Tag: royalties

I recently finished compiling royalty statements for all the artists on Loöq Records, an activity I do twice a year.  Even with the custom database I designed specifically for the task, it’s difficult and takes a long time.  We receive reports from our various distributors — detailed spreadsheets with a row for every iTunes download, streaming music click, mobile ringtone, youtube view, etc.  I import these records into the database, crank the digital wheels, and churn out beautiful, detailed royalty statements for every artist and remixer who has ever had a release on our label (over a hundred different statements, and growing each reporting period).

I love this process — partly because I’m a database nerd, and partly because there are always a few artists in the bunch who receive unexpected, sizable payouts.  It’s fun to share that kind of news.

You may have heard that the music industry, and music labels especially, are dying a slow death.  This may be true for the big labels, but many of the independents (like us) are doing pretty well.  It’s true that people are buying less music, and that people tend to buy individual tracks instead of entire albums.  And piracy does have a negative impact, though it’s not as great as the RIAA would have you believe.  But the main reason for lower sales per release is that there are way more releases out there.  The digital floodgates are open — it costs almost nothing to put out a “record” these days.  So sales revenues for each release are, on average, lower.  But there are also unexpected new sources of income, like shared ad revenue.  For example, every time you watch a video on youtube.com that uses a Loöq Records track, that Loöq artist gets paid (after I compile and send out the royalty statements, that is).  Tracks also generate revenue (for both us and the artist) when we license them out for use on television shows, movies, video games, and commercial websites (if you’re interested in licensing a Loöq track, please get in touch).

But for a young artist starting out, are things all that different than they were ten or fifteen years ago?  Now you can submit a track to a label, or two dozen labels, with a simple email (linked to an mp3).  When I was twenty years old I was sending cassette tapes in padded envelopes to music labels individually!  So some things are easier.  On the other hand, I would usually get a cash advance when I would sign a track, in addition to royalties.  These days, at least in the electronic music world, cash advances are rarer (though royalty rates are higher — Loöq offers 50% of gross sales and licensing, and that’s not uncommon).

So the business landscape has changed.  Artists have more power, as they have the option to go directly to consumers (skipping labels altogether).  Labels still have their place — they can expose artists to wider audiences, provide distribution outlets, and promote the artists’ work.  For the music consumer, labels act as a valuable filter (artists, myself included, can’t always tell when their work sucks and needs to be shelved).  On the other hand, some things remain the same.

Setting Yourself Up For Success

There are some things that artists (not just musicians, but also writers, visual artists, choreographers, all creative types) can do to increase their chances of success.  By “success” I mean fame and fortune — too often an artist achieves the first but misses out on the latter.  I’ll leave “artistic satisfaction” and other fuzzy elements out of the equation for now — those are too hard to quantify.

Blogging, tweeting, having a presentable website and a large online social network — these things can all have a positive impact.  But other areas are more important.  You don’t want to end up like Tila Tequila, do you? (Over a million MySpace friends but no artistic respect.)

I put “young” in parentheses because these ideas make sense at any age.  Young people might be more inclined to seek advice, but these days people are starting new careers at all ages (myself included).

Am I qualified to give advice?  To date, I’ve done a few things right, and I’ve had some great luck.  I’ve had releases on my favorite labels and I’ve had my tracks played by the DJ’s I respect most.  Over the years I’ve received tens of thousands of dollars in sales, performance, and licensing royalties.  Perhaps my musical success to date has been limited by my unwillingness to tour,  my reluctance to give up my freelance programming work (I enjoy it, and the income it provides), and my tendency to take on too many projects in various creative spheres (I’ve released music under at least eight different aliases, and now I’ve taken up writing).  So I’m not going to be the guy to tell you to quit your day job, sling your guitar or synth over your shoulder, and hop on a train (that might be good advice — I just haven’t tried it myself).

So for what it’s worth, here’s my advice for artists (young and not-so-young):

1. Prioritize quality (and if it sucks, don’t release it).

At least half of what people call talent is simply a fascination with a particular art form — an interest so deep that you are willing to engage with the practice long enough to get good at it.  Eventually you may accidentally create something half decent.  Your peers may be impressed — they may tell you something like “You’re a good artist.”  Don’t believe it for an instant — just keep working.  With some luck, you’ll create something half decent again.

One of the biggest pitfalls for an artist is to believe that they’re talented.  Even if you are talented, you’re perfectly capable of creating stinkers.  If you believe your own hype, you might end up spending more time defending your reputation than getting down to work.  Avoid this trap; instead keep quality consistently high by giving each composition the time and energy it deserves, by getting feedback from trusted advisers, and by constantly improving your skills and knowledge (and gear, when you can afford it).  If a particular piece of work doesn’t meet the incredibly high standard you should be keeping for yourself, then shelve it.  You can always steal the good bits later for a future composition.

You should always aim high — with every creative attempt you should try to achieve transcendent brilliance.  You’ll probably fall short most of the time, but if you don’t aim high you have zero chance of creating something great.

2. Keep the pipeline full (and be patient).

In any artistic career, it can take a long time to see any kind of tangible success from a creative work.  And most of what you do will probably result in a whole lot of nothing.  Keep working anyway, and keep releasing (or submitting) work at regular intervals.  If you focus on quality and keep up your efforts, something is bound to connect with somebody at some point.  Remember that success is always uneven (see my “positive black swans” post for more on this idea).

The unpredictable nature of this process is frustrating, but it’s rewarding when something finally does take off.  It can happen five or ten years after you finish the work, in completely unexpected ways.

The biggest Jondi & Spesh track to date, “We Are Connected,” was released as a vinyl 12″ on our collective DIY label Trip ‘n Spin Recordings.  Sales were not so great — nobody really “got” the track except for a few DJ’s in San Francisco.  After languishing in record shops for a couple years, the record was “discovered” by John Digweed (a widely respected, world-famous DJ).  Once he playing the track, other people noticed.  Re-releases, compilation deals, and licensing deals followed.  But it took a long time, we didn’t see any real money from the track until many years after writing it.  Same with Momu’s track The Dive which was championed by Nick Warren and Paul Oakenfold (the link goes to the music video of the track, directed by Kia Simon).

If you’re going through a dry stretch in terms of tangible rewards (money, fame, respect from your peers), it can be hard to keep working.  You need to develop an indomitable spirit, a conviction so great that it cannot be moved by fortune’s fickle whims.  Think Tina Turner style resilience.  How you get there is up to you — it’s a spiritual question — but you need to have a rock solid core.  Hope, love, persistence, courage, realistic optimism, creative problem-solving, a sense of limitless possibility — all those are part of the equation.

3. Join a crew (as long as that crew respects/values/needs you).

If you can find a group of like-minded people who share at least part of your artistic vision, by all means join forces.  You’ll probably waste a lot of time in unorganized “business” meetings, but if the chemistry is right then the potential for fruitful collaboration and needed morale-boosting will be worth it.  Dealing with artistic rejection is part of the game, and it can help to have a creative partner or group to help pump you up again (and talk about how everyone who doesn’t understand your work is a tone-deaf cretin).

On the other hand, if your crew doesn’t respect you and your contributions, if they don’t really need you, you’re better off on your own (or starting a new crew/business/collective with more enlightened people).

4. Maintain as much ownership as possible (and don’t be afraid to negotiate).

Getting your first contractual offer is terrifying.  I remember reading mine — I broke out in a cold sweat.  I was elated to get an offer from a real music label, but worried that I might be getting ripped off.  I didn’t understand most of the language in the contract, and I didn’t have any other contracts to compare it to, so I felt pretty lost.

In the music industry, there are many types of royalties payable to artists: sales royalties, master use fees, sync rights fees, performance royalties, and mechanical royalties.  It took me years to get even a cursory understanding of what each of these terms means.  This article provides a good introduction.  And you should own and read a copy of this book.

Whatever your creative area, you should always try retain a sizable ownership percentage in your own work.  If you want a label to release your work, you’ll probably need to give up a percentage of ownership for at least a period of time — in that case you want the rights period to be as short as possible.

Don’t be afraid to ask for better terms.  It helps if you’re willing to walk away from the deal — that gives you an extremely strong negotiating position.  But even if you aren’t — even if you’re so hungry to get the damn thing released on any terms — it’s still a good idea to ask for better terms.  Ask for a larger advance, a shorter rights period, a smaller territory, a larger marketing budget, and/or a higher royalty percentage.  The label might say no, or they might meet you halfway.  But they’re not going to walk away or get mad if you politely ask for better terms (and if they do, they’re not worth working with).  Remember, they like and value your work — otherwise they wouldn’t have made you an offer.

As a label owner, I might be shooting myself in the foot by sharing this information.  But we don’t low-ball artists — our first offer is usually as high as we’re willing to go (generally 50/50).

On a side note, you should also have written contracts with artistic collaborators.  These can be simple, plain-language contracts that you write yourself, but they should describe in detail what the ownership shares are (on both the profit and loss side).  Err on the side of including too much detail in your partnership contracts — it will help you avoid disputes down the road.  And don’t assume that if you just have a conversation with your collaborator that it’s handled.  You will both forget the terms within months (or rather, you’ll both remember, but differently).  Write it down.

5. Limit your exposure to criminals, sociopaths, and bumblers.

This sounds obvious and easy, but in fact it’s quite difficult.  Criminals and sociopaths are some of the most charming people around.  They’ll sweet-talk you, acquire your assets, and then deliver nothing.  For an audio example listen to the hidden track on the end of the first Jondi & Spesh album, Tube Drivers (released in 1998).  Skip to 14:40 to hear the voice of the guy who still owes us $80.

These days, it’s easier than ever to do a little background research on a music label, gallery, or publisher.  Find other artist who have worked with them, and contact those artists directly.  Let’s say you’re researching a music label.  Ask the label’s other artists what it was like to work with that label — did they fulfill their promises?  Did they respond to calls and emails?  Did they do a good job on the release, promoting it sufficiently?  Did they ever send a royalty statement?

In some ways newbie bumblers are even more dangerous than outright criminals.  Filled with idealistic, inspired ambition, they start a label (or gallery, or whatever), even though they have no f*cking idea what they’re doing.  They might pull through and become the real deal (we did, after years of bumbling), or they might crash and burn.  As an artist, you might benefit from getting in early on these new, idealistic ventures.  On the other hand, you might see your works die in limbo if you throw your lot in with these types.  Play it smart — if you believe in a new venture then dip a toe in (do a single release or a show or whatever to see how it goes) — but at the same time try to get your work released on more established, reputable labels.

6. Do whatever it takes to get inspired, and then act on it.

The work itself should be fun.  Even if you are putting in long hours and struggling to overcome obstacles, you should feel engaged and alive while you work.  If you don’t, if it feels like drudgery and toil, you probably need to recharge your creative batteries, or change something up in terms of your focus or work process.  Try working in a different genre, or listening to new artists.  Learn what activities tend to create inspiration within you and then do them.

When you do feel the rush of inspiration, act as quickly as possible.  If you wait too long, the spark will fade.  Inspiration is like raw milk — at room temperature you have less than a day before it starts to sour.  Now I’m mixing metaphors.  Drink that spark of milk — get to work immediately.

7. Be good to absolutely everyone.

You don’t have to be nice to everyone, but you should at least be respectful and courteous.  Why?  I remember once when I was in high school, an old Deadhead got mad at me because I wouldn’t give him any spare change.  He started yelling about karma, about how what goes around comes around.  I had no idea what he was going on about — but he was drunk and he smelled bad.

I don’t believe in invisible forces that reward or punish us for our good or bad deeds, but I do believe that we are social primates who keep close tabs on each other, and talk about each other a lot.  If you consistently treat someone well, they’ll remember it for a long time, and perhaps tell other people that you’re a good guy.  If you slight someone even once, they’ll remember it forever and tell everybody you’re an asshole.

It’s easy to accidentally slight someone, forgetting to return an email or a phone call, or not saying goodbye when you leave a party — that can be all it takes.  In fact, it’s impossible to avoid — the human ego is generally pretty fragile.  Just going through life is like being a bull in a china shop — you’re constantly knocking over egos and stepping on feelings.  Though is sounds cheesy, you can counter this natural tendency by projecting love, by infusing everything you do, say, and write with compassion.

A personal code of ethics is also important — you should of course treat people fairly.  But people can’t necessarily feel your ethics.  They can feel your love.  I’m not talking about being mushy or flowery or affectionate — I’m talking about being engaged, giving someone your attention and respect, and keeping your heart open to their experience — simple empathy.

Can you be a total dick and still get to the top?  Of course you can!  But most of the people I’ve met who have achieved a high level of artistic success are warm, caring, and down-to-earth (at least in person — their stage persona might be different).

That’s it — that’s all I’ve got.  As always I write about this stuff so that I can take my own advice.  Please feel free to share your own thoughts on artistic success and business advice for artists below.