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I never thought I’d have to devote a column to this
topic, but apparently it needs addressing based upon feedback to me from
major labels, distributors, artists, and indie labels themselves. Here are
some basics:
1. Set up a phone for business calls, KEEP the phone in service, and
return phone calls. Changing your phone number every few weeks may be the
way you normally operate, but when people can’t reach you for business you
lose money, opportunity, and momentum. No one could possibly imagine how
many calls I get from retail stores, radio stations, and distributors
asking me if I know how to find a certain label because all the numbers
they have are disconnected. My tolerance for this is very low. I’m not
talking about artists and labels who expand from one office to another and
transfer their calls to a new number, I’m talking about the hoards of
folks who have even placed ads in this magazine with numbers that have
been disconnected even before the magazine hits the streets. I understand
the value of disposable cell phones with free chips, but can we please
spend the $25 a month to have a voice mail service or a phone line
dedicated just to business that remains in service! One of my favorite
rappers, KRS-1, has changed numbers (business numbers) so much in the ten
years I’ve been running Rap Coalition, that about 5 years ago, I stopped
keeping track of him and to this day don’t even try. It has become a joke
in the music business about Kris’ numbers changing. When people call me
with opportunities for artists, and many do, I call those I know I can
find.
This is a small industry. Word spreads very quickly. Major labels know
which small indie labels are unprofessional and hard to work with, and
rarely do the better major labels approach these unprofessional indies for
deals--it makes sense really, they just don’t need to. You’d be surprised
what is said behind closed doors about indies. In a perfect world, an
indie would have many distribution opportunities from which to choose, but
with some distributors not making offers because of an indie’s reputation
the choices are severely reduced to mediocre distributors, especially with
the amount of labels competing in today’s marketplace. I got a call last
week from one of my favorite A&R Research guys (a major label’s frontline
to find new artists to sign) who told me about a label that I’ve worked
with on and off in the past few years. He explained how he left a message
at the label, twice, and never got a return call. He had pitched the
president of the major label he works for, why he thought they should sign
the indie label from the Midwest. Meanwhile, no one called him back. Go
figure! Gee, who’d want a deal from Def Jam anyway!
2. Pay your artists. It amazes me how someone who thinks they have a good
business mind could be stupid enough to not pay the artists who have made
them money, but somehow this happens enough that I have to mention it. Pay
your artists. They signed contracts with your label, and in those
contracts it stipulates when and how much. This ain’t rocket science. For
every unit sold, your artist gets a cut. It isn’t much to begin with, and
if you mismanage your money, or spend it elsewhere, you STILL owe them
what you owe them. So set enough money aside EVERYTIME you receive payment
from your distributor, retailer, or customer, etc. You owe them a percent
of sales (usually around 12% AFTER they recoup what you spent making the
record and on advances) and mechanical royalties (roughly seventy cents
for every album sold). We’ve all heard the alleged rumors of No Limit and
Cash Money not paying their artists and the artists leaving; don’t let
this happen to you. Contracts keep your artists there; paying them keeps
them happy and keeps their lawyers from breaking their contracts. If
you’re selling units, it’s because of the music and the artist, NOT
because of your logo. A logo brand may help, but a record without a logo
still sells, a logo without a record does not. Pay your artists. Get the
point?
3. If you don’t know what you are doing, seek help and information from
those who do. The music industry can be a very expensive place for trial
and error. I’ve seen labels waste $50,000 to $75,000 in a few weeks time
learning this business. It’s not worth the aggravation. Find someone who
has done it before, preferably successfully, and ask questions. Or hire an
experienced consultant. Or work with another label to learn the way it is
done, or hire someone COMPETANT who has. This game is full of people
skilled in the art of hype, however, so do extensive research before
hiring anyone!!! I also believe the majority of folks in this business to
be inept, so make certain you hire someone competent. Ask for references
and check them--every single one.
This is a business, and although it would be nice to have your boys around
you since you trust them, that’s not smart business. Hire the best person
for the job. You will make more money and then you can hire your boy to do
whatever he’s good at, which will hopefully make you even more money. The
earliest lesson I learned was to not try to fit a square peg in a round
hole: this means don’t put someone into a position they are not right for,
just because they are available.
Thanks for reading this far, I know it was the basics but I see these
mistakes being made everyday in this business. Since I started in this
industry in 1992, there are less than 50 people still doing something
worthwhile ten years later. People come and go quickly, and although to
outsiders this looks like easy money and an easy game, that is so far from
the truth. Labels who were at the top five short years ago, don’t even
exist anymore. A true case of killing the golden goose.
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