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This is why your CD's cost $18

post #1 of 24
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I would link the page but it was dead so I used Googles Cache.


[quote] By Jennifer Ordonez
THE WALL STREET JOURNAL

MARINA DEL REY, Calif. Eighteen-year-old recording artist Carly Hennessy is packing up her small apartment. Her promotional posters will go into storage, and the beige rental couch will be returned. A weight-control message that the slender teen scrawled in marker on the refrigerator "NO, U R FAT" will be wiped clean.

For two years, Vivendi Universal SA's MCA Records paid the rent here while Hennessy prepared for pop stardom. And that's not all: the label so far has spent about $2.2 million to make and market her new album, an upbeat pop recording called Ultimate High. "Some people just struggle," she says. "I was very, very lucky."

Not lucky enough. Ultimate High was released in stores nationwide three months ago. So far, it has sold only 378 copies amounting to about $4,900 at its suggested retail price.

In many other industries, this would be considered an extraordinary bomb. But in today's troubled music business, it's routine. Of the thousands of albums released in the United States each year by the five major record companies, fewer than 5 percent become profitable, music executives say.

The high failure rate has become the focus of an escalating battle. On one side are big names such as Don Henley and Sheryl Crow, who are fighting the industry's practice of holding top performers to multiple-album contracts that can take decades to fulfill. They complain that labels unfairly enforce such deals because they need to offset their lavish spending on ill-conceived acts that never make it.

"We're expected to indefinitely fund the record company," says Mr. Henley, a solo artist and member of the Eagles, who calls the industry's high percentage of flops "shameful." He and other top performers staged concerts, in part to support an amendment before the California legislature that would limit recording contracts to seven years. That's the current cap on contracts for actors and other service workers, under a state law that originated from a 1940s legal case that helped break up the Hollywood "studio system," which tied movie stars to multiple-film contracts. In 1987, the music industry successfully pushed to exempt record contracts.

Record companies say they need to keep blockbuster acts on their rosters for as long as possible because they rarely see returns on the huge sums they must sink into virtually all new performers, and because it's so hard to predict who will succeed. The companies warn they won't be able to support as much young talent if contracts are limited. They point out that some of the loudest critics of the current system were its beneficiaries before they were rock stars.

Music executives also say it has become harder to launch new acts. Among the reasons: Deregulation of the radio industry in 1996 has led station owners to consolidate into a few big companies, which are under pressure to maximize profits and pull songs off the air that aren't instant nationwide hits. Superstores such as Wal-Mart, which stock fewer titles than traditional music stores, are the fastest-growing segment of music retailing, making it costlier and more competitive for record companies to secure prime shelf space.

As a result, industry executives estimate that major-label releases must on average sell about 500,000 copies just to break even. Last year, of the 6,455 new albums distributed in the United States by major labels, only 112 have sold at least that many, according to SoundScan, which monitors music sales. Overall music sales were down 5 percent last year the steepest decline in a decade.

The story of MCA and Hennessy shows the dysfunctional economics of the music industry at work. MCA, one of Universal Music's major labels, initially hooked up with the spunky teen-ager three years ago because it was trying to get a piece of the great success competitors enjoyed with young pop artists like Britney Spears and 'N Sync. Hennessy, a native of Dublin, had released her debut musical effort, Carly's Christmas Album, in Ireland at age 10, after performing all over Europe as Little Cosette in Les Miserables. At 13, she was named the Irish national spokesmodel for the Denny sausage brand. Soon, she and her family began hoping for much more, and Hennessy dropped out of high school. "The most beautiful voice you'd ever heard and she would have ended up singing in the bath," says her father, Luke Hennessy, a real-estate investor.

Luke Hennessy flew to Los Angeles in early 1999 and, after several months and a few intermediaries, got a disc of his daughter performing songs by various artists into the hands of established music producer Steve Dorff. He recorded a new demo of Hennessy singing some songs he had written, and it eventually crossed the desk of MCA's president, Jay Boberg, who says he found Hennessy's voice "extraordinary."

Although Hennessy didn't write her own music and hadn't ever performed solo in front of a big crowd, she had charisma, drive and pipes three things music executives say are most difficult to find in a single young performer. Mr. Boberg, 43, envisioned starting her off as a teen-oriented pop singer, in the hopes that she could one day develop into a more mature female vocalist along the lines of Celine Dion.

Over a long dinner at Spago with Hennessy and others in June 1999, Boberg and MCA's artist-development chief described their plan. Hennessy didn't object, even though she saw herself more as an edgy rock-and-roll performer. "This was my big chance," she says.

The executives offered her a six-album contract, under which Hennessy would get a $100,000 advance for her first album, plus $5,000 a month in living expenses while the album was being made. The label would own the recorded music and would front the cost of recording and promotion.

For Hennessy to make any more money, the label would first have to recoup its advance, its recording costs and half the cost of any music videos, as well as her living expenses meaning the album would have to sell between 500,000 and 700,000 copies, MCA says.

Such contracts have drawbacks for both sides. Artists can be unceremoniously dropped if they don't live up to expectations. But if they blossom into superstars, they can use their new leverage to demand that their contracts be rewritten to pay them much more.

Hennessy and her producer spent about three months recording eight songs. The total tab, including studio time, musicians' salaries, producers' fees and Hennessy's living expenses, was about $350,000 typical for a first pop record, MCA says.

Unfortunately, neither Hennessy nor MCA were happy with the results. Dorff, who had produced and written songs for Celine Dion and other artists, says he thought the album was "contemporary" and made the best use of Ms. Hennessy's vocal talents. But Hennessy thought the music was "old-sounding." Boberg deemed the album "too Barbra Streisand" meaning it was too serious for its target teen audience.

MCA decided to rerecord Hennessy's album from scratch. In early 2000, the company retained London-based producer Gregg Alexander, who had produced hits in Europe for former Spice Girl Geri Halliwell and others, to produce four songs. For the rest of the album, MCA turned to Los Angeles songwriter Danielle Brisebois, who had been helping Alexander on Hennessy's album.

In April 2001, with the album still unfinished, MCA decided to try to get Hennessy some notice by releasing her first single, a bouncy tune called I'm Gonna Blow Your Mind. On a call-in show, Nickelodeon asked viewers to rate 30 seconds of the song's video, but the audience was unresponsive. The video was quickly shelved.

By the time the album was done, MCA had spent about $640,000 rerecording it, including Hennessy's living expenses. That brought the total cost of making the album to about $1 million high for a first album. But at least this time, Boberg says, "Everybody thought this was going to be a hit."

If the album, due to be released in April, doesn't take off, MCA will re-evaluate. "If we can't find any market in the world that validates our view that she is a talent, then we have to question whether or not we move forward," Boberg says.

In the meantime, Hennessy is dieting and working out to look good for her European press tour. She got a tattoo her first of an intricate cross on the small of her back that she hopes will impress her fans, and has started learning to play guitar. "This album is going to be huge," she says. "I won't stop until it is."

<hr></blockquote>


This is why the Industry is stagnant. Not enough talent...too much marketing and poor mismanagemant. There are Too many attractive singers when I believe the majority of us buy music to hear good songs...not fawn over how sexy the singer is. I no longer care if the Music Industry survives or not. They have been a Viral Plague on Music for a Century or more. It's time for their demise.
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post #2 of 24
There is a lot of talent out there, but the industry doesn't care about finding talent. They seem to have forgotten that people actually like and will buy good music.

You don't need $2.2 million to make a great record, you need talent and an ability to not live like a superstar before you are one.

Why take a little girl to freakin' Spago instead of Chick-Fil-A? Why $5000/mth living expenses? Why $300k to record an album? Nirvana recorded their first album for $600.
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post #3 of 24
Thread Starter 
[quote]Originally posted by groverat:
<strong>There is a lot of talent out there, but the industry doesn't care about finding talent. They seem to have forgotten that people actually like and will buy good music.

You don't need $2.2 million to make a great record, you need talent and an ability to not live like a superstar before you are one.

Why take a little girl to freakin' Spago instead of Chick-Fil-A? Why $5000/mth living expenses? Why $300k to record an album? Nirvana recorded their first album for $600.</strong><hr></blockquote>

True...lately I've made a concerted effort to support groups that I like with new purchases. Lucky for me I now have the Internet as a "soundcheck" and I have much less Buyer Remorse now. This story though is not unique...it appears that this happens way too much..yet the industry blames the consumers for it's mistakes. It's a laughable situation but considering their attempts to have legislation passed to their benefit I find things like this extremely distasteful.
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post #4 of 24
[quote]Originally posted by groverat:
<strong>There is a lot of talent out there, but the industry doesn't care about finding talent. They seem to have forgotten that people actually like and will buy good music.

You don't need $2.2 million to make a great record, you need talent and an ability to not live like a superstar before you are one.

Why take a little girl to freakin' Spago instead of Chick-Fil-A? Why $5000/mth living expenses? Why $300k to record an album? Nirvana recorded their first album for $600.</strong><hr></blockquote>

As a musician, I agree. Policies of the record companies now pretty much dictate that if an "artist" doesn't sell at least 250,000 copies on the first album, he/she is finished. I think we will see the proliferation of smaller, independent labels.
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post #5 of 24
The music industry is COMPLETELY out of whack, in every way.

The LAST thing it's about, it seems, is talent and musicianship. It's about midriffs, nice asses, hair, dance moves, merchandising, the "perfect" single, etc.

At least in the mainstream.

I have three good buddies in Nashville who are all familiar in the song publishing/demo and studio session and A&R fields, and all that entails.

The horror stories they've told me over the years just blew mind!

I agree with groverat on this: the record companies are spending all this needless money, instead of being smart and doing it for the right reasons.

It's just a twisted, ****ed-up world when people like Lucinda Williams and Steve Earle can't be heard on radio, but the most chipmunk-voiced bubblehead can rule the airwaves with the stupidest, lightweight horseshit.



Modern, mainstream pop/rock/country all SUCK! I can't think of ANYONE popular in these fields (say, on the current Top Ten?) that isn't a hack, a derivative hack (how many Matchbox Twenty/Creed/Blink 182 ripoffs do we have to endure anyway?) or just plain useless.

There's a very good reason the soundtrack to "O Brother Where Art Thou?" has been so popular: it's REAL music, played by REAL people using REAL instruments.

Seems to me, enough people out there were starved for something that pure and simple and real.

'Nuff said...

If I was a musician and trying to "make it", I honestly think I'd say "**** off" to the traditional ways and use mp3, the Internet and alternative outlets/resources to follow my dreams. There is NO WAY I would do that whole record company song and dance bullcrap, and put up with their nonsense.

Like signing a deal with the devil.
post #6 of 24
Thread Starter 
Pscates,

I'm going to buy Lucinda Williams album just because of your post(Don't get me wrong I've heard some tracks off of it and couldn't understand why it wasn't selling). As only you can...you're giving the blunt truth. I honestly think that we can now survive without the large behomoth corps destroying music. Distribution is the key and the Internet allows unfettered distr(in theory)
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post #7 of 24
Or, you do it "your way" (Internet, mp3, etc.). What if you create this HUGE buzz and fan base WITHOUT the help of traditional methods and outlets?

You might be in a position to negotiate more aggressively when the big labels DO come calling.

I mean, if you're already successful, known, making a living, have respect/credability, etc., what do you care if Warner Brothers or Atlantic comes knocking?

And if they do, you don't necessarily have to do it THEIR way. You can perhaps be in a position to dictate more of your deal, which would be cool.

It's not the 60's anymore, and I think if you're truly a musician with something to say (not someone simply in it for the fame and money...that's a whole other story), you can do it with new, innovative methods that leave the politics and corporate nonsense out of it.

But you probably have to be truly dedicated to MUSIC. That's the key. You won't be on MTV and you won't have a Top Ten CD, and you won't be opening for Sheryl Crow.

BUT, you'll be "real" and you'll be doing it for the right reasons.

That's my take anyway. What do I know.

post #8 of 24
Thread Starter 
and you will reap MUCH better financial returns on a lower amount of sales. I think the Indie Labels should form a coalition to co-opt Videos and Marketing for a fair cut. I like Indie Music but we all know that you're not going to see them get Radio Play and all that.
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post #9 of 24
XM radio to the rescue!
post #10 of 24
My brother started his own record company last year. He has a studio and records people and makes CD's for them and if they want to, he will manufacture and market the CD for these groups. With the artist actually getting most of the profits and they can get out of the deal at any time. It seems to work pretty well, he has some REALLY good rappers.
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post #11 of 24
If you sign to a major label:

The record company will own the masters and copyright of your work in perpetuity
Your band will get an advance from the label, but that advance will get divvied up in approximately the following priority/pecking order:

1. taxman
2. entertainment attorneys
3. band's manager/A&R dept personnel incidental costs (business lunches, bar tabs, cocaine, etc)
4. album producer's fees
5. studio time
video costs
instrument and equipment rentals
rehearsal room costs
miscellaneous incidentals (drum heads, strings etc)

If there's anything left, maybe some per diems for band members from the start to finish of the recording cycle. This advance of course is the debt of the band (signees), but the purse strings are controlled by the Label's accounting department.

The advance is to be recouped by the label from the *artists* (approx 12% points) of retail. This means that if a band gets an advance of $200,000 to cover costs incurred in making a record, and the average retail price of a CD is $15 in the stores:

12% of $15 = $1.80 per unit

This means that over 110,000 units have to be shifted before the band sees a single solitary cent from sales. The label, which earns approx. 60% of retail (after manufacturing/distribution etc. costs are factored in) will be in clear profit after approximately sales of 22,000 units. If the album goes on to clear 110,000 sales, (the start point of artist payment) then the label will by then be in profit by approx $800,000.

Of course most bands dont get anywhere near even making a profit for their label, but often thats a result of the band not being promoted according to the terms of their contract (true for 99 in 100 artists), often an internal political decision byt eh label, or the music just isn't happening and the public aren't impressed. The chances are that a band on a major label will be dumped after one failed album, their songs are dead in the water and they will be in huge debt.

That's a highly simplistic way of looking at the typical mechanics of making a record, but as an investment of time, effort etc on the part of an artsist, its usually a disaster.

If you're a new artist, rehearse like hell, record your first cd in a local studio, form a littloe homebrew record company, get 1000 or so pressed to start and sell it at your gigs! Sure its not so glamorous but a whole lot more practical! You won't get into huge debt, you may even make some $$ and you will have all the control over your creativity and you will *own* your music and songs!

The music industry is melting down. With the essentials of a studio now running on any capable computer out there, anyone can make a decent sounding album, if they can write a half decent song, and they can play their instruments, and they know what they are doing technically of course. Perhaps the rub these days isn't so much who can make a great album....but *who can cut it live*??

Just my 2cents....
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post #12 of 24
Interesting post, Samantha.

Yep, that pretty much echoes everything my buddies in Nashville have explained to me over the years.

It's quite the racket!

I wholeheartedly endorse and support that do-it-yourself ethic. As I said in an earlier post, if your thing is truly MUSIC (and not money, fame, etc.), you've got a much better chance - with the technology available today - to get your stuff recorded, have more control over it, save money, avoid massive debt and being dicked-around, etc.

Unless you're just a total superstar who calls his own shots (is there even anyone that high up the rung who can? McCartney? Springsteen? Elton? I don't know...), you're pretty much a slave and whipping boy for the suits for the first several years.

And if your first CD doesn't spawn 2-4 massive Matchbox Twenty-type hit singles, it's el booto time...

post #13 of 24
Some of the best stuff out there is indie. As a matter of fact, my favorite artist for the last couple of years in the (sort of) mainstream is Jonatha Brooke. She had a major label deal and recorded a great album, but, with her a-typical lyrics and song construction, the company didn't know what pigeonhole to put her in, so they dropped her. She then went on to form her own record company w/ nationwide distribution (bad dog records) and recorded one of the best albums of the last 5 or 6 years - "Steady Pull."

Oh, and same goes for a band called Walt Mink. Some of the best, most inventive rock ever. Lost their major deal and plugged on w/ an indie label called Deep Elm.

I'm going to go hear some real music this weekend. And most of it independent.
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[ 04-23-2002: Message edited by: Thoth2 ]</p>
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post #14 of 24
Thread Starter 
[quote]Originally posted by Thoth2:
<strong>Some of the best stuff out there is indie. As a matter of fact, my favorite artist for the last couple of years in the (sort of) mainstream is Jonatha Brooke. She had a major label deal and recorded a great album, but, with her a-typical lyrics and song construction, the company didn't know what pigeonhole to put her in, so they dropped her. She then went on to form her own record company w/ nationwide distribution (bad dog records) and recorded one of the best albums of the last 5 or 6 years - "Steady Pull."

Oh, and same goes for a band called Walt Mink. Some of the best, most inventive rock ever. Lost their major deal and plugged on w/ an indie label called Deep Elm.

I'm going to go hear some real music this weekend. And most of it independent.
Merlefest.
Thoth

[ 04-23-2002: Message edited by: Thoth2 ]</strong><hr></blockquote>


I think I'm going to start supporting Indies more. I can't stand the radio anymore. Typical Playlist

Puddle Of Mud
Linkin Park
Limp Bullshiza
yadda yadda yadda.

now repeat groups with different songs and then claim "we play the best music"


Jonathat Brooks has a nice gig going. She even has DVD-Audio (Impressive...AND expensive). I can't listen to her audio at work but I'll check it out later.

[ 04-23-2002: Message edited by: hmurchison ]</p>
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post #15 of 24
[quote]Originally posted by hmurchison:
<strong>


I think I'm going to start supporting Indies more. I can't stand the radio anymore.

Puddle Of Mud
Linkin Park
Limp Bullshiza

now repeat groups with different songs and then claim "we play the best music"</strong><hr></blockquote>

Indeed. I hate the radio, except NPR. When I go on trips w/ my wife sometimes see wants to listen to the radio. Usually its "80's" music, which of course is not the kind of music I listened to in the 80's (I was a big Dokken fan. Boy, was THAT a long time ago). Anyway, some of the new stuff they play is just like the old stuff. Exactly.
I do love listening to the college stations when we pass through some college burg. I've gotten turned on to a lot of great stuff that way. Also, there's a great radio program available on the internet called "Morning Becomes Eclectic" out of an NPR station in Santa Monica. Great stuff. Finally, if you're into old time/bluegrass, check out "Roots and Branches" on WETS out of Johnson City, TN (East Tennessee State Univ.'s station). Its on the internet.
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post #16 of 24
Thread Starter 
These type of stations should be featured on XMRadio and Sirius. If I new I could hear Indie groups of multiple Genres on XMRadio I'd be signing up....I'm just afraid to get caught up in a Major Label melting pot of boring songs and weak talent.
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post #17 of 24
All this talk has kind of got me thinking... perhaps this is a bit too far fetched.

Apple's goal with technology has always been making huge, complicated systems simple, compact, and easy to use. The Apple/Mac made big, expensive, mainframe systems look like a joke. Final Cut Pro/DVD Studio Pro brought expensive, confusing media creation from workstations to the desktop. Why doesn't Apple do something with Audio?

I don't know about hardware, but is there anything Apple could do, at least on the software side, to make music recording, editing, publishing easier and cheaper? Something like... I don't know... Audio Studio Pro? Perhaps it could do something like record all your tracks, edit them, tweak them, mix them, then burn it to a CD? To me, it just sounds like the whole recording studio experience is just waiting to be replaced by something innovative... something to allow aspiring musicians to create professional sounding music all by themselves without a whole lot of money.
post #18 of 24
eVo, that's funny: I have spent part of today (since thinking about it while falling asleep last night) thinking the very same thing.

They seem to have three segments kinda taken care of video/photography, digital music playback and DVD authoring, via iApps and/or pro-level software.

As a musician and analog 4-track tinkerer, it would be VERY cool if Apple would come out with something like this. Probably won't (too limited appeal, I suppose), but in the same way they made digital music, photography and video "easy" and for the masses, how cool would it be to have a slick, intuitive Apple-designed digital audio multitrack software.

Aah, I'm dreaming...



In the meantime, guitarists, check out Line6's new gadget:

<a href="http://www.line6.com" target="_blank">http://www.line6.com</a>

:eek:

Unfortunately, seems to be Windows-only at the moment.

post #19 of 24
Forget XM Radio and Sirius, this is why God gave us broadband.
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post #20 of 24
Forget XM Radio and Sirius, this is why God gave us broadband.
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post #21 of 24
[quote]Originally posted by groverat:
<strong>Forget XM Radio and Sirius, this is why God gave us broadband.</strong><hr></blockquote>

I didn't know you could have DSL in your car.
post #22 of 24
[quote]Originally posted by eVo:
<strong>

I didn't know you could have DSL in your car.</strong><hr></blockquote>

That would be one seriously long phone line

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post #23 of 24
Yeah, and you'd always have to go home the same route you left, so as not to tangle your cord throughout town!

How stifling!

post #24 of 24
[quote]Originally posted by eVo:
<strong>All this talk has kind of got me thinking... perhaps this is a bit too far fetched.

I don't know about hardware, but is there anything Apple could do, at least on the software side, to make music recording, editing, publishing easier and cheaper? Something like... I don't know... Audio Studio Pro? Perhaps it could do something like record all your tracks, edit them, tweak them, mix them, then burn it to a CD? To me, it just sounds like the whole recording studio experience is just waiting to be replaced by something innovative... something to allow aspiring musicians to create professional sounding music all by themselves without a whole lot of money.</strong><hr></blockquote>

It get's worse. Final Cut Pro was originally developed by Macromedia...they were even calling it Final Cut, but had yet to market it. Apple could've purchase SoundEdit from Macromedia when they bought Final Cut Pro.

It's a shame because Macromedia hasn't updated SoundEdit in years, and yet it is still capable of doing things that no other sound app today can do. It was easy to use and elegant.

Apple should still consider buying SoundEdit, if Macromedia would sell it, and turn it into i-SoundEdit or i-AudioStudio or something. Definitely not a "Pro" package that would compete with what's out there, but something simple, elegant, and capable of doing multi-track editing. They could then create an app that would go with it that was capable of non-destructive editing. Integrate them both and allow integration with i-Tunes, and it would kick ass.

As far as the record labels, they are so friggin clueless...here's a hint (not that they're even capable of reading this): not every artist you sign should be considered the next Britney Spears or The Backstreet N'Sync O-Town Boyzzz.

They should be using technology to crank out CDs from pretty much anyone willing to sell their sole to them. Then, spend only so much as they see the return on the investment. They could've made a modest profit on that poor girl, but instead blew a wad of cash in their greedy quest to turn her into a cash cow.
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