Record companies have a 5% success rate. That means that 5% of all records released by major labels go gold or platinum. How do record companies get away with a 95% failure rate that would be totally unacceptable in any other business? Record companies keep almost all the profits. Recording artists get paid a tiny fraction of the money earned by their music. That allows record executives to be incredibly sloppy in running their companies and still create enormous amounts of cash for the corporations that own them.
The royalty rates granted in every recording contract are very low to start with and then companies charge back every conceivable cost to an artist's royalty account. Artists pay for recording costs, video production costs, tour support, radio promotion, sales and marketing costs, packaging costs and any other cost the record company can subtract from their royalties. Record companies also reduce royalties by "forgetting" to report sales figure, miscalculating royalties and by preventing artists from auditing record company books.
Recording contracts are unfair and a single artist negotiating an individual deal doesn't have the leverage to change the system. Artists will finally get paid what they deserve when they band together and force the recording industry to negotiate with them AS A GROUP.
Thousands of successful artists who sold hundreds of millions of records and generated billions of dollars in profits for record companies find themselves broke and forgotten by the industry they made wealthy.
Here a just a few examples of what we're talking about:
Multiplatinum artists like TLC ("Ain't 2 Proud 2 Beg," "Waterfalls" and "No Scrubs") and Toni Braxton ("Unbreak My Heart" and "Breathe Again") have been forced to declare bankruptcy because their recording contracts didn't pay them enough to survive.
Corrupt recording agreements forced the heirs of Jimi Hendrix ("Purple Haze," "All Along the Watchtower" and "Stone Free") to work menial jobs while his catalog generated millions of dollars each year for Universal Music.
Florence Ballard from the Supremes ("Where Did Our Love Go," "Stop in the Name of Love" and "You Keep Me Hangin' On" are just 3 of the 10 #1 hits she sang on) was on welfare when she died.
Collective Soul earned almost no money from "Shine," one of the biggest alternative rock hits of the 90s when Atlantic paid almost all of their royalties to an outside production company.
Merle Haggard ("I Threw Away the Rose," "Sing Me Back Home" and "Today I Started Loving You Again") enjoyed a string of 37 top-ten country singles (including 23 #1 hits) in the 60s and 70s. Yet he never received a record royalty check until last year when he released an album on the indie punk-rock label Epitaph.
Think of it this way: recording artists are often the writers, directors and producers of their own records. They write the songs, choose the producers and engineers who record their music, hire and oversee the photographers and designers who create their CD artwork and oversee all parts of video production, from concept to director to final edit. Record companies advance money for recording costs and provide limited marketing services for the music that artists conceive and create. In exchange, they keep almost all of the money and 100% of the copyrights.
Even the most successful recording artists in history (The Beatles, The Eagles, Nirvana, Eminem) have been paid a fraction of the money they deserved from sales of their records. This is a very big and very important project and we're in the early days.
Here's what we're looking for:
1. Artists who are willing to speak to the media to publicly lend their support to the idea that recording artists need an organization that represents our interests in Washington and with the record companies. We also would like you tell your managers and attorneys that you support this cause and that you expect them, as your representatives and employees to do the same.
2. Anyone who can tell us specific stories about how artists have been ripped off by record companies like the ones I told above.
We're going to have to educate the public and the media and Congress and the only way we'll do that is by giving them examples they can relate to. NOW is the time for action. Artists like Garbage and N*SYNC have have joined me in questioning bad contracts and have also gone to court to change the system.
Record companies have merged and re-merged to the point where they can no longer relate to their artists. Digital distribution will change the music industry forever; artists must make sure they finally get their fair share of the money their music earns. We need to come together quickly and present a united front to the industry.
Your managers and attorneys will probably tell you not to rock the boat and not to risk your "relationship" with your record company by taking a stand. Most attorneys and managers are conflicted. Almost all entertainment law firms represent both artists and record companies. Lawyers can't take a stand against record companies because that's where they get most of their business. Even the best managers often have business relationships with labels and depend on record companies to refer new clients.
Think about Eddie Vedder and Pearl Jam's stand against TicketMaster. Everyone knew he was right and yet no other artist took a public stand against a company that we all knew was hurting our business because our managers and attorneys told us it would be a bad idea.
Attorneys and managers are your employees. Make sure they know how you feel and that you want them to publicly support the idea that the terms of recording contracts are unfair and cover too long a time period. You also want them to support an organization that will negotiate health and pension benefits for all recording artists.
Artists have all the power. They create the music that makes the money that funds the business. No one has ever harnessed that power for artists' collective good. And remember something equally important: Actors had to fight to end the studio system that forced actors to work for one employer and baseball players had to strike to end the reserve clause that tied a player to one team for his entire career. Even though "experts" predicted economic disaster once actors and athletes gained their freedom, both the film business and baseball have enjoyed their greatest financial success once their talent was given its freedom.
