Music Business Articles

Record Deals versus Independent Releases

I'm mostly a producer and engineer, so I haven't been out there going for any type of record deal, but I am planning on putting out my own release independently with a friend who sold 10,000 copies of his first release by himself. I'm doing it just to get my name out there more as a producer and to try to make some money on a very small indy level with some artists I will sign and produce in the future.
[UPDATE: I have one release of my own out already that I sell through specialty market retailers and that is doing well, and I'm currently working on the second volume for that product line which will combine a DVD of instructional video for that specialty market along with a full CD of original music. I also co-wrote several songs with the artist mentioned in the above paragraph, and his new CD will be out very soon, plus we will be doing a CD project for charity later this year (2005).]

I have worked with, or come in contact with, many artists, big and small, and I've done a lot of studying up on the business as well. Let me try to summarize what I've learned about the state of the music business these days.

First, you need to get educated about how the business really works, even if you aren't planning on releasing a record yourself. If you don't know how it works, then it is very likely you will get screwed over or at least be wondering why you didn't make a dime even though you sold several hundred thousand copies of your record through that great record deal you thought you had. Check out the books on my Required Reading list. The one at the top of my list is "Confessions Of A Record Producer". Check out some of those books, which you can find in many bookstores or online stores.

Unless you are a very well established band with a very strong regional following and a long history of college radio play and sales of your own CD release, then no Major record label is even going to look at you. The exception to this are the manufactured groups like N'Sync, or the pretty girls like Brittany that have been performing since and early age and came up through the Mickey Mouse Club and other similar avenues. Even if you have some strong inside connections, most labels are not willing to take a chance on un-proven talent. You need to prove yourself one way or another!

That pretty much leaves most average bands and musicians (that don't look like super models) only two choices. Either work your ass off and achieve a certain level or local and regional success on your own, or find some small indy label that has a little capital and is willing to take you on.

The other thing to think about is that NO ONE is going to work as hard as you when it comes to your own success. Just because you might get lucky and land a deal with some sort of record company, doesn't mean that they are going to necessarily do much for you.

Here are some examples from people that I've worked with.

1. I have a client and friend who goes by the artist name of Aneel. He does urban RnB music for more of the adult crowd. Before I met him, he worked his ass off to produce his own CD, and then worked two jobs to raise money to promote it. He did most of the promotion by himself, but hired some indy promoters also. He sold over 10,000 copies of his first CD this way... mostly through small college radio station markets all across the nation (he was #1 on some station in Hawaii). Since his songs were charting on college radio, and his sales were charting through soundscan, he soon starting getting some label interest. While he was working on his second CD, he negotiated a sub-label deal with Hollywood Records (Disney's big label). His second CD was released last summer in the Midwest and southern regions and it bombed because Hollywood Records did pretty much no promotion at all! He soon found out that Hollywood Records had signed several small artists and basically did the same thing with all of them..... nothing! He is out of that deal now and is currently working with one of the good guys from Hollywood Records who left out of frustration with that company, and who started his own company with distribution through Universal. Aneel plans on putting out his third CD (that I'm co-producing with him) through a distribution ONLY deal with this guy, and doing all the promotion himself again. He already has the contacts with all the radio stations that played his first CD, so he has somewhat of an established market, and is not leaving it up to someone else to do the promotion for him this time around.

2. OK... How about some real MAJOR LABEL ARTIST stories. I'm currently working on producing a drum sampling CD with the Queensryche drummer Scott Rockenfield. Scott recently joined a band with some other well known artists, and the produced a CD on their own. They already have all the major label contacts you can want, and all the major labels have copies of the CD, yet no one has approached them with any offers as of yet, so they have put it out themselves (and it's actually doing pretty good on an indy level just from word of mouth through their fan clubs).

3. Another major label artist that I'm going to be producing a sampling CD with in April is Greg Adams, former trumpet player and writer/arranger for Tower Of Power. After he left Tower Of Power, he had a solo artist deal with Epic. He released two great CDs through them (really good music, and great production). According to him, with each royalty statement, he somehow owed Epic more money! He has basically been forced to go the independent route for his next CD which he is just wrapping up now. The head of a local jazz organization that I am the engineer for, and who Greg has done some work with, has decided to help Greg release his next CD independently. Greg has a decent following in the LA area and many radio stations that are just waiting for his next release, so he will have no problems selling at least a few thousand copies on his own and even if he doesn't sell more than 10,000 copies, he will make more money than he got from Epic. [UPDATE: After the indy release was out for a short while, Blue Note Records picked up Greg and put the same CD out, only to drop him only about a year later. Greg is now with another indy label and has a new CD out.]

Being on a major label is no guarantee of any type of success. Only about 1 in 10 CDs released by major labels make any profit for the label. That one usually makes enough money to cover the losses of the others for the label, but unless you are that one, those aren't very good odds (especially when you add in the odds of even getting signed to a major label).

Books like "confessions of a record producer" break down the numbers for a typical major label deal, and it's pretty scary. If you are giving a typical deal with a $250,000 advance (which you have to use to pay for the recording, and only get whatever is left over to live on for pretty much the remainder of your career), and the record label does the typical promotion for your release, it basically comes down to the fact that you need to sell over 1,000,000 copies of your album before you will see one cent from royalties!! You have to recoup everything, and the producers get their percentages out of your share even before you recoup. Get the book and check out the numbers if you don't believe me. Similar breakdowns of the numbers can be found in other books as well, such as the Donald Passman book.

So, if you still think a major label deal is the way to go, then you better be in a position to negotiate for the biggest advance you can possibly get, and then figure out a way to turn in a recording that the record company will accept for cheap, because that's all the money you will most likely ever see from that record deal. Of course, if you wrote the songs and they get a LOT of radio play, then you'll see some airplay royalties after about 2 years (it takes a long time before those checks start coming in, and they really aren't that big).

What I, and many others, suggest these days is to find a way to do it on your own first! You'll make much more money if you can manage to sell even 10,000 copies of your release on your own than you would selling several hundred thousand through a major label artist deal. And, if your end goal is a major label contract, you'll have a better chance of getting one and being able to negotiate a fair contract, if you can release your own CD first and sell at least 20,000 copies (but then, why would you even want to go with a major label at that point??).

If you don't have the drive or desire to promote your own music, then you better take on an "extra band member" to be your manager who really believes in you and has the right personality and business savvy to do it for you!

Or, if all else fails, write some killer techno songs, and hire a Playboy model to talk sexy over the top of the music while you hide behind a rack of keyboards and computers.

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