TMV Read with alarm the recently announced tie up between UMG and Live Nation where the latter will manage artists on behalf of UMG. If 360 deals were not bad enough this is even worse. Yes, we see the benefits for both companies involved with the deal but the conflicts of interest for the artists are many and rather scary.
Artists have generally always been robbed for their art by a majority of major labels. If an Australian artist sells 1.3 million records and still owe their record company $300,000 as was the case with Noiseworks in Australia – then something is seriously wrong with the percentage splits between artists and labels in this business.
The fact an artist can sell so many records in such a small territory and whilst the label of the day was making more than $15AUD PPD from every sale, the artist after making the label a minimum of $15,000,000 AUD gross still owes the record label? There are numerous similar stories the world over when major labels are involved and the list runs into the thousands of bands who have experienced such a scenario…
But hold on a second a label can make such an amount and the artist still owes the label? Governments and regulatory bodies around the world should be looking into the dodgy practices that allow such a scenario to still persist in the 21st century. Even if the artist were to make some money the record label would own the sound recordings for 50 or more years? Yes, record labels take risks, yet perhaps they should be ensuring the successful bands are not ripped off to help the label pay for the unsuccessful ones they sign.
At least with the old deals artist made money form their publishing and live performances. With the take it or leave it 360 deals offered by major labels that are the current status quo artists are set to be screwed even further with what was once considered off limits legally. I refer to cross collateralization and the serious conflicts of interest it brings to the table.
The fact everyone in the value chain is receiving less in the age of digital music sales it is even more important that artists receive fair and equitable deals.
Having a tie up between the world’s largest major label and then the world’s largest live music promoter and ticketing company will only lead to more entrenched unfair deals for artists.
Germany provides a beacon of hope all other western governments and regulators from which to ensure artists get a fairer deal. In Germany after ten years a label has to pay the artist another advance to hold the rights to the recording or they by default revert back to the artist. Why is this important you may well ask? Put simply it means the label has to pay if they want to keep it in their catalogue or the artist gets it back.
In TMV’s view deals with clauses such as those in Germany would ensure if labels were to keep a catalogue past ten years that they would work it or give it back to the artist for the artist to do what they want with it. We would go even further and suggest that after recording costs all major label artists splits should be around the 60/40 in favor of the label. All their marketing costs are tax deductible so trying to claim marketing spend as a reason for keeping the status quo is a non-starter.
On a final note, there are so many DIY tools for artists whether that be Reverbnation, Topspin, Bandcamp etc. on the market. Until artists are at least in a bargaining situation they should not be pursuing major label deals. Artists can make a lot more money selling less-records by going the DIY route rather than they ever will by going down the major label route. TMV predict that until major labels bring their deals into the 21st century where they are fair and equitable to artists – that more and more artists will shun signing to them.
