David Byrne Thinks The Music Industry Might Just Be OK (Provided Everyone Stays Cool)

Dec 19th, 2007 // 29 Comments

chartttt.gifIf you’re of advanced age, you may remember Steve Albini’s infamous Maxmimumrocknroll screed from the mid-’90s, where he outlined just how how thoroughly a label could fuck over what we’d now call an “emerging act,” way before the crazy ol’ Internet knocked over everything we knew about being a small band. (Or something. Right?) So sure, we live in very different times now, thanks to the ongoing industry flameout, one where indie bands are infamously more career-minded than ever before, major labels are just as evil (and confused and desperate), and indie labels can occasionally score a Top 10, 300k-selling hit record. (Hey, it’s not that different, after all.) That’s why David Byrne has penned a guide for young bands on how not to drown in the currently muddy industry waters, augmented by audio interviews with Radiohead’s management, Brian Eno, Merge Records co-founder Mac McCaughan, and others. Naturally, because he’s David Byrne and not Steve Albini, Byrne’s “six survival strategies for emerging bands” paint a far less grim portrait of the possibilities for getting and staying paid in 2008 and beyond, and even if you’re not in a band, he lays out all the mumbo-jumbo about “equity deals” and whatnot in language accessible to the layperson. Or music blogger!

1. At one end of the scale is the 360, or equity, deal, where every aspect of the artist’s career is handled by producers, promoters, marketing people, and managers. The idea is that you can achieve wide saturation and sales, boosted by a hardworking machine that stands to benefit from everything you do. The artist becomes a brand, owned and operated by the label, and in theory this gives the company a long-term perspective and interest in nurturing that artist’s career…
The artist often gets a lot of money up front. But I doubt that creative decisions will be left in the artist’s hands. As a general rule, as the cash comes in, creative control goes out. The equity partner simply has too much at stake.

2. Next is what I’ll call the standard distribution deal…The record company bankrolls the recording and handles the manufacturing, distribution, press, and promotion. The artist gets a royalty percentage after all those other costs are repaid. The label, in this scenario, owns the copyright to the recording. Forever.
There’s another catch with this kind of arrangement: The typical pop star often lives in debt to their record company and a host of other entities, and if they hit a dry spell they can go broke.

Obviously, the cost of these services, along with the record company’s overhead, accounts for a big part of CD prices…Theoretically, as many of these costs go away, they should no longer be charged to the consumer — or the artist.

Sure, many of the services traditionally provided by record labels under the standard deal are now being farmed out…But he who pays the piper calls the tune. If the record company pays the subcontractors, then the record company ultimately decides who or what has priority. If they “don’t hear a single,” they can tell you your record isn’t coming out.

3. The license deal is similar to the standard deal, except in this case the artist retains the copyrights and ownership of the master recording. The right to exploit that property is granted to a label for a limited period of time — usually seven years. After that, the rights to license to TV shows, commercials, and the like revert to the artist…It allows for a little more creative freedom, since you get less interference from the guys in the big suits. The flip side is that because the label doesn’t own the master, it may invest less in making the release a success.

4. Then there’s the profit-sharing deal. I did something like this with my album Lead Us Not Into Temptation in 2003. I got a minimal advance from the label, Thrill Jockey, since the recording costs were covered by a movie soundtrack budget, and we shared the profits from day one. I retained ownership of the master. Thrill Jockey does some marketing and press. I may or may not have sold as many records as I would have with a larger company, but in the end I took home a greater share of each unit sold.

5. In the manufacturing and distribution deal, the artist does everything except, well, manufacture and distribute the product. Often the companies that do these kinds of deals also offer other services, like marketing. But given the numbers, they don’t stand to make as much, so their incentive here is limited. Big record labels traditionally don’t make M&D deals…
In this scenario, the artist gets absolute creative control, but it’s a bigger gamble.

6. Finally, at the far end of the scale, is the self-distribution model, where the music is self-produced, self-written, self-played, and self-marketed. CDs are sold at gigs and through a Web site. Promotion is a MySpace page. The band buys or leases a server to handle download sales. Within the limits of what they can afford, the artists have complete creative control. In practice, especially for emerging artists, that can mean freedom without resources — a pretty abstract sort of independence…

At this end of the spectrum, the artist stands to receive the largest percentage of income from sales per unit — sales of anything. A larger percentage of fewer sales, most likely, but not always.

Byrne advocates none of his six options in particular, though he seems to think the middle options offer the greatest (safest?) chance of success, but the key to making any of them work seems to be (as with any business venture) realistic expectations. You know, what musicians are supposed to have gained after a decade of VH1 Behind The Music specials detailing how some dumb pop star ended up in hock to a corporation (Byrne raises the cautionary specters of TLC and MC Hammer) have made even non-musicians aware of label machinations. And with the legacy of the Nirvana-fueled ’90s boom that prompted the Albini article being a general awareness that an agreement with any label should not be entered into lightly, only a fool would play the game outlined by his first two models at this point, right?

Meanwhile, even on the more manageable indie scale exemplified by Byrne’s fourth and fifth strategies, everyone’s predicting (maybe rightly) that mid-size labels are on their way out–”as the roles they used to play get chopped up and delivered by more thrifty services,” as Byrne says–and naturally some wag will come along to claim that surely Byrne’s final option will be the only one that will matter in a few years, especially now that Radiohead has shown us all that D.I.Y. can be done on a scale beyond “shopping seven-inches to mom and pop distributors” or “Internet cottage industry.” But even leaving aside the erosion of brick-and-mortar music retail or the less than rosy picture Byrne paints in regards to iTunes, I dunno. The prospect of hunting and pecking through endless MySpace pages to find new bands probably thrills me no more than the prospect of having to shoulder the burden of managing every aspect of their career thrills four people who just wanna write some songs.

Since October and the great In Rainbows freakout, pundits great and small have been arguing over the question Merge Records’ Mac McCaughan raises at one point during the final part of his audio interview: “Do you need record labels?” Wipe the Radiohead stars from your eyes, and yes, it’s obvious that, as with music publications and blogs, the average person still needs the filter a record label provides. It may be a vestigial need that will seem silly in a few decades, but it’s still there for the time being. McCaughan wisely argues that what the (indie) industry needs to continue propping itself up are good record labels–labels with hands-on owners with enough of an abiding interest in music that the consumer can still infer a sort of aesthetic guarantee–with a scalable staff and budget and their heads screwed on when it comes to sticking to the core of “bands that sell 5 to 50,000 copies” rather than chasing down Billboard. And who knows, with that mindset maybe these labels will thrive at least as long as there’s still enough money to be spread around between artist and staff, i.e. unless further (predictable or unpredictable) developments allow the industry to collapse to the point where Byrne’s final option of total D.I.Y. is the only way for anyone to earn a modest living (or at least recoup costs) from making music.

Of course, the modest ambitions of McCaughan and Merge–and those realistic expectations required to make the best use of any of Byrne’s six models–are not common in an industry built on a hundred years of get-famous-quick schemes. “No single model will work for everyone,” Byrne says. “There’s room for all of us.” That kind of flexibility doesn’t please major labels, and the idea that the world might not be ending–or that the artists may actually need the machinery of the labels to some degree, or that Radiohead doesn’t have the industry by the balls–certainly makes it harder for journalists to write apocalyptic thinkpieces on the end of music as we know it. But while I’m generally pessimistic about the future of the industry–and I’m not always teary-eyed at the prospect of it drying up and blowing away–Byrne’s level-headed optimism is one of the few assessments of its changing fortunes that’s left me moderately hopeful that the old model can coexist with the still-developing new. Then of course I went and read that “Music Journalism 2.0″ story Maura linked to and got cranky and depressed all over again. Oh well!

David Byrne’s Survival Strategies For Emerging Artists [Wired]

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  1. Al Shipley

    If you’re of advanced age, you may remember Steve Albini’s infamous Maxmimumrocknroll screed from the mid-’90s

    I don’t think one needs to be of “advanced age,” that shit was forwarded around as if it was hot off the presses through like 2004, each time prompting a new round of increasingly inaccurate guesses as to which band he’s referring to in the essay.

  2. Jess Harvell

    @GovernmentNames: c’mon dude, we all know it was dada.

  3. SuperUnison

    The point that seems neglected here is that a band IS a brand identity. Ancillary revenue streams (everything other than albums) can actually yield better money than album sales when you take into account the time investment. On a DIY level, A t-shirt sold for $12 entails a favor from your buddy who has some design chops and perhaps $4-$6 in manufacturing costs. An album that’s worth a damn usually entails months worth of practices and recordings, $2-3 for manufacturing, and another $1-$2 for shipping. In other words, a DIY version of the 360 deal is my prediction for the future of the business. Band friendships will become like strategic brand alliances (How many Liars fans here also own the Deerhunter record?) and will, in turn, function in much the same way as the “aesthetic guarantee” that Mac was talking about.

  4. SuperUnison

    @GovernmentNames: I first saw it in 03 and I still find a reason to forward it several times a year. Partly cause I’m pretty shameless Albini fanboy, mostly cause it reminds anyone who isn’t hip to that shit how evil and ineffectual the big labels are.

  5. Jasonbob7

    @SuperUnison: I almost agree. I think the future of the industry lies in “360 companies” that specialize in developing band brands and monetizing the many aspects of their value. Major record labels are trying to become 360 companies in the interest of chasing revenue, but they’ll most likely fail because they’re not built to work that way. They can hire all the merch people and licensing specialists and brand consultants they want, but as long as the people at the top (Morris, Bronfman, Lack, and Hands) are stuck in the “hit-maker” mindset, they’ll never truly fill the 360-company role. The success stories will be savvy businesspeople who figure out how to maximize the value of a small handful of modestly popular bands.

  6. bedpan

    i think the other charts were far more interesting. like, that “where the cost of a cd goes” might shut some people up about “oh, the artists only make $.17 from each cd anyway” – someone’s seen too many tlc behind the musics!

  7. Recury

    “Wipe the Radiohead stars from your eyes, and yes, it’s obvious that, as with music publications and blogs, the average person still needs the filter a record label provides.”

    They have this shit called “the internet” that is pretty good at that, I don’t know.

  8. Jess Harvell

    @Recury: so the entire “internet” is a “filter” now? or do blogs and music websites and label websites somehow exist independently thereof?

  9. Recury

    Those, collectively, are the internet. They are as good or better at filtering than record labels.

  10. Catbirdseat

    God, I hope, I pray, that Mac is right and that

    “as with music publications and blogs, the average person still needs the filter a record label provides.”

    But I’ve got this nagging feeling that people are starting to be less and less interested in those external sources of “taste,” and want to rely more and more on social-networked / Last.Fm’ed / personally-tailored suggestions for what they should listen to.

    But I hope and pray that Mac is right, and my nagging feeling is wrong.

  11. Maura Johnston

    @Recury: The whole Internet?

  12. Recury

    I misread it. Just ignore me.

  13. Recury

    Wait, no not yet. I don’t agree that people need the filter of a record label when they have all of the other filters on THE INTERNET (this includes music blogs, music reviews, music websites, music forums, last.fm type stuff, etc.).

    OK, now go back to ignoring me.

  14. Halfwit

    In my spare time (read: for hours on end), I play a little shareware game called Chart Wars. You run a record label, and you basically operate under the “standard deal” model. It’s fascinating to watch a band become a victim of their own success, especially if they’re unfortunate to burst out of the gate with platinum sales. The cost of recording, manufacturing, and distribution quickly outpaces what the band can possibly earn from touring (especially if you’re paying for a de luxe stage show). I often feel guilty watching a band that’s earned me $24 million, but is “officially” in debt to me for $13 million.

  15. coolfer

    Or course labels are still important. If not for the effort of labels, not even the indiest of the indie would know about 98% of the music they own. Even industry-hating hipsters take their cues from labels. When a label signs a band, it’s an important signal that says the band is worth more attention than the hordes of unsigned bands. Every day music blogs cover which band got signed to which label. Tell me labels aren’t important, and I’ll believe you when bloggers don’t care what Mac thinks, or don’t care more about a band after it signs to Merge, or when Pitchfork devotes more of its attention to self-released albums.

    Heck, a lot of bands need a label’s help to get their shit together. There’s a lot of nurturing that goes on. You can’t just put out an EP, get a little buzz and expect the world to remember you when you finally return with an album and hopes of a tour. Keeping momentum is an art form at which labels are pretty good and DIY artists are not. By the way, has anybody heard from the Black Kids lately?

  16. janine

    @Recury: How do you think the music ends up on “music blogs, music reviews, music websites, music forums, last.fm type stuff, etc.?”

  17. Anonymous

    Right on, Coolfer. Of all the blog-hyped bands of the year, how many of them are unsigned? Why do unsigned bands with strong regional support and that pack hundreds into clubs often get little or no blog love?

    I rarely see those who argue that the Internet will somehow replace the label address these questions. There is always the hypothetical unsigned band that will break through and get huge because of blogger love, but I still see a lot more indie labels breaking new, relatively unknown bands, than bloggers.

    Of course, there are a couple of exceptions to this rule, but for the most part those ‘breakthrough’ bands have had the economic means to farm out all of the things a label would do–publicity, promotion, etc. That takes good day jobs (or, more likely, trust funds.) These are not resources most unsigned bands have, which is why indie labels continue to play an essential role for most bands.

  18. Catbirdseat

    My question is: is it possible for the indies to sustain as viable businesses IF, for example, they’re only selling 5-7000 units per release? I mean, I know Mac and Byrne talked about how a label shouldn’t count on getting a big “Top 10″ release *every* year, but I guess I was under the impression that those Neon Bibles and Ga Ga Ga’s were subsidizing the smaller sellers like the Rosebuds and the Broken West, and that they were integral to keeping things going these days. Realistically, can an indie without a really big act or two remain solvent today?

  19. Recury

    @janine: Lots of different ways. What are you trying to say?

  20. janine

    I was trying to get you to connect the dots… The overwhelming majority of the time, a label is responsible when you see something “music blogs, music reviews, music websites, music forums, last.fm type stuff, etc.”

    Do you believe that your favorite online sources spend hours on MySpace? Do you think every band has the resources in time and or energy to do their own, successful DIY online marketing campaign? Are you reading the above? Those are some smart folk who are writing some knowledgeable commentary.

    Perhaps I’m wrong, what are some of the “different ways” to get attention without label support? (It needs to be repeatable. In order to be the new model, it has to be a model.)

  21. Anonymous

    @Catbirdseat: The subsidization model is how major labels have worked for a long time. I forget the exact figure, so I’m probably going to overstate this, but a ludicrously small percentage of major label releases make a profit, less than 10% I think. I think the point might be that if indies start to think they can stay solvent off that model, they are sorely mistaken. Conversely, can an indie sustain selling 5-70,000? Yes, if (BIG if) they keep their costs low enough. Which probably eliminates their chance of ever having that top-10, 300,000 seller. Damned if you do…

  22. Recury

    There are plenty of reviewers who trawl myspace or p2p sites for music and I specifically mentioned filters that don’t rely on marketing like forums and last.fm.

  23. Anonymous

    @Recury: So when you find music on last.fm, how do you think the listeners you get it from find it? When someone recommends something to you on a forum, how did she find out about it? You’re talking yourself into a recursive loop here.

    I mean, yeah, sometimes a scene can get covered by a (number of) journalist(s) and get straight to you without label promotion (e.g. Wham City) but where does that leave bands that are not part of a scene? Are hip neighborhoods going to become the equivalent of industry towns, where you have to move to Brooklyn to get heard?

    Either there’s a piece of your argument that you’re leaving out, or you’re talking yourself in a circle.

  24. worldsfair

    steve albini is so full of himself and his archaic anti-capitalist rhetoric barely applies to anything real anymore… for jebus’ sake the man still talks about “selling out” like its some kind of real and present danger (like WMDs in a 3rd world country)

    on the other hand, david b and thom y do a pretty great job of being factual, objective and simple in this. well done boyz. much respect

  25. noamjamski

    @worldsfair: Agree or disagree with the Byrne article but leave Albini out of it!

    Steve Albini can draw waveforms free-hand!

    Albini Facts: [albinifacts.blogspot.com]

  26. Anonymous

    @Recury: See coolfer’s post above. Also I worry about the fiscal sustainability of your suggested approach for artists. Not to get into an art vs. commerce fight but I would like to hope that if artists become successful then they ought to be able to at least scale back other employment if not support themselves entirely with their art.

  27. Anonymous

    What labels do, ultimately, is save a lot of people a lot of time, and most people need that. I certainly do.

  28. Recury

    @lastclearchance: They go to shows, are part of a scene or got it from the artists themselves. Or the artists just promote it themselves, as was brought up earlier, and no, sending your shit somewhere to get it reviewed and printing up shirts is not really beyond the means of most musicians.

    All else being equal, every musician would rather have a big label pushing their stuff, but you guys are making it sound like it’s an absolutely fucking vital part of the process and it just isn’t. There are tons of people out there who work outside of that system. No, they aren’t big and no they probably won’t ever have a hit, but that isn’t what I’m talking about. I’m talking about whether listeners can get the music they like without labels.

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