Chicago Rocks!

9 09 2010

We at L4M represent musicians from all over the country.  Yet, deep down, we have a special affinity for Chicago musicians.  Is it because we live in Chicago?  Well…yes, duh.  Anyway, some of the best music at some of the best venues happen here in the Second City.

The time has come (again) for Chicago artists to get the attention that they deserve.  L4M and the Bottom Lounge has teamed up to present a “This is Chicago” music series featuring many of our clients at one of the best Chicago music venues in the city. 

The first concert will be SEPTEMBER 16, 2010 at 8:00pm (doors) and feature Blah Blah Blah, of1000faces (featuring Matt Walker), The Blind Staggers and DJ Yours Truly.  It’s five bucks online with code:  Blah or eight bucks at the door.  Please come out and support goood music, a good musical venue and some decent lawyers.  We want to make this a regular event, so let’s pack the first one.

Here’s the Bottom Lounge’s Promo Page:

BLAH BLAH BLAH • THE BLIND STAGGERS • of1000faces

CHIRP RADIO WELCOMES: Thursday, September 16, 2010 – 9:00pm

BOTTOM LOUNGE AND LAWYER4MUSICIANS.COM PRESENT

 

Doors 8:00 PM / 9:00 PM.

17 & Over





Streams of Revenue: How Songwriters Make Money.

22 08 2010

Hello? I'm looking for the writer of Toxic. I think I owe him money.

Music is everywhere.  You turn on your tv, see a youtube video or turn on the radio and  hear a famous artist performing a song.  But who makes money when the public hears or sees a performance? 

It is a common misperception to think that the artist you see or hear is making all of the money from that song.  In the pop world, especially, this is not true.  Don’t get me wrong, the famous artist probably has more money than you or I could ever dream of.  However, the main revenue streams come from songwriting.  Oftentimes, pop stars do not write their own songs.  Songwriting for bands or artists can bring in huge amounts of money.  The main areas of revenue from songwriting come from mechanical royalties, performance royalties and synchronization licenses. 

Suppose you write a song and a major artist (for this post let’s use Justin Timberlake) decides he wants to record your song and put in on his next album.  If your song has never been released to the public his label will have to pay you a First Use Mechanical License.  This gives Mr. Timberlake the right to be the first person to reproduce and distribute your song.  The rate for a First Use is negotiable and varies widely.  You have to weigh the exposure of being on Justin Timberlake’s next album vs. your leverage in getting paid.  But, keep in mind; this will not be your only source of revenue.  Let’s say you and Timberlake’s label settle on $15,000 for the First Use right (this could be and probably is higher or lower). 

So, you now have $15,000 in your pocket but cannot be the first one to record and release your own song.  That tradeoff is up to you.  Let’s assume you think it is worth it.  What other sources of revenue streams can you now expect from this song? 

First off, for every copy of the song reproduced you should receive 9.1 cents.  Usually, this is only paid on each copy sold (digital or physical).  So, for every album sold you should received 9.1 cents.  If your song happens to be the single or a hit, chances are your song will sell digitally as a single more than the entire album.  So, for every 99 cent download you should receive 9.1 cents.  If the single or single and album combined sell 1,000,000 you should receive $91,000.  Not bad.  Not bad at all.  Keep in mind that label contracts and tricky accounting can lower these numbers.  However, the 9.1 cent rate is set by the government.

Another lucrative source of revenue is from synchronization licenses.   Every time a song is placed with a visual (think on a tv show, in a video game or in a movie) the writer and publisher must grant a synchronization license.  This is a negotiated rate.  A hit movie can pay in the hundreds of thousands of dollars for a theme song or a song that plays in the climax of a movie.  A television show will pay less but this difference can be made up in performance royalties.

Did someone say performance royalties?  Yes.  In addition to getting paid to have your song in a movie or television show you will also receive money each time the tv show airs, the movie is shown outside the U.S. or shown on tv.  Lastly, if your song is a single and receives radio airplay or is played on the internet you will receive performance royalties.  All of these performance royalties are collected and distributed by performance rights organizations.  In the U.S. we have three;  ASCAP, BMI and SESAC. 

As you can see being a songwriter can be a very lucrative business.   You will have access to multiple revenue streams.  Think of the writers of the song “Toxic” by Britney Spears.  She did not write that song.  However, every time it aired on MTV or radio the writers received performance royalties; every time her album sold or someone bought “Toxic” the writers received a mechanical royalty.  If anyone wanted to use the song in a video game, movie or tv show , the writers would get paid multiple times.  Also, if any cover versions are done the writers would receive mechanical royalties.  I really wish I wrote that song.

Protecting yourself as a songwriter is not an easy proposition.  Seek counsel if anyone wants to buy your song or if you are going start publishing your own material.

SHAMELESS SELF PROMOTION OF THE WEEK:

Come check out L4M and a ton of other experts on music and advertising at the Billboard Music and Advertising Fall seminar on September 15-16, 2010 at the Westin on Michigan Avenue right here in Chicago.  We are on a panel and will be floating around all weekend.  Follow up the seminar on the 16th with a L4M sponsored show at Bottom Lounge featuring Blah Blah Blah.   More info coming soon.

www.MusicAndAdvertisingFall.com





Lollapalooza and Lost Amongst the Giants

6 08 2010

How do you book Lolla's main stage?

 

As Chicagoans, we are spoiled with great music and great music festivals.  Whether it is a local street fest with unknown but talented local bands, one of the many venues (Metro, Bottom Lounge, Park West…), Pitchfork Festival or the grandaddy of all commercial festivals, Lollapalooza, the Second City has to rank as one of the best music cities in the world.  As a music fan the choices are too numerous to count.  Often we are left with a sense of regret if we choose to check out Schubas while there is a great show going on at Double Door or we pick the wrong stage at Grant Park and find out that MGMT actually tried during their live set this year.  

As fans, these dilemmas are pretty minor.  As a band, getting noticed or better yet, getting booked can be overwhelming, frustrating and just flat out depressing.  There is a wicked catch 22 situation between labels and bands these days and booking gigs is just one part of it.  Labels and investors look for many things when determining whether to sign a band.  The label will look at the number of units sold (digital/physical), the number of fans (facebook/myspace), the amount of press garnered, and the number of shows booked (taking into account the quality of those shows).  

So a band is then faced with proving itself by doing a lot of work itself.  The band and management (if management is in place) must grind it out to show that it can sell or give away a sufficient number of albums, generate its own press and social media statistics and book its own shows.  Booking agents are out there but agents will only take a band onto its roster if the band has already proven itself by booking a ton of shows on its own.  The band is left with the nauseating decision of whether it is better to not play at all or to play their uncle’s picnic just so it can “book” a show.  All of this has to be done while also factoring in that touring and playing live shows may be the only source of income for a band.  (You sure you want to be a musician?) 

The best advice that we can give to a band who is in this type of crappy situation is to forget labels and booking agents.  Just pretend they don’t exist.  Once that impossible task is completed, the band can focus on a plan of attack.  Let’s assume that the band is talented, has a local following and can book a few decent size venues on a regular basis within its home town.  No band is going to make a comfortable living doing this, but being able to take up a residency at a solid venue in a metropolitan area is a really good first step.  The band then has to find other bands from the same city and from surrounding cities and states and get them to play at their venue with the hope of reciprocity.  Assuming that goes well and the bands from other cities like your band, you now have an invitation to play in a new city or state.  As momentum grows, small local tours can be arranged all without the almighty aid of a booking agent or a label.  The band has to team up within its own community.  Take solace in the fact that there are a million other bands in the same situation as yours.  When you team up you are that much stronger.  

Now that you have a plan of attack (which may take several months or more to put together), you can attract more fans, sell more merchandise and book more gigs.  Wait a second; isn’t that what labels and booking agents are looking for?  Ah-ha.  Obviously, this takes a lot of hard work, committment and organization.  If those attributes are not your strong suit, you better quit the business or get a team together who can help.  As we consistently tell our clients, being in a band is a lot of hard work.  We turn down clients who are looking for a quick fix or for someone else to get them to where they think they want to be.  If you are not committed to making music a full time job, it most likely will not happen for you. 

Hopefully this was more motivational than depressing.  Either way, we are off to Lolla to make some bad decisions about who to check out and marvel at hipsters in skinny jeans. 

SHAMELESS SELF PROMOTION (SORT OF) OF THE WEEK: 

THE BOTTOM LOUNGE – CHICAGO 

 

L4m is psyched to partner with one of Chicago’s best live music venues, The Bottom Lounge.   The place is large yet intimate, the beer list is large and amazing and the staff is not large but also awesome.  We plan on working with them to showcase both our clients and other bands who will eventually be our clients (or not).  If you haven’t gone to a show there yet, shame on you.  If you have, then you are super smart.  Stay tuned for updates on our collaboration.





THE L4M MODEL GETS SOME LOVE: Band plus budget (The Deal Magazine)

2 07 2010

 

Band plus budget (The Deal Magazine). CLICK LINK FOR STORY

It is good to know that certain labels and certain industry experts understand the new model for musicians.  “The 360 deal” does not have to have a negative connotation.  Finding the right partners and the right team for your project has been our focus from the jump. 

Special thanks to Townie Records , Hey Champ and the author of the article Matt Miller from The Deal.com.





CELABELS: Anyone Can Have a Music Label.

28 05 2010

Music Mogul?

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:





L4M and Friends Make a Move

21 05 2010


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.

Contact us if you have questions or issues that you would like to see tackled by us and this site: josh@lawyer4musicians.com or info@tkhlaw.com.

To find out more about our newest L4Mer, click here and discover the man, the myth, the legend: Ajay Gosain.





What Does Your 360 Deal Really Mean?

6 05 2010

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:

1.  Royalties (publishing/sometimes writer’s share)

2. Record Sales (all formats)

3. Tour Income

4. Merchandise Sales

5. Licensing Income

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)





Unique Methods to Fund Records and Films

18 04 2010

Websites that serve as independent fund raisers for artists are not new.  Over the past decade several sites using the fan funded model have popped up (some have subsequently disappeared).  The sites are natural offspring of some entrepreneurial and creative musicians and film makers realizing that the label/studio system probably is not going to work form them.

The basic premise is that you offer your friends, family and fans (the 3f’s)  an opportunity to participate in the creation of your new album or film.  In exchange for buying a piece of the project the 3f’s will get extras that the general public will not get.  Examples of the extras that participants get are: exclusive tracks, t-shirts, signed copies of vinyls, screenings with the cast and crew, etc.

Some models have tried to take it to the next step and share income with the 3f’s who go from participants to investors when they provide money to a project.  Sellaband.com is probably the most well known band investment models (now in bankruptcy, this concept obviously has some issues to figure out still).  On the film side of things sites like kickstarter.com and indiegogo.com have had success in getting independent movies with fairly small budgets into production via fan participation.

But what happens when you want to raise more than $5,000 or even $50,000?  I guess it depends on how wealthy your 3f’s are.  For most of our clients we are trying to raise money in the several hundred thousands or millions for their projects.  Their 3f’s are typically not looking to get a t-shirt or dvd out of their participation when they are putting that much money into a project.  In most scenarios a participant becomes an investor and will want to see a monetary return on his investment.

Equally as important, the method for raising money with the promise of a financial return on investment follows very strict rules and regulations.  When you try to raise significant funds for your project you are essentially selling securities or stock in your product.  The Securities and Exchange Commission governs these type of transactions and you must follow their guidelines or risk serious consequences.  Unfortunately, the legal fees for setting up an Offering (offering of a financial interest in your project) are high and you definitely cannot create an Offering on your own (even if you find an example on line).  Oftentimes, musicians and film makers must go to their 3f’s just to get the money to pay for the Offering.

So with all of these barriers why to musicians and film makers go through the trouble?  Several reasons.  First, the old days of being discovered are over.   The quantity of product is simply too high and the methods for finding talent are too vast.  A&R departments are decimated and studio budgets are tighter than ever.  Risks are averted on all levels.  It is now a necessity for the independent to truly be independent and make their own way in the industry.  Further, most musicians and film makers feel that if they get their first project produced and into commerce, the sky is the limit.  This sentiment is justifiable.  Film makers who are able to get a movie made and actually distributed immediately create a brand for themselves and their production company.  It is far easier to sell the second feature as compared to the first.  Same for musicians.  A musician who has released countless EP’s and singles may not be interesting to an investor until she produces and distributes a full length album.

So as the annoying saying goes, you have to spend money to make money.  Whether it is strictly as a participant structure or through an Offering, a lot of work, time and money goes into the process.

I am interested to hear from those of you have used this method; whether it is through a website or on your own door to door fund raising effort.  Here are some of my friends who are using the participant method.  Check out and if you like them, PARTICIPATE!

Film maker Carey Bruce and Road’s End Films are producing Forests of Mystery and using Kickstarter.com:

Talented Singer/Songwriter Levi Weaver has funded his own projects through 3f participation.  Check him out here:





Should Performers Get Royalties?

8 04 2010

Did you know that the U.S. is grouped with China and Ghana as one of the only countries that does not pay royalties to the performers of a song that is aired publicly (Radio/TV)?  Weird, right?  Well this odd and troubling (for some) fact may be changing soon.  Here is my fellow L4M’er, Eric Malnar with his take on the Performance Rights Act and what changes may be on the horizon:

The Performance Rights Act (the “PRA”) was introduced in the U.S. Senate (S.379) and the House of Representatives (H.R. 848) in February of last year.  So why are we talking about this now?  Well, as most of you should now, L4M was recently in Austin, Texas for the 2010 SXSW festival and the PRA was the topic of an interesting and heated panel.  Interestingly, all sides of the issue were represented, except of course the radio stations (these are the guys who are supposedly adversely affected by the bill).  Perhaps invitations were sent but nobody from the radio world wanted to appear on the panel…who knows.  It is a shame because it would have been nice to hear their perspective especially since it appears as though the Obama administration is supporting the PRA and it might actually become law.

As a musician or someone who makes money through music,  should you care about the Performance Rights Act?  Well, it depends on what you do.  As many of you know, every time a song is played on terrestrial radio a royalty is supposed to be paid to the songwriter.  However, there is no payday for the artist who appeared on the song (singer, guitar player, chime and etc).  For example, if I wrote a song for a famous pop singer I would receive the royalty not the singer.  This is currently the system for terrestrial radio.  Think of Aretha Franklin singing RESPECT.  Everyone in the world has probably heard that song, but every time it is played the royalties for public performance go to the writer (specifically his estate) Otis Redding.

Give it to me. Give it to me. Give it to me. R-O-Y-A-L-T-I-E-S!

Digital sources of music are governed under a different law.  Under the Digital Performance Right in Sound Recordings Act of 1995 (“DPRSRA”) digital music providers are required to pay performance royalties for performance of the sound recordings.  Many feel that the difference in the way royalties are paid for terrestrial radio versus digital providers is unfair. The PRA would remedy this scenario by requiring a royalty for the singer as well as the background musicians.  So as you can imagine, the digital folks, like Pandora and LALA are excited about the passage of the PRA because they feel it will provide a level playing field.

Another often heard argument in favor of the PRA is the fact that other countries do not have the same terrestrial radio exception that we have here in the States.  In other words, money is being collected overseas for American artists but it is not being paid because the U.S. does not have a reciprocal system.

Wow, so this all sounds too good to be true, what is the catch you ask?  Well terrestrial radio stations are not happy about the PRA.  They argue that this will drive up costs and either put them out of business or force them to change their format to talk radio.  Thus the dilemma, is it worth receiving new rights under the PRA to the potential detriment of your opportunity (as an artist) to have your music played on terrestrial radio?  Back in the day when my band was struggling to get exposure we would have done almost anything to get played on big radio.  If the radio industry, which claims to be struggling, pulls music from most of its stations, another avenue for musicians to get exposed is closed.

Regardless of what happens it is important for every artist to understand his or her rights as a songwriter, performer or both.  As recording contracts morph into more intricate deals (e.g. 360 Contracts) artists need to be versed on all avenues of revenue.  It is no fun talking about music and money in the same sentence but at the end of the day, you need to pay the bills so you can live to play another day.

Stay tuned for updates on the PRA and more insight into some of the hot topic areas of music in film.





Hot Topics in Music and Film

3 04 2010

Here are the Hot Pockets or Topics in Music and Film

The hangover from SXSW has subsided and deals are actually getting done in the world of both music and film.  There are several hot topics which are been written, blogged, tweeted and plain old talked about in the music and film industry.  Over the next several entries we will try to explore several of those topics.

A new contributor to L4M, Mr. Eric Malnar will update everyone on the public performance royalties debate that is garnering attention from the House, Senate, White House and musicians all over the world.  We will also explore what is a standard 360 deal these days and continue to share our experience of working with musicians (both label musicians and independents) in the ever changing industry.

On the film front; just when I thought it was safe to celebrate the passage of Section 181…President Obama seems to have lost the legislation somewhere between health care reform and his next pack of Camels.  We are still waiting for his signature on H.R. 4213 and eager film makers are anticipating the one year extension that should have come on January 1, 2010.  In other film news, state tax incentives are ever changing so we will try to keep you up to date on the best places to film.  Plus, we will walk the newbie film maker through the process of raising funds for an independent movie by explaining all of the paper work (stupid lawyers) that is necessary before you can even accept a check from your mom.

SHAMELESS SELF PROMOTION OF THE WEEK:

One thing I take a lot of pride in is introducing talented people to other talented people.  As a lawyer for creative people, I am able to make introductions to some gifted artists which then results in some pretty cool stuff.  I always tell my clients to view us as a resource; whether it is introducing managers to artists, labels to artists, licensing companies to advertisers or musicians to other musicians, our clients end up with the same contacts and connections as we have.

Possibly the best example is this song.  Our clients, Database, French Horn Rebellion and Hey Champ collaborated to bring you a Remix of Beaches and Friends.  The song is doing great on a worldwide level.  Enjoy:








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