So, they are willing to churn and burn 99 creative souls in order to find 1 artist they can test against hundreds of others. They don’t care to help you grow a profitable business with your 10-100k fans.

So what are they hoping to find?

Well, you need to be good looking, that’s for sure. America’s musical stars are, by and large, fairly gorgeous people. There aren’t a lot of ugly ducklings in the Billboard Top 100.

Then, provided you are bright and shiny enough, a huge section of the population needs to be able to relate to you and your sound. This means that your sound cannot be wildly different from anything that is on the Top 100 right now. As explained in this article, the Billboard Top 100 gets more and more generic every single cycle. And it makes sense: when you don’t have a target market, a generic product will sell best.

So, if you have anything fringe about you, your label handlers will be quick to smooth out your rough edges. That means changing your wardrobe, your hairstyle, and even your subject matter.

As we’ve already discussed, labels don’t know how to market very well. So, they will usually grasp desperately at whatever success got you into their board room in the first place. Did you blow up on YouTube with a party song? Great. Say hello to your party album. Every song you do from this point on will be about beer pong, drunk girls, and skipping class. You hit a vein with the partying college kids and now they’re going to milk it for all it’s worth! Go ahead, try to make a song about something else. Your A&R will tell you it’s “not really what we’re looking for”.

Then, they’ll tack on a songwriter to your bill to help you figure out how many times you guys can actually fit the word “party” into a song.

Labels spend so much money employing this mass marketing method that they are butt-clenchingly terrified of trying anything new. If you get to major label contract level, chances are they are going to double down on whatever got you there (while simultaneously fukking it up).

Just ask Kid Ink or Chamillionaire.

 

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4. The Record Deal Has A Devastating Failure Rate
30-year music business veteran and formally noted expert on the subject, Moses Avalon, wrote this amazing article breaking down the numbers behind the major label business model.

It should come as no surprise to you that getting signed to a major record label is like winning the lottery – in the sense that most people don’t win it and those who do usually end up right back where they came from.

I don’t mean to make this whole thing all “doom and gloom”, so let’s just look at the numbers:

According to Avalon, 1 in 42 acts submitting to record labels do get signed. This number is a liberal estimate, as not all the acts signed in a given year actually submitted demos; some are scouted. But, pending that you actually are one of the lucky acts that do get signed, you still face a treacherous road of disappointment, failure, and abject consequences.

Avalon goes on to explain that, these days, 99% of those actually signed to major labels each year never get to release their first album. They get shelved. In fact, only 0.2% of acts signed to a major label manage to avoid getting dropped from that label in the process of fulfilling their contract.

This can be for many reasons. As explained in this BuzzFeed article, sometimes labels are acquired, merged with other labels, or unceremoniously shut down. All the artists in development at that time are usually caught in the shuffle. Sometimes, A&Rs get fired and their signees go on the back burner. Sometimes, labels are only signing you to make sure you never release your music…

 

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5. Artists Do Get Intentionally Shelved

You won’t find a whole lot about this on the Internet. You’ll hear mentions of it in interviews with label veterans; you may read about it in books involving the music industry. But, almost every other shytty thing that record labels do has been covered extensively in some article or another.

So, it’s time that this information be made as public as possible.

Out of the 99.8% of artists signed to a record label and dropped before fulfilling their contract, a certain percentage are intentional failures.

That is, major record labels will intentionally hold up an artist’s release and prevent them from ever seeing the light of day. The crime is almost unforgivable – but, the logic is pretty simple:

Let’s say, for example, it’s the year 2008, and you’re a teen pop singer. You’re white but vaguely urban, bright, shiny, ready for the big time…

Posting cover videos on YouTube, you start racking up millions of views and getting a loyal following. All of a sudden, label execs are starting to call your Mom asking about you.

Next thing you know, you’re flying all expenses paid to LA for a week of meetings with major record labels.

You and your family are excited for the bright future that is unfolding before you…

You meet with RCA and they seem excited about your future, too. They offer you a 5-album deal with a huge advance.

The next day, Atlantic offers you even more!

Then comes Island Records…

Island offers you more money than your family has made in the past 5 years. They promise you the whole world. They walk you through their massive plan, step-by-step, to turn you into the biggest pop star since Michael Jackson…

They have a 10-year plan that puts you in the drivers seat of the most successful music career of the 21st century…

And you and your family sign on the dotted line.

Game over.

What you didn’t know, was that for over six months, Island/Def Jam has been developing Justin Bieber: a young, white but vaguely urban, bright, shiny pop singer. You aren’t the biggest artist of the 21st century, he is. You’re just a threat. When you started poking your head out of the ground, your fate was sealed.

Island could have ignored you, yes. They could have left you and your family alone. But, with you making waves on YouTube, one of their two competitors would definitely have signed you. Then, you would be in direct competition with their shiny new pop star. To Island/Def Jam, Bieber represents untold billions in revenue. So, they are more than willing to outbid their competitors to get you into a gigantic record deal.

We’re talking dictionary sized, player.

Island throws enough paper at you to keep you from recording, releasing, or even publicly performing a single song for the next half decade. Plenty of time for Justin to get a stranglehold on the marketplace.

Dream deferred.

Does this happen?

Yeah. It definitely happens.

Maybe, for some of them, the label had every intention of giving them a fair shot. Unfortunately, as many have scientifically documented, the Top 100 sound becomes more homogenized every year. So, if you’re getting signed to a major label, you probably sound like someone they care a lot more about than you.

 

[Complexion]

Industry rule #4080

Modern day slavery combined with a Minstrel Show.

 

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Da fukk?! U pay somebody just to fukk up their career and keep them out of the game so they won’t do damage to another artist signed to your label?!

 

[Sauce Dab]

Music business is a dark business. Coli nikkas love to make it seem like this “streaming era” makes everything easier but there’s a reason they on here posting with us and not making hits

 

[Mastamimd]

Subs. I talk about this all the time with my homeboy, now I got some reading to do.

 

[Mastamimd]

I owe you rep btw.

 

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A barber with no customers....and the place is packed.

Fat ugly chicks who use skinny face apps

Industry rule #4080

Modern day slavery combined with a Minstrel Show.

Music business is a dark business. Coli nikkas love to make it seem like this “streaming era” makes everything easier but there’s a reason they on here posting with us and not making hits

Subs. I talk about this all the time with my homeboy, now I got some reading to do.

I owe you rep btw.

Ya’ll gotta help a sister out on this Saturday. I’m sipping some tea, taking a break from some writing and saw an article talking about Normani. Then I saw this link.

There’s a lot of very VERY uber smart dudes on this shyt who know so much about music, so I just be lurking and learning.

They probably been knew about this shyt but it’s new to my slow ass.

This some new new shyt to me. It makes me look at all these artists and their struggles differently. How I’m gon make only $20 from the shyt that has my entire essence in it. My look, my sound, my voice, my tone...and u gon pay em pennies for THEIR shyt.

How you gon offer an artist a record deal just to get them out of the way and have fans clowning them calling them a flop not even realizing the game?

That’s why a lot of these artists be snapping and looking crazy as hell.

 

[EA]

When I wanted to be in the music industry as an artist as a teenager, my family forced me to research all of the industry practices. My mum, auntie and godfather had record deals back in the day and wanted me to make sure that I was pursuing music in an educated way but by the time I finished reading everything, I figured getting a 9-5 is way more lucrative (and it is).

If you really don’t want to get fukked in the industry, you need:
Capital to fund studio/mixing/mastering
A lawyer that can provide basic contracts and negotiations (splits and royalties for the people that you work with. Even if you’re getting favours for free, have them documented in legally binding contracts)
Create a record label so you can benefit from tax breaks (expenses for travel, the cost of putting out music, etc)
Publishing and clearances sorted before you release any music
More capital so you can sign on with a bookings agent
Good admin skills (unless you’re going to get a manager)

If you’re not willing to handle both sides of the business, then be prepared to get fukked on at least one contract.

 

[Complexion]

Da fukk?! U pay somebody just to fukk up their career and keep them out of the game so they won’t do damage to another artist signed to your label?!

From a business point of view it makes sense because you protect your investment and eradicate potential competition but on a human level its all super scummy. If you ever see inside the industry you'd realize how its all just pimps and hoes, 98% business, 2% show.

There is a reason the pimp would buy his hoes fur coats, keep them dressed nice and seemingly content because that makes the trick happier to partake and buy into the illusion which just keeps the pimp laced. Entertainment is entertainment except now they have contracts instead of a backhand.

Most people would be surprised to see their heroes getting screamed on talking about "I put you here, don't think I can't take it all away if you don't do what I say, you are mine and if you decide to leave I'll make you radioactive for eternity" and then have the same dudes flossing on social media talking about how "bossed up" they are.



In reality they're all just puppets, playing a role in a reality show. Remember, the people in front of the camera change with the times but those behind always remain the same.

Rhyming about being dope dealers when in reality they're hope dealers selling dreams to fiends about lives they don't lead because they're hemmed up all round and barely staying above ground. Its all so disgusting on so many levels because they shovel fools gold day and night in exchange for real value. Like mileage on hoe turning tricks takes a strain which is why so many of them lose what little brain remains as they flip out and "go crazy" when in reality its the only sane reaction to the situation they're in but there is so much content missing from what the people know plus the narrative is controlled to make it seem so.

Very few in the entertainment field are actually happy, no mater how it may seem, and none of them - not one - wields any actual power beyond a token role they are given to play for the moment in exchange for cooperation.

 

[Koba St]

Why can’t these multimillionaire musicians come together and form their own record label to at least give better terms to artists?