thewayne | Behind the doors of the music industry

Lots of music industry stuff!

An accounting analysis of what musicians get paid! (it ain't much, on the order of 2%). It breaks down and "explains why huge megastars like Lyle Lovett have pointed out that he sold 4.6 million records and never made a dime from album sales. It's why the band 30 Seconds to Mars went platinum and sold 2 million records and never made a dime from album sales. You hear these stories quite often."

http://www.techdirt.com/articles/20100712/23482610186.shtml

http://news.slashdot.org/story/10/07/13/1737224/RIAA-Accounting-mdash-How-Labels-Avoid-Paying-Musicians

Former Rolling Stone editor and author Fred Goodman was looking to write a book on the music undistry from an executive insider perspective, he chose Warner Music CEO Edgar Bronfman Jr. He had amazing access and wrote a book, this interview between Wired and Goodman was interesting.

One very good excerpt: "The sorry fact was that record executives had no personal financial incentive to be forward-thinking. In an industry where bonuses were based on chart performance and market share, incentives were tied to creating hits and not to addressing the fact that the CD business was being rendered unnecessary and needed to be reinvented. With a lethal myopia, the industry went around its day-to-day business and made sure all its windows and doors were locked, completely indifferent to the fact that its house was on fire."

http://www.wired.com/epicenter/2010/07/tell-all-author-discusses-music-industry-in-crisis-part-1-of-2/all/1

Part 2 is not yet up.

This interview that Wired conducted with Tommy Silverman, the founder of Tommyboy Records, gives more information along with discussing ideas that they're hoping will improve the situation, such as 50/50 partnerships with talent so that if the talent doesn't make money, the label doesn't make money, and vice-versa. I think it looks like a good idea, whether or not it would work in practice remains to be seen.

The standard industry practice is that talent get money when they sign with a label, they get money when they give them an album, and that's about it. The costs for the album are so front-loaded that they'll pretty much never be recouped, thanks to creative bookkeeping. So if they're not doing an album every 18 months, they've got to hit the road and sell concert tickets, which might enrich Ticketmaster more than the artist.

"There were only 225 rookie artists in 2008, and less last year, that broke 10,000 albums for the first time — not that that’s the only arbiter of success, but it’s one of them. That year, there were only 10 new artists that broke through by doing it themselves. If you can’t sell 10,000 albums in digital and physical combined, you’re still relatively obscure."

http://www.wired.com/epicenter/2010/07/tom-silverman-proposes-radically-transparent-music-business/all/1

And finally, someone got ahold of the RIAA's IRS Form 990S, which shows all executive compensation and lots of other goodies.

"So all in all, for a 3 year period, they spent around $64,000,000 in legal and investigative expenses to recover around $1,361,000." Interesting business model, that.

http://www.p2pnet.net/story/41631

http://recordingindustryvspeople.blogspot.com/2010/07/ha-ha-ha-ha-ha-riaa-paid-its-lawyers.html

http://yro.slashdot.org/story/10/07/13/2024228/RIAA-Paid-16M-In-Legal-Fees-To-Collect-391K