Record Labels Contemplate Unrestricted Digital Music

New York TImes ^ | 1/23/07 | Vicotria Shannon

[Moonman62]

Oh, I forgot. Now I'm going to have to try suspending my speakers on snotbags. Thanks for the idea.

[sionnsar]

Mp3s are poor faxcimiles of the original content, they have one 10th the audio quility of a full recording.

Some of us no longer have ears capable of hearing the difference. I lost significant hearing working around NASA wind tunnels -- and I remember the experience of nearly being rendered unconscious from a blast of very loud noise from one tunnel (far worse than my bagpipes *\;-), but I got into shelter and closed the door not more than a few seconds before I would have passed out, at the rate I was losing consciousness.

Lat year I experimented with data rates when ripping CDs and have settled on values that to my ears are indistinguishable from CDs (192 kbps, approx 7:1 reduction). I've also tried much lower rates that had simply unacceptable results, such as the music sounding like it was under water. I'm sure one could set data rates for MP3 conversion that would result in little more than low-frequency noise.

But I'll leave the really high-end listening to the folks who say they can hear (and pay) the difference between gold and copper speaker wires.

[El Gran Salseron]

"don`t know why, but I have heard the difference many times."

That's because analog audio, as heard on lps, is a constant flow of audio.

With digital, the audio produced by an anolog signal is being sampled/converted X times per second.

128 K audio CD or MP3 = the audio is being sampled 128,000 times per second. Any music that occurs between the samples that are taken is lost.

320 K audio CD or MP3 = audio signal being sample 320,000 times per second so that the sound quality is better but no matter the current sampling rates available, audio on CDs or MP3s will NEVER sounds as good as a good ol' turntable and vinyl.

If the numbers are too big for you then try to imagine flowing analog audio quality. Then try to imagine digital audio and you got to hear only two samples per second. Think of how much music you would miss if they let you hear only samples of twice per second.

The trade-off is in the noise of the stylus friction with the vinyl. Don't try to imagine that there is no noise. Wherever there is friction there is noise. The other variable is being able to get rid of turntable/60 cycle/60 Hz hum. ( That is what it is called but in actuality it is 120 Hz hum which is an harmonic of 69 Hz. ) The hum can be reduced but NEVER eliminated.

It becomes a toss-up and personal preference as to whether to use CDs or vinyl. If you want full audio quality, use vinyl on a turntable and suffer the friction noise and hum. If you want music without background noise but less audio quality, use CDs or MP3s.

I prefer the less noisy CD or MP3 on my computer although, for all of my personal listening pleasure, I record at 320 K. Anything that I want to make available online is 128 K because of downloading speed. Some people are still on dial-up.

One more thing to consider: Vinyls get scratched very easily. I have found scratches on vinyl which were stored in a sleeve and in a cover. They got scratched just sitting upright on the shelf. They also warp if not stored upright and in a stable invironment with low humidity. CDs, on the other hand, are much more durable. ( They can get small scratches and still play. )

You are correct. There are loads more audio on vinyl than there is on CDs or MP3s. I hope that you now understand why and the pros and cons of each. Regards.....

[Screamname]

Thanks, I get it now about the sample rates. I know what you mean though about the hum and the "bacon frying" effect of scratched records. But if that record is in good condition, daaaaamn, in my opinion nothing beats it. My set up if you heard it you would swear there was a live band playing in my room. I was listening to one the other day, Paul Simons record "There goes rhymin Simon" and was playing that song "Kodachrome"...Daaamn, that thing was so crystal clear I swear I thought I heard someone sneeze in the background of it, and someone probably did which is why I heard it.

Those recordings back then were awesome, just the way they seperated/panned all the instruments. Everything new I hear today seems to come across as mono although I doubt they record in mono. On the other hand it could just be because a lot of stuff seems over-produced today. 20 gazillion synths on top of 20 gazillion sound effects.

[ByDesign]

"Artists are already releasing their own music on MySpace webpages and such.
Stick a fork in the RIAA."

There's also a groundswell of resentment in the industry with artist's for the actions of the RIAA in "their" name, when they know that little if any of the proceeds of the lawsuits will end up in their pockets.

I'd love to see the accounting for the "damages' they've collected in the name of specific artists, and how much of that actually went to said artist, if any.

The RIAA and the labels have only themselves to blame.

[ByDesign]

Artists never have control of their destinies. Their star is hitched to a wagon that is never going fast enough. They will always complain even if they are successful beyond the wildest dreams of avarice. In fact, the very rich ones (Metallica & U2) will do whatever ensures them even more wealth. But there was once a time when they played their songs on a couch in a rotten old living room with friends all around... never again.

---

'

This is not and never has been about the msuicians crying poor - yes, some idiots like Lars from Metallica was running around crying about it, but he's always been a corporate asskisser - and he's gotten PLENTY of flack for it from his fans and peers.

This is about the labels. Period.

A typical recording contract gives the artist at MOST 6% of all sales, and that's after you've paid the label back for recording fees, advances, marketing, manufacturing, lawyers, accounting, and videos (if any are made). Trust me, labels get VERY creative about how they tabulate their accounts. EVERYTHING in recoupable - if you call the label and the secretary uses a sticky to wirte down your message, you pay for it. (Okay, maybe not that bad, but close enough!) Often the label will loan you money to mount a tour, or will pay in your name to get on a tour (Ozzfest type festivals start at 50K for the small stage, opening slot). That's recoupable, with interest.

Usually it's ears after the album is released that money is made - world-wide sales (if you get a deal) even longer. Usually, it's 2 years or so before the royalty checks, if any, start going out.

Then, the band gets to pay for their equipment, the salary of their crew, their techs, tour costs, accountants, lawyers, and the manager gets 10-15% of all gross profit. Sometimes theres more people with a slice of that percentage.

You have to sell tens of millions of albums to see any kind of significant money.

Band make money from publishing, touring (ticket sales and merch), endorsements, and if they're really big, royalties. Most bands don't make much, most are lucky to break even, as far as royalties go. Now the labels are demanding a cut of tour proceeds, too.

Until maybe the last decade, you had to work with labels to get anywhere, for the most part. There were those who broke that rule - Frank Zappa, The Grateful Dead for example made their money off touring, and Zappa had his own label. Hip hop artists figured it out early on and create their own labels and produce themselves, to get more money.

So don't blame the musicians. They are'nt the ones pushing the labels to sue anyone, nor do the RIAA actually consult them. Most musicians see an album as a marketing tool to sell tickets and t-shirts.

No, this about corporations like Sony and Universal, who can't create products that people actually want, have drained the well, and are crying poor, yet still make billions every year - they just did'nt make as much as they expected, because people are'nt buying the albums. Normally, they typically sold enough albums to offset piracy just fine, not so much anymore.

[Caipirabob]

OMG - I might have access to decent brasilian music without flying to Brasil at some point?

Where's the fun in that? ; )

[Tainan]

FLAC is an improvement.

Zarf, as a recovering audiophile I agree with your synopsis.
Marriage chilled my sound jones...but I still long for the aural pleasures of high $$$$ sound.

[Irishguy]

huge difference?

not sure i agree with that...what codec and bit rate did you use to compare?

[mylife]

Audiophile!!!! ::pointing wildly at EGS::

[mylife]

Flac and Shn formats are compressed but are completly lossless full reproductions of the original recording

[mylife]

I use LAME and encode at 256 variable bitrate on Exact Audio Copy

[Uncle Meat]

The big A&R and marketing dollars are all about hoodlum music and skanky girl pop. They have put no real talent out for over a decade.

You hit that nail on the head.

[El Gran Salseron]

Audiophile? Nah. I just understand both audio and electronics. You already know why.

[Blind Eye Jones]

You're right musicians get screwed, and they may even know that they are getting screwed but at least they can say to their friends in that rotten old living room: "We're signed!" It may be the biggest mistake of their careers but they figure it's better than not being signed. Many bad things can befall them: the album is not pushed or released and is used as a tax loss, the manager skips with the advance from the record company (Badfinger), they sign a bad contract making them pay for all previous albums and promo and with compound interest, they're locked into a contract for years with no guarantees of future releases and at a dismal royalty rate, etc. The best article I've read is this one:

The Problem With Music
by Steve Albini
Whenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying shit. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end holding a fountain pen and a contract waiting to be signed. Nobody can see what's printed on the contract. It's too far away, and besides, the shit stench is making everybody's eyes water. 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: $ 7l0,000
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".


Mind you, I can show you the record company's reasoning towards bands and their justification for why they do what they do. It also makes a lot of sense and is not as mercenary as we think. If you want to read about their point of view, let me know.