THE MUSIC BUSINESS

Rapcointelpro is Rap Coalition's Intelligence Program to give insight into starting a label and selling units on your own.  If you haven't read all of the articles in the first few sections, now is your chance!!

Section One is WHERE TO START
Section Two is SETTING UP THE RELEASE
Section Three is FINDING DISTRIBUTION

Yippee!  On we go...

This section is basic information about the music business that doesn't really fit the set up of your record or the actual selling of units, but does help you understand the urban music business a little better.

And as always, the information on this site is here to help you, and we take no responsibility for the quality of the information here other than to share otherwise hard-to-obtain stuff, blah, blah, blah... And well, hell, it's free!  Here it is.  You can access the article by clicking on the blue title of the article.

Here's what's in this fourth of five sections, TA DOW:

RAPONOMICS Rap is feeding upon itself and runs the risk of being destroyed economically. If it is not profitable for major labels to put out rap records, they will move along to other genres of music to exploit. Although independent labels appear to be closer to the streets, and therefore closer to understanding why and how records sell, it’s the money, connections, and power of the majors that help expand the rap music genre beyond its current marketplace. If the major labels move on to an area of music that they view as more profitable, such as Latin music or gospel, the reach of rap music will shrink as popular culture is blitzed less and less by rap music on the radio, in stores, and as part of everyday life...

A RISKY BUSINESS Rappers talk tough about life in the 'hood but when it comes to money, many are babes in the woods. Some top stars never get top dollar. CHERYL JAMES AND SANDY DENTON knew very little about the music business when they landed their recording contract that transformed a couple of Sears customer-service reps into rap's most successful girl group: Salt 'N' Pepa. How little? In 1985, when their manager said sign on the dotted line, they did: a 1~year contract with Next Plateau Records for 50 cents per album sold (half the going rate) with no option to renegotiate even if they were to become, say, a top 40 hit machine. Three platinum albums later, they made about $100,000 a year each, while their manager and record company raked in millions. "I always knew something wasn't right with it, but I didn't know what," says Denton of their ironclad deal. "We were intimidated by this white business-man telling us it was the right thing to do." Adds James: "We never even thought of a lawyer." ...

PROFITABILITY I used to run big record companies and now I run a small company, Artemis Records, which I also partially own. Universal and Warner Music Group, two of the big four international music companies, have fired me. Artemis is distributed internationally by Sony and in the U.S. by RED, which is predominantly owned by Edel, a European indie. I have a tangled web of friendships and feuds with executives and artists at every company. My wife, Rosemary Carroll, is an attorney who represents many artists. I am not objective, but I have opinions....

PUBLISHING 101 Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records is financed through the publishing that the CEO owns. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music....

Eight Different Kinds of Publishing Deals: A Thumbnail Sketch  People often speak of “publishing deals” in a generic way, which implies that there is only one kind of publishing deal. In fact, there are a number of different kinds of publishing deals, as described below. In the very early days of music publishing, songwriters simply sold their songs to music publishers for a flat amount. Later, as songwriters became more business savvy and gained a little more negotiating leverage, a new kind of contract evolved, consisting of three basic elements: (1) The songwriter would assign all copyright ownership of the songwriter’s songs to the publisher; (2) The publisher would then commercially exploit the songs (e.g., by the sale of sheet music); and (3) The publisher would pay royalties to the songwriter....

PUBLISHING INFO Publishing is the most valuable thing that artists own, yet the least understood.  The moment an artist creates lyrics or music, the artist owns that composition--as soon as the pen writes a lyric or a note is played next to another to make a song.  Most artists underestimate the value of their songs and too often give away their publishing or sell it too cheaply because they need money...

BAD ECONOMY SURVIVAL Many in the music industry are experiencing the same things right now as we all seek to grapple with the new world disorder. The economic downturn and September 11 attacks have pounded already weak sales in a music industry grappling with rampant piracy and slowing CD replacements. Gigs are drying up, distributors are 120 days out, customers are staying home, and your bills are piling up. Music groups are under pressure to make deep-seated changes to survive the times ahead and the "ripple effects" will be profound...

RECORD INDUSTRY REBOUND If you are noticing that all of a sudden the record stores are about to be flooded with new Hip-Hop product you are correct.  We are looking at Jay-Z, Nas, 50Cent (December 3rd), Fabolous (December 3rd), Ja Rule, DMX, and an Irv Gotti remix album (November 5th) all within 1month of each other, when there were virtually no major releases from June to October....


PERFORMANCE AGREEMENTS When performing live for compensation, it's a good idea to have a written contract. You may encounter some owners or promoters in smaller venues who refuse to sign a written contract. In these situations, the good news is that a contract for a live performance does not need to be in writing in order to be valid. Of course, for obvious reasons, it's often more difficult to prove the terms of a verbal agreement. So, if the person hiring you refuses to sign a formal written contract, try to get something in writing - whether it's a letter of confirmation, a fax or even an e-mail - showing the date and time of the performance and the compensation you will be paid....

PROMOTING SHOWS So, you want to put on a show, eh? That's a nice idea. A great way to get exposure for your band and a good way to get a good gig. But it takes a bit of organization in order to pull it off. You gotta plan almost everything in advance and be ready for the unexpected. All-ages shows are great, but for the most part they're very disorganized and they usually have lousy sound. With some planning, a little hard work and some arm-twisting, you can pull it off and maybe even make money at it. Here are a some tips on how to set one up....

THROWING A RAVE 1 These are pieces combined from articles about how to throw a Rave. We thought some of the ideas will be useful even to promoters of rap shows.... Here are some things that I found useful when I threw my parties. I was throwing regular house parties, at my house that I lived in college, but I had crowds of about 90-130 at varying times at the two parties I will talk about. While my observations are limited to these rather small events, I am sure they can be applied to any situation. First off, you must be honest with yourself. Can you throw this party? Do you have the financial means? You must WANT this party. You should want to go to a party like the one your are throwing. You must give yourself plenty of time to plan and stage this event....

THROWING A RAVE 2 These are pieces combined from articles about how to throw a Rave. We thought some of the ideas will be useful even to promoters of rap shows...."Levitation" was the name of the rave we were going to throw on the rooftop of an apartment building. Despite warnings from everyone I knew that the person arranging for the rooftop was not worthy of our trust, I trusted him anyway. After inspecting the roof, I decided it would be best to keep this one fairly small, since it looked like only 100 people could fit up there at a time. So I made 150 flyers and sent out mailings to the 35 people on our list. We didn't post any anywhere, nor did we hand them out in clubs. In fact, we probably handed out most of them in Colorado, where we knew nobody would come from to attend. We just wanted to advertise the hotline/mailing list....

GUIDE TO NEGOTIATING If you're involved in the music business, sooner or later you'll sit down with someone you have to negotiate an agreement with. It may be a management or record contract, or perhaps a "work for hire" agreement where you provide music for some particular use. Use the following general guidelines to keep the communication on the best level possible....

THE CLIMATE FOR INDIES In the '80s was a decade characterized by big corporations, slick packaging, and Phil Collins' shining forehead, the '90s seem to be experiencing a resurgence in the grass-roots, do-it-yourself ethics that empower the little man and woman to get out and put their creative thumb prints on the world. The music industry is hardly immune to this climate, and as a result, small labels have been springing up like lemonade stands in a suburban heat wave. Some are started by artist managers who want to organize the talent around them into a viable company; others by studio owners or producers wanting to expand their operations by developing their own indy label towards securing a production deal with a larger company; and the vast majority are started by artists themselves seeking to develop their musical product towards professionally presenting themselves to the music industry. There are four factors contributing to the indy label resurgence today and each one is a door of opportunity for anyone who can offer good music, basic business smarts and a load of perseverance....

THE RAP INDUSTRY Rap music has hit a dull spot. It has lacked creativity for a couple of years now except for the random album here and there to break up the monotony. I’m more than just a fan of the music: I study the industry--under a microscope. One of the reasons it is so boring right now is because no one is taking any risks.
There is nothing new--just recycled formulas of what labels think will continue to sell. This is a justifiably sensible business decision, but a horrendous artistic decision. History shows us that boredom is what has killed musical art forms in the past. Remember disco? Remember the watered-down, commercial R&B of the late 70s? Rap emerged due to an outcry for an alternative form of popular music in the late 70s and early 80s, bringing a new and exciting answer to boring and redundant music of the day.

GLAMOUR IMAGE The successes of Nas and LL Cool J are not very common within the hip hop game. Videos tend to flood our minds with visions of tinted Benzes, Versace, Hilfiger and sparkling jewelry. Stacks of money are thrown all over marble top tables like plates of red beans and rice (supporting ill-usions)...

PERCEPTION VS REAL Perception is not always reality. That's something that I have been saying now for many years--especially when it comes to our beliefs and perceptions about how well major label artists are doing. Too often, our perception of how well major label artists are doing in their careers or how successful they are is based entirely on how often we see their music videos on MTV or how many reviews or articles we see about them in the press. Not to mention the amount of times we hear their songs over and over again on the radio....

FILM AND TV If you are an avid TV watcher or film fan, you have noticed that less and less known artists have their songs featured, or are dominating the new TV shows or movies. Instead, TV and film music supervisors have been aggressively looking for and have been actively using independent artists who release their own CDs....

FILM & TV DEALS Composition for film and TV has evolved in recent years. Where one composer used to be responsible for all the musical elements in a film, these have now been divided so that each part of the collaborative effort can place greater focus on its unique element. The "soundtrack" and the "score" now fall under two separate departments and a new creative music executive has evolved to fill the vacuum and carry some of the load that was once completely the composer's. Enter the "Music Supervisor." ...

SPONSORSHIP DEALS Tis is a topic I always bring up and talk about when it’s time for the first NAMM (National Association On Music Merchandisers) convention at the beginning of each year. While thousands of industry buyers walk around to the various manufacturers booths talking about what products to buy and feature in their music stores, countless more independent artists are walking around the showroom(s) trying to get the attention of anyone who will talk to them--all desperately seeking a sponsorship deal from a coveted audio gear, recording equipment or instrument company. Only later will they learn that the deal they so desperately want doesn’t really provide them with the support money they seek. In reality, they will be lucky if they manage to get a free guitar or a discount on strings...

GREED For the most part, the business and art sectors of our society often resemble fraternal twins, with the common denominators being their operational and marketing mechanics. And, until recently, that's about where the similarities ended. However, it is ironic how suddenly these fraternal twins have become identical twins, almost overnight, through another common denominator...greed....

ARE LABELS GREEDY? The amount of accusations of greed and ineptness leveled at record companies recently is only half as shocking as the record industry's meekness at defending itself. The public has been led to believe that CDs are highly overpriced by greedy companies who are also stealing from the artist in their thirst for profit. Therefore it is quite okay for everyone to download freely on Napster or some other vehicle to redress this "evil." It is also argued that the industry's slowness to respond to the opportunities of the internet opened the door to the likes of Napster. Unfortunately, some naïve artists have supported and fueled these ideas....

WHY THE MAJORS SUCK An artist who signs a major label recording contract today is probably taking the biggest risk of his or her career. With a mortality rate of 1 out of 10 failures, it's clearly a crap shoot whether a new major label artist will "make it" or not. The list of "where are they nows" over the last ten years runs into the thousands. This sucks!...

ARTIST DEALS Who is the incredible bonehead who said rappers make a lot of money? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be very wealthy, and have an interesting, far above average, glamorous lifestyle, this puts an incredible amount of pressure on the artists to appear wealthy. And it's not just the fans; I can't tell you how many times I've been out with rappers along with people in the industry, and the industry opportunists have expected the artists to pick up the dinner check. I've even seen people have an attitude if the artist doesn't pay for everything. This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist's entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket).  Add to this the artists’ own payroll responsibilities: fan club, website, security, office and/or studio, etc, and family members he, or she, is expected to support or help financially....

LIST OF BOOKS A list of recommended reading....