Injustice from Inside the Cruel and Shallow Money Trench That is the Music Business
gonzoxinjustice
 One year ago today my boyfriend, Chris released his first EP.  Today, I found myself looking for some information on the business ethics of the music industry, purely out of curiosity and the desire for an answer to the astonishment that the last year has brought to us.  At 23, I have been a paraprofessional librarian for more than 5 years and I keep reaching for an answer somewhere out there in the piles of information on the internet and in books, yet so far, there is none.  I find myself so jaded by the industry’s business ethics (or lack there of) that I just remarked yesterday over how I hardly listen to music anymore.  The beauty and purity of music has somewhat been tainted for me by the disgusting practices behind it.  

There are thousands of details and hours of subjects to discuss over what he has been through, but right now I just want to focus on the lack of ethics and protection for these kids who “just write music” and how there are so many more opportunities now for them if they just had the right information to make better decisions.  I will try to remain unemotional, and use facts of what happened to support my points, but this will be quite difficult as I am so sensitive to the cruel ways of this tainted business.  

Chris started off his “band” with one song that he wrote himself and recorded using free 30-day samples of music programs, and paying a friend a small amount to add a little more quality to it using his modest studio equipment.  I use quotations for the word band because it was not originally a band, but rather his very last attempt to be a musician before he would throw in the towel and give up on ever being in a legitimate band after years of searching for members and trying to join other bands.  

It was the first complete song he ever wrote.  He wrote it about a local scene of kids that he was briefly a part of, and intended it to be something he and his friends would laugh about, making fun of themselves.  He combined the styles of all of the bands that influenced him at the time.  He didn’t question himself in combining different styles because he was not an experienced musician who was limited by the knowledge of the arbitrary “do’s and don’ts” of music.  The song was sexual and vulgar, referencing drug use and the need to belong. It had all of the ingredients required to become its own sensation with a new generation of youth.  And it did.

The song hit the internet in full affect, and became an un-intended national hit in its own right on social networking and video sharing websites.  As far as the business goes, an iTunes account was started in haste.  The song was selling on its own.  All was good at the moment, despite Chris’ lack of experience in business, music, or both.  As the popularity of the song, as well as Chris’s image grew, more songs and live shows were demanded by a fast-growing fan base.   In a hurry to satisfy the overwhelming demands, Chris enlisted a friend of his that he had previously attempted to start a band with to help him write more songs.  They worked well together, however, others were enlisted to “help” also and he quickly fell victim to these predatory leaches, most directly due to his lack of experience and hasty decision making.  No one though, would take more advantage of his weaknesses, than the record company.  

By the time this newly formed duo began searching for a label they had 3 songs on iTunes that they had recorded with their own equipment, a modest online merch store hosted by a local vendor, and an extraordinary online fan-base.  All of this was done entirely by Chris and his new music partner.  They began to shine as self-starters, utilizing online social networking like few had ever done before.  This is the point when one should ask himself, “So, what do you need a label for?”  

Business was absolutely flourishing!  I will just say that their monthly cut from the online sales of just 3 songs was astounding.  This income was almost entirely put right back into their successful venture.  After all, they needed a van and trailer to tour in as well as better equipment to play live shows.  They, like so many, wanted to make this a genuine stable career, and for the first time in their lives, that life-long dream seemed to be fairing in their favor.  

It seems to be very difficult to obtain any level of success in this industry without catching the attention of those business-savvy leaches in their sky-line offices in New York and L.A. (the word “leach” seems all-too befitting).  If you make some noise in the industry they will come.  We have all heard this a million times.  We all know about them.  They will fly you out to the city and buy you dinner.  They will give you free stuff.  They will be your best friend until you sign that deceitful piece of paper –then your worst enemy will appear.  Although Chris attended these proverbial meetings and witnessed these industry clichés, he never signed those papers.  These are not the villains of this story.  With reports of the collapsing and merging of the industry giants, the words “major label” seemed too insecure to trust with the fragile direction of a newly-blossoming career.

The search for a label stemmed from the desire to carry the strong momentum they had self-established to the next level.  They were just kids that wrote music and they had never had to deal with the kind of tangled mess that a full-fledged small business entails.  Many things still needed to be done, and the intimidation of being overwhelmed began to set in.  They needed to book tours and record a record and then distribute it.  They would then need to promote that record.  The ultimate goal at this point, is to make this dream something that could provide you with a stable income and prove itself to be a legitimate career.   

Ultimately, they chose a small local label that had just started out, yet it had some affiliations deeming it capable of distributing the record. They felt that they could trust this label because the owner was also in a band, and they felt that an understanding had already been established based on this.  There is no need to go into detail to present the point of this story. I will just state some events that have lead Chris to the point of losing everything that he loved and worked so hard for, and now to the point of starting over and trying again, in hopes that his lessons learned will help himself and others.  

After signing with this label, inexplicably they were given 1 month to write an entire record AND record its final versions.  They were forced by this timeline to settle for releasing a very rushed and dissatisfying EP.  As of today Chris has not seen 1 penny of his EP sales or online merch sales sold (as you remember, the first 3 songs were bringing in considerable income for them, now after adding 6 more songs and touring 5 times they have nothing?).  

The contract that he signed would not be considered artist-friendly in some ways, yet actually generous in others so it was not all that bad.  However, it is my understanding that by contract, the label must make available its accounting practices upon request, including record sales.  They did not do this.  To this day they have not shown Chris a single record sales report, even after formal request.  After seeking a professional opinion, Chris was told that it is common practice for a legitimate business of this nature to show quarterly reports to all parties.  That means every 3 months.  Today it has been a year and nothing has been shown to explain what kind of income has been brought in.  

Understandably frustrated over all of this and many other reasons unmentioned, Chris became extremely depressed and anxious.   In December, he walked away from a show, after touring for 2 months with the very people who were behind all of this.  This incident sadly resulted in the complete demise of his band.  

By now, there must be screaming inside your brain saying, “Why wouldn’t you go get a lawyer?!!!”  The truth about our country is, you could steal a candy bar from the grocery store and have to pay some enormous fine, but if you perform suspicious accounting practices, rendering someone penniless and unrepresented, then you might as well have won the lottery.  

When all is said and done, you can either move forward or go back and throw money that you don’t have at the situation.  Again, being penniless and unrepresented leaves you helpless and that is shockingly a common practice for this industry, and an ideal situation for the label.   My profession has accustomed me to look up information, yet when I searched for news articles and court cases on this situation, I came up with little regarding the music business, but there has been an abundance of press about corporate corruption and shady or hidden accounting practices.  When large corporations who were left responsible for their own accounting practices formulated numerous greedy schemes and refused to become transparent, enough people began to cry foul, the laws were changed, and now bad suit-and-tie men are being prosecuted left and right.  

I am not saying that all labels ought to be compared to the likes of Madoff and Enron, I am simply expressing the shock I have felt in witnessing the deceitful and unethical practices that have become acceptable and common-place in this industry.  There are very few industries that would accept this unreasonable way of conducting business.

In plain English, I will explain the implications of a standard record contract (emphasis on the word standard):  

*It is common practice to sign the rights to your material over to the label.  This does not sound too perilous but it is.  It means you no longer own songs that you wrote or the web page you created, or possibly even the shirts that you designed.  All of the business and financial decisions regarding YOUR material may be made by someone else.  I, to this day, do not understand why it is necessary to sign the rights to your material away to someone who merely promotes and distributes the product, especially now that the internet does the same thing without you losing any rights (more on that later).  It would be more rational to simply give permission for the use of your material, rather than for someone else to completely own it.  

*Commonly, the label will act as a lender in order to promote your record.  Labels, however, are not ordinary lenders.  If you borrow money from the bank you will be given the agreed amount to put into your business and then you will pay it back over time with a reasonable interest. This is ethical and just.  In the music industry, the label will front you an untold amount of money for promotion and then take it back immediately and at once, regardless of whether or not you have bills to pay, a family to feed, or money to eat for yourself.  Meanwhile, the label is allowed to make a profit while you are left hanging!  The money to “pay them back” for promotion is taken out of your entire cut of the record sales.  It’s like giving someone a credit card with your name on it, without a limit, and allowing them to spend how they see fit.  Then, your entire paycheck is confiscated in order to pay it back all at once.  Smaller payments are not allowed and you are forced to continue working for them to get paid.  Chris made a similar public statement about this situation, “I’m tired of doing the monkey dance to pay everyone else’s bills.”  His statement was quickly written off as that of an arrogant singer-guy, but he was only trying to give a hint as to why he could no longer continue a rigorous touring schedule, compromising his health, without receiving an income.  

In this way of business, I see very little financial risk on the labels’ part and a near-slavery situation for the artist.  All the while, the labels are responsible for the accounting practices.  So, if you have paid them back, no one is really there to see that they start giving you your cut. There is no regulation for this and I suppose, under the right conditions, they can keep taking your cut and show you bogus spreadsheets that they typed themselves.  Again, your paycheck is being confiscated and lawyers do not work for free.  This hypothetical situation is all too feasible by the permitted practices of this industry.  

In the 1940’s the Screen Actors Guild revolutionized the business of acting by diminishing bad contracts between the actors and the corrupt studios.  They influenced and utilized labor laws and united the actors to combine forces and push for reform.  This made me wonder why the music industry never did the same.  Then I did some more research and found out that there is something called the Recording Industry Association of America.  They claim to represent both the artists AND the labels.  The artists and the labels!?  If a lawyer can not represent both the plaintiff and the defendant, than I don’t understand how an organization can be an advocate for the best interest of the opposing parties of a record contract.  I then found out that there is something called the Recording Artists’ Coalition and once again I felt hope.  They seemed to be more devoted to promoting the Grammy’s than advocacy, but that is beside the point.  It did not take long for me to find out that the Recording Artists’ Coalition has merged with the Recording Industry Association of America.  They are now the same “advocacy” group.  This gave me a good idea as to how it is possible that today the music industry is so far behind in creating a just environment for its artists.

The story I presented is not about a chart-topping group on a major label.  It reveals the deep corruption of this industry on all levels, big and small.  I am assuming that the system as it is today has harmed thousands of hard-working and creative people, and cut short an untold amount of otherwise thriving careers.

 It is not just educated business-savvy middle-aged men that have taken advantage of this horribly unethical industry.  It is anyone that has ever leached on and immorally taken advantage of someone else’s creativity. Musicians, too, have taken advantage of other musicians.  It is appalling to me that I have been such a devoted fan of music for so long without ever hearing exactly how the industry has been operated.  I just knew that “labels take advantage” but now I know exactly how and it is sickening.

Today music is changing rapidly thanks to the internet, and artists can now promote and distribute their own material to a degree never seen before.  They can sell their music to almost anyone in the world while still keeping the rights to their own material.  They can promote to millions of people directly from their homes or studios. I want to see the day when labels can only offer ethical promotion and distribution deals, or else the musician will choose to walk away and do it themselves.   The laws thus far have failed to protect musicians, so they must take it upon themselves to learn what is true and what is right.  I truly hope that reading this will give some rising musician a chance to stop and think about how much power he or she really has.  I have chosen to share Chris’s story because his band made mistakes because they were too anxious and overwhelmed.  They had a choice to take advantage of the new opportunities of the industry and make their own rules, but they unfortunately were wrongly influenced into trusting that the good old label would help them out.  This does not need to happen anymore but I know it will.  As a library professional, I truly believe that information is more powerful than any lawyer or any amount of money.  It is my nature and my duty to arm people with information, and I hope that I have.  

 

 


For further inquiry...
gonzoxinjustice

Chris's story is a little more current than the norm because he was actually able to see an enormous income from his digital record sales BEFORE he signed to the label.  In the old days bands would go directly to the label to start selling their music so they could never really begin to comprehend what kind of revenue they were bringing in for everyone else but themselves.  Chris's story is also unique in that he is not having issues with a major label, but an independent label.  This is up for debate, however, since a major label is his "distributor" (whatever scam that is suppose to imply).  When all is said and done, recording contracts are no better than pyramid schemes that always place the artist at the bottom of the pyramid.
I have found some more information on the subject:
In this article in Huffington Post, Jeff Price (founder of Tunecore) cites Chris's band for selling 25,000 copies of a single in 45 days (in the good ol' pre-label days).  It is a great article regarding how music has changed, and how the labels are becoming less necessary to the industry:
http://www.huffingtonpost.com/jeff-price/the-democratization-of-th_b_93065.html

Here is another article that was written at the same time as my own (very recently).  It is from a technology discussion website.  It is about the labels' claim that they can not accurately track record sales, while other industries have been able to accurately track sales and revenue with basic technology for many years:
http://www.techdirt.com/articles/20090619/0323015288.shtml
This site also hosts other articles on the subject:
http://www.techdirt.com/articles/20080711/1439371651.shtml
http://www.techdirt.com/articles/20090602/2308085105.shtml

One last article you should read if you are interested is a speech that Courtney Love gave at an online entertainment conference back in 2000.  It is a little outdated but still very relevant.  She spoke about who the "real pirates" of the music industry are:
http://archive.salon.com/tech/feature/2000/06/14/love/

I hope this information gives you a good idea as to how this industry is operated!
Thanks for all the support <3




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