Gizmodo 
Enter your username and password.
Tip your editors:
Editorial Director:
Brian Lam | | Twitter
Editor:
Jason Chen
| AIM | Twitter
Features Editor:
Wilson Rothman
| Twitter
Senior Contributing Editors:
Jesus Diaz
| AIM | Twitter
Mark Wilson, Reviews
| AIM | Twitter
Contributing Editors:
Matt Buchanan
| AIM | Twitter
Adam Frucci
| Twitter
Sean Fallon
| Twitter
Jack Loftus
| Twitter
John Herrman
| Twitter
Dan Nosowitz
Chris Mascari
Kat Hannaford
| Twitter
Rosa Golijan
| Twitter
Chris Jacob
Columnist:
Brendan I. Koerner
Interns:
Don Nguyen
Kyle VanHemert
Comment Account Questions:
Original material is licensed under a Creative Commons License permitting non-commercial sharing with attribution.
12/03/09
/just kidding
12/03/09
12/03/09
It's a database and logic problem in the accounting code. The completely missing album royalties are because there is not a unique identifier in the domain table for that album. So no income. The rest of the problems are because of hardcoded logic in the different accounting systems.
Quote:
"Why did 29 plays of a track on the late, lamented MusicMatch earn a total of 63 cents when 1,016 plays of the exact same track on MySpace earned only 23 cents?)"
Because the code that controls the input from the music sellers is totally assed up. The logic for each income stream is differently hardcoded as it comes in and it sucks.
I read the entire article and it sounds like they're ripping you off, but it is also likely that they have bad IT guys running the show or shows. Hard to prove it.
12/02/09
12/02/09
The people who are the easiest to reach, and thus the easiest to curse out, aren't the people at whom your rage should be directed. And the people who really make the crappy decisions which create your frustration, you'll never ever be able to reach.
Accountability is a hard thing to find.
12/02/09
First off- you have NO friends in the industry. The only people that watch out for you are most likely already a part of your tour entourage. Everything from not getting paid to not getting paid. Yes, that's generally the main thing. And I'll tell you, 5 years after that, they're still trying to recoup $10k, which is the booking agent's fee.
Second tour I was much wiser- (age 20 the first time, age 24 the next ) and learned to just be an asshole, because you'll get stepped on if you don't. And therein lies the problem. Much like your average New Yorker, everyone is afraid of being walked on, so everyone is a dick to everyone else.
Either way, fun times- just don't associate with the industry.
12/02/09
Or, and I'm thinking of a little issue that was brought up by Peter Jackson to New Line about Lord of the Rings, that they are deliberatly obtuse because small errors/skims of little fish are happening with the big fish and those errors/skims are BIG.
12/02/09
12/02/09
"this doesn't mean Warner "lost" nearly $400,000"
With all respect, they did lose nearly the amount that they invested in you. It wasn't money spent as much as it was money put towards an investment that they hoped would give a return.
12/02/09
12/02/09
12/02/09
12/02/09
That said, when I think about the $400K, that figure cannot be the whole production/distribution costs for the band's albums. The company must have spend money pressing CDs and trucking them around the country and buying media spots, etc. And we don't know what that number really is, so we don't know whether the company made or lost money on TMJ as a whole.
So, I'd like to know more about the $400K and the other costs. For example, if the $400K was an advance paid to the band against royalties, then I don't think anyone would argue that repaying those funds out of royalties makes sense. But I *don't* think that is what is going on.
The more I think about it, the more I still feel like I'm missing part of the puzzle. That doesn't mean, of course, that TMJ isn't getting screwed. It is pretty obvious that the record industry has the vast majority of the bargaining power and is probably millimeters away from a contract of adhesion.
12/02/09
I once had a contract years ago, one considered a good one believe it or not, and simply unheard of today. We got 12.5% of SOME sales, 0% others.
Of the 97.5/12.5 split, 100% of ALL costs to make, advertise, distribute, comp, and even all the touring costs were debited from our 12.5%.
Split profits, but ALL costs related to the album are not split, they come from only one pool, the artists. This is the way it's done, and why artists can be in the hole forever even on a hit album.
That was a good deal, too, today they don't even make the offers that good.
This means that one can easily generate many millions more than the costs of the album and still be considered to owe the company money. They didn't lose anything.
12/02/09
Imagine it with smaller numbers. The label spends $100 on an artist in advances, marketing, etc. Their CD will be sold for $10, and the artist gets $1 of that, while the label gets $4.
After selling 25 CDs for $250, the artist will have earned $25 which the label keeps to recoup expenses, taking the amount owed down to $75. The label gets their own $100 cut though. At this point, the label will have collected $125, be owed $75 by the band, and have still only spent $100.
In this (poor) example, the label has earned $25 profit even though the artist is still way in the hole. By the time an artist is actually earning royalties, they're a gravy train.
Obviously the numbers are all off, but that's what he means when saying that they didn't lose $400,000. Unless you accept that the label really only took in $.62 from all the digital sales, and didn't keep a cut that isn't being reported.
12/02/09
12/02/09
@giz sancho: You missed the point. My first statement was that they are due a full accounting, including the digital domain.
12/02/09
12/02/09
And furthermore, accuracy is not something to be lazy about, especially when you're dealing with other people's money. The fact that you guys ended up in an "unrecouped" status doesn't negate any responsibility they have to keep their books straight. And given all the tech that's available to aid record keeping, there's really no excuse. Don't stop, man.
12/02/09
"Just don't earn enough" = "lose".
If they aren't making a decent return on their investments, which they have not been doing, then investors leave them for other more profitable companies, which they have been doing.
12/02/09
12/02/09
The fact that many labels are losing money will drive capital away from large labels and to better (read: more profitable for the amount of risk being taken) uses, like smaller more agile labels,more direct financing of individual artists, and to larger labels that have found some more efficient way to do business. This is of course what the pirating/indie/artist community would like. However, they may soon come to realize that while major labels can be a major hassle to deal, it pales in comparison to the wrath of disgruntled direct investors.If they don't manage their financing well, that money will dissapear overnight.
Going from indie-style garage band to international rockstars will for the most part always require outside investment. It's a risky bet and if those investors aren't being compensated well, they'll take their money and go play elsewhere.
12/02/09
I doubt there's many who would agree with me, but really the entire issue hinges on the "international rockstar" thing. It's actually not impossible for a garage band to make their own content and distribute it themselves if they're willing to sacrifice the millions of dollars for the simplicity that comes from managing your own work.
Maybe I'm an inexperienced idealist, here, but I think that while there would need to be an initial investment to get any band to a place of being established, the investment needed if the goal wasn't world domination would be significantly smaller.
Indie music is huge right now. I think there's never been a better time to start a band. It's a crowded market to be sure, but every coffee house and hole-in-the-wall is looking for a local band to play. Not to mention the ease of digital distribution as well as making merchandise to sell. Simply put, if you absolutely did not want to deal with a label, you wouldn't have to. You won't make it to superstardom, but maybe that's not such a bad thing? Maybe there's a good middle ground between nothing and rockstar?
Of course, there will always be people who want to be huge. But there's no room for the people who just want to be good. That will, inevitably, lead to the decline of some labels.
12/02/09
I don't think you'll find many artists who deep down inside if given a chance wouldn't want to take a shot at going bigger than their own limited financing means can take them. They may say otherwise but if by taking some form of outside investment will propel them to the next level, be that regional, national, or international, I do think it would be naive to think most artists wouldn't bite.
Currently the vehicles for outside investment are the major labels, but this may be changing, especially as they bleed money and are no longer keeping artists, investors, and consumers happy.
12/02/09
I suppose the matter of just how many artists want to "make it big" would be a matter of anecdote and opinion. And the anecdotes I surround myself with are likely not the majority. I've recently become a huge fan of artists on Jamendo, which is pretty much the place you go to if "making it big" isn't your goal.
But I think one thing we can both agree on...the model is changing. And the labels don't look too willing to adapt. I'm not exactly convinced they will die out entirely...maybe morph into something else, I dunno. But like you said, investors may start looking elsewhere. I'm really interested to see just what this industry will look like ten and twenty years from now.
12/03/09
If the artists get all the concessions that many of them think they have a moral right to, and if the profits of labels or any outside investment in music comes down to levels that the "common person" (who if they have a 401k and own any equity mutual funds, likely owns a piece of the labels) finds appropriate, large investors and mutual funds will just stop investing in music.
As to whether it's anecdote or opinion I guess I'd say the following. The amount of money poured into larger artists, and the vast number of failed attempts by labels to make artists larger points to the fact that most artists, if given a shot, will take outside investment in some form, be it labels or otherwise, to get larger.
12/02/09
12/02/09
12/02/09
12/02/09
11/20/09
Taking a true-cost approach, I'll ignore subsidies, though that certainly cuts the time in half for early buyers.
Pulling $180 per month out of my butt as an estimate for conventional power, I come up with about 32 years to pay off the difference. Which... is actually pretty good aside from the pile of Li-ion and silicon waste left at end-of-life.
11/20/09
*facepalm*
11/20/09