What They'll Never Tell You About the Music Business

by Peter M Thall

  Advertising and publicity, of course, continue to have their place in the overall marketing of a record. But print advertising is not particularly effective in the music business, and radio and television advertising is prohibitively expensive. Other forms of publicity—such as interviews in trade magazines, appearances on television talk shows, or articles inserted into consumer magazines—all require a “story.” Beginning artists rarely have one that can be effectively publicized. Merchandising a new artist will not be very extensive—perhaps limited to delivery of posters and in-store displays to record stores, with no guarantee they will be used. Thus in most cases, radio promotion is the only viable route with which to bring an artist and the artist’s recording to the attention of eventual buyers.

  MARKETING TOOLS

  A well-intentioned record label executive might say, Here are one hundred things we can do to market you and your record:

  1. Arrange for in-store appearances.

  2. Get you mentioned in Hits magazine.

  3. Take ads in trade publications.

  4. Get you mentioned in Billboard.

  5. Send postcards to advise everyone of the impending release.

  6. Put stickers on the record and on telephone booths in towns where you have elicited interest.

  7. “Snipe” the city (put posters up on abandoned buildings).

  8. Bring you to conventions to perform.

  9. Utilize Broadcast Data Systems (BDS) and SoundScan.

  10. Hire an independent publicist.

  11. Do a video. We’ll post it on YouTube or SoundCloud.

  12. Do another video. We’ll post it on YouTube or SoundCloud.

  13. Get on a television show.

  14. Get a track of yours on a soundtrack to a cool movie or TV show.

  15. Send you to Europe and other foreign countries.

  16. Send you on tour in the United States.

  17. Hire independent radio promotion people in addition to those on our permanent staff.

  18. Take out ads in towns where you have fans to strengthen your core support.

  19. Send you on a radio promotion tour in the United States.

  20. Send you on a radio promotion tour in Europe and other foreign countries.

  21. Arrange for radio interviews by satellite to foreign countries.

  22. Arrange for an “event” with a flying pig balloon à la Pink Floyd.

  23. Host a number of “listening” parties to introduce your album.

  24. Hire ethnic-specific marketing people to reach your biggest fan base.

  25. Feature your record as the “Record of the Week” on our website.

  26. Co-op advertise your album (for example, by paying for one-half of Tower Records’ print ads in the Sunday paper).

  27. Prioritize your album by delivering it to key radio stations 120 days before the official release date so that upon release, you will have 40 parallel one-station ads (see “Airplay and Payola,” this page).

  28. Place your music on the Internet and digitally download “teases” to interest consumer in purchasing the record or listening to it via downloads or streams.

  29. Place a track in a TV commercial.

  30. Offer free downloads on consumer products.

  31. Offer free downloads or inexpensive album downloads for short periods of time via Amazon.

  32. Feature your band at a music convention/festival such as SXSW, Bonnaroo, Lollapalooza, or Ozzfest.

  33. Place a track on a video game.

  34. Create a video moment whose goal is to “go viral” on YouTube or VEVO. Gotye (“Someone I Used to Know”)—380,000,000 viewers—and Carly Rae Jepson (“Call Me Maybe”) 420,000,000 viewers—did it, why not you?

  35. Obtain feature articles in mainstream publications highlighting your being the cutting-edge artist of the moment. Especially useful in magazines with annual music features.

  36. Similar mentions on “What We’re Listening To” features.

  37. Provide opportunities for in-store performances at bookstores/cafes

  38. Obtain an interview at a music conference such as Music Matters, SXSW, MIDEM. This certainly helped Jason Mraz whose success in Asia-Pac territories had not yet translated in the United States.

  39. Obtain an add-on to a Sirius-XM channel such as “Coffee House.” Remember, they actually identify the artist. Jason Mraz was heavily featured on this channel in 2011.

  40. Obtain caller ring-back tones in new markets—this has helped enormously where it has been otherwise difficult to expand an artist’s commercial success into new territories.

  41. Compete on broadcast television shows such as American Idol, The Voice, even America’s Got Talent.

  42. Have someone manage your Twitter account to increase the number and improve the demographics of your followers.

  43. Try to obtain features on NPR or local public radio stations. In New York City, WNYC plays a portion of a song by a break, cutting edge, artist every morning and then advises its listeners as to when and where they can be seen live THAT NIGHT.

  44. Release your CD (album or single) by surprise, virally, to garner press attention (see Drake, Kendrick Lamar’s efforts in 2016).

  45. You get the idea.

  THE GOAL-ORIENTED CAMPAIGN

  These “hundred tools” are on the table at all times, and the senior record executive who oversees marketing, publicity, and promotion departments, and is charged with breaking the act or the album, will choose among them, and others. Yet the decisions will not always be tied to an agreed-upon goal shared by the artist and the record company.

  Instead of saying, “Here’s our goal; let’s apply the tools,” record company executives often say, “Look, here are our tools. Let’s apply as many as we can afford and see what sticks.” While everyone (including the artist and the artist’s manager and lawyer) is applauding the record executive for convincing the record company to apply any given tool (like a cutting-edge video), they often lose sight of the goal—if indeed any goal has ever been articulated, let alone agreed upon. And before the coda fades to black on the $100,000 video, an entire career may be lost. Indiscriminate application of marketing tools makes the record company no less the victim than the artist. Ironically, it is often the artist who has the creative ideas that actually push the record company in the wrong direction. A record company president once told me that his company’s marketing should be to the eventual consumers, not to the artists or their managers.

  This is top-down management, not bottom-up management, where goals are identified and money and labor are spent efficiently and effectively. To mount an effective goal-oriented marketing campaign in the music industry requires a fundamental familiarity with the practical side of the business. Yet the lawyers and business affairs executives of record companies, whose job it is to negotiate the many-faceted, intricate legal and financial relationships between the parties, are often light-years away from understanding how a record is sold—how the company can help an artist to succeed.

  It is very easy to work the next Kanye West record. It is nearly impossible to work the new “new band” record. How do you get the label to work the new band product after the first week, when it has sold only 200 units nationwide? And how in fact does the label arrive at the 200-unit number? Will it rely on SoundScan, which is merely a statistical sampling? Will it totally ignore sales at mom-and-pop stores or speciality underground stores, which is where any new band’s core fan base will begin to show interest? Will it recognize Internet activity as a barometer of things to come? If a record does not show a lot of sales activity in the first two weeks, not infrequently the label will give up on the record. Yet it is on these first two weeks’ activity that much, if not everything, that the artist has dreamed about for a lifetime, depends. One wrong format decision, one bad decision as to where the money is spent, and the artist is history.

  Identifying the goal, keeping your eye on it amid all adversity and turmoil, prioritizing functions, a
voiding distractions, managing time, capitalizing on opportunities—all of these are characteristics of the highly successful entrepreneur. And all of these are characteristics of the highly successful artist. Yet just as every artist is different from every other artist, the goals of every artist are different from the goals of every other artist, and the means toward those goals will differ, even among artists who share similar aspirations. For example, some bands do not really want to be a band; they just want to make five records every ten years for five decades. Others realize that their fan base is everything and that time spent in front of two hundred people at a time will go much further toward achieving their goals than doing an in-store appearance or radio convention visit three thousand miles away. Some do not aspire to have trade magazine ads and stories, but rather prefer to utilize “bounce-back cards” to establish a database of like-minded fans. The business side of things is anathema to those kinds of artists. Their goal is to be like Hootie and Phish—that is, to reach their fan base because it is to them that they have something to say, not to the readers of Time magazine or people who watch PBS programming. These bands’ methodologies have the intended design of making the record company irrelevant insofar as building a sales base is concerned. Michael Bolton actually held parties after his gigs, inviting fans to a hotel suite where beverages were served (nonalcoholic, I’m told). The purpose was not just to have a good time, but to use this unique opportunity to identify his true fans and to be able to contact them later—for example, on the release of an album, or when Bolton would be coming to their town or area again, maybe even a few years down the road. Then again, the methodology of a singles band may be completely different. A track on a movie soundtrack or placement on American Idol is golden to this kind of act.

  All artists are special. They have different attributes, different natures, and different missions. Some of these differences are addressed in one way or another in the contract. Most are not. The contractual domain provides structure and rules to the artist’s professional life. The practical domain is primarily concerned with the goal of success.

  THE RECORD CONTRACT

  The goal of “success” is never mentioned in the record contract itself, nor do artists’ professional representatives always think through contract negotiations with success in mind. Too often, the negotiations center on what to do in the event of failure—not success. Most recording contracts clearly state that no provisions be made regarding eventual sale of sufficient records to meet specific goals. Yet other than the ostensible artistic purpose of creating music, is it not the perceived goal of every artist to become a hit artist? Why, then, is the contract never couched in these terms?

  Suppose record executives and the artist’s representatives can agree on what makes a particular artist unique and then agree on which tools should be utilized to promote that artist. Do any of the parties concerned know what the contract says on the subject? How often do the hundreds and thousands of music industry people involved in an artist’s career make marketing decisions on the basis of the contract? I would suggest hardly ever.

  Maybe they don’t want to know what the contract says. Does the manager disclose to the record company just before a decision about tour support funding is due that a (least important) member of a band has just quit the band? After all, the contract will require that a notice be sent within a set number of days after the occurrence, but you can be sure it will not be sent even if the manager or attorney is aware of the contractual requirement.

  Do the delivery requirements under the contract jibe with the likely release date six months later? Has any record ever been delivered on time? Has any marketing director ever said, “Don’t deliver the record now; we can’t do anything with it until the second quarter of next year.” On the contrary, no record company business affairs lawyer ever misses the opportunity to notify an artist (certified mail, return receipt requested, with copies all over the place) that he is one hundred days late in delivering the record and therefore the contractual consequences will take effect. (For example, the mechanical royalty rate in effect when the artist “should” have delivered will apply, not the mechanical royalty rate in effect when the artist “did” deliver the record.) Ironically, when the record is actually delivered, the timing is often perfect for the record label to release the record. In other words, the delay may have worked to the record company’s advantage. Yet the contract penalizes the artist for late delivery.

  Is all of the money that is being charged to the artist being applied to the correct account? How does the actual way in which the marketing budget is structured affect the profit-and-loss statement of the record company with resultant decisions as to whether to pick up an option or to not throw good money after bad? What does the contract say about that? What mechanism does the contract provide to resolve the multitude of issues of this nature that arise during the course of an artist’s career?

  If the artist’s team (manager, lawyer, business manager) believes that the contract does not contain adequate provisions for promoting the record, does the team build another 30% over-budget contingency into the recording fund to ensure that it can access this money when it is needed for promotion—not for recording? If not disclosed, is this ethical? Is it dangerous? Is it tantamount to stealing? Do the potential disadvantages of this kind of practice—for example, setting a tone and establishing a reputation that might hurt the artist and the artist’s team—outweigh the potential advantages?

  The label will direct its own overworked publicity department to apply its necessarily generic styles to the artist’s album (although rarely to the artist’s “career”), and if the publicity department cannot generate much press, the artist is usually blamed. It is nearly impossible to restructure a label’s departments, least of all the publicity department, to custom-fit a particular group. It is a rare contract that will commit a record company to covering the costs of an independent publicist to market an artist’s record in every important market.

  Much of what is in the contract is never enforced. Here’s just one among many possible examples. The last paragraph of section 11.03 of Sony Music’s form agreement requires that an auditor hired by an artist to examine Sony’s books may not be at the same time engaged in “any other examination.” Paragraph 11.03.1 goes on to say:

  The preceding provisions of this paragraph will not apply if Sony elects to waive the provisions which require that your representative shall not be engaged in any Other Examination.

  Originally, these clauses were presumably inserted to frustrate the auditor who commences an audit for one client, sees an error affecting other artists, calls the other artists, and says, “Hire me for a third of what I can dig up for you, and I will audit your account at the same time as I am proceeding with the audit I have just begun.” At the request of my clients’ auditors, fearing the potential consequences (especially to themselves) of this provision, I have repeatedly invested hours and hours of time negotiating modifications to such clauses. The fact is that the likelihood of their ever being enforced is nil, and so, practically speaking, my efforts are a waste of time and money.

  For a seventy-page (or more) document that costs between $15,000 and $20,000 (or more) in legal fees to negotiate, that is a sad commentary on the practicality and efficacy of the services that the label forces the artist to obtain and pay for.

  Tour Support

  Having a provision in the contract committing the record company to provide deficit tour support guarantees that a band will have the chance to perform live. It means that the record company will absorb losses associated with an artist’s tour; in essence, it is a subsidy. Customarily, record companies are very hands-on with respect to planning the tour, selecting the cities visited and the clubs played, budgeting, etc. If the budget is, say, $50,000 for a twelve-city tour, yet projected gross income is only $20,000, the record company promises to bear the burden of the $30,000 balance. The provisions that establish this in a typical contract are
no different from one artist agreement to another, and most stipulate that such support will be provided for a tour schedule that is approved by the record company and the artist (so-called “mutual approval”; see below). Although such a provision may be totally satisfactory for many artists, for some it may not be. For example, the artist and the artist’s manager may disagree with the record company as to what tour schedule will best achieve the aims of that particular artist and will differentiate the artist from other artists. The record company’s “approval” of a tour plan is not only irrelevant in this situation, it is a waste of money—money that might more effectively be spent elsewhere, or saved until an appropriate tour opportunity comes along.

  Here’s an example that concerns a new band that was given the opportunity to be the opening act for a well-known group. Now, it is axiomatic that any good new band will be bringing to the stage a style and an interpretation that is unknown to the public, and the more talented and innovative the new group, the more likely it is that the band’s style will take some getting used to. In fact, the better the new band, the more likely it is to be dismissed by an audience with an established taste. This is why radio, with its repeat-play capabilities, is still so important in introducing new art to the public. In this case, the new group knew that the audience would be likely to hoot them off the stage, but the record company and the agent thought that partnering with the famous band and playing in front of large audiences would be a great coup. The record company agreed (joyfully, I might add) to lend its contractually agreed-upon financial tour support to that tour and to that tour only. As it turned out, not only was the audience impatient to hear its favorite act, it was totally turned off by the nature of the new band’s music. You can imagine the frustration of the artist and manager when a few months later the perfect tour opportunity materialized at a festival with a number of like-minded bands whose much larger audience was complementary to our—now depressed—new band. Why depressed? Because there was no money left with which to introduce the band to the very people who would have liked them and would have bought their records. To add insult to injury, the wasted tour support money was logged as an additional advance against the artist’s account.