Thanks Bolter.
But to be fair, that page hardly shows what I do in the business. That's just my fun project.
What I do in the music business... I'm a music producer, recording engineer, tour manager and A&R manager. Done work with and for such names as Sony Music, Snoop Dogg, Cypress Hill, Ice T, Craig G and lots of others. I'm knee deep in the game, that's what I bring to the table. You know some people... I think I know who's judgment I'll trust on matters music industry.
(Not meant to disrespect you mate, but it's like saying you know more about paintball than Robbo, because some mates of yours play.)
A million pound deal is nothing. It's laughable. Invest that million? Don't make me laugh. You simply can't.
That million is what in the business is know as an advance. It's not a real salary. It's not a bonus that you just get to pocket.
First thing to happen is that Her Majesty wants a cut and sends the taxman over. Suddenly you don't have a million anymore. I'm not hip to your tax levels, but it's safe to assume pretty much half of that million is gone.
So, you got half a million left. Still nice money. Then there are legal fees for licensing and publishing. Usually these are not handled in fixed fees, but in percentages. But let's say you went budget and you'd still have to say goodbye to about 150 to 200 thou. So your left with 300K.
But who do you think pays for your promotional items? Who pays for your studio time? WHo pays your engineer? Who pays your producer? Who pays for your videos? Guess what, it's not the record company that pays for that. It's you, the artist. Not directly, but the company will hold back payment of royalties until ALL costs incurred have been paid off to them. So your records better sell, or you're left owing the company. Most companies aren't very gung ho in getting back that money owed them, but they will sit on your contract (contracts most often aren't for a fixed amount of time, but rather for a fixed amount of releases) in the hope that if you turn out to be not much of a cashcow, they can sell it on to a record company that is willing to buy you out. That money then goes to pay off what you owe. Hooray.
Still, you have 300K left. Nice. But you also need some staff (you REALLY do), since there are things involved that you don't know much about and/or are not good at. That 300K is gobbled up pretty damn quick.
But let's say your record does well. Most beginning artists sign a contract that gives them 20-25% royalties on the catalogue price. Now the catalogue price is not what you pay in the store, it's what stores and wholesalers pay the record company to buy your albums and releases. A new release is usually catalogued around the 4-5 pound mark, so you get about a quid per sale. Sound lovely if you sell a couple hundred thousand, but as said earlier, this money first goes to the company to pay off your debts. And royalties don't get paid like wages, they get paid when the company can be bothered to figure out how much they need to pay who, so they come in once in a blue moon. Besides that, you have divvy up the royalties between the performing artist and whoever owns the actual rights (The writers and composers). On X Factor, that is NOT the performing artist.
And because producers and writers hate waiting for their cut, there is a tendency for them to charge a fixed fee, rather than a percentage these days. Your company pays this for you at first, but this is also added to the money owed side of things.
So, your million is pretty much gone. No royalty money is coming in for the moment and probably only will in small amounts anyway, unless you manage to create one of them songs that is timeless (think Bohemian Rhapsody, Sweet Child In Time and such) and gets airplay and sales until the Sun dies. So royalties won't make you rich either.
50 Cent signed a million dollar deal when he came out in 2003. He was still living with his grandmother when his album hit the streets...
Hmm, let's think of a way to make some income then. Go on TV and perform on Jonathan Ross! Yes!
No... You get paid little to none for something like that, since they know YOU are using THEM to promote yourself. So those are unpaid working hours...
What's left then? Well, the real bread for an artist comes from live performing and ticket sales. But all costs for running a tour are for the artist as well, so you gotta pay for your roadies, transport and so on. That's why artists often employ companies to run this for them for a percentage.
All the above is exactly the reason why these X Factor winners try to take full advantage of their short lived fame (although it could be argued, and often is, that their fame is shortlived through over exposure) and try to get as many gigs as possible, often playing 4 venues a day, zipping all over the country. Believe me, this is terribly wearing on the body. And more often than not, these X Factor guys often have contracts that force them to pay for the "right" to perform their songs on stage and have to do an X number of shows FOR FREE wherever Simon deems necessary. But, performing IS where you CAN get rich.
The music business is a pool full of sharks and you HAVE to swim across it. So either make friends with the biggest shark in there, or be the biggest shark. Why do you think the industry is infested with some true gangsters? Sharks man, sharks...
Stick to your opinions all you want mate. They are based on an outsider's knowledge. Mine are based on 20 years of experience in the business. Even a band that has gone through the whole pub circuit thing won't know what they are in for when they sign their first contract. They are usually in for a good old gang rape.
