The Problem With Music

This oft-referenced article is from the early ’90s, and originally appeared in Maximum Rock ‘n’ Roll magazine. While some of the information and figures listed here are dated, it is still a useful and informative article. And no, we don’t know how to reach Steve Albini.

-Negativland

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:

$ 710,000


 

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”.

 

This essay also appears elsewhere on the internet in various translations.  Here are a few of them:

German, translated by M.Dmitrieva

Belorussian – this translation seems to have disappeared.  Let us know if you find it.

French, translated by Kate Bondareva


63 Responses to “The Problem With Music”

  1. Why Most Rappers Are Broke - Future Producers forums says:

    [...] as you sign a big deal you're in debt… See Courtney Love's Letter to Recording Artists and also The Problem With Music :Negativworldwidewebland Most of the time it isn't mismanagement that keeps artists poor, its the desire to be big in the [...]

  2. The Problem with the Future of Music: Amanda Palmer and the rise of the music biz Super PAC - On The Download says:

    [...] of the music biz Super PAC Published May 03 2012, 10:05 AM by Daniel Brockman In The Problem With Music, an oft-cited screed from the heady alternative-bands-being-poached-by-major-labels days of 1993, [...]

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  5. Five Things We Learned From Steve Albini’s Ask Me Anything Reddit Chat | MTV Hive says:

    [...] which he’s in favor of – and generally approves of the direction of music for bands these days. Given what he wrote about in a famous essay that appeared in Maximum Rock N Roll in the ’90s, that’s probably to be expected. [...]

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  7. I Can Hear The (<3) Beating As One « The House Of J-bola Virus says:

    [...] http://www.negativland.com/news/?page_id=17 [...]

  8. QUESTION OF THE WEEK: THE GHOST WITH THE MOST? | MetalSucks says:

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  9. The Psychology of Copyright Violation « Cathi Carol says:

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  13. NSA | theminefields says:

    [...] I concede that artists do benefit from concert attendance and merch buying. Former Camper Van Beethoven leader/current professor David Lowery makes a good point here, though, about why that isn’t enough: http://thetrichordist.wordpress.com/2012/06/18/letter-to-emily-white-at-npr-all-songs-considered/ (In the interest of fairness, here too is a remarkably eye-opening piece by noted asshole Steve Albini from the 90′s about the flaws of record companies that Lowery seems to be trying so hard to flatter: http://www.negativland.com/news/?page_id=17) [...]

  14. Emily White and the Celestial Jukebox | The American Conservative says:

    [...] Here’s the pretty much definitive response by musician/producer David Lowery. His points are good, namely that the responsibility to support artists resides with individuals, not governments, and that by not paying for music a listener is simply choosing to patronize the technology companies who manufacture laptops and deliver broadband rather than the musicians themselves. There’s definitely something to that, though looking at his calculations of just how much Ms. White owes to her favorite artists, I couldn’t help thinking of Steve Albini’s similar tally of how badly some record labels bilked their artists. [...]

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  24. Amanda Palmer: The erotic politician on the crowd-sourcing campaign trail - On The Download says:

    [...] arithmetic that screws musical acts who are bad at accounting with his infamous early 90s essay “The Problem With Music”. So it should come as no shock that he somehow found his way into this thing, with his seemingly [...]

  25. Man fined under French anti-piracy law - for downloads his wife made? - Page 26 says:

    [...] you need a little more development. Swim again, please. Backstroke”. And he does of course. The Problem With Music :Negativworldwidewebland Reply With [...]

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    [...] go on about the gruesome inner workings of record companies myself, I’ll recommend you read The Problem with Music by Steve Albini. Suffice it to say, artists don’t need record labels the way that they used [...]

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  38. "Why Most Rappers are Broke" | Les Jones says:

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  43. Freelancing Tool Kit: Contracts and Business Formation | SPOOL: Creative. Industry. Unraveled. says:

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  44. End ALL Copyright In Music and Stop Criminalizing Your Audience | MassBands.org says:

    [...] circles, and this is what I came up with. I’ve read a few articles about it, there was one by Steve Albini that was quite interesting.  If anyone can get some national acts involved in “ending [...]

  45. The financial decline of the music industry and two possible consequences - Music Banter says:

    [...] I had no problem, but… Anyways, here's a more informative view of what he industry was all about back in th e90's. Steve Albini has produced a number of albums that did very well, but he knows what was happening from the front lines as well. Check this out. I don't think you would want a return to big budget albums again, seriously. The Problem With Music :Negativworldwidewebland [...]

  46. The death of the record deal? | Kenai Music LessonsKenai Music Lessons says:

    [...] For an excellent explanation of how this worked, read Steve Albini’s article “The Problem with Music”, and also bear in mind that it was written in 1992. Those huge margins were partly greed, [...]

  47. Thanks For Nothing, Trent Reznor | ScottFromNY says:

    [...] But from 2006 to 2009, Trent Reznor of Nine Inch Nails decided to make his schtick about sticking it to the man. At this time, the man was Interscope Records, founded and operated by Jimmy Iovine. Interscope had charged outrageous amounts of money for NIN records overseas, threatened suit against individuals leaking music as part of an officially sanctioned marketing campaign, and a bunch of other nasty things that Steve Albini’s been rallying against for years. [...]

  48. Ways To Live Online: Nothing Is Free | monstatruk says:

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  49. An Open Letter To Pirated Artists - Falkvinge on Infopolicy - Falkvinge on Infopolicy says:

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  50. Steve Albini on “Selling Out” | That Eric Alper says:

    [...] Via [...]

  51. Higher ed getting iTuned, and customer service’s role. | InsideTimsHead says:

    […] If you bought music before the turn of the century, you did so totally on the terms of record companies. You’d hear a good song and either could buy the single (with a B-side that was usually a throwaway track) or, if you were like most consumers, pay $16.99 or some inflated price for a CD or album. Maybe the album was great, perhaps another decent track or two helped you rationalize the purchase, or the rest of the album could be junk. Chances are you couldn’t listen to the album to know for sure, so you shot blindly and hoped for the best. Musicians were almost completely at the mercy of record companies, signing exploitative contracts that Steve Albini ably covered in the eye-opening essay The Problem With Music. […]

  52. Jak podpisa? kontrakt nagraniowy z wytwórni? muzyczn?? | Akademia Sound Park says:

    […] popyta? artystów z bran?y. Warto te? przeczyta? t? ksi??k? i – ku przestrodze - ten wpis Steva Albiniego o kontraktach nagraniowych. A tak?e wpis Davida Byrne’a. Wszystkie wymienione pozycje […]

  53. The Solitude Trilogy – Glenn Gould, Shellac and Marnie Stern | Quartertonality says:

    […] And I think that this anti-industry stance is pretty well known because of Steve Albini’s famous tome against the corporate music world. In addition to all of this It seems that they relate more to […]

  54. ANALOG TAPE BEST RECORDING MEDIA « WORDVIRUS says:

    […] CNET’s Steve Guttenberg (“The Audiophiliac”) profiles prolific audio engineer and general music industry do-it-all Steve Albini; Albini (who’s worked on literally thousands of albums with musicians across a wide range of genres) has interesting things to say about compression, the rise of home-recording (“The majority of recordings will be crappy, low-quality recordings, but there will always be work for engineers who can do a good job, because there will always be people who appreciate good sound.”), and why he still prefers to record to analog tape. (Note: Albini is justly famous not just for his production work, but in particular for his essay “The Problem with Music.”) […]

  55. Punk Rock Enforced By Law | shapejam.com says:

    […] ago, in the Pre-Torrent age there was an amazing piece in the Baffler from the record producer Steve Albini who ran some numbers showing how a band can […]

  56. Album that you need to hear: Pink Mountain – “Untitled” | Quartertonality says:

    […] we don’t care.” The song aligns them philosophically with Steve Albini’s famous tirade (that I reference every chance that I […]

  57. Steve Albini tellls you why is better not to sign with a major label. | gabedm says:

    […] In this essay the almighty sound guru goes deeply through figures explaining why is better to stay independent, and I will add to release yourself your music. keeping control over it forever. This way it will take you longer to be worldwide known but you will know how the game works and will be solely responsible for your music and its exploitation. […]

  58. Don't Prostitute Yourself Miley - Sinead O Connor - Page 52 says:

    […] The Problem With Music :Negativworldwidewebland Sign in or Register Now to reply […]

  59. is this music?» gigs Shellac - Edinburgh Liquid Room live review - is this music? says:

    […] pretty exploitative music service are slim to say the least – see singer Steve Albini’s The Problem With Music […]

  60. The VICE Guide to Making 2014 Better Than 2013: How to Be Less Stupidly Poor in 2014 | Spy | Sex · Persuasion · Influence · Adult Lifestyles · Entertainment | Espionage Magazine | Sex · Psychology · Lifestyle · says:

    […] pragmatic about it, your band’s not going to happen. Steve Albini explained why in his essay The Problem with Music all the way back in the early 90s, before anyone even knew what an illegal download […]

  61. The VICE Guide to Making 2014 Better Than 2013: How to Be Less Stupidly Poor in 2014 « INTLFACES says:

    […] pragmatic about it, your band's not going to happen. Steve Albini explained why in his essay The Problem with Music all the way back in the early 90s, before anyone even knew what an illegal download […]

  62. Daron's Guitar Chronicles - Liner Note April 2014 says:

    […] “The Problem With Music” and you can currently read it on the Negativland website here: http://www.negativland.com/news/?page_id=17. The tl;dr is a spreadsheet showing how a typical band who sells 250,000 albums ends up making […]

  63. Egg and chicken question - Page 4 - Home Recording forums says:

    […] Sign in to disable this ad Read this: The Problem With Music :Negativworldwidewebland New Gregor The Terror album! Download – El Bastardo Azul Or Buy the CD! New and old stuff – […]

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