The House voted to pass HR 4213 with some minor revisions and amendments. After passing the House and the Senate earlier this year, Congress could not present the bill to the President until proposed changes (which likely means more pork was added) were debated. Thankfully for film makers, an extension of Section 181 through December 31, 2010 remained as part of the bill without any modification. The extension will permit films that were or are being produced in 2010 to utilize the tax deduction.
Even though it still looks like we are on the right track (which we have been for about 6 months), Congress adjourned for a week long holiday. So the Senate and President will not see this Bill until at least June 7.
Obviously, this extension will be great news for everyone associated with making movies in the United States. To find out more about Section 181 or to figure out how it can help with your film’s money raise, please feel free to contact us at josh@lawyer4musicians or info@tkhlaw.com. Remember, HR 4213 is not a law yet (not until the President signs it) and this blog does not contain legal advice upon which you may rely. Thanks to all readers who help us stay on top of this and correct any misinformation that is out there.
What are the requirements of owning and operating your own music label? Apparently having a recognizable name and a healthy checkbook and/or ego are prerequisites. Recently, Perez Hilton announced the launch of his label Perezcious Music, then David Letterman through his hat into the ring with Clear Entertainment and just this week, the most qualified American Idol judge, Ellen DeGeneres, joined the fracas by forming ElevenEleven Music.
So these media moguls who have worked very hard for a long time to reach their respective level of celebrity recognized the same thing that we have been writing about for the past few years: Major Labels are dying. There is a wide gap in the industry where well funded and well publicized projects can have a real impact and make real money.
The independent model (self funded, self produced, self released) has fizzled a bit over the best year or so. The glut of content and ease of production has made it harder to get noticed. But the labels remain in disarray and the old multi-album record agreements are not coming back. So is the only way to get your music out and actually noticed partnering with a celebrity?!? We’re here to say…not necessarily.
What do these new Celables (I want credit for this new moniker) s have that attracts musicians? 1. Money (in Letterman’s case, a whole lot of it); 2. Celebrity/Fame/Recognizability and 3. Easy Access to the Public.
Each one of the above three examples has enough money (or access to money) to fund a “major label” like push for an artist. (Notice that they are starting modestly with one or two artists evidently learning from the failed major label model of signing every artist and hoping one hits) That means that they can afford to pay for the production and recording of an album, pay for the marketing and advertising prior to and during the release of the album (including paying to get music in the right places, on the radio, on MTV, etc.), pay for a distribution agreement and pay tour support to get the artist out on the road in front of his newly purchased fan base. The obvious HUGE plus with being part of a Celeb label is the instant recognizability that it gives to the artist. Any piece of press that talks about Ellen’s new label will inevitably mention her new artist as well. Finally, what better way to push the artist in front of an enormous audience than to promote him or her on your own show or website. The Celables will push (as all of them already have on their own shows, websites, and other appearances) their artists to their previously established enormous fan base. Think how hard it is to get to perform on Letterman. Now think how easy it is to perform on Letterman, in front of millions of potential purchasers of music, if you are on Mr. Letterman’s label.
So how can an indie compete with a Celable? Well, there really is no replacement for the first requirement: Money. However, as we have consistently written here on L4M, if you push your music to the level where an investor may be intrigued enough to partner with you, you may be able to get a regular old rich guy to take care of this need. Now, your rich guy is probably not David Letterman, but with the rich guy’s best asset, money, you can purchase a lot of what the Celables have. Buying the right marketing, or better yet, partnering with the right marketing and public relations firm can get you the placements you need, the buzz you deserve and even land you on the Ellen show. Paying for an experienced management team can also get you that access as well as get you bookings at big shows or on legit tours.
The point, the model of a musician investor partnership can work. Does it work better if that investor is uber famous? Probably. But, putting the right team together and using money in a smart and creative way can get you to the same point as Runner Runner (never heard of them? they are Letterman’s band).
SELF-PROMOTION OF THE MONTH: NEW ARTISTS
As the L4M family grows, so does our client base. Check out this talented dude:
THE SHOW is about to start. Nasser THE SHOW Goins is what’s next in hip hop. You just might know it yet. Letting everyone know that Uncool is the New Cool this Hip Hop Rock Star has all the tricks. Check it:
Exciting news from L4M headquarters. After following the recent trends in film and music, the L4M team (basically yours truly) decided that independent is, in fact, better. While we have always brought an unfettered view of the industry and have not exactly been held back by the “establishment”, we have officially started practicing what we have preached.
Along with a couple of other former partners and one new music guru, a new firm was formed. Troglia Kaplan Holzman will be the law firm behind the L4M crew for the foreseeable future. We are a general business law firm that specializes in helping creative individuals and their businesses navigate through the turbulent legal and business world that surrounds them. Our new firm will give us even more flexibility and availability to help musicians, film makers and artists to treat their particular craft as an actual business. Basically this move will allow our Left Brain Guide to the Right Brain Thinker grow and improve.
The answer, as of what we know, is not yet. Rumors continue to run wild, but according to the Speaker of the House’s Office, the Senate’s Committee on Finance and the record of Congress activity for today, May 11, 2010, there were no applicable votes on Section 181 or any Bill which includes the provision.
Our friend at Facebook: Extend Section 181 may have started this rumor, and I hope it is actually becomes fact, but we just simply cannot confirm any sort of extension yet. Keep checking here for updates.
The earth is you, the label is the universe. Thus you, and everything you do, is part of the label. Pretty deep.
We at L4M have written quite a bit about 360 deals. The 360 deal has become the standard recording agreement. Gone are the days of multiple album deals. (Who records and releases full length albums these days anyway?) Artists today must be multi-faceted. Income has to be generated from a bunch of sources. The old system of paying back advances via record sales has gone the way of the DoDo bird and Eagle Eye Cherry.
The origin of the 360 stems from the steady decline in album sales over the last decade. Labels were funding artists with advances and would recoup based on record sales and royalties. All other income would go straight to the artist or her affiliate. While record sales have plummeted, concert ticket sales and merchandise sales have stayed fairly strong. The result was strong earnings for artists and pissed off labels who were not able to recoup their initial advances. Not surprisingly, the labels dropped a lot of artists and repositioned themselves (slowly) to adapt to the changing music economy. Savvy investors also came on board, sometimes replacing labels, and presented more mainstream, non-music industry, proposals that work more as a partnership rather than a label/artist venture.
While each 360 deal is different, you can pretty much bet that each will contain the following core elements: The label/investor who funds a band, either with an advance or an investment, will receive a percentage of income from:
Some 360′s go even further and give the label/investor a share of personal appearance income, solo (if it is a band) performance income, dj income, book/tv/movie income etc. Basically income from anything that a band or an individual in a band may earn while under contract could theoretically be collected by a label/investor in a 360 deal. If there is any hope of a 360 deal working, you must negotiate certain removals or certain untouchable categories as well as negotiate the percentages of income shared.
As I have written before, a 360 deal is not the worst thing in the world if it is drafted and enforced in a fair manner. This may come as a surprise to my readers as I tend to be a bit slanted toward artists, but if you think about it, a 360 may just work for some bands. If you get a label or investor who is looking to share in all streams of revenue, then you must have an agreement that certain benchmarks or obligations of the label must be met. If the label plans on sharing in your tour income, they should also be spending money on tour support and promotion. If a label wants income from your personal appearances, the label should help secure such events. The principle behind the 360 is that without the investment made by the label/investor, the band would not succeed. Typical of many labels, they will sign a band to a 360, supply them with a small advance and then disappear. Then the band works its collective ass off to get gigs and sell gear and the label still collects its share. That just plain old sucks.
If however, you have a fair label that wants to share in a 360 deal, they will expect to help you earn more money by promoting all aspects of your career. Whether it is hiring a PR company, street teams, securing world wide distribution, etc., a label that works with and for the band has a much better claim that sharing in all of their artists income is fair.
So do your research, advocate for yourself and your band and make sure that if a label or an investor wants a piece of everything you do, they are helping you achieve everything you want to achieve. (FYI: 360 deals are beasts and should always be negotiated by an attorney)
