Equitable Exchange?

Does this make sense?

Everyone knows that 50/50 record deals are not anywhere near 50/50.  The split is taken of the "Net" as defined by the contract.  Every contract is different but rest assured there are plenty of costs that are used to calculate that net and I agree many of them should be there.  Hard costs, especially, should all be included in there.  They could be distrbution, promos, posters, publicists, radio promotion, advertising, etc.  However, many labels include a fee called "admin", "overhead", "venture", etc. that is compensation for the label before the 50/50 split.

Hmmm.

The artist works too.  They tour (without tour support) tirelessly playing before hundreds of thousands every year, they interact with the fans directly and through the web and Twitter, they sell the CDs EVERY night THEMSELVES, they write the songs, they record the songs, the sweat it out every day but they are not compensated before the net.

Is that equitable?  

I agree the label should make money and hopefully a lot.  50/50 implies a joint venture between 2 business.  Each one should be bringing an equitable amount and they should share equitably.

There is of course value to the label "fronting" a lot of the marketing money (which is most certainly a risk factor) and that is why that money is "first out" but what is that value.  Imagine what would be the APR of a $75,000 loan that is paid off in 6 months?  Maybe that is the answer?

Hmmm.

Making choices

Should you bear the risk all by yourself, fully knowing that there is a pending cash crunch coming?

Should you go with an established indie that has had some cool bands and defined level of expertise?

Should you go with an younger indie that has fewer cool bands and more passion then expertise?

If those questions were not hard enough alone each one is not equal in terms of deal structure.

Time is ticking

Portugal The Man

The plan is to update this through the process of album finishing to album release.  This is the process by which bands have to make tough decisions on what to do to gain success.  

The Background

PTM is a band that plays 250+ dates a year.  They have a VERY solid touring base across the country.  Not just in the majors.  This is real touring not your major market touring (the monday after SXSW the band brought out over 300 paid to a show in El Paso).  PTM recorded 2 full length for OC punk rock label, Fearless Records.  Nice enough people and they really liked the band but by their own admission, they were not necessarily the best home.  The band's debut sold quite well and their follow despite great media coverage, rave reviews, and bigger touring suffered.  Everyone has excuses but the band lost several thousand sales to P2P and not being able to sell either record on tour.  

While developing N. America PTM reached out for it's next territory.  We had some support in Germany so we threw our focus on Germany, Switzerland, and Austria.  4 headline tours and a 5th planned it is safe to say that this band has a firm hold on GSA.  Visions Magazine has been HUGE supporters and have put the band in many of their year-end lists.

The Current State

Having finished their commitment to Fearless the band set out to finance themselves through at least the recording process.  They went to Seattle and spent time recording with Phil & Kirk from Kay Kay & His Weathered Underground (an amazing band if you have not already heard of them).  3 intense weeks later the band emerged with a record.  The quickly jetted off to Europe for some touring while Phil worked on mixes.  

To be honest, I got really scared here.  I new the songs had huge potential but I was not hearing it.  OK, I freaked a bit.  I made some calls and we hooked up with Paul Kolderie (Pixies, Throwing Muses, Radiohead, nothing really all that good).  I sent him the files and begged him to break the news to me lightly.  Paul called back and said once he stripped away all the plug-ins he found some really great stuff.  His biggest compliment was "I would have never had recorded some things this way but they sound really cool".  With that, Paul and Adam Taylor began mixing and doing additional production.  The record gets completed and sounds magnificent.

Emily Ibarra came on tour with the band to shoot the album cover and to get some promo shots done.  

Makenna Combs and John started working on the package and everything is nearing completion.

The Questions

Can a band do it alone?

What sacrifices will they make along the way and are they too risky?

What is fair value or an equitable trade to enter into an agreement with a record label?

Can the band finance the minimla marketing and promotion themselves?

Do the fans really care that the band does it themselves and needs the support of record sales?

Does the industry care about working bands? Will press, radio, tv, retail support a band without the label backing?

Does the band have the work ethic to pull it off?

These are just some of the questions I will be asking myself over the next few weeks/months.

I will keep you posted.  In the meantime if you are interested here is a sneak peek acoustic version of a new song.