By Eileen Tilson
Back in the heyday of the “Big Booming Music Industry,” little musician-wannabees would pray to the guitar gods at night hoping that one day, the big man in the suit would present them one with the Holy Grail, aka, The Record Deal. In the world of music, this was like finding the golden ticket taking you straight into the Chocolate Factory. Alas, as we all are aware, nothing lasts forever and the steady decline of physical product left the labels scrambling for ways to make money. For those of you who still believe in signing here is a little business definition for you:
“The label’s interest in you is contingent upon how your band performs as a financial instrument. An advance is essentially the label loaning you money for a set period of time with the expectation that you’ll be able to repay the loan plus interest, thus making the label a Return On Investment (ROI).”
Going back to the current scene, we have all seen how labels have had a steady decrease in revenue these past few years; however this might be about to change. Warner Music Group announced today that their reported narrowing losses were only $46 million for the fiscal third quarter, compared to a $55 million loss a year ago. Why the change you ask? CEO Edgar Bronfman confirmed that 50% of revenue came from “areas of the business that did not exist in 2004”. 60% of currently signed WMG artists are signed to 360 or expanded rights deals.
Just in case you ever wanted to see a real record contract, the folks from Breaking Benjamin (the band just broke up) have so kindly released all the paperwork. The entire court filing is available thanks to Tunelab. The actual record contract starts on page 25 here. It takes a minute to download, but totally worth it.