In response to yesterday’s post, reader Scott W. solicits learned opinions on music producer Rick Beato’s claims of a Y2K Curse.
For those in too much of a rush to watch the video, Rick observes that a whole slew of bands that hit it big in the 90s fell off the map in the aughts. Right around the year 2000, in fact, almost like someone threw a switch.
- Cake
- Blur
- Live
- Everclear
- Collective Soul
- Blues Traveler
- 311
- Gin Blossoms
- Days of the New
- Our Lady Peace
- Third albums that failed to connect (A member of Jesus Jones told me outright that this is what happened to them.)
- The 1996 Telecommunications Act, which Rick does pin some blame on and author JD Cowan has written about at length.
- False positives – Some bands he cites as victims of the curse, most notably Live, stayed big into the aughts.
- Wild Cards – Other acts that fell prey to the curse owed their decline to issues within the band, e.g. artistic differences, personality conflicts, drug problems, etc. Blur and Oasis were two high-profile casualties of internal drama.
A harsh reality obscured by the glitz and glamor of showbiz is that most acts, even those that meet considerable success, tend to fail. The perpetually stadium-packing supergroup was a Cold War phenomenon whose day is done, except for the few pre-90s megabands that linger on.
Most groups followed a career path that ran from Mom’s garage -> playing friends’ parties -> open mic nights at dive bars -> headlining local shows -> van tours of colleges in the tristate area -> B stage at the county fair.
A tiny sliver of bands got a break and found their way onto the lineup at one of the big festivals or were tapped to open for an A list act passing through town. Most of those bands blew their shot, but the percent of a percent that made good landed the coveted Big Record Deal.
That, according to an eye-opening article musician and author David Stewart passed along, was when our gun-slinging guitar heroes’ problems really began.
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 underlined, expenses are not.
Â
Advance: $250,000
Â
Manager’s cut: $37,500
Legal fees: $10,000
Â
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 CD’s, shipping tapes, misc expenses: $2,000
Â
Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Director’s fee: $3,000
Â
Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000
Â
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
Â
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
Â
Tour gross income: $50,000
Agent’s cut: $7,500
Manager’s cut: $7,500
Â
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
Â
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)
Â
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
Â
THE BALANCE SHEET
Â
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
Â
Band member net income each: $4,031.25
Â
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.
Repeat this process for the two albums left on the band’s three-record deal, and it’s no wonder why most bands that make gold records go back to playing the state fair.
Or at least they used to before the establishment made an end run around the process and just started manufacturing every popular act from scratch.
And since this blog’s readership leans towards writers, it’s important to understand that New York publishing is even more backward and evil than the record industry.
That 20 grand publishing advance up there? That’s for a book the band’s publisher paid a ghostwriter 40 grand to crank out.
Unless your craving for validation trumps your need to eat, you are well advised to steer far clear of legacy industry gatekeepers. The secret to avoiding the traps that musicians and authors all too often fall into is knowing the value of your skill and never settling for less.
Even if you’re not an artist, you have skills that you can turn into income streams and use to heal the culture.
My best selling author client Adam Lane Smith will show you how. Take his course today!
I will say one MAJOR factor he didn't mention were the massive label mergers. He touched on the radio industry, but not the labels themselves.
Many of the bands he mentioned as not making it didn't make it because they were dropped from their label and thereby had no more support. I mentioned how this happened with Less Than Jake and how they only got a foot in the door again because of another music fad, but still couldn't play everything they wanted to.
He also doesn't mention that most of the bands that did make the 2000 cutoff died by 2010, such as the garage rock bands. They died because, as The Hives said, there was no more money in the record industry. This is why most bands tour and release select albums rarely these days. It just doesn't bring in the money.
The industry's dead.
JD
What would be a possible solution?Streaming? Playing local venues?
xavier
Bands make money playing live, but touring is a huge cost/time sink. Streaming would be a possibility, but either you shell out a ton for equipment to stream good quality sound, or you sound poor w out good mixing. Self released albums could do well, but you need the mailing list access so it's known. And even then, studio time is costly, as is mixing and mastering.
Recorded music has largely killed live.
Plus, let's be honest, live sound sucks with few exceptions.
Alfred
Thanks. That's a helpful analysis.
xavier
Man this reminds me of african american musicans that got really screwed by the record companies and why there is no live music with instruments these days
That cost the studios money and music these days is so cheap to release.
I saw Skillet when they were playing flyover state youth groups. My dad saw both Billy Joel and Lynard Skynard live in small venues in and around Memphis. Those days are over and may never come back.
Mom's garage -> playing friends' parties -> open mic nights at dive bars -> headlining local shows -> van tours of colleges in the tristate area -> B stage at the county fair."
So I never got past the 4th step and you can add in not earning anything much more than complimentary drinks. Even when the music was tight and the musicians excellent.
Forget warning the kids about drugs, teen pregnancy, or texting and driving; warn them about joining a band. Tell them "The money, the music, the hang." If the gig supplies at least two of the above, take it. Any less get out because I've wasted time in bands that literally had none of the three.
For an interesting read, try Hitless Wonder: A Life in Minor League Rock and Roll by Joe Oestreich. A story about a hard-working band with solid material that got the record deal but got dropped eleven days later.
A few years ago, I read a convo on FB of a couple of music artists talking about where the real money is these days. Surprisingly, they said it was Youtube. Because of the way Youtube pays royalties to artists, that was the hot place to upload your music and get noticed. I don't know how good it is these days, with youtube trying to kill off its own userbase. Streaming services like Spotify aren't great for artists, because they pay so little, and discoverability is tough. It was really interesting.
I read your Music Men post, too, and it was also interesting. I was just listening to spoof covers of songs that turn stupid pop songs into clever songs about videogames (Minecraft has some excellent stuff, and my kids just found an Among Us cover artist who has some pretty good production value). When the parody artists are producing better versions than the original material, something is wrong. Ex. Weird Al
The truth about digital marketplaces, which internet autists like Wallstreetbets were the first to figure out, is that they're essentially games run by dumb algorithms.
Spotify is no different. An upstart indie band cracked the discoverability problem by uploading an album that was just ten hours of blank tracks and asking their modest fanbase to constantly loop it in the background.
I do think it is YouTube still but yes it might not be in the future. The Petersen's are a Youtube/live blues grass family band that I follow. They along with metal cover band Frog Leap Studios seem to be making better and better videos with years of videos suggesting it is still lucrative.
Reading that case study I didn't make it past the first I think, four figures. Didn't need to. It's non-viable.
Advance 250,000. Recording budget 150,000. We expect the expenses for recording to be no less than 150,000. Let's be wildly optimistic and say that all other expenses for a full year of whatever the job is are no more than that, ha, ha, HAHAHAHA! But OK. 250,000 – 150,000= 100,000. You're a four-piece, right? 100,000 /4 = 25,000. Below minimum wage, here in Oz.
If all goes well, nothing gets more expensive than expected, and you miraculously make enough to pay back the advance, you are fucked. It gets /worse/ from there.
Those are 1993 dollars, but you're still right.
"If all goes well, nothing gets more expensive than expected, and you miraculously make enough to pay back the advance, you are fucked. It gets /worse/ from there."
I don't doubt it, but I'd love to know exactly why that is.
The numbers as written can't support all the extra cuts being taken. I'd have to check it out and going over business numbers in detail still gives me PTSD, but I think ultimately it's a business that would be viable done organically, but with the cuts, takes, slices, and I suspect a very large hidden cost of finance, it gets frittered away to nothing.
Or to put it another way, for most entertainers, the price they can charge converges on the marginal cost of production, and everyone who says otherwise is a thief.
Which would include most record company execs, managers, and A&R men.