Paul B. Ungar, Esq.
Attorney At Law
"So You Wanna Be a Rock 'n Roll Star..." in the New Millennium – Part Deux
About 10 years ago I published an article entitled “So You Wanna Be A Rock ‘n Roll Star in the New Millennium” which described in detail a few examples of ShowBiz clients of mine who actually “made it” and how they “did it”.
This is an update of that article – not only featuring examples of some of my clients who’ve successfully “broken in” to The Biz recently – but also containing some general observations of mine about the state of Our Music Universe in 2016.
First of all, in my now 34+ years of practicing entertainment law, I can still say that literally all of my clients who’ve been successful have several things in common:
1) They’re really, really good at whatever it is they do;
2) They do their homework and then constantly network with credible people and legit companies; and
3) What separates “the men from the boys” (No offense, Ladies!!) is that someone -whether it’s themselves or others – believes in them enough to write some fairly serious Checkos in order to help them. These days, given the ubiquity of decent home and low-cost commercial recording studios, most of that money is used for professional public relations and marketing in order to create a “buzz”.
Just because you’re “good” and you work hard at your craft – that won’t necessarily do the trick.
The problem is that today – more than ever – there are just too many talented folks out there and fewer and fewer label signings. It’s not just about how picky the labels are – they’ve always been extremely picky – but with the advent of streaming, the whole record industry is struggling with a new model where, with but a few notable exceptions – most music consumers aren’t buying anything at all – instead they stream and basically treat the Internet as one big free (or practically free) radio station where they can listen to almost anything they want anytime they want for little, if any, money. The big problem is that royalties paid by the streaming services to both the labels and the artists is basically Bubkas. Example: One of my guys was the songwriter of a song on a commercially released video that had 22 Million views. The combined songwriter/publisher public performance income for that exploitation was about $15,000 (of which my client - who was the sole songwriter - received about $7,500). So that comes to a combined songwriter/publisher per exploitation royalty rate of about $0.00068 per view!! Not nearly enough for him to quit his day job!
So you’re dealing with an industry that is trying to redefine itself while being extremely gun-shy about new signings of unproven acts.
In the Olde Dayz, the labels would sign lots of “singles” and development deals – literally hundreds of new acts a year where they would spend maybe $5,000 - $10,000 on recording a single, and then invest maybe $25,000 per single per act in promotion and marketing costs in 1 or 2 major markets. They would then see which artists “stuck to the wall” so to speak, continue with those artists, drop the rest and then sign lots more new acts and repeat the cycle again with them. The problem for the labels today is the amount of money they have to spend on PR and marketing – my small-to-midsize label clients tell me it takes at least about $30,000 these days in professional PR & marketing to break an act in one major urban market. The big labels spend much, much more (I did a recent deal where the recording fund for the first album was about $200,000 and the combined amount of promo, marketing and deficit “tour support” was close to $500,000!!). So there’s no way even the big companies can sign that many acts at those levels of funding.
So rather than sign lots of acts, nowadays the labels want you – as an indy artist or an indy label – to “test market” your “product” for them. After all, everyone who approaches them says basically the same thing: “I’m good, I’m different – Pick Me!!” Whereas if you’re in the position to say: “I’m good, I’m different and – with relatively limited resources – I actually got several thousand people to reach into their wallets and buy my Stuff!!” Well guess what: You go to the head of the line!!
How do you sell anything – no less several thousands of units – these days, given the current environment?
That’s where professional PR & marketing comes into play. No matter how “good” you are, how’s anybody going to find you through all the “white noise” out there? That’s where professional advertising and marketing comes into play. A good PR firm will get you out there – not only on traditional and satellite radio – but also via social media. Yes, Virginia, there are paid bloggers and celebrities who’ll Tweet about you – for a fee. If you analyze the “behind the scenes” of who’s gone “viral” – you’ll find that first of all, it rarely happens and secondly, when it does, you can more often than not find somebody involved (e.g., a manager or investors) who’ve sunk money into PR.
How do you find a “good” PR firm? There’s lots of them out there – some good some not so good. I suggest starting with an artist whom you respect, or who’s in a similar genre as you, and see who they use. You can also look at PR firms’ websites which often list some of the artists that they represent. Once you find a person or firm which seems like it might be a good fit, call them up, speak with them – or possibly meet with them - see if they “get you” and ask what they charge. (Some charge as little as $500 a month – others charge $25,000 or more per week). If you have funds, many of them will negotiate with you - and please don’t sign anything – even if they tell you it’s a “standard” contact (P.S.: No such thing!!) - until you run it by an experienced entertainment lawyer (FLASH from the Shameless Self Promotion Dept: Like Me!!). Believe me, if you have money – they want it and they’ll usually negotiate. When you have money it changes the whole dynamic; instead of virtually begging for help, you’re in the position of having them convince you that they should work for you. Once again, this is leverage at work…and it does work!!
How do you get money for PR if you don’t have it? That’s where friends / family / fans and other investors can come in. While there are Security and Exchange Commission rules about investors and investments, under the SEC rules (which regulate investors on a federal level) and most state “blue sky” laws (which regulate investors on a state level), as long as there are less than 35 investors, you can keep the whole situation private without any SEC or “blue sky” registrations – you can set up a private LLC or a Corporation and issue Stock or Membership Interests to your investors in exchange for their Cashish. I sometimes kid around with – but seriously advise - bands and say: “Hey, you know those 20 groupies who follow you around everywhere – offer them a small percentage of ownership of your band in exchange for say $500 per person.” POOF!! There’s $10,000 you didn’t have 30 seconds ago…which now can be used towards PR & marketing. Setting up an LLC or a Corporation – and doing agreements with investors or shareholders - are relatively simple (READ: relatively inexpensive) matters. But be careful about trying to DIY – as there are lots of little twists and turns that should be addressed - preferably by a competent entertainment lawyer.
As far as getting money through crowd sourcing is concerned – in my experience very few of these projects get enough funding to really get off the ground. It is possible, but mostly crowd-sourcing doesn’t really work because serious investors want a return - and most crowd funding scenarios don’t allow it (although the SEC is experimenting with certain limited return-on-investment scenarios – but it’s rarely done because the investor qualification, accounting and reporting requirements are currently very onerous and almost require hiring a separate individual to administer these matters).
Another way to get funds is through sponsorship arrangements – and that’s where social media can really help. It’s possible that if you are sophisticated enough, you can “mine” your data – you can find out not only who “likes” or “follows” you, but how old they are, where they live, how much money they make, etc. If you have the “right” demographics, you can then go to companies who want to sell their stuff to your crowd – and they will give you money – sometimes lots of it - to advertise to those folks. You can do this on a local, regional and even national basis. And unlike investors – who want something back for their money – sponsors don’t: it’s just advertising to them. Example: I helped one of my clients who does sports and entertainment marketing get $25,000 in sponsorship money from a major brewery to sponsor a relatively small non-televised college football game half-time show. Even on a local level, several of my “small-time” bands have gone to area businesses for sponsorship: if you have the right demographics, it’s fairly easy to go to, say a car dealership and get a couple of grand from them (which is basically nothing for a car dealer!!). Add up a few more businesses (e.g., a restaurant, a hardware store, a bakery, etc.) and all of a sudden you can get several thousands of dollars through sponsorship arrangements – which you can then invest in professional PR to try to get you to “the next level”. And all you really have to do to get the money is make a couple of stage announcements (“Need a New Car? See Joe’s Ford in Edison, NJ – He’s a Great Guy!!”), hang a few posters, give out discount coupons, hats, T-shirts (which the companies will give you), etc. Easy Peasey…..if you have the right numbers….
You can also get yourself “out there” by associating yourself with charities, community organizations and other non-profits. In exchange for doing a free or reduced price show and/or donating a percentage of your profits for their cause, you can ask them to promote you through their social media. (But again be careful, as there are many state and local laws that must be complied with). One of my clients – a jazz singer and a breast cancer survivor – did a few (paid) shows for her local chapter of the American Cancer Society to promote breast cancer research – in exchange they featured her on the homepage of the national ACS website for several weeks. That site probably has millions of visitors each day – you can’t buy publicity like that!! The Moral of the Story: She got lots and lots of offers to play out of that situation. Plus, you’re doing something good for others and, although it may not be very lawyer-like, I believe in “What Goes Around Comes Around” Karma!!
Finally, a lot of people ask me about “shopping” their material. I rarely – if ever – do it – because without a significant sales history (as reflected mainly in the Sound Scan database and/or other databases that show actual sales) and/or a “buzz” created by professional marketing & PR – it hardly ever works. I can tell you that in my many years of representing big and small labels, I can’t remember one time where my label clients cared about who an artist’s lawyer was. It’s about you– not about who represents you. And today more than ever the labels want to see actual sales results.
You’re essentially trying to start-up a new business – which just happens to be you and your talent. And all successful new businesses need start-up capital – again, here mostly to be used for professional PR and marketing. If you think about it, coming up with $30,000 - $50,000 to start a new business is relatively “chump change” if you compare it to say starting a restaurant (which might cost you $500,000 or more to get going) or a high tech company (which could cost millions).
A final illustrative story: a small indy label client of mine recently signed a very talented R&B singer who recorded a great tune. My client hired a “name” producer – who not only helped produce a really, really good record, but who’s name added instant credibility to the project. Then my client hired a very famous female singer to do a duet with his artist - and they recorded a very high-end video of that performance. All of this cost my guy about $50,000. He then spent about $30,000 on professional PR. The week after it was released, the record broke into the Billboard Top 20 Singles chart at #17. Within eight days, I got a call from one of the “Big Three” major labels – they called me, not the other way around - and shortly thereafter I was able to get my client $1,000,000…. So he invested about $80,000 and got $1,000,000 back….which, after recouping his out-of-pocket costs, he split 50/50 with his artist. Not bad, huh?
Look, like most things in Life, there are no guarantees. Even the big labels – who spend literally millions of dollars so you can see their latest artist on Conan or whatever – only succeed with about 10-20% of their new artists. So it remains a very, very, very risky Biz.
But even in “these days of modern times” (Respect to the Firesign Theater!!), it is still definitely do-able.
Finally, I’ve also seen some bands who’ve done well enough on their own – again because of their talent combined with good professional PR - to actually turn down offers from labels.
Remember: if you do any and/or all of the above, you’ll be automatically way, way ahead of those out there who don’t “get” how this industry really works. And if you don’t do it, you’ll be automatically behind your competitors who are engaged in all of this as we speak.
- Paul B. Ungar, Esq.
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