Money For Nothing And Your Chicks For Free
Behind the rock-and-roll glamour myth are real numbers and hard reality.
AUGUST 24, 1998:
And that attitude probably extends down to the local musician as well. Sure, theyre not making as much money as their MTV compatriots, but so what? They work once a week. People pay to see them have fun, and then they get their pick of the groupies afterward. Its gotta be a sweet life. After all, they dont call it playing music for nothing.
But for every Mick Jagger and Madonna, there are literally hundreds maybe thousands of musicians, even ones you see on MTV, who are barely making a living playing music. Just getting to that level is usually itself a feat of Herculean proportions. And once they do reach that level theres no guarantee theyll stay there.
So, what is the reality for a working musician? How do they go from garage to clubs to The Pyramid? And how much do they make along the way?
For the sake of illustration, lets put together our own band five guys from Midtown that well call the Flyers and follow their career arc.
The first question, and one that would presumably be answered for us way before this point, is what kind of music the Flyers play. After all, the kind of music a band performs plays a significant role in determining how their career unfolds.
If they were a rap band, for instance, they could probably make more money from recording than an ensemble band because much of the music is programmed by one or two people, saving significantly on production costs. Their promotion costs might also be lower since rap artists often enjoy tremendous word of mouth and club exposure from deejays. But, because of the violence that is (often wrongly) associated with rap, the Flyers would miss out on one of the main sources of income for music artists live performance.
If the Flyers were a blues or jazz band they might enjoy a longer career, but one that would take longer to establish. Blues and jazz both thrive on emotion and feeling gained through years of experience, something that has prompted some fans to say that a player in one of these genres doesnt even start to get good until hes 40. The rewards in these fields are also not nearly as high. Blues and jazz make up only a small percentage of record sales worldwide, so the Flyers would have to make a living from constant touring in small clubs and festivals.
So, for the purposes of this article, lets say that the Flyers are a college-rock band á la the Goo Goo Dolls or the Dave Matthews Band. Though record sales for such bands have dropped in recent years, they, along with country and R&B acts, are probably still the best bet to break out and have a big hit.
After months rehearsing in a garage, the Flyers feel they are ready to get out and play in front of an audience. Fortunately there are plenty of restaurants, bars, and discos in Memphis that feature live music. The trick is finding the right one for the Flyers kind of music.
In the short term, the Flyers could make more money as a cover band; that is, as a band that plays songs made popular by others. Good cover bands in Memphis can earn between $50 and $100 per musician per show, depending on the size of the group. Cover bands are often found in more restaurant-like establishments or in discos. Their pay is usually a fixed guarantee from the club owner. However, a few really popular cover bands such as Dr. Zarr and the Amazing Funk Monsters or, in their day, groups like Y B Normal or the Generics can make more by demanding the money taken at the door, leaving the bar to make its profit from drinks and food.
Cover charges in Memphis rarely go over $5. Top bands like Big Ass Truck and Garrison Starr, of course, demand and get more, but they are the exceptions. (On Beale Street a $10 wristband allows access to all the clubs on Beale. B.B. Kings Blues Club recently caused a stink on the street by breaking with the wristband policy and charging a separate $7 cover charge.)
The real payday for cover bands, however, comes from private parties, where top bands can make $1,000 a show in town and much more out of town. Playing a fraternity or sorority party in Fayetteville, Arkansas, or Oxford, Mississippi, for instance, can earn a cover band as much as $3,000.
Bands playing original music often end up playing for door receipts as well because bars wont risk guaranteeing them money. Occasionally a club will promise the band a small guarantee, but typically just enough to cover its bar tab. (Once a staple of the live music scene, the old free-beer-for-the-band policy has, for wise financial reasons, almost completely disappeared.)
So, lets say that the Flyers line up their first gig at the Map Room on a Friday night. Now that theyve got a gig, its their job to bring bodies in to see it. Many bands are under the mistaken impression that clubs have built-in audiences just waiting to hear music. In fact, in almost every Memphis club the band has to bring in the crowd. Most bands playing original material build their following by getting their friends to come, who then spread the bands reputation through word of mouth.
After playing around the city for several months perhaps working their way up from the Map Room to Barristers to the Young Avenue Deli the Flyers have developed a small following. A hundred or more fans show up at every gig. At $5 a head, after they pay their doorman ($20), the soundman ($20-$50), and their bar tab (as much as $50), each of the five band members goes home with about $80 in pocket. Not bad.
More importantly, people at the shows are beginning to request certain songs. So naturally, the Flyers are thinking about recording a CD.
Once a big deal, these days the price of recording and manufacturing a CD has dropped to the point that most bands can afford to make one. At an overall cost of just a couple thousand dollars, bands can even charge the whole thing to a credit card. Too often, however, bands decide to record before they have the following to warrant the cost. The result is less a career move than a vanity project. Bands also often spend too little on production and come out with an inferior product, or they dont order enough copies to cover production costs.
But for those who play it smart, recording a CD can be rewarding and surprisingly lucrative. For a $15 CD, $5 goes to the record store. Independent distributors, like Memphis-based Select-o-Hits, take another $3, leaving $7 for the band. But many independent local releases dont need that kind of distribution muscle. If a band distributes the disc on its own, thats an extra $3 in their pocket. So now the band is getting $10 of every $15 CD sold. Of course, they still have to pay their costs (studio time, manufacturing, etc.), but as you will read later, this is very different from a major-label record deal where the label decides how much to spend on a record and the artist is the last to get paid.
Many bands quickly abandon the do-it-yourself attitude of their first independent releases, however, giving up a piece of the pie to let someone else do the leg work. The conventional wisdom is that artists have neither the time nor expertise to sell records on the same scale as the major labels. But at least one woman has shattered that wisdom. For more than 10 years folk singer Ani DiFranco has produced and distributed her own records on her Righteous Babe label without any help from the majors. And now her hard work is paying off as her new records are selling in the hundreds of thousands.
For most musicians, however, the dream is the elusive recording deal with a major label. But going from being a well-received local or regional act with a CD to being a national recording artist is the biggest and most difficult leap in the music industry. And there is no proven technique. Some artists sell enough copies of an indie release to impress a major label into giving them a deal. Others go the indie-label route, slowly building their numbers until a major label takes a chance with them. Others keep touring and recording on their own for years without ever making it to the next level. And a select few get a major-label deal without a CD, sometimes before playing a gig.
But lets say that after a year or two the Flyers manage to sell 10,000 copies of their CD and build a strong, college-age following throughout the Southeast. Those are strong enough numbers to make an executive with one of the major labels take notice and offer them a contract.
The six major record labels sign hundreds of artists to recording contracts every year. Some actually get to record. A few of those get to see their CD released. And even fewer about one in 20 make any kind of impact. Those that do usually enjoy the full strength of their labels promotional muscle.
The rest become globs of paint in the record labels Jackson Pollock-method of market research: Throw it up there and see what sticks. Fatally tagged non-priority bands, these groups receive much smaller recording budgets and little or no promotional money. In effect these bands must prove themselves on a grass-roots level before their own label will invest any more time or money. (Though labels wont say who is on the non-priority list, this would seem to be the fate of a number of Memphis acts who have signed major-label deals, including Todd Snider and Garrison Starr.)
Non-priority bands typically receive a budget of about $10,000 to record their first major-label CD. A priority artist, on the other hand, may receive between $75,000 and $100,000. Its important to note that this money, like all the money a label spends on a band, is a loan, albeit one that doesnt have to be repaid unless the record is released and sells.
Consumers and music-industry critics have complained for years about the high price of CDs. They note that, despite forecasts made when the technology debuted in the 80s, the price of new CDs has not dropped but has instead increased. But an examination of the budget involved in producing, manufacturing, and delivering a CD to music stores does not reveal much fat. And if blame is to be levied, it certainly doesnt belong on the artists, who, ironically make the least on a major-label release.
For a typical $15 CD with national distribution, the store usually takes $5. The record distributor, who is responsible for getting the disc in stores and for some of the promotional duties, takes another $3. That leaves $7 for the record label and the band. The label takes its share first, recouping its expenses for production and promotion. Finally, once all the other expenses and shares are paid, the artist gets paid.
Usually a band ends up with about 12 to 13 percent or about 88 cents of that $7, which must then be split among group members and management. At 13 percent, if their record goes platinum (1,000,000 copies sold), the Flyers cut could reach $910,000. Divided among five band members, that comes out to $182,000, minus the agents cut, lawyers fees, etc.
So, while the money aint bad, it is clear that the Flyers wont make it rich in the recording studio. In fact, many artists see recording as a means to earning more money through touring. Artistic considerations aside, for them a CD is a promotional tool to get them playing bigger and more lucrative shows.
As a new band with its first major, national release just out, the Flyers start playing small theatre-type venues like the New Daisy or Newbys. At this level the economics arent much different than they were in the smaller clubs. An act will usually get a guaranteed amount anything from $2,000 to $10,000 against a percentage of the door; since these clubs typically make their money from selling alcohol, often all the door money goes to the band.
Once a band starts playing larger halls and arenas, however, the system changes a little. Such shows are typically booked by an independent promoter such as the recently defunct Mid-South Concerts or the newest promoter in town, New Orleans-based Beaver Productions.
The promoter guarantees the band a certain amount against a percentage of ticket sales, usually around 50 percent. Of course, as the expected crowd and the size of the venue increases, so do the guarantees. A band playing The Orpheum, which seats 2,500, can demand a guarantee between $10,000 and $50,000. At the 5,000-seat Mud Island Amphitheatre: $60,000 to $100,000. The 12,000-capacity Mid-South Coliseum: $100,000 to $200,000. And at the 20,000-capacity Pyramid: $250,000 or more.
In addition to booking the band and backing the guarantee, the promoter pays for rental of the facility and covers all the incidental costs, including advertising, security, and insurance. What is left after paying the artist and other miscellaneous expenses is profit. If all goes right, a concert promoter may end up with about 10 percent of gross sales. Often, because of cost overruns, unforeseen expenses, or just bad luck, it can be much less or sometimes nothing at all.
For the band, the financial outlook is a little rosier. Top artists like Eric Clapton or Janet Jackson can take in as much as $500,000 a night. Of course a lot of that money is eaten up by expenses sound, lights, transportation costs, and those damn agents. But add that up over a 40-city tour and it becomes clear that an artist can make more on the road than on a multiplatinum album. In addition, band merchandise (T-shirts, posters, etc.) sold at concerts and through Web sites can be a real cash cow. A band can earn as much as 10 percent of their performance fee at a concert with only minimal overhead for production and sales staff.
The real money in the music business, however, is in songwriting and publishing. Not because there is necessarily more money involved but because once the initial work is done writing and copywriting the song there is little left to do but count the money That, of course, is a simplification, but more than one music publisher has called the business money for nothing: Just fill out little pieces of paper, send them out, and deposit the checks.
As recording artists, the Flyers will only earn royalties on records sold. But for the band members credited with writing the music, there is an added payday. Royalties for writing and publishing a song that appears on a record fluctuate around 5 cents. So, for a million-selling song, royalties can come to $50,000, or if the writer composed all the songs on a 10-song album, $500,000.
That money is usually split equally between the songwriter and the publisher, a company (often made up of just one person) that does the paperwork involved in getting songs copyrighted, monitors the accounting, and negotiates terms of the songs use by others.
But still, the songwriter of the Flyers has almost doubled his income from the records sales. And this doesnt even include the royalties he will earn for broadcast, film, sheet music, and jukebox rights, all of which add several thousand dollars to the kitty. And the money comes for years, regardless of how the songwriters career is doing otherwise.
From here the story of the Flyers could follow any number of paths. They might make another record and eventually become the next U2 or R.E.M. Or they could stay on the same level recording and touring with moderate success for years. Its more likely that the second record would flop, and the label would then drops the band, who would disappear for a decade until a nostalgia wave hit and they could start playing casinos and small clubs again. Or maybe tired of the grind and each other, they would just break up. Maybe the drummer would become a successful restaurateur, the vocalist a manager of professional wrestlers, and the keyboardist a producer, helping new bands down the twisted path of a music career.
Perhaps they invested their royalty checks. Or maybe they blew it all in six months, and all they have to remember of their days as rock stars now is a box of CDs in the attic. Or maybe not even that. Maybe the only reward they get any more is a smile at hearing their song played on a jukebox and seeing a young couple dance along.
No, for most who embark on a music career it isnt all stretch limos, swimming pools, and super models. Its hard work, little reward, and constant uncertainty.
But nobody made them do it. They didnt pursue music because they wanted to make money. They did it because they loved the camaraderie of the band, the attention of the crowds, and, most of all, the sound they could make with their fingers, feet, and voices.
Otherwise whats the point?
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