“The experience we had with Record-Play was brilliant, we needed a very specific piece of music and had a very short space of time to find it,” says Jezz Vernon, Head of Marketing for Metrodome Films UK. “Music Hub generated selection after selection and within 48 hours we’d found the perfect track.”

“We believe this initiative allows businesses to re-assess the ways in which they use music in production,” says Daniel Cross, Managing Director of Record-Play Ltd. “We have negotiated a low cost structure which means companies, even those on tight budgets, don’t need to compromise on quality.”

The full catalog of music in the Hub is available for anyone to browse and stream, no registration is necessary. For users who do choose to register, tracks become immediately downloadable for testing to picture or licensing. To explore the site visit: www.record-play.net/musichub.

Why live revenues have grown so stridently is beyond the scope of this article, but our data – compiled from a PRS for Music report and the BPI – make two things clear: one, that the growth in live revenue shows no signs of slowing and two, that live is by far and away the most lucrative section of industry revenue for artists themselves, because they retain such a big percentage of the money from ticket sales.

(It’s often claimed that live revenues are only/mostly benefitting so-called ‘heritage acts’. Unfortunately, the data doesn’t shed any light on this because live revenues are not broken down by type of act, gig size or ticket price.)..

It’s interesting too that, overall, industry revenues have grown in the period – though admittedly not by much – which arguably adds strength to the notion that, when the BPI releases its annual report claiming how much ‘the music industry’ has suffered from the growth in illegal file-sharing, what it perhaps should be saying is how much the record labels have suffered.

The graph the record industry doesn’t want you to see (via We Make Money Not Art)

You don’t want to build an infrastructure if you have no use for it, and therefore, no means to support it. In simpler terms, you don’t want “dude” hanging around the rehearsal space being “managerial” by drinking your beer and telling you to work on the second verse of the song, while he hits on your girlfriend.
Instead, the manager must be actively engaged in furthering your career.
In order for the manager to do this, he needs tools to work with.

The first tool is the demo.
The second tool is some kind of fan base, which is typically built by playing live. Certainly, there is no absolute order to the progression, and many bands have management that helps guide the band long before they have demos or play gigs.
But for the most part, you’re going to have a hard time attracting a manager and keeping him busy if you don’t have some groundwork already laid. There are as many types of managers and styles of management as there are types of bands and styles of music.
This chapter presents some of the more common ways in which bands connect with management, and what role management plays in the artist’s career. It is not a set of absolute rules.

The Three “Must Have’s” of Management
However you and your manager come together, and whatever role the
manager finally ends up playing in your career, there are three characteristics that a manager must have in order to help your career effectively—both before and after you get a record deal. Those characteristics are passion, connections, and funding. If your manager has passion, he may be able to succeed without the others. However, if your manager is without passion for your music, your chances of long-term success will be reduced. The best-case scenario is, of course, having all three.

Beginning-Level Managers
At a certain point—after you’ve made a demo, played some gigs, and started to develop a following—you may be approached by someone who is interested in managing you. Most likely, the people approaching you at this
early stage of your career will be friends, family, fans, or people who work at the venues where you perform. Some of the most successful managers in the business originally came from this pool.
Bertis Downs, for example, began working with REM when he and members of the band were college students together in Athens, GA. Brian Epstein worked in his family’s furniture store that had a little music division in it when he was asked to go see a band. That band was the Beatles, and he became their manager. Rusty Harmon was a college student and an intern at a management firm, who showed a young band around when they came through town. You may have heard of this band, since they’ve sold about a gazillion records and won two Grammys under Rusty’s management: Hootie and the Blowfish.

Why Passion is Important
Friends, fans, and families who become managers typically have one massively important thing in common: they all are extremely passionate about the artist they work for.
Typically, they feel that the artist is great, and while they often don’t have a surplus of connections or capital, they believe they can make up for this through sheer force of will fueled by their passion, which they have in abundance. As mentioned above, this can and does happen. Passion, combined with energy (often youthful) is a very potent mix that often knocks down many barriers and allows an artist to experience real career growth. Managers in this type of situation often believe that lacking the experience, knowledge, connections, or money actually allowed/forced them to try things that other more “experienced” managers would have dismissed.
In so doing, they createinnovative strategies that further the idea of career development. Necessity is the mother of invention, and I would add, it is also the stepmother of innovation. The beautiful thing about the record business is that there are very few rules.
When a manager is passionate enough to make the artist succeed—no matter what rules they have to ignore, break, or rewrite—that is often the best type of manager to have.
Such relationships force the band and management to work much more closely than they would in a more traditional management/artist role. This can create an open and honest relationship from day one. In other words, because a beginning-level manager is not going to be able to say, “I’m going to get you touring with this other artist I also manage, and I’m going to set up a showcase for you to perform in front of my A&R friend from Sony,” he or she must involve you—the artist—in the decision/planning. Instead, they must say, “Listen, let’s figure out what our resources are and begin building something in an organic fashion.”
This method, while perhaps being a slower route, is a good one, as it directly and closely involves you, the artist, in the process of your career development. A close relationship often has the positive side effect of being an honest relationship. Closeness and honesty are imperative, and will give you a far better chance of avoiding the all-too-common litigating over accused improprieties, resulting from the artist not knowing what the manager is doing, but believing that, whatever they’re doing, they ain’t doing it honestly.

Professional-Level Management
Passion is the key ingredient to making an artist management relationship work. If you find someone who has real and genuine passion and isn’t a complete derelict, you will be better off than many. Ideally, however, your manager will also have the connections and the funding.

The Importance of Connections
While it is fine (and often refreshing) for a manager to have a low-key persona, they must be able to sell themselves and, more importantly, the artist. In so doing, they will build connections. The record business is one
where you live and die by how connected you are. You can make the greatest music in the world, but unless you can get it heard, it doesn’t much matter.
Simply put, at all stages in your career—from getting an A&R person to listen to your demo, to getting your video played on MTV, to getting a gig to perform at the Super Bowl Halftime Extravaganza—it is often connections
that make the difference.

The reality is that the strength of the connection is frequently as powerful as the strength of the music. There are many examples of someone who makes mediocre music but is well connected getting a record deal before an
artist who makes great music but has few connections.
To get a record deal, you often must develop your connections from the ground up. The process can be accelerated if someone on your team, in this case the manager, has connections.
A fundamental role of the manager is to expose his artist to more people.
Therefore, managers spend much of their time casting a wide web around all the corners of the industry. In so doing, they develop relationships with booking agents, record labels, radio stations, press, and so on. When you
partner up with a manager, you are not only getting this person’s individual expertise, energy, and hopefully, passion. You are also gaining access to their connections and relationships. It is this quality that will catapult your demo from the bottom of an A&R person’s pile to the top. These connections help in many similar ways, from having your music heard by music supervisors at advertising agencies to introducing you to a music publisher to securing you an opening slot on a coveted tour.

Connections are built over time and must be maintained. You need to carefully examine any potential manager in order to determine just how broad, good, and most importantly, applicable their connections are to the music you are making. Much in the way that you research appropriate labels for your music, you must do the appropriate diligence when you
are considering your manager. Understand also that connections can and do come in organic fashions. It is perfectly acceptable for you and your manager to have a symbiotic relationship in which your manager benefits
from his association with you, and vice versa.

The trick is being able to make connections that have real meaning to your career. If you have a manager who is very well connected but not in any way that is appropriate to helping advance your career, they might as well not have any connections.
If this is the case, make sure they at least have … money.

The Importance of Money: How Management Gets Paid
This brings me to my last essential management criteria: capital. First, you need to understand a bit about how managers make their money. Typically a manager will receive a commission—usually 15 to 20 percent—of all of the income that you generate (the gross). This includes money from gigs, money paid to you from a record label as a personal advance against royalties (typically, not from money advanced by a label for you to record your record), money from merchandise, income from your music being used in movies or commercials, and any other source of income you generate as an artist. It is therefore in the best interest of the manager to leverage all of those connections I mentioned above to help you generate as much money as you can, which of course, generates more money for
them. This is capitalism at its finest, and when it works, it works great for everybody.
The problem is that young or unestablished artists typically take quite a while to generate any revenue. Also, these artists typically don’t have any money of their own, so the management is left to spend their own money in order to develop the band before any money comes in. Because of this, you will occasionally see management securing other pieces of the artists’ potential income as a kind of collateral against the money and time they are putting up. Sometimes, for example, management will acquire some part of the artist’s publishing—in other words, a piece of the equity in the
copyrights of the songs.

Managers and Publishing
This means that when these songs begin generating royalties, the manager will be paid a percentage of the money. Managers do this because they often defer their commission while spending their own money. They have no guarantee that they will ever recover their investment. This practice has largely been frowned upon (by both artists and managers), and was seen only occasionally in the past. However, I’m seeing it happen more and more, and I believe it will become even more of a common practice in the future.
As an artist, you must seriously debate whether parting with your publishing, in order to provide a sort of insurance to a manager, is the right thing to do. My opinion is that it is usually the wrong thing to do. As we will see in the publishing chapter, I do not believe that you should hold on to your publishing at all costs. Rather, I feel that giving up some part of
your publishing is frequently essential to building a successful career. With one caveat: Whoever you assign any part of your publishing to must be able to do something with it. By this, I mean they must be able to “work” your publishing to generate awareness about you and money for you. If they cannot do this, do not assign any part of your publishing to them.
Therefore, if a manager is requiring you to assign some portion of your publishing to them, you should only do this if you feel the manager is going to actively engage in working your songs.

Of course, it may not be this simple for you, especially if you don’t have a lot of options. You may feel that the prospective manager can help your career in many ways, and that it would be foolish to miss the opportunity
to have him or her represent you by clinging too tightly to your publishing.
You may be right.
Your publishing is valuable. Part with it with caution, and only if you’re getting something of real tangible value in return.

It’s Money that Matters
Money is a significant factor in creating effective artist/manager relationships.
The manager is spending money, hoping for a return on investment.
Publishing is one way to hedge that bet. Of course, managers who have no money will not be able to offer you much for your publishing.
Managers who have no money have a hard time being effective. There are always expenses involved in getting a band signed: recording costs, gas for the van, fan mailings, travel, guitar strings, and so on. It all adds up. Of course, management doesn’t have to pay for any or all of these things. But remember, they can’t make any money unless the band is making money, so they usually opt to pay for these things and others so that the band has a
better chance of getting signed.
Even after you get signed, management is often the fountain of money.
For instance, an artist and manager may determine that they need an independent publicist because they feel the label’s publicist (if it has one) can’t do an effective job due to workload, the label’s priority scheme, or whatever. The label is not obligated to pay for this (though often they do), and so the band and management are left to decide whether or not the potential added exposure they would get from a publicist is worth the outof-pocket expense.

Many times, in a situation such as this one, the band itself is not generating enough income to pay for something like this, so the management foots the bill. Theoretically, management will be reimbursed for these costs once the band does start generating some money. If neither the band nor the management can afford to pay, it really is the band that suffers.
Good managers understand that new and developing artists are much like startup businesses. The first couple of years (or records) typically are money losers. The hope is that after the painful initial period has ended, there will be a financial reward that will recoup all the early losses and then some. This is why managers will fund an artist’s career at the early stages—and, in fact, sometimes well into an artist’s career.

by Berklee Music

The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the shit. Eventually, one of them capitulates, and there’s only one contestant left.

He reaches for the pen, but the Lackey says “Actually, I think you need a little more development. Swim again, please. Backstroke”. And he does of course. Every major label involved in the hunt for new bands now has on staff a high-profile point man, an “A & R” rep who can present a comfortable face to any prospective band.

The initials stand for “Artist and Repertoire.” because historically, the A & R staff would select artists to record music that they had also selected, out of an available pool of each.

This is still the case, though not openly. These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave. Lyle Preslar, former guitarist for Minor Threat, is one of them. Terry Tolkin, former NY independent booking agent and assistant manager at Touch and Go is one of them. Al Smith, former soundman at CBGB is one of them. Mike Gitter, former editor of XXX fanzine and contributor to Rip, Kerrang and other lowbrow rags is one of them.

Many of the annoying turds who used to staff college radio stations are in their ranks as well. There are several reasons A & R scouts are always young. The explanation usually copped-to is that the scout will be “hip to the current musical “scene.” A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences.

The A & R person is the first person to make contact with the band, and as such is the first person to promise them the moon. Who better to promise them the moon than an idealistic young turk who expects to be calling the shots in a few years, and who has had no previous experience with a big record company.

Hell, he’s as naive as the band he’s duping. When he tells them no one will interfere in their creative process, he probably even believes it. When he sits down with the band for the first time, over a plate of angel hair pasta, he can tell them with all sincerity that when they sign with company X, they’re really signing with him and he’s on their side. Remember that great gig I saw you at in ’85? Didn’t we have a blast. By now all rock bands are wise enough to be suspicious of music industry scum.

There is a pervasive caricature in popular culture of a portly, middle aged ex-hipster talking a mile-a-minute, using outdated jargon and calling everybody “baby.” After meeting “their” A & R guy, the band will say to themselves and everyone else, “He’s not like a record company guy at all! He’s like one of us.” And they will be right. That’s one of the reasons he was hired. These A & R guys are not allowed to write contracts. What they do is present the band with a letter of intent, or “deal memo,” which loosely states some terms, and affirms that the band will sign with the label once a contract has been agreed on.

The spookiest thing about this harmless sounding little memo, is that it is, for all legal purposes, a binding document. That is, once the band signs it, they are under obligation to conclude a deal with the label. If the label presents them with a contract that the band don’t want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength. These letters never have any terms of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes.

The band cannot sign to another laborer or even put out its own material unless they are released from their agreement, which never happens. Make no mistake about it: once a band has signed a letter of intent, they will either eventually sign a contract that suits the label or they will be destroyed. One of my favorite bands was held hostage for the better part of two years by a slick young “He’s not like a label guy at all,” A & R rep, on the basis of such a deal memo.

He had failed to come through on any of his promises [something he did with similar effect to another well-known band], and so the band wanted out. Another label expressed interest, but when the A & R man was asked to release the band, he said he would need money or points, or possibly both, before he would consider it. The new label was afraid the price would be too dear, and they said no thanks. On the cusp of making their signature album, an excellent band, humiliated, broke up from the stress and the many months of inactivity. There’s this band. They’re pretty ordinary, but they’re also pretty good, so they’ve attracted some attention.

They’re signed to a moderate-sized “independent” label owned by a distribution company, and they have another two albums owed to the label. They’re a little ambitious. They’d like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus — nothing fancy, just a little reward for all the hard work. To that end, they got a manager.

He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but it’s only 15%, and if he can get them signed then it’s money well spent. Anyways, it doesn’t cost them anything if it doesn’t work. 15% of nothing isn’t much! One day an A & R scout calls them, says he’s ‘been following them for a while now, and when their manager mentioned them to him, it just “clicked.” Would they like to meet with him about the possibility of working out a deal with his label?

Wow. Big Break time.

They meet the guy, and y’know what — he’s not what they expected from a label guy. He’s young and dresses pretty much like the band does. He knows all their favorite bands. He’s like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot. The A & R guy was full of great ideas, even talked about using a name producer.

Butch Vig is out of the question-he wants 100 g’s and three points, but they can get Don Fleming for $30,000 plus three points. Even that’s a little steep, so maybe they’ll go with that guy who used to be in David Letterman’s band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe– cost you 5 or 7 grand] and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about. Well, they like this guy and they trust him. Besides, they already signed the deal memo.

He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but he’ll work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasn’t done bad either: 50 grand for the Babes and 60 grand for the Poster Children– without having to sell a single additional record.

It’ll be something modest. The new label doesn’t mind, so long as it’s recoupable out of royalties. Well, they get the final contract, and it’s not quite what they expected. They figure it’s better to be safe than sorry and they turn it over to a lawyer–one who says he’s experienced in entertainment law and he hammers out a few bugs. They’re still not sure about it, but the lawyer says he’s seen a lot of contracts, and theirs is pretty good. They’ll be great royalty: 13% [less a 1O% packaging deduction].

Wasn’t it Buffalo Tom that were only getting 12% less 10? Whatever. The old label only wants 50 grand, an no points. Hell, Sub Pop got 3 points when they let Nirvana go. They’re signed for four years, with options on each year, for a total of over a million dollars! That’s a lot of money in any man’s English. The first year’s advance alone is $250,000. Just think about it, a quarter million, just for being in a rock band! Their manager thinks it’s a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so they’ll be making that money too.

The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, it’s free money. Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on.

That’s enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody In the band and crew, they’re actually about the same cost. Some bands like Therapy? and Sloan and Stereolab use buses on their tours even when they’re getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. It’ll be worth it.

The band will be more comfortable and will play better. The agent says a band on a major label can get a merchandising company to pay them an advance on T-shirt sales! ridiculous! There’s a gold mine here! The lawyer Should look over the merchandising contract, just to be safe. They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo. They decided to go with the producer who used to be in Letterman’s band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old “vintage” microphones.

Boy, were they “warm.” He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very “punchy,” yet “warm.” All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies! Here is the math that will explain just how fucked they are: These figures are representative of amounts that appear in record contracts daily. There’s no need to skew the figures to make the scenario look bad, since real-life examples more than abound. income is bold and underlined, expenses are not.



Advance:	$ 250,000
Manager’s cut:	$ 37,500
Legal fees:	$ 10,000
Recording Budget:	$ 150,000
Producer’s advance:	$ 50,000
Studio fee:	$ 52,500
Drum Amp, Mic and Phase “Doctors”:	$ 3,000
Recording tape:	$ 8,000
Equipment rental:	$ 5,000
Cartage and Transportation:	$ 5,000
Lodgings while in studio:	$ 10,000
Catering:	$ 3,000
Mastering:	$ 10,000
Tape copies, reference CDs, shipping tapes, misc. expenses:	$ 2,000
Video budget:	$ 30,000
Cameras:	$ 8,000
Crew:	$ 5,000
Processing and transfers:	$ 3,000
Off-line:	$ 2,000
On-line editing:	$ 3,000
Catering:	$ 1,000
Stage and construction:	$ 3,000
Copies, couriers, transportation:	$ 2,000
Director’s fee:	$ 3,000
Album Artwork:	$ 5,000
Promotional photo shoot and duplication:	$ 2,000
Band fund:	$ 15,000
New fancy professional drum kit:	$ 5,000
New fancy professional guitars [2]:	$ 3,000
New fancy professional guitar amp rigs [2]:	$ 4,000
New fancy potato-shaped bass guitar:	$ 1,000
New fancy rack of lights bass amp:	$ 1,000
Rehearsal space rental:	$ 500
Big blowout party for their friends:	$ 500
Tour expense [5 weeks]:	$ 50,875
Bus:	$ 25,000
Crew [3]:	$ 7,500
Food and per diems:	$ 7,875
Fuel:	$ 3,000
Consumable supplies:	$ 3,500
Wardrobe:	$ 1,000
Promotion:	$ 3,000
Tour gross income:	$ 50,000
Agent’s cut:	$ 7,500
Manager’s cut:	$ 7,500
Merchandising advance:	$ 20,000
Manager’s cut:	$ 3,000
Lawyer’s fee:	$ 1,000
Publishing advance:	$ 20,000
Manager’s cut:	$ 3,000
Lawyer’s fee:	$ 1,000
Record sales:	250,000 @ $12 = $3,000,000
Gross retail revenue Royalty:	[13% of 90% of retail]: $ 351,000
Less advance:	$ 250,000
Producer’s points:	[3% less $50,000 advance]: $ 40,000
Promotional budget:	$ 25,000
Recoupable buyout from previous label:	$ 50,000
Net royalty:	$ -14,000
Record company income:
Record wholesale price:	$6.50 x 250,000 = $1,625,000 gross income
Artist Royalties:	$ 351,000
Deficit from royalties:	$ 14,000
Manufacturing, packaging and distribution:	@ $2.20 per record: $ 550,000
Gross profit:	$ 710,000
The Balance Sheet: This is how much each player got paid at the end of the game.
Record company:	$ 710,000
Producer:	$ 90,000
Manager:	$ 51,000
Studio:	$ 52,500
Previous label:	$ 50,000
Agent:	$ 7,500
Lawyer:	$ 12,000
Band member net income each:	$ 4,031.25

The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties.

The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it.

Since the previous one never “recouped,” the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won’t have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this fucked.

Steve Albini is an independent and corporate rock record producer most widely known for having produced Nirvana’s “In Utero”.

Let’s look at an example: Suppose an artist’s “all-in” royalty (artist & producer combined) is 60-cents a record, and the producer’s royalty is 10-cents a record. Assume the producer gets a $10,000 advance and that the recording costs (including the producer’s advances) are $120,000. If the producer is paid from record one, and the album sells 150,000 units, the producer will get $15,000 in royalties (10-cents x 150,000 units). Since he already got a $10,000 advance, this is deducted, and he gets the balance of $5,000.

Units Sold	150,000
Producer Royalty	x $.10
	$15,000
Less Advance	- $10,000
Net Payable	$5,000

So as not to mislead you, you should know that it’s extremely difficult for even superstar producers to be paid from record one.

Hot Producers
Hot producers can get a royalty that is retroactive to record one after recoupment of recording costs at the combined rate. What this means in English is that (a) before recording costs are recouped, the producer gets no royalties at all; (b) once the recording costs are recouped, the producer gets paid from record one “retroactively” (meaning the company goes back and pays on sales previously made that didn’t bear royalties at the time of sale.); and (c) the recording costs are recouped at the artist’s “all-in” rate (the combined artist & producer rate). This is easier to see with numbers:

Assume the same facts as in the first example. By changing the deal so that the producer is paid retroactively, however, the producer makes less. This is because, at 150,000 units, the artist will have only recouped a total of $90,000 ($0.60 x 150,000=$90,000), which is short of the $120,000 recording costs. Thus, the recording costs have not been recouped, and the producer is not entitled to any royalties. So, instead of the additional $5,000 paid in the first example, the producer gets nothing (except, of course, the $10,000 advance).

If that album later sells another 50,000 copies (a total of 200,000 units), the recording costs are now recouped (200,000 x $0.60 = $120,000 in costs), which means the producer gets paid for all 200,000 units ($20,000, which is $0.10 x 200,000 units), less, of course, the $10,000 advance. At this stage, note that the producer is in the exactly same position as if he or she had been paid from the first record sold.

Most Producers
Most producers are paid retroactively after recoupment of recording costs at the net rate. This means that, instead of recouping at the combined producer & artist (all-in) rate, the recoupment is only at the artist’s rate after deducting the producer (i.e. the all-in rate “net” of the producer’s royalty). In our same example, this would mean $0.60 less the $0.10 producer’s royalty, or $0.50. Thus, under this example at 200,000 units, the producer still doesn’t get any royalties, because $0.50 x 200,000 equals only $100,000 which is short of the $120,000 needed to recoup the recording costs.

In this case, the producer wouldn’t get his record one royalties until the artist sells a total of 240,000 units ($0.50 x 240,000 =$120,000). Once this sales level is reached, the producer is paid retroactively ($24,000, which is $0.10 x 240,000), less the $10,000 advance. At this point, re is no difference between this deal and the deals under the first two examples.

Other Royalty Computations
Except for the record one aspect, producers’ royalties are customarily calculated in exactly the same way as the artists’ (except for home video). This means they get the same packaging deductions, the same “free goods” reduction, and, the same proportionate reduction for foreign, budget, mid-priced, CDs, etc. For example, if an artist gets 75% of his or her U.S. rate in England, the producer will get 75% of his or her U.S. producer rate in England.

Home Video Royalties
For home video devices, producers generally get half of their otherwise applicable rate. The theory is that the Master is only half of the product (the video portion is the other half).

Who Hires the Producer?
Until about ten years ago, record companies routinely hired the producers. However, one day they woke up and found their in-house lawyers spending so much time negotiating producer deals that it was costing them a fortune. So they hit on the brilliant idea that the artist should hire the producer, which has not only shifted the paperwork burden to the artist, but has also shifted the financial burden to you. Let’s analyze the issues separately.

The question of who does the paperwork to hire a producer is really a question of whether you or the record company bear the legal fees for negotiating the producer’s deal. Can you guess which arrangement is better for you? Can you also guess which one is very hard to come by?

Who Pays the Producer?
Remember, in an all-in deal, you are responsible for the producer’s royalties, regardless of who actually contracts with him or her. This is a much more serious issue than it may appear at first glance because the producer may be entitled to royalties before you are recouped under your deal with the record company. This means you could owe money to the producer at a time when the record company doesn’t owe you anything. This means you could have to write a check to the producer from your own pocket. This is not a good thing. Let’s take another look at the example we gave in our last issue:

Units Sold	150,000
Producer Royalty	x $.10
	$15,000
Less Advance	- $10,000
Net Payable	$5,000

Notice that the producer is owed $5,000, but 150,000 units times the artist’s $0.60 rate comes to only $90,000, meaning that the $120,000 recording costs have not yet been recouped. Now remember we talked about how the artist is responsible for paying the producer’s royalties in an all-in deal. If you put these two points together, you’ll see how the artist is obligated to pay $5,000 to the producer, but the artist is getting no money because he or she is unrecouped. A major bummer.

And the situation can get much worse. Watch this Parade of Horribles: The artist may have received substantial advances in which the producer did not share. For example, if the artist spent $120,000 on recording costs (as in our example), and got another $100,000 as an advance, the artist won’t get any monies until both the recording costs and the $100,000 advance are recouped. Meanwhile, the producer, who didn’t share in the advance, is owed royalties.

So what happens in real life? Any producer who has the slightest idea of what he/she is doing will insist on the record company paying his/her royalties. Any artist who has the slightest idea of what he/she is doing will insist on the record company paying the producer’s royalties. Any record company that knows what it’s doing (and they all do), will avoid this obligation like the plague.

It’s simple enough to get the record company to pay the producer after the artist is recouped. This is because there are royalties from which it can deduct the producer’s royalties. This is also relatively meaningless because the artist then has the money anyway. But it’s when the artist doesn’t have the money that this issue is critical.

If you have a reasonable amount of bargaining power, you can get the record company to pay the producer and treat the payments as additional advances under your deal. This makes you further unrecouped, but it’s vastly superior to taking the money from your own pocket. If the company does agree, it will insist on approving the producer’s deal, so that the amount it has to pay while you’re unrecouped can’t get out of hand. Also, as your bargaining power declines, the sources from which the record company will get these monies back increases geometrically–not only will the company want to take it back from your royalties, but it will also want to take it from:

This album’s budget–meaning they’ll hold back part of the money until either (a) the producer earns it or (b) you flop so bad it becomes obvious the producer will never get it.

Your Mechanical Royalties–the royalties an artist is paid by his record company for records sold.

The next album’s budget–assuming there is a next album.

Some record companies attempted to take first-born children, but this practice died out in the late Sixties.

If you don’t have much bargaining power, you’re going to end up giving the company whatever it wants in exchange for an agreement to pay these royalties. Whatever it is, though, it beats the hell out of writing a check or selling your prized squeegee collection, so I suggest you take it. But don’t let them know I said so until after you fight valiantly.

From “All You Need To Know About The Music Business” by Donald S. Passman. ©1991, 1994, 1997 by Donald S. Passman. Reprinted by permission of Simon & Schuster, Inc.

So what does each person in the production process do, to create a record?

The people typically involved would be:

In the studio

• Artist
• Either a solo artist or a band.
• Writers
• This may include the artist and/or the producer.
• Producer

The Producer oversees the whole process and uses their knowledge, experience and skill to transform a rough sketch of a song into a well-arranged, professional recording.

Typically the management of the budget and the time frame is down to the producer, with assistance from the record company. If circumstances change during the project so that the budget or delivery date are affected the producer (or their management company) will need to liase with the record company to get approval for the new budget / timescale. Key factors to ensuring a project is delivered on time and on budget are creating a realistic budget and timescale from the start, closely monitoring progress and costs during the project and making changes where necessary and working quickly.

Recording Engineer

A recording engineer sets up the equipment necessary for recording and operates it during recording. This is a highly technical role. Often producers will carry out this role themselves rather than bringing someone else in specially.

Mix Engineer / Mixer

The mix engineer or mixer mixes the track, balancing different instruments and elements, applying equalisation, compression and effects. They also set up the equipment necessary for mixing and operate it. This can be quite a creative role, often transforming the song completely.

Pro-Tools Editor

It is quite common to have an assistant to carry out editing and other tasks within Pro-Tools or any other digital recording software being used. This task may well be carried out by the programmer or the assistant engineer.

Programmer

A programmer creates backing tracks, beats and loops using samples, synths and computers. Programming can be an integral part of the writing process, or programmers can be brought in at a later stage to improve or add to the basic instrumentation. Often writers or producers do their own programming.

Assistant Engineer / Tape Op

Provides basic assistance with setting up, wiring and operating equipment (and makes the tea).

Session Musicians

These may include the artist’s regular band, or musicians recruited specially for the session and / or string sections or orchestras.

Arranger / Conductor

Necessary if strings or an orchestra are involved.

Some producers will be more hands-on than others, recording and then mixing the whole record themselves, even physically setting up the equipment and doing the “knob-twiddling”. On the other hand they may use engineers or specialist mixers to carry out parts of the process (as outlined above) and in that case the producer will have an overseeing role, directing the other people involved. The producer will generally have a big creative input in the whole record – the instrumentation, arrangement, overall sound and mixing. In essence a record producer’s role is similar to that of a film or theater director.

Other people involved in the studio production process include:

Studio Manager

Amongst other duties a studio manager will liase with record companies and management companies, organises the booking of the studio and oversees sessions in the studio to make sure everything runs smoothly.

Mastering Engineer

At the record company:

A&R Person

A&R (Artist & Repertoire) personnel are first and foremost responsible for signing the artist. They should have close involvement in the recording process providing artistic input / feedback and monitoring progress of the tracks to ensure they will meet the record companies expectations and that they are commercially suitable. The A&R person will often have input into the choice of producer / mixer / studio / musicians and so on.

They will usually negotiate the key terms of engagement for a producer or mixer and approve the budget. There are obviously a lot of other tasks outside the recording process which the A&R person is also involved in such as promotion, live performances, record releases and so on.

Production Coordinator

The production coordinator oversees the logistical side of the process, liasing between all parties and ensuring that everything is organised and runs smoothly. They may also create / manage the budget. This entire role may be carried out by the producer management company.

Business Affairs Person

The Business Affairs department will deal with negotiation of the contract between the record company and artists / producers / mixers, sometimes in conjunction with an external lawyer.

Finance / Accounts

Process all payments.

At the management companies:

Artist Manager

The Artist Manager organises everything on the artist’s side and represents the artist’s interests in the whole process. They will liase with all other parties and usually approve the recording budget, choice of producer / mixer and terms for engaging the producer / mixer. They may be involved in the recording process to ensure that the artist is satisfied with the outcome since the record company and the artist’s interests can often be different.

Producer Manager / Project Manager

The Producer Manager will actively seek work for producers and manage the development of their career. They will liase with all other parties and negotiate the producer’s / mixer’s terms of engagement. They will often oversee the organization of the project.

Production Coordinators

Often the production coordination is partly or wholly carried out by the producer management company rather than the record company.

Finance / Accounts

Invoice the record company for fees due and look after finances for the artist / producer.

Other relevant parties include:

Artist’s Lawyer

The Artist’s lawyer will negotiate contracts for the artist.

Record Company’s Lawyer

Sometimes a record company will use an external lawyer to negotiate contracts on its behalf.

Producer’s Lawyer

They will negotiate the producer’s contract on the producer’s behalf.

Session Fixer

A session fixer will supply and organize session musicians / string sections / orchestras.

Accountants (Artist’s / Producer’s)

Sometimes an artist or producer or their management company will use an external accountant to oversee their finances.