James Lee Stanley
In the past, major labels were the Holy Grail for musicians. To sign with a major label meant a real recording budget, tour support, a PR department, a booking agent, a distribution machine with the ability to not only distribute, but collect, and an actual cash advance against the monies that they thought you were going to make.
And be assured that they got back every dime that they ever invested in you because while they were selling their discs for around 7.50 a unit, they were charging you back every cent that they spent on you. It went against your royalty rate, which for the Beatles was around .05 a recording split four ways amongst the four of them.
The labels made out like bandits and they explained it thusly: ?it costs so much to break an act and every act doesn?t make it, so we need the buffer. Don?t ask why all the suits were driving Mercedes Benz?s while the musicians were all sleeping together in one-room apartments.
But as the artists became more aware, the royalty rates kept climbing and the majors kept trimming their rosters and the benefit of being with a major began to diminish.
When I started my label, Beachwood Recordings, I did so because one of the majors told me that they didn?t think that they could sell more than 75,000 units on me and that wasn?t enough. Based upon the .25 per CD that they were going to give me and the 100,000 dollars that I?d be in debt to them by the time the recording came out, by their figuring, I?d have to sell 400,000 units for them to break even. Their gross would have been $562,500, but they would be getting their money back from my .25 per unit.
So I went home all depressed that they weren?t going to sign me even though they thought that I could sell 75,000 units, but then I had an epiphany. If I put out my own recording, then I wouldn?t just be getting .25 cents per CD, I?d be getting the full retail price.
With the majors, I could sell 100,000 units and not see a dime. With my own label, I could sell 10,000 units and gross $150,000.00. It didn?t seem like rocket science to me. I started my own label in 1980 and never looked back.
These days, the major labels are offering what they call 360 deals, whereby they get a piece of every dime you make, from touring to merchandise; publishing to endorsements. Anything that you make money on, they would make money on.
So you have to do the math very carefully and you have to consider that you will be dealing with the producers that they want you to work with, possibly the songs that they want you to sing and maybe the musicians that they want you to work with.
And there is still no guarantee of anything, except that they will get a cut of every single thing you make, period.
What I recommend is doing your own thing, your own label and starting regionally. Keep in mind that if you sell 10,000 CD?s across the entire planet, statistically you are still completely unknown. Sell 10,000 units in and around a hundred-mile radius of your hometown and you are FAMOUS.
And people come to see fame a lot more than they come to see talent. It?s great to be talented, but you have to raise your profile enough to get noticed, or you will never be able to make a living with the talent that God gave you.
And as people come to see you, they are going to help spread the word. It?s like a magnet. The more people you bring out to see you, the more people want to come out to see you. And therein lies the rub.
This article is reprinted with permission by JamesLeeStanley. Pleasefind the original article and support James at datamusicata.com
