What They'll Never Tell You About the Music Business

by Peter M Thall

  THE IMPORTANCE OF THE MIX: MIXTAPES

  The mix can make a huge difference in hip-hop. Mixers are not always paid royalties, but a simple remix of a commercial release, for radio purposes only, can transform a work. Enormous amounts of money are at stake here. Do you like a particular pop song? Change one chord and you have a hip-hop song and a killing. The music “bed” is different. Then a rapper “raps” on it, thereby transforming it into a cutting-edge track. With the addition of some musical elements, such as strings, you have hip-hop. (Sometimes I think of the joke about ravioli as a metaphor for hip-hop. Two square noodles and a piece of cheese constitute no more than just that; twist three corners and you have two square noodles and a piece of cheese with three ends twisted. But twist the fourth corner, and voilà—ravioli!) Drake, and many other urban artists in recent years, have discovered the value of the mixtape. The appeal to the public is that these compilations of music are created by individuals who are not connected to the record company. Sometimes the mixers/DJs are not even known to the artists. Yet they constitute a valuable tool in addition to those described in chapter 9. But this time they are tools not of the label but of the team identified with the artist—even if the mixers are not officially associated with the artist. There are undoubtedly copyright infringement issues raised by these activities, but most artists suffer the impingement into their area of artistic control on the theory that cutting edge, new, and different outweigh the technical arguments offered by their labels or lawyers. Many artists support a variety of mixtapes being introduced into the marketplace even before the artist’s official album is released. The tease alone serves an important promotional purpose.

  CAREER CEILINGS

  With a few notable exceptions, a successful career is as difficult to achieve in the hip-hop world as in other mainstream genres. The audience for all pop genres is very fickle. Its fondness for a particular artist or “look” or “sound” can die as rapidly as it was born. And, as noted above, tour success has in the past eluded most rap/hip-hop artists. Again, there are exceptions, and the phenomenal touring success of hip-hoppers starting with 1999’s Hard Knock Life Tour and the Up in Smoke Tour of 2000 promises venues and outlets not only for known acts, but for up-and-comers as well. It is, after all, show business, and the more that the proponents of the genre get the chance to communicate their art to others, the more it will be fine-tuned to fit the needs of the population and the more it will reflect the population’s own needs, wishes, desires, and fears—a nice return to the point in the circle from which it began.

  HIP-HOP AND POP CULTURE

  Hip-hop musicians are idols and role models not just to black kids, but to white suburban rich kids as well. Identifying with hip-hop raps is the ultimate rebellion for white kids.

  Some hip-hop romanticizes killing, drugs, misogyny, and bravado, in many cases using language of jarring crudeness. Yet hip-hop, as an expression of rebellion and the conflict between generations, is no different from a lot of popular music from the 1950s or 1960s or just about any other decade before or since. The manner of expression has changed, and the force from which the expression gains its energy certainly has different origins, but the melding of music, yearning, anger, and politics reflecting cultures, trends, and styles spins a common web. Certainly the birthplace of hip-hop and rap was the ghettos and projects of urban centers in America. But the characteristic rawness of this genre is not unique to the inner cities.

  Almost twenty years ago, the (white) country singer David Allan Coe recorded two underground albums of songs that are considered to be among the most racist, misogynist, homophobic, and obscene songs ever recorded. Ironically, at the beginning of the new century, the white rapper, Kid Rock, invited Coe to open his acts for him. Coe’s music has taken on a new life through the Internet and through the welcome that the new “interpreters of the culture” have given it.

  Currently, in the truest tradition of the music business, hip-hop artists and their audiences are beginning to embrace all sexes and all cultures. Women artists, for example, have quite publicly and vocally urged a diminution and even a cessation of misogynist features of hip-hop. It is no coincidence that Destiny’s Child, a female group, was VIBE’s Artist of the Year in 2000 or that Beverly D’Angelo has risen in profile to present the women’s response to the “booty shaking” that is rampant in male hip-hop. By 2005, VIBE was honoring Mariah Carey for her “Emancipation of Mimi.”

  BUSINESS MANAGEMENT AND THE MANAGEMENT OF BUSINESS

  Rappers and hip-hop artists in general are no different from other artists in that they hardly ever listen to their business managers. This behavior creates an environment where it is simply a matter of time before taxes and debts will overwhelm the artist. There is little that a business manager can do to help the artist avoid judgment day; the bankruptcy laws are around, but they have been seriously diluted. Further, declaring bankruptcy is not a panacea. If an artist can convince the bankruptcy court to allow him or her to walk away from most debts, the consequences will be felt for many years to come—certainly for the remainder of the artist’s “youth.” And hip-hop artists who play in the financial world must wake up to the fact that the game has rules and that there may be tragic consequences if they don’t take steps to guard against the day when their music-generated earnings begin to dry up.

  Rappers, even more perhaps than their counterparts in other genres, must pay attention to their financial security. Often they do not have family resources to fall back on. Lacking a college degree, they may not be able to make a good living outside of their chosen profession. Their music is less likely than mainstream music to be picked up for Broadway shows, for film and television soundtracks, or for commercials, etc., as more mainstream music is. Finally, the incredible speed with which their genre evolves breeds obsolescence.

  One money-earning solution for many rappers, MCs, and hip-hop artists who have signed exclusive agreements to provide services either to a record company or to a particular project is to do side projects without the knowledge of their record company (or the business manager or the lawyer for that matter). The financial equivalent of sneaking a smoke or hiding from Mom may or may not catch up with them, but there are a lot of more traditional, and safer, ways to accumulate capital and maximize earnings.

  Whether you are a Wall Street wunderkind, a young classical pianist, or a band of underage rockers—or rappers—you need advice from trustworthy representatives: lawyer, business manager, personal manager, whomever. It is these (mostly state-licensed) professionals who are qualified to provide guidance and to protect you from grasping fans, producers, record companies, and, yes, even family members. Hip-hop artists and rappers are no different, yet it takes a special professional to understand these young people and care about what they have to say. Fortunately, there are a growing number of lawyers and business managers who practice in this field and who believe that to represent hip-hop artists is no less a privilege than to represent any young creative person.

  THE CHANGING IMAGE

  Across the spectrum of hip-hop artists, managers, and producers, a number of individuals have achieved considerable financial success, an ascendancy that automatically makes them once removed from the world of the streets. Others have deliberately turned away from the violent, antisocial, “thug” image cultivated by some of the genre’s most visible icons. Before Destiny’s Child broke up, they were actively involved in raising awareness and funds for the National Alliance of Breast Cancer Organizations and the National Breast Cancer Coalition, and I understand that their members retain their commitment to this cause. Common, a Chicago-based hip-hop musician, has set up a foundation, the Common Ground Foundation, which raises money to be spent on such things as instruments, travel, computers, and post–high school tuition for low-income youths. Talib Kweli rejects the hustler/thug image out of hand. He uses the medium—which he calls “alternative music”—to entertain, yes, but he also uses it to “bring information and to promo
te literacy and multicultural education in Brooklyn.” This changing image is not, unfortunately, universal. According to rapper-turned-activist Chuck D, “Hip-hop is caught up in a time where one’s worth and status are contingent upon money rather than a genuine love for the music. The degradation of women and the ubiquitous use of the N-word are not what…Afrika Bambaata, Kool Herc, Grandmaster Flash, and all the pioneers started way back.”

  CONTRACTUAL ISSUES

  Hip-hop artists, and their representatives, must be cognizant of specific contract issues that exist only in the hip-hop field. For example, while most rock groups are self-contained and are largely, if not totally, responsible for writing the songs they perform and record, in the hip-hop world, it is equally customary for most, if not all, of the songs to be written and controlled by others, in whole or in part. In the urban world, therefore, one needs what is known as “outside protection”—that is, protection from the contributors of the songs so that they will (1) license the first use of the songs in the first place, and (2) license them at a rate and according to the provisions of the artist’s controlled compositions clause in the artist’s agreement with his or her production company or record company. Failure to agree on splits (see chapter 14) in time for royalty accounting periods—or ever—will merely result in the record company’s holding all royalties. If you don’t think that this is significant, at one point, the US record companies were holding over $300 million in royalties due music publishers and their writers because either they were not advised with finality as to what the agreed splits were, or because they had no recent address to which royalty statements and payments were to be sent.

  Guest Artists

  Remember that when a record company brings in a guest artist who has to write his or her own verse, the principal artist’s record company cannot give the guest artist–writer a part of the copyright—only the original authors or their publishers (if they are signed to publishers) can. However, since the principal artist’s record company has a stake in the result, the guest artist can make this a condition of his or her agreement to participate. One might think that when an artist (or record company) calls in a guest artist, this issue will have been dealt with. Often, however, it has not. Such issues are often worked out over time, but the legal fees (for all of the parties) can be enormous. It has become customary in recent years for everyone involved in the production of a song to share in the authorship credit (if not the actual authorship) in some proportion depending on the power of the respective parties. When an artist is “featured” on another artist’s record, even when one is significantly more important than the other, it has also become customary that the two artists and their record labels merely “swap” services with each other, often without a royalty being paid to the artist providing the services. The mutuality of spirit is welcome in a world which is often characterized by adversity.

  Remixes

  Another situation often arises now that remixes have become big-ticket items that record companies have found can increase record sales. The producer of the remix receives a fee, but not always a royalty. The theory is that the producer has entered the situation too late in the game to claim a “producer” share in the income of the record. This is wrong, but it is the custom. Again, this issue should be dealt with in advance if the remix producer is going to have a chance for success in seeking a royalty participation. The producer who waits will run into enormous resistance and expense—and, most likely, will fail.

  Interludes: Their Impact on Mechanical Royalties

  Most hip-hop albums are full of what are known as interludes or ad-libs (usually described as musical elements one or two minutes in length or less), and record companies simply will not pay for them. If a record contains five to ten of these interludes, the costs of obtaining the rights from third parties will reduce the artist’s royalties considerably, and may even absorb all or a major part of them. Even if the producer, and not the artist, is responsible for the interludes, the artist—however excellent he or she feels the choices may be—will ultimately pay for them. Or, if the party contracting with the record company is a production company rather than the artist, the production company will also be hit with the cost of incorporating these interludes in the recording. Whether it is the production company or the artist who pays, there are only two ways to avoid this debacle: (1) raise the mechanical cap, or (2) cut way back on the number of interludes. Otherwise, what appears to be merely a mechanical royalty issue will end by actually reducing the artist’s (or production company’s) royalties payable on the sale of records containing those interludes. If you don’t resolve this issue at the contract-negotiation stage, your royalty flow will be littered with land mines that may blow up in your face.

  THE RAP COALITION: SELF-HELP EXEMPLIFIED

  Go to the website www.​wendyday.​com and surf the various websites recommended on the site. This accumulation of sites (crossed with Ms. Day’s original, www.​rapcoalition.​org, provides something that rockers and blues artists of the past were never offered: the information necessary to control their own fate! The not-for-profit organization, Rap Coalition (www.​rapcoalition.​org) provides help to fledgling artists (and those not-so-fledgling artists who did not do it right the first time) in the form of management guidance and legal services. Here is an extraordinary example of how the Internet is helping not only to disseminate useful information, but also to break the walls of secrecy that have for so long and so effectively kept doors from opening for young artists. And, although Dr. Dre and Eminem have publicly questioned the value and impact of the Internet, they, too, are benefiting from Internet exposure.

  It should be noted that these sites, as well as others that exist to help artists maximize their chances of success, have a bit (okay—more than a bit) of a bias against record companies which can skew the credibility of the advice. However, as I have pointed out more than once, record companies serve a genuine and often underappreciated purpose in developing the careers and selling the records of artists and so, as with any resource, one must weigh the information carefully in order to make an informed decision.

  For example, one of the sites, which does some calculations on the bottom-line “mathematics” of the record business, concludes that even an artist whose records may have sold hundreds of thousands of copies is working for about $12 per hour. Even if this is not an accurate figure, it is undeniable that, given the long hours performing musicians put in, the average per-hour return is quite low. However, it is my hope that artists and their managers and other representatives will be able to use this information to enhance their negotiating capabilities rather than to give up entirely on an industry that, like it or not, has enormous global strengths and value.

  In any event, owning one’s own record company or Internet distribution service is not going to be everyone’s cup of tea. The wheel has been invented before, and probably better than most of us can reinvent it today. Each artist is different, and each artist has a distinct milieu and environment, so no one formula for whether to leave the traditional system or embrace it will work for everyone. Nevertheless, the information and advice provided by the Rap Coalition is well worth considering. This organization has established a division—Visionary Management—whose sole purpose is to act as a school for managers. In chapter 5, Personal Management, I noted that managers, unlike other professionals such as accountants and lawyers, are not trained by means of any consistent, approved, and universally respected school or method. The Rap Coalition and its progeny may prove to be an exception. Let’s hope so. As they say on their website, “We believe it’s time for hip-hop artists to take control of their own art form!” This is a truly out-of-the-ordinary organization whose sole purpose is to help hip-hop artists to control their own fate.

  HIP-HOP RULES

  Never, at least since Ira Gershwin, have words in song meant so much. Rap, after all, is talk. Ja Rule, a well-known rapper, says, “What else can you rap about [than] sex, violence,
and materialism.” Apparently a lot. Lyrics have taken on a much more vital level of meaning. Ira would be envious.

  But hip-hop is not really the sea change from rock and roll that it appears at first glance. Rebellion, women, the good life, the hard-knock life—these are still the staples of the music. Only the environment is new. And the expression.

  Given all of the congressional criticism of hip-hop, and the willingness of the major record companies to cave in to this criticism by censoring the music or placing warning notices on labels, it is actually quite remarkable that so much of what is expressed actually gets disseminated—whether through broadcast, podcast, traditional record channels, or downloads, which remain largely unlicensed and uncontrolled. While there remains a tendency for the majors to go with the sure thing, change is possible and indeed change occurs on a continuum that would perhaps shock our founding fathers. Mos Def, commenting on the corporate music industry’s practice of promoting the same overexposed, clichéd product, said, “If all you make available is acorns, people will eat the f*&$*n’ acorns.” Yet whenever the art of hip-hop—which after all is a reflection of our culture—is able to offer alternatives to the corporate-sponsored musical pabulum that dominates the charts, everyone wins.