What They'll Never Tell You About the Music Business

by Peter M Thall

  The music industry executive’s strength is enhanced only when the company he or she joins has an established and tested management training program. Although the institutions that form the music publishing and recording industry today are very well set up for precisely this kind of training, it is unlikely that these companies will also give the fledgling executive the information that I am seeking to impart in this book. For the personal manager and business manager in whose hands the artist and the record and publishing companies place their trust, this book is intended to provide not just informational data, but also a perspective that will help them to become more aware of the parts of the business which no one will teach them, but which they must nonetheless understand if they are to perform their functions effectively.

  Ironically, when it comes to artists, it is widely accepted that really creative people do not know their business. After all, aren’t they living in the realm of the idea—the eigenwelt—the world that is interesting precisely because it is not the mitwelt—the shared world, the concrete, tangible world that can be objectively evaluated? The late Northrup Frye, one of the 20th century’s preeminent literary critics, and a noted commentator on Canadian society and culture, gave an acclaimed series of lectures at the University of Toronto several decades ago. In these lectures, published as The Educated Imagination, Frye spoke of the uniqueness of creative people—how creative people see things that “aren’t there.” What more appropriate an image for artists? What more dangerous a situation for the creative forces of the music business? And how can the creator—a living, breathing human being from whom the art emanates—function effectively in the shared world? Those who live in the imagination cannot be expected to have either the patience or the time to attain the knowledge and experience to rule their own destiny. We are all familiar with the saying “the lawyer who represents himself has a fool for a client.” How much more troublesome is the vision of artists who drift through life without an understanding of their business—the customs, traditions, contractual norms, and laws of the very industry that would not even exist but for them and their artistic contributions?

  Remarkably, we are talking not just about fledgling musicians, singers, and songwriters. Many of those who have topped the charts for a generation are no more sophisticated than the novice when it comes to the business intricacies that, when all is said and done, will determine their financial outcomes. Equally remarkable is the fact that their representatives—the executives at their record labels and publishing companies; personal and business managers charged with fiduciary responsibilities toward their clients; attorneys in whose trust they place their careers; investors and others from the financial arena who follow the industry from Wall Street to the Times building—are often just as unsophisticated and unaware.

  Ultimately, all of the creative people who form the heart of the music industry must depend on a network of advisors in whom they need to place their trust. Nothing could possibly constitute more of a gift to artists than a competent, hard-working, intelligent, aware, trustworthy representative. And, although artists’ advisors are all too often ill-informed, there are many—managers, attorneys, accountants, and agents—who have dedicated their lives to further the artistic careers of their clients. Attorneys and accountants customarily work for agreed-upon fees. Managers and agents work for a percentage of the artists’ income; in essence, they work for nothing until the day comes—if it ever does come—when the economic potential of the people they represent is realized. At their best, these people can make a difference profound enough to encourage artists and help them bring to fruition and to the world’s attention the results of their creations. For many—and I include myself here—that is enough compensation for the tribulations experienced in the course of practicing our professions.

  I have sought, in this book, to expose the most treacherous pitfalls faced by both creators and their representatives and have pointed out some of the most egregious examples of the ways in which artists can be affected by customs and practices to which the industry universally adheres. It is not my intent either to alarm the artist or to depict the industry or its principals as monsters of selfishness. On the contrary, as the music industry has become more sophisticated, it has come to terms with certain realities—financial and artistic—and the result has been the establishment of more thoughtful and fairer practices than existed during the heyday of Tin Pan Alley almost one hundred years ago. Nevertheless, I feel that the more one exposes the conundrums that face artists, the more likely it is that they will be solved.

  The evolution of the music industry as an institution is no less a process than the evolution of any other business or political entity. In the present environment of technological advance, the artistic community must adjust to the sea changes occurring both in the creation and the delivery of music, and so there is more than ever a need to examine the underpinnings of our industry so that we can better fine-tune our business relationships and take advantage of the promises of the future.

  In 2015, a dispute raged between those who think that the down years for musicians are over and the “creative apocalypse” that was forecast for musicians never happened, and those who think this is a misplaced, and ignorant, view of reality. The appropriately named The Future of Music Coalition is, of course, on the opposite side of the pundits who have judged the plight of musicians to have ended in the glory of new sources of exploitation, distribution, and income. The devil, as they say, is in the details—more appropriately the data. As can be expected, data is read differently by different people—especially those with their own agendas. But suffice it to say that the digital evolution, as I refer to it in chapter 4, this page, has presented myriad problems for musicians, and interpreting their reality on the basis of impersonal data that lacks the human test seems quite useless. (For example, a New York Times feature disclosed that since 1999, “music directors and composers” have increased enormously—from 53,000 to 60,000, a 15% increase. But the data included, for the first time, music teachers, employed and hardly starving in their van performing midnight gigs at the local club. This addition skewed the results which, without including them, indicated that the number of “music directors and composers” dropped during this period from 53,000 to 47,000, a decline of 11%.)

  Still, for those 47,000 and for all who choose to enter this extraordinary way of life for love or profit, this book will provide a foundation that will assist them in comprehending and managing their business throughout their careers in whichever part of the industry they choose to serve.

  What They’ll Never Tell You is divided into twenty-five chapters that identify and explore many of the most important issues that impact the musician, singer, and songwriter, and therefore the producer, the personal and business managers, the accountant and the attorney, and every level of music company executive. Some deal with fairly intricate issues; some are rather more accessible. None, to my knowledge, are addressed sufficiently in the principal books on the subject of educating the reader on the ins and outs of the music business. In this book, I have tried to find a common ground between the theoretical and the practical; my analysis of the issues faced by the professionals in the music business, as well as by the business entities themselves, is informed by years of experience, litigation, and both psychological and financial reinforcement. I have written this book on the theory that more knowledge is better than less, and the greater the awareness on the part of both the representatives of talent and those who exploit it, the more likely it is that an optimal collaboration between artists and companies can be achieved. I hope the information will be received as another layer of wisdom over that which already exists in significant amounts among the top professionals in the field.

  Record companies, producers, and music publishers need not be concerned that all of their secrets are now out, nor should attorneys and accountants fear that their jobs will be rendered obsolete by this book. Record company personnel may feel that I have giv
en away too many secrets, and my peers in the legal and accounting professions may feel that I have given away for free what they charge fees for. To them I respond, like a retailer who believes the best customers are educated consumers, that educated artists, producers, personal and business managers, agents, A&R (artists and repertoire) people, attorneys, and accountants will be better served, and will better serve each other, than those who have chosen, or who have been forced, to live in ignorance or, worse, in a daydream.

  It is not enough to know the things you think you need to know about the music industry. Those who live within it—whether at the artistic or the business end of the spectrum or somewhere in between—must know more. They must know what they never knew or did (and do) not even think they want to know. They must know the difference between surface and substance, between truth and lie, between reality and myth. Only then can they prosper within their industry while taking genuine pleasure in their contributions to the culture that sustains them and the rest of our world.

  ACKNOWLEDGMENTS

  Thanks must go to all of my own mentors over the years: in particular Bernard Korman, the former general counsel of ASCAP, who taught me that it is okay to reexamine and rewrite what I have created; the legendary Harold Orenstein, the first true music business attorney, who taught me order and legal ethics; and the many people who assisted me in researching and editing this book, particularly Bob Nirkind, former acquisitions editor at Watson-Guptill; my current editors, Jenny Wapner and Clara Sankey, at Ten Speed Press, as well as Sylvia Warren, whose knowledge of the music industry was enormously beneficial to me and to the readers of this book.

  I would also like to thank my former associates Scott Francis, former president of Warner-Chappell Music Publishing, and Michael Simon, the innovative and imaginative president/CEO of the Harry Fox Agency, Inc.; Stewart Hescheles; Loren Chodosh and Sandor Frankel, who give attorneys back their good name; Terri Baker, the true artist’s attorney; Cheech; David Kincaid, of The Brandos, who “did it himself”; the great Anna Moffo, who sang La Traviata 956 times and encouraged me even more often; and Ira Sallen, formerly executive vice-president of human resources of BMG Rights Management and currently their valued consultant.

  Thanks are also due the following people from whose insights I have benefited enormously—both in writing this book and in life: Maestro Gilbert Levine; Chris O’Malley; James Phelan; Deirdre O’Hara for my morning whisper line; Dr. Steven Paul; Bob Epstein, my colleague who taught me many things that I didn’t know; Alex Murphy; Paul Adler; Errol Wander, CPA; Nat Farnham; Judy Corcoran; Kathleen Marsh, CEO of musicnotes.​com; Martin Josman; Gilbert Hetherwick, former president of Sony BMG Masterworks; Carol Matorin, another superb and wise attorney and former vice-president, general counsel, Marc Jacobs; Joseph Dash, former head of Columbia Masterworks; the incomparable pianist and music historian Steven Blier; Jackie Kim; Natasha Azava, the new generation of music attorney, Renata Zeigeur, our valued assistant; and Carol Gigante, my secretary and assistant for twenty-five years without whom nothing would have gotten done. On a personal level, I wish to thank Theresa Wing Hines and her two amazing sons, Graham and Ian, for inspiring me to put the finishing touches on this epic work during the heat of a Connecticut summer and fall, 2015. I also owe heartfelt thanks to my daughters, Emily and Sophie, and my stepson Vincent, both for their support and for their frequent admonishment on reading a portion of the manuscript: “Are you sure you want to say that?”

  1 • INTRODUCTION

  It is a sobering thought that when Mozart was my age he had been dead for two years.

  —TOM LEHRER

  Everyone has an idea; everyone has talent; everyone thinks that they can write or play or sing a song better than much of what they hear on the radio. There are one hundred songs on the charts. Why can’t theirs be one of them? Perhaps it can. But I am fairly certain it won’t.

  There is an apocryphal story about David Merrick, the legendary Broadway producer. An agent said to him that his artist was talented and deserved a chance at appearing in one of Merrick’s shows. Merrick went over to the window (his office, like mine, was on Broadway), opened it (you could in those days), and yelled at the top of his lungs: “TALENT!!!!” He then turned to the agent and said, “If I want talent, I can get it by the thousands. They’re all out there just waiting for me to open the door. Finding talent is not my problem.”

  In fact, although unique talent is rare, all of us have talent to one degree or another. But what we do with our talent is the ultimate issue—and the key to opportunity. I say opportunity, not success, because all one can hope for in the music business is opportunity. Success depends on many factors: the ability and inclination to roll up one’s sleeves and work at the craft of creation so as to actually improve and fine-tune one’s skills; the ability to earn money and to provide oneself with food and shelter during the process, which can and will take many years; understanding one’s limitations; and identifying an attainable goal and keeping it in mind over the years, amid innumerable distractions. It also depends on one factor over which even the most talented individual has no control: luck—ever-changing radio formats; the attention—or inattention—of an artist’s representatives at important moments; timing (for example, the release of a key single on the same day the label is shut down and its artists moved to a sister label).

  I have long been sure that most of the talented people who pursue their craft diligently and over a long period of time—those who “stay in the ring”—do realize their potential. The truth of this has been proved time after time. What I am less sure about is what advice to give to the young artists who have talent but who may not have the personal or financial resources to pursue a career in the arts. One thing is for sure: These artists will not lack for advice. There is no limit to the number of people, including top professionals in the music business, who think they know it all. Sometimes advice givers are being practical; sometimes they are simply jaded; sometimes they are dead wrong—and some are greedy and will say anything to get up-front money. So, how can the artist seriously pursuing a career in the music industry maximize the chances of getting good advice? As I emphasize throughout the book, the best approach is to assemble a team consisting of an attorney, a personal manager, a booking agent (personal managers, who are not licensed by the states, are not allowed to seek or obtain employment for their clients), and an accountant.

  SELECTING THE RIGHT ATTORNEY

  There is plenty of justification for seeking out a good attorney from the outset, not least because attorneys have become an important source of business to the record and music publishing companies. Record companies know that if they maintain a cordial relationship with us, they may eventually be at the top of our shopping lists when an artist of significance comes into the picture. Attorneys are also safe—in the sense that the presentation of an artist to a record or publishing company by an attorney diminishes the possibility that the artist will create problems for the company in the future. The triage—the checking out—of the artist, and of his or her bona fides, will have already been done by someone whose telephone number will be the same in the near future when a problem might arise. In addition, attorneys are licensed by state authorities and have state as well as national ethical rules that guide and bind them.

  People in the entertainment industry in the United States have learned something that many in other industries—and countries—have not: the selection of an attorney should be made earlier, not later, so he or she can help you in structuring your deals and relationships in ways that can avoid problems. But, although choosing the right legal representation is one of the most important decisions that creative people make, there is no simple formula for making the right selection. Attorneys come with offices, secretaries, and occasionally ties and jackets. They come in every possible stripe and from every possible background, and it is difficult to evaluate them objectively. Attorneys with all of the trimmings appear to be more stable—more dependable�
�than those without. But appearances can be deceptive, and there is no substitute for extensive experience in the music industry.

  It is not difficult to begin your search. Numerous websites and bar association assistance lines, as well as books and magazines, identify attorneys whose practice areas include the music business. Most attorneys, or their assistants and secretaries, are helpful and clear with callers and are happy to guide potential clients to the appropriate firm or institution for assistance. In addition, most attorneys will provide brief consultation time, at no charge, to potential clients.

  Once you are in the process of narrowing down your short list of potential attorneys, however, things become more complicated. You will need to personally interview each attorney, and at some point all of the following questions must be answered to your satisfaction:

  • Has the attorney had experience with your kind of music?

  • Which record companies does the firm have the best relationships with?

  • Which record companies have most recently signed the firm’s other clients?

  • What is the firm’s policy with respect to introducing new clients to other clients—like producers, managers, songwriters, production companies, etc.?