Wednesday, March 19, 2008

Letter From Jim Prentice

Well, golly gosh kids (worded for precious Aaron's sensitivity). Months after writing to the, ahem, Honourable Member, some petty functionary in the offices of the Minister of Industry fires up the 'we didn't read it' machine and poops out a form letter responding to my letter about copyright reform. Well thanks a whole bunch for your attention to detail there Jim. Perhaps if my note had been scented with the musky aroma of a lobbyist, with just a whiff of future favours, it might have warranted reading.

But who am I kidding, Jim Prentice doesn't really care what I think. He doesn't care what you think. He has marked out a very exclusive constituency, one that could sit around a table. They are the CEOs of a handful of international conglomerates. Those are the people Jim Prentice served at the time I wrote him and those are the people he serves now. Those are the people for whom his schemes of copyright reform are being prepared. Otherwise, he might have responded to the volume of public outrage with public consultation. He might have begun seeking out the opinions and interests of Canadian stakeholders, creators, educators, innovators, libraries and businesses. What have we heard from the Minister? Nothing. Not a lick of information about the bill he is holding close to his chest and not the first hint of interest in why we gathered en masse to slow him down.

Instead I get this limp effort, bereft of information, rich in fibs and platitude:

Dear Ms. Stewart:

Thank you for your e-mail, regarding possible amendments to the Copyright Act.


Gosh, you're ever so welcome. And thank you for assuming my gender and getting it wrong.
 
The Act must continue to be supportive of innovation and research while reflecting current technological and legal realities.  To this end, it must provide adequate protection for copyright holders while promoting access to copyrighted material. 


Technological and legal realities? Like, how your pals at SONY/BMG/EMI/UNIVERSAL and etc. ignored shifts in technology and the market, shit on the consumers of their products, mistreated and routinely robbed the creators of their products. And now are attempting to have you write new laws to protect them from the repercussions of their own ineptitude, avarice, greed and stupidity. Adequate protection of copyright holders, as determined by who, the above noted multinational crooks? How about they sleep in the beds they've made. It is high time that some of those businesses went the way of the dinosaur. Promoting access to copyright materials. Excuse me, how does opening the door to litigious corporate behemoths promote access?

With this in mind, I am pleased to inform you that the federal government committed in the Speech from the Throne on October 16, 2007, to “improve the protection of cultural and intellectual property rights in Canada, including copyright reform.”  In this respect, I am working closely with my colleague, the Honourable Josée Verner, Minister of Canadian Heritage, with a view to introducing amendments to the Act.


"Improve the protection of cultural and intellectual property rights..." Like the way that the Federal Government has presided over the decimation of the National Film Boards documentary library?

Please be assured that your comments will be taken into account as we move forward. 

Sincerely,

The Honourable Jim Prentice, P.C., Q.C., M.P.


Minister Prentice, it is eminently clear that you are neither interested in my thoughts nor in those of the thousands of other Canadians that have had to chase your sorry, dishonest ass down on this issue. Please, Minister Prentice, allow me to be perfectly clear, you sir, are a lying sell out. The future of Canadian artists, writers, musicians, archivists and educators are at stake. You can take your false assurances and stuff them up your empty suit. Do not insult our intelligence with this sort of drivel. You were ready and set to table legislation before Christmas. You aren't working closely with anyone, there are no consultation processes taking place, the legislation is written and you are biding your time, hoping that the public gets distracted. Well Jim, we're still here, we're still watching. And we won't settle for a piece of legislation designed to make bought and paid for shills like Graham Henderson happy.

Speaking as a working artist, he does not represent me or my peers or our interests and evidently neither do you. I spent my day and a chunk of change in the recording studio today polishing tracks for my next release. We are the people that move the cultural heritage forward. We are the people that learn our craft from those that have gone before us. Mr. Prentice, your corporate pals would brand us pirates. But the thing is that "piracy" is only wrong when they aren't profiting by it. The tales of the industry robbing artists blind are legend. Like most legends they are rooted in fact.

So since I'm a pirate, I might as well just copy and reproduce an entire essay by someone to illustrate the nature of the kinds of bastards that you, Mr. Prentice, are bedding down with. The following is by Steve Albini. I first became aware of Steve Albini when I bought the album "Earth, Atomizer, Let's Go" by Big Black. It was a beat box, distorted guitar, bass and guttural rage coming out of Chicago. It was fierce, ferocious and uncompromisingly intelligent music. I shared it with my friends because it wasn't readily available in the malls and shops. Because that's how the good music proliferates and gains fans. Steve Albini went on to become a highly respected producer, here's his take on the corporate music industry that Jim Prentice is working so diligently to support:

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:
$ 7l0,000

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".

10 comments:

Unknown said...

a) I got that very same letter a while ago, actually. From more than one Honourable Member, even. A disenheartening experience, isn't it?


b) Alright, I've meant to say this in the past, but there was never a time I could without simply looking bitchy. But this post REALLY brings it into focus.

For the love of GOD, PLEASE, PSA. Use a SMALLER font - This clumsy monster you type in makes a reading a chore.

Lindsay Stewart said...

lol alrighty then robin. bitchy would have been more like aaron ignoring all of the content of a post to whine about a naughty word. i'll look into the type face issue. cheers.

Frank Frink said...

So, you wanna be a rock 'n roll star? Get your money for nothin get your chicks for free? You have a better chance of being hit by lightning or a meteorite.

Albini was actually going easy on the big industry conglomerate. Record labels, promoters, managers, booking agents - they're all snakes with arms (and I've got some stories). And now the snake is feeling threatened. Still won't stop it from wanting to bite the hand (i.e. the public) that feeds it.

Maybe the T-shirt guys have figured out how to count money like record company guys

Do I have to spell out the answer to that one? Three letters, first one is the 25th letter of the alphybit. Ditto the venue operators and the ticketing people.

Lindsay Stewart said...

ticketmaster = satan. though i have to say that i'd love to kick any musician that charges or allows the audience to be charged enormous ticket prices. the industry is just a magnet for scumbags. no wonder prentice gets on with henderson and the weasels.

¢rÄbG®äŠŠ said...

Potato-bass is de rigueur.

I play guitar and have at times daydreamed (from a safe distance) about making a living with it.

I inevitably conclude that I'd be poor and bitter, though drunk more often.

LuLu said...

Perhaps if my note had been scented with the musky aroma of a lobbyist, with just a whiff of future favours, it might have warranted reading.

Why PSA, I am just shocked that you think Canada's New Government might be open to bribes ... for shame.

Sean S. said...

ticketmaster evil? why because of the $3-15 surcharge, oh and the extra $2 they charge to order tickets online and than pick them up from the agent booth? I mean that $10 show on campus only really cost me $17.50, that's a steal!

Great article, I knew these bands had it bad, but not that bad.

Kyle Lahnakoski said...

I got my form letter too! You can almost feel the contempt oozing from it.

Niles said...

I also received that nifty 'gosh darn you wonderful constituent I *hear* you dude and I surely will take that opinion under due consideration' letter. Nothing like government e-mail spam reply.

Can we start a club? We can use our decoder rings to translate the reply. 'dear commie-liberal-hippy internet-pawn of civilization-destroying pirates. It is indeed a pity you don't understand the complexities of life. Now, please get out of the way of the letters-of-trademark freemarketeers who do, you Aynrandian inferior. Sincerely - one of the SHP (steve harper party) mouthpieces'

Frank Frink said...

Here's something you may not know about the ticketing surcharges that no one involved wants you to know. It's not all the ticketing agency's. For arena/stadium sized shows, and on occasion smaller venues particularly when the promoter is also the venue owner/operator, a portion goes back to the local promoter and the venue as 'marketing fees', and in the case of extra-major-super acts (think Rolling Stones level) with the act itself.

It's all in the name of everyone's 'creative accounting'.

Something to watch for... likely within the next two-three years you'll begin to see more and more promoters/venue operators doing their own ticketing. Since most of the selling is now done online the capital costs of maintaining POP networks and call centres are much reduced or no longer considered. The software is available to them. Just don't count on it leading to lower ticket prices. It just becomes another revenue stream for the promoter or venue. The service charges will be blended into the ticket price, no longer broken out. While that may sound 'better' - you don't care to know how much the service fee is - what it realy means is you have no idea how much extra they're actually pulling out of your wallet. Some of that will be shared with the performers, creatively accounted for, no doubt. But, you/we the consuner will still be gouged nonetheless.