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Career Planning, Part Three
by Christopher Knab - Fourfront
Media & Music - December
2000
Back to Music
Business 101
Click Here for Part 1, Part 2
This is the 3rd of 3 columns devoted to what is called a ‘Career Plan’
for a new band or musician intent on establishing their career in a professional manner. Since most newcomers to
the business of music have very little experience dealing with the business side of their music, a Career Plan
is a useful tool and discipline for serious musicians to consider. It lays out tasks and strategies for putting
a band together by prioritizing those things that are most important in the early stages of a career.
In each installment of this column you will find several issues discussed. It is important to note that this plan
is a prototype based on a hypothetical situation surrounding a typical band that had undergone an extensive interview
and ‘inventory’ of their accomplishments and goals. I hope you are inspired by these ideas, and realize that to
adapt them to your needs, you would also have to take time to answer questions about your music, your goals, your
dreams, your finances, and your commitment to your music as a business.
There were originally 10 goals that I set out to write about, but I have thrown a BONUS 11th goal. Since many musicians
think they want a record deal, I layout some useful information about such deals for you…consider it my Christmas
present!
As a music business consultant I am available to help you plan out your career. You can email me at Chris@Knab.com for details
on my services, or visit my website www.4frontmusic.com. For more articles and information on the business of music.
That being said, I hope you find this information beneficial in building your career as a professional musician.
Christopher Knab
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Organizing Your Band
A Prototype Of A Career Plan, Part 3
By Christopher Knab (with the cooperation of Dianne Caron)
(copyright 2000 Christopher Knab)
Click Here for Part 1, Part
2
Goal #9: BAND BANK ACCOUNT
A band bank account is definitely something you want to have once you
generate some income, I don't think it really matters too much which bank you open up an account with, other than
going to a bank that you feel comfortable with, and perhaps have your personal checking and savings account with.
There are two items you'll need in order to open up a band bank account:
1. a business license and
2. a federal EIN.
Always think about keeping good track of your income and expenses. This will make it so much easier to file taxes.
GOAL #10: ENTERTAINMENT LAWYER
Attorneys in the music business do more than just look over contracts
and advise clients about the law. They are very much involved in structuring deals and shaping artists' business
lives.
One of the major things to look for in a lawyer is his or her relationships in the industry. Lawyers have evolved
into one of the most powerful groups in the music industry. Attorneys end up seeing more deals than anyone else
and, thus, have more knowledge of what's "going down" around town. Record companies, for instance, can't
ignore phone calls from important lawyers, nor can they afford to treat them shabbily in any particular transaction
since they're going to be dealing with these lawyers over and over, and they don't want to make enemies out of
them So a lawyer with good relationships will get your deals done quicker, and, if they know what they're doing,
will get you the maximum that can legitimately be had.
Here are some other aspects for you to consider when "shopping" for a lawyer:
Experience
Does he or she have expertise in the music business? Make sure that the lawyer you are hiring is an entertainment
lawyer with at least some experience in the industry.
Fees
There are basically three ways attorneys in the music business charge their clients:
1) Hourly Fee
Some lawyers charge on an hourly basis. The rates range from $125 per hour for new lawyers to up to $450 or more
for more established, reputable lawyers.
2) Percentage
Others charge a percentage usually between 5 % and 1 0%. If the lawyer does a percentage, make sure he or she fully
explains how he or she computes it; each firm is different!
3) "Value Billing"
Some lawyers do something known as "value billing," often with an hourly rate or retainer against it.
A "retainer" is a set monthly fee that is either credited against the ultimate fee or it's a flat fee
covering all services.
"Value billing" means that, when the deal is finished, the lawyer asks for a fee based on the size of
the deal and his or her contribution to it. For instance, if the lawyer had very little to do with shaping the
deal, but rather just did the contract, the band should expect a fee that is close to an hourly rate. On the other
hand, if the lawyer came up with a clever concept or strategy that made the band substantial sums of money, or
the lawyer shaped or created the deal from scratch, he or she will ask for a much larger fee. If your lawyer "value
bills," you should get some idea up front what it's going to be, so that there aren't any rude surprises.
Also, ask your attorney if - in addition to fees - he or she charges for any other costs such as long-distance
phone calls, messengers, photocopies, faxes, etc.?
References
Ask the lawyer for references of artists at your level, and check them out. Does he return phone calls? Do they
get deals done in a reasonable period of time? ("Reasonable" in the music business is not going to be
anywhere near the speed you would like. It's not uncommon for a record deal to take four or five months to negotiate,
especially if you're a new artist and can't force the record company to turn out a draft quickly. Four to five
months is a realistic time frame, but if it goes beyond that, someone isn't doing their job.)
Well, there you have it…10 Goals for you to consider when building your
career, but…
Hey, what the heck….we’re on a roll….how about a BONUS GOAL?!
If you do all the things mentioned so far, it might be time to acknowledge the real goal most musicians THINK they
want….
GOAL #11: A LABEL DEAL
Once you have an attorney and have opened up your own publishing company,
and built your career on your own for a good while, a label deal may come your way. These days labels are attracted
to acts that have built a strong following and proved to the industry that they are a solid investment. If a label
deal is a dream of yours, then consider this information before you rush into anything.
INDIE LABEL VS. MAJOR LABEL:
Indie Label
When you think about pursuing an independent record label deal please think about the following issues:
Distribution
Make sure the label has some sort of a working distribution system (if not on an international then at least on
a national level).
Roster
Make sure the roster is not too big or else you won't be awarded the attention you deserve. Also, make sure the
bands on the roster match the type of music you play.
Publishing
If the label wants part of your publishing, do not be surprised, but be sure your attorney protects as much of
your publishing as possible.
Merchandise
If the label wants a percentage, they will probably get it.
Options
Find out how many options the label wants. Since "options = number of records and years," you don't want
to agree on too many options.
Indie Promoters and/or In-House Staff
Find out if the label works together with independent promoters. It is a good sign when they do since this raises
the chances that your record will be seriously and effectively promoted. Also, find out if there is any in-house
personnel or if the label is a "one-person-enterprise."
Advertising
Find out if the band has an advertising budget for releases.
Tour Support
Find out if and how they support you on your tour (financially, morally, etc.).
Points/Mechanicals
Find out how much you get paid for each record sold.
Major Label
When pursuing a major label deal be absolutely sure that this is what you really want. Here are some points that
might help you determine whether this is the right thing for you to do:
Options
A major label oftentimes signs artists for 6 - 8 records (not years).
A&R
Research the A&R person! Know who they've signed, who they've worked with, who they've worked for, etc.
Number of Releases
Find out how many records the label releases per year. You don't want to sign with a label that releases too many
products. Remember, they only have so much time and enthusiasm to put into the promotion of a record.
Meetings
Set up meetings with A&R people and presidents if possible (i.e.: at conferences, special showcases, etc.);
note that if they are sincerely interested, they win fly you to the meetings.
Here are some clauses that you will encounter (and sometimes have to
watch out for) in a contract with a record label:
Exclusivity
Every record contract includes a provision stating the deal is "exclusive." In other words, during the
term of the agreement, you can't make records for anybody else. Therefore, an exclusivity clause in a contract
refers to the fact that you may only contract with this record company (you are "unilaterally married"
to that company). I strongly recommend that your attorney define the extent of exclusivity.
Term
The duration of the contract. (Ex: Years + Product / Years + Option)
Product/Creativity
Who will control the amount of product and the quality of product. You always want as much creative freedom as
possible; the record company oftentimes maintains a veto power when letting a band choose the producer, engineer,
studio, etc.
Recording costs
How much (recoupable) recording costs will you get. Don't overdue it! Remember, you will have to pay it back.
Advances
How much (living) money will you get that is recoupable (goes usually to lawyer and manager). Also, remember, you
will have to pay back the amount to the label.
Royalties
The money paid for your service as recording artists (Canada: 75 - 90 % / UK, Japan, Australia: 60 - 70 % / Rest
of the world: 50 % - of U.S. rate).
Video
Who controls the music video and how the costs are apportioned. Try and have only 50% of the cost recoupable.
Publicity
Rights to name, likeness and voice are issues related to this.
Merchandising
How will your record company control your publicity.
Union
Your promise to join a union (AFTRA, AFM).
Auditing
Your right to audit the books. Make sure this clause is included in the contract.
Accounting
The label's responsibility is to report financially to you (reports to artists usually occur every six months;
i.e., if one accounting period lasts from January till June the label will report to the artists approximately
in September).
Assignment
The record company's right to sell the contract (see "Label Deals").
Controlled composition
How the label will pay mechanical royalties.
Termination
This clause specifies the songs you may not be allowed to record for a set time after the ending of the contract.
Sideman's clause
You might want to consider including a sideman's clause. A sideman's clause allows an artist to do studio work.
The artist still needs permission; the record company, however, can't say no unless they have a very good reason.
Sideman performances are freely permitted, on the following instances:
I. The performance must be truly a background performance, without any solos, duets, or "stepping out."
2. The artist's exclusive label must get a "courtesy credit" in the form of (artist) appears courtesy
of..... Records."
3. The artist can't violate his/her re-recording restriction for any selection, even as a background performer.
4. If the artist is a band, no more than two of the band can perform together on any particular session. This is
because the record company doesn't want the band's distinctive sound showing up on another label.
Under normal circumstances - without such a sideman's clause - you would be prohibited to perform for any other
band/label under the terms of an exclusive contract. If you have a sideman's clause in your contract, make sure
all of you sign the legal document.
Key man clause
If a significant label executive resigns, or leaves the company, you may terminate the deal. The label may also
put such a clause in concerning a band member.
FOR YOUR INFORMATION
Label Deals:
There are four basic label deals:
First Option
The major (larger) label helps finance an independent (smaller) label and in turn has first option on any of the
artists' contracts, Or in other words: If you sign with a smaller label that has a first option deal with a bigger
label, you might end up on the bigger label.
Co-operative
The major (larger) label offers to fund the next release of an artist of an independent (smaller) label and in
turn gets to take over the band. This would only affect you if you were already signed to an independent label.
Licensing
A label surrenders the right to a recording to another label (usually overseas)
Buyout
One label buys out another label.
So, there you go. This ends my 3 part series on issues related to putting
together a plan for you career. These goals should keep you busy for a good while. I have thrown a lot at you,
but if you can commit to these goals you will benefit from organizing your band as a business, and all the hard
work you have put into making you music will have a better chance at success if you approach starting your music
career on the right foot.
There are many other goals you will have to address as your career grows along, like developing your own website,
and learning how to market your music on and offline…but all that will come in good time.
Remember too that I am available for personal consultations to help you put together a plan based on your unique
situation. You can reach me by email or by phone.
Good Luck!!
Christopher Knab
Click Here for Part 1, Part
2
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Christopher Knab is an independent music business consultant based in Seattle, Washington. He
is available for private consultations on promoting and marketing independent music, and can be reached at 206-282-6116
or by email at: Chris@Knab.com
Visit the FourFront Media and
Music website for more information on the business of music from
Christopher Knab.
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