6 Music Industry Predictions For 2012

While staring down the barrel of 2012, attempting to forecast the upcoming roller coaster year the music industry will certainly deliver seems like an impossible assignment. However I have the ability to see into the future. I’m not necessarily clairvoyant, a prophet, a physic if you will, rather I have a very specific method. What’s this method you ask? It’s a complex algorithm I sketched on the back of a cereal box that only my dog Francesca, the hair model / adult Justin Bieber lookalike in the attached photo and I understand.

Many cast criticism regarding the humdrum nature of my 2011 industry predictions so this year I’m going for broke. None of this “I predict decreasing album sales with increasing digital sales” type business, I’m going all out. Due to these bold presumptions I’m cutting the list in half, highlighting 6 things to watch for in 2012. Spin the roulette wheel folks because I doubt these predictions made anyone’s industry shortlist.

1. Vegas Baby, Vegas

Venture around the globe and genre classifications change. Sometimes the change is subtle, sometimes not. For instance, music classified as blues in the United States packs a consistent expectation whether you’re traveling to Australia or Thailand. Other genres fluctuate in terms of musical consistency. Pop music in the U.K. doesn’t necessarily correlate with U.S. Pop. Finnish rock defers from Spanish rock, etc. Few genres speak one global language but electronica has struck a worldly cord. Call it house music, electronic, dance or electronica, regardless, from Oslo to Detroit, electronic music reaches the same audience and speaks the same language. Now more than ever the once underground genre has thrust itself onto the U.S. main stage. Combating once negative stereotypes and dismal sales figures that detoured label interest, electronic has now eliminated the negative overtone. Electronic fans are a globally united group and brands are looking to align with the movement. The hottest sector of live music business today is electronica. Acts consistently sell out 2,500 – 5,000 capacity rooms and have weaseled into iconic arenas such as Madison Square Garden. Perhaps the most staggering of all statistics is the fact The Electric Daisy Carnival in Las Vegas drew 230,000 attendees. The estimated economic impact for the 3 day festival generated over $136 million for business – including hotels, restaurants, and transportation – and over $8.9 million in tax revenue. The 2012 festival has already sold out. Using Sin City as a litmus test for success may be in order. Las Vegas experienced devastating economic woes in the past years and shifting fate to the tune of $136 million in the course of 72 hours doesn’t go unnoticed. With a passionate, party going, money hungry city built around gimmicks, Vegas will likely take full advantage of the fact they have more 2,500+ seat music venues and clubs crammed into a 135.8 square mile radius than anywhere else – essentially a prime foundation for an electronica fan base. Las Vegas will become to electronic music what Nashville has become to country music. Sure the transition will takes years to fulfill, however I estimated 2012 will be the year Las Vegas begins their electronica branding campaign by increasing artist/city integration, tour stops and festivals.

2. America Insulates

For Americans, American culture is cool again. People have gravitated back to the “Made in America” campaign. Supporting local musicians, funding artistic communities, generating unheard local genres and buying local has become mainstream. The wave will inevitable effect the underground music scene – strengthening artists with full communal support that lacked in previous years. I don’t envision global impact from this movement but as Americans continue to buy American products, small town U.S. will strengthen the local music scene, possibly effecting sales from major international artists looking to build upon the generic American fan base. Look for an increase in locally owned/operated labels and for radio programming to focus upon more local artists.

3. Claiming Stake In Bands

I predicted big things in 2011 from artist/company relationships and fully believe 2012 will bring something much more invigorating. The relationships between artist/company exist on numerous levels. The extreme, monetary based partnership such as the ones between Lady Gaga & Virgin Mobile, Foo Fighters & Blackberry, Taylor Swift & Covergirl, or Method Man & Sour Patch Kids – all the way down to the creative corporate underwriting evident of Converse’s Rubber Tracks Studio which assist indie group with funding projects - corporations are deeply involved with music. These relationships, like everything in the music industry constantly evolve into new creative models. Regardless of old models or new models, two aspects will forever remain consistent – (1) corporations can provide massive visibility for artist, and (2) the high priced Lady Gaga’s of the world and brands willing to invest millions even if they can’t prove how songs (or artist) sells a single product for them, are a rarity. If a company can’t afford to shell out a $2 million endorsement advance but they can provide bands with a visibility platform to reach 17 million people within a target demographic, stock options, or opportunity to help grow -what indie band wouldn’t accept this partnership? Expect to see deeper indie artist /company relationships, one where companies assist with release strategies in a nontraditional way. This allows bands to target niche markets more effectively using Direct 2 Fan (D2F) methods, and subsequently allowing companies to piggyback grassroots indie marketing strategies through an organically generated progression as opposed to simply buying endorsements.

4. Touring Reaches Conflict

Festival & tours reached blockbuster numbers in 2011, however following the 2012 summer concert season I believe the table will be set for extraordinary conflict. Why? Nobody’s happy. Nobody (unless you’re Australia). Promoters feel artist charge too much, fans believe ticket prices have spiraled to unthinkable amounts, promoters bitch that they’re in the red after every show and artists think 360 deals eat up everyone’s bottom dollar. However the real kicker…..wait for it…… insurance rates will climb to unconscionable levels due to the traumatic concert events that plagued 2011. Further, several countries have implemented new security regulations driving cost out of whack. Nobody is happy.

5. Non Traditional Labels Explode

Record labels at their core perform three duties: produce music, market music, and distribute music. Sure, hundreds of additional components exist, but these three pillars are the foundation to any label. What happens if one of these components is irrelevant? What about two? Essentially anyone could play their hand in the label game if they perform one of the three components efficiently – right? Take a look at William Street Records, the label for Cartoon Networks. The label has nothing to do with music (other than the fact they use it), they don’t produce music, and in many cases they don’t have traditional distribution but they do have a marketing platform. By incorporating music during network bumps, television programs, etc. Williams Street Records can expose music to millions of followers within a centralized creative platform they control. Why should they pay a multitude of labels and publishers for artist services when it can be controlled in-house? The network doesn’t know music - they develop cartoons but nobody cares. Because the label has a TV network at their disposal, they can do certain things that major or indie labels can’t - such as air 30 second spots as frequently as they want, feature music videos, generated animated characters for shows, all while targeting a specific demographic of 18-34. In today’s age where artists are equipped with the necessary tools to produce their own albums, they can reach fans immediately via Direct 2 Fan platforms, etc., why should they seek a traditional label? Running a label today isn’t necessarily about maximizing sales rather it’s about creative control and efficiency which nontraditional outlets provide.

6. K-Pop Launches in The United States

Until now K-Pop has hit the U.S. marketplace with little success. According to Nielsen SoundScan, typical sales for larger K-Pop artists struggle to top 3,000 units within the States. So why will K-Pop explode in 2012? K-Pop was merely introduced to the U.S. market in 2011. In 2012 the mild mannered music fan will become attracted to the genre simply because K-Pop has penetrated the mainstream media. Additionally, K-Pop artists are highly professional and strategically structured to appeal to the 4.8% niche of the American culture. It brings ownership to Asian Pacific Americans looking for their mainstream musical voice in the American pop-infested market. Further, powerful organizations endorse K-Pop music as a means to spread Pacific culture. With endorsements surrounding tourism and cultural exports; I can assure you the genre will not quietly fade away.

BONUS – Country Music Strikes Europe With Overwhelming Success (Discussed in the upcoming post January 15th 2012).

Martin F. Frascogna is an entertainment attorney who specializes in international entertainment law representing clients in 23 countries spanning 6 continents. He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships into the appropriate global territories. Frascogna will be speaking at the MIDEM Conference in Cannes France January 28-31 2012. Follow on http://twitter.com/#!/frascognamusic, view speaking schedules, or e-mail at: mff@frascognalaw.com or marty@frascognamusic.com

Report Card - The 2011 Year End Review

It’s that time of year again. Time to brag about work well done or tuck tail in total dishonor. With only days remaining in 2011, the previous predictions once meant to define 2011 must be evaluated. Personally speaking, I believe the Nostradamus blog attempt reflects a successful report card – something I’ll happily prance home this holiday season to request parental signatures. Self-serving statistics? Maybe, however I think 7 for 11 bad is pretty damn impressive.

If you haven’t read the January 3^rd 2011 post titled, “11 Music Predictions For 2011” I would advise doing so, otherwise best of luck making sense of this.

1. Prediction -Companies Will Hold Stake In Artists

Outcome: Partially Correct

I can’t reward full credit for this prediction simply because companies haven’t necessary “taken stake” in artist, however they continue to shed sizeable funds by corporately underwriting music projects. For example, Converse opened Rubber Studios in order help indie music projects. Are they asking for royalties? No, but companies are trusting bands to generate a hands off promotional grass roots tactic that penetrates a niche market on their behalf. I will parlay this prediction into 2012 as I believe companies will figure out ways to fund projects, offer stock options or integrate marketing techniques while chomping off percentage points from music sales.

2. Prediction - Major Labels Will Adapt

Outcome: Partially Correct

“Adapt” is subjectively used here. Despite the EMI/Sony/Warner merger and sales ping pong game, I believe the major labels had a pretty good year adjusting to the market.

3. Prediction - Shelf Space With Big Box Retailers – REDUCED

Outcome: Nailed It!

This really wasn’t difficult to figure out. As the Best Buy v. Major Label price point debacle will inevitably reach it’s boiling point early 2012, I believe shelf space for CD’s will be coming closer to a complete exit. Vinyl however is a totally different story. With increased sales of 36.5% in 2011, retail outlets will more than likely latch onto this temporary trend in order to offset the CD decline.

4. Prediction - Big Box Retailers Outside Of The United States – INCREASE

Outcome: Correct

This one is debatable but I’m taking credit for it. Australian retailer JB Hi-Fi continues to increase locations and has done a fantastic job providing digital services as well. As Australia may not be the perfect litmus test, Europe is a total crap shoot. Some countries had retailers die while others thrive. What about the Asian market you ask – wait for it – I’ll be getting to that in my 2012 predictions.

5. Prediction - Artist Development Will Once Again Exist

Outcome: Correct

It’s comforting to witness progression this year. Despite what people think, success in the music world doesn’t happen overnight as there is a long evolution that requires certain platforms for accomplishment. Many of the Top 40 Acts from 2011 had long roads before “making it.” Chalk up a victory for artist development in 2011.

6. Prediction - New Genres Will Generate Mainstream Impacts

Outcome: Correct (I’m pretty much a wizard)

Several genres gained success (i.e. – Dubstep for starters), but the rapid acceptance for electronic/house music in The United States is happening at a creepy pace. When was the last time a DJ was discussed within Grammy circles? When was the last time a DJ booked multiple dates at Madison Square Garden? This warm embrace has been surprising but not impossible to predict. The United States has remained decades behind Europe’s mainstream acceptance of electronic music so the trend was bound to strike at some point.

7. Prediction - The European Market Will Level Out

Outcome: Failed

Certainly some countries are feeling the economic blow coupled with streaming services chopping up sales, but to boldly state the market has leveled out would be inaccurate.

8. Prediction - Traditional Managers Will Be Weeded Out

Outcome: Failed

Not only was this prediction wrong, it was way wrong. Simply gauging from the amount of management contracts I reviewed in 2011, managers are eager to take on new duties and they have also embraced a greater amount of work typically delegated to other parties.

9. Prediction - Entertainment Attorneys Must Adapt

Outcome: Failed

Collectively, we’re a group assholes. From what I’ve seen, a majority of firms still attempt to collect bloated retainers while focusing solely on traditional legal work. Hopefully 2012 will bring new standards and widespread implementation but I’m doubtful.

10. Prediction - The Australian Market Will Continue To Amaze

Outcome: Correct

Who are we kidding; Australia is like an industry fantasyland. Tour season is lively, the economy is booming, the amount of homegrown talent generating global appeal climbs with each passing day, and I’m pretty sure unicorns exist there. As the Australian music infrastructure continues to be perfected, Australia could become a self-sustainable industry giant.

11. Prediction - Canada Picks Up Steam

Outcome: Failed

I would like to say the Canadian market has picked up steam, but outside of monster releases from Michael Bublé and Nickelback I can’t site substantial growth with releases or touring. However don’t count out Canada just yet. I’m certain the talent and infrastructure is currently in place to make an impact within the next few years.

Martin F. Frascogna is an entertainment attorney who specializes in international entertainment law representing clients in 23 countries spanning 6 continents. He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships into the appropriate global territories. Frascogna will be speaking at the MIDEM Conference in Cannes France January 28-31 2012. Follow on TWITTER - @frascognamusic, view speaking schedules, or e-mail at: mff@frascognalaw.com or marty@frascognamusic.com

4 Ways To Negotiate a 360 Deal

When you hear the word “deal” in today’s industry more than likely it’s a 360 deal. Commonly called “360” you’ll also hear these agreement referred to as multiple rights agreements, all rights deal or bundle agreements. Remarkably, 360 deals are nothing new, especially for record labels as they’ve been in existence for decades. Labels have always wanted artist to sign a recording contract, be in bed with a management firm affiliated with the label and sign merch deals with parent companies. Anyway you spin it these situations have 360 characteristics. What’s unique about the 360 deal today is the fact everyone feels as if they can implement multiple right contracts so somewhere these things tiptoed into the mainstream. While writing this article I’ve got a music publishing contract sitting on my desk demanding multiple rights. Publishing companies demanding 360’s entitling them to merch sales? Not to be outdone, last month I dealt with a booking agency demanding 360 rights with entitlement to record sales. In the music industry bizarre, anybody and everybody insist their expertise rises to the level of 360 status. Absurd? Maybe. Farfetched? Not really. Since much of a musician’s income comes from sources other than recorded music, why should labels be the only ones to implement multiple rights agreements? Be it old school 360 or new age 360 deals, two things have remained consistent: (1) people assume they’re non-negotiable and (2) they involve a substantial commitment by an artist.

360 deals are simply a strong-armed request. Best stated by a fellow attorney “the large print giveth and the small print taketh away.” The offering party is attempting to hedge a bet and trap artists. Multiple right deals require substantial investment so often the “non-negotiable” contract is nothing more than a label swinging for the fences in hopes the bands believe them so they can collect a higher percentage. Sorry to say most of the time this works. Further, don’t be so quick to toss labels under the bus. Most of the time out of the offering parties (i.e. – managers, labels, production companies, agents, etc.) labels bring more to the table (and naturally request more in return). Industry companies have business experience and prey on artist who don’t. If multiple rights deals were non-negotiable, I’m assuming everyone thinks Shakira and Madonna’s attorneys didn’t negotiate with Live Nation? Robbie Williams was faced with a take it or leave it type deal with EMI? I guess the tooth fairy drop these contracts on their doorstep? Let’s come back to reality - non-negotiable 360 deals are negotiated at every conceivable level. The non-negotiable approach is typically a means to get artists signing on the spot as if a label can take away all the sorrows with the quick stroke of a pen. Regardless of who’s offering, and despite the varieties 360’s have 4 consistent (yet broad) concepts that will always serve as a negotiating start point:

1. Call Out The Conflict
Enjoy incestuous relationships? Have fun with a 360 deal! Sure they sound attractive when someone tells you that all the agreements can be bundled into one. This quickly allows everyone to focus on the music/career because “hey man, we’re a one stop shop for everything you need.” Bad starting point. Essentially you’ve just been blinded with “let’s get creative and ignore business” communication. With everyone intertwined (i.e. -management, label, publisher, agent, publicist, etc.) who is keeping the checks and balance system? For example, if the label stiffs the artist, the manager (who is also employed by the label) will be unlikely to call the label on the sour situation at risk of losing his own job. In many U.S. states and foreign countries artist managers (and agents in some cases) have to fulfill a fiduciary duty to their clients. Welcome to the legal world. Once this basic standard of care becomes violated, managers (or any other respected party) have essentially violated their fiduciary duty. Bring up fiduciary concerns on the front end and I can assure you negotiations begin immediately on that so-called “non negotiable” contract.

2. Know Your Strengths
Some artists do a tremendous job selling and promoting music. Others do not. Know your strengths. Should you already have a substantial following, high record sales, sync deals, merch sales, etc. why sign a full 360 deal? Peel off the irrelevant sections in order to bifurcate a 360 into a 220, 180, 100, and so on. Build the model that works for you. This is not only realistic but it’s also good business.

3. Know Your Rights
*Unquestionably the most important aspect of 360 negotiations.
The most valuable rights an artist can possess: (a) copyrights and (b) trademarks dictate the strength of multiple right negotiations. I’ll only touch copyrights in this section but if you want a quick review of trademarks CLICK HERE. Copyrights control so much more than artists realize. When you legally own a copyright to your work, you actually own a bundle of rights (6 to be specific). As these rights vary country by country, essentially the bundle allows the owner to the following:

• The right to dictate reproduction of the work
• The right to control derivative works
• Distribution rights
• Performance of the copyrighted work
• Display of the work publicly via film/images/etc.
• Performance by means of digital audio transmission

Take the bundle as a whole or isolate any particular portion and the owner can dictate the scope of use, time, geographical location, or purpose. Putting these concepts in motion, let’s assume BAND X receives a 360 offer from Live Nation located in The United States. In regards to the copyrighted material, BAND X can grant Live Nation distribution rights (in the U.S. only), rights to derivative works (in Finland only and then to another company for rights in The United States), performance rights of the copyrighted work (for no longer than 12 months in the U.S. – not globally), etc. Artists own the bundle of rights and they should never blindly give away the entire bundle. Negotiate by being specific about geographical locations, duration of time, and/or purpose of the work. We’ve only touched the tip of the iceberg here, as a new world of negotiation can be opened up when discussing other rights (i.e. – trademarks) publishing, bookings, or merch rights.

4. One Word Speaks Volumes – “NO”
Presented with a non-negotiable 360 deal – just say “No.” If you’re as good as you think you are, if you’re in as high demand as your friends tell you, or if venues are drooling for you to perform – reject a 360 deal. If the offering party is serious about signing you they’ll present you a second offer. If they don’t it was probably one-sided to begin with. Nothing speaks volumes more so than a rejection.

*Stay tuned for a YouTube instructional video later in November 2011 regarding copyrights.

Martin F. Frascogna is an entertainment attorney at www.frascognalaw.com where he specializes in music globalization and indie artists. He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships opportunities into the appropriate global territories. He co-authored the American Bar Association (ABA) book: Entertainment Law For the General Practitioner, which is used by entertainment attorneys around the world. Currently Frascogna has clients in 23 countries on 6 continents. Feel free to contact - Martin F. Frascogna (mff@frascognalaw.com or marty@frascognamusic.com) or on TWITTER. See him speak live at MIDEM in Cannes France January 28 – 31.

Why Your Band Needs a Registered Trademark

Intellectual property remains the core money making ingredient for bands in the music business. Many assume intellectual property simply refers to filing copyrights, but this is only a fraction of the overall equation. For bands, the real money flows when they control both: copyrights and trademarks. What is a trademark (aka – the mark)? Why are they important for bands? How do you squeeze money out of a trademark? All you really need to know is that a trademark can become a groups most powerful negotiation tool and when used properly, the trademark can churn more money then music alone.

When you hear the term “intellectual property” it essentially refers to the BIG 3: copyright, trademark, and patent. Other components exist as well, such as trade secrets, trade dress, service marks, etc. but for the sake of discussion we’re going to stick with the BIG 3. Patents relate to formulas or inventions and are irrelevant for discussion here. Copyrights refer to an original work of authorship fixed in a tangible medium of expression. Boring legal mumbo jumbo so just know that a band’s recorded music, when filed properly, is protected via the copyright. Because most recording artist understand the legal significance of a copyright, we’ll focus on the remaining component – trademarks. Trademarks are any unique symbol, design, mark or words that distinguish the product from others on the marketplace. For example: Nike’s swoosh, Coca Cola’s traditional font logo, the leaping puma for PUMA, The Recording Academy’s gramophone logo, McDonald’s golden arches, etc. How is this relevant to the music business you ask? Imagine if U2 couldn’t legally use the symbol U2? Their music would be seemingly worthless if it wasn’t coupled with the symbol “U2.” What if Island Records had to pay a licensing free to a third party every time they printed the palm tree logo on a disc? What would happen if Aerosmith didn’t legally own the mark associated with the band name? Believe it or not, trademark battles are fought everyday on the front lines of the entertainment legal community. These stories rarely get attention mainly because higher visibility equates to higher licensing fees for the infringed user. In this regard, the person infringing wants to handle trademark infringement matters quietly and quickly. The mark owner wants to sit back and collect licensing fees and/or out of court settlements by not drawing attention to the matter in hopes others will infringe as well. Nonetheless trademark carnage is an everyday occurrence and unfortunately bands usually spill the bloodshed. Rarely do groups understand the importance of owning a trademark (much less the filing process) because labels like to keep the significance and worth hush hush. Well it’s time to shed some light on the topic so indie and major artists have a complete understanding of where the money is hidden and bodies buried. Instead of pounding the importance of a trademark let’s play out two real life scenarios.

1. Twenty years ago a small band out of Louisiana, United States hired an attorney at our firm. Gigs pretty much consisted of college dates and dingy bars. The group had a catchy name (which will remain confidential), and upon our attorney’s recommendation the group registered their trademark (i.e. band logo & band name). A year after filing, their trademark popped up in Billboard Magazine as advertisement for a label operating under the same name. The problem was the label didn’t own the rights to the name, the band did. A member of the greatest boy band in U.K’s history started the label, but even that level popularity can’t trump the law. The label gained success, signed bands, and released product all under a mark that they didn’t legally own. The rightful owner of the mark, a small no-name band from Louisiana, was able to settle outside of court for a substantial sum of money. The alternative for the infringing label was to drag through federal courts, have the case highly publicized and still lose their shirts at the end of the day. Settlement, even a high priced settlement, was the best option. The no name regionally touring band struck gold, essentially pocketing more money by owning a trademark as opposed to performing and recording music.

2. In 2009 I began representing an international group who had just completed a U.S. tour run from 2008. The problem with the tour was they generated a lot of visibility and success, all while operating under a band name they didn’t legally own. Other groups began calling their band they same name, and to make matters worse the copycat bands contacted the same venues in which my client had played shows. Most of the venues booked the group under the assumption it was my client. Wrong. Even worse, one of the copycat bands eventually got a record deal. My client’s band name became so diluted by untalented copycats that they had to change the band name and literally build a new fan base from scratch. If they had registered a trademark they could have filed lawsuits against the copycats or issued cease and desist letters so they couldn’t perform under the same name.

Owning a trademark essentially becomes a band’s battering ram with negotiations, touring, and product. The owner of a trademark can limit the use of the mark. If a promoter or third party wants to print posters, T-shirts, and other merchandise product - guess what - they must first acquire a license to use the mark. Should a label offer a group who owns their mark a recording contract, the groups got all the leverage. Oddly enough, labels forget about the importance of a trademark. How successful would a Lady Gaga album be if Interscope didn't have authorization to use the name/mark “Lady Gaga” Umm not very successful. To salvage such a deal a label would have to pay a licensing fee to use the mark. Merchandise rights are the same way. With 360 deals becoming commonplace, what was once “standard” contractual language has shifted, often leaving out verbiage which would transfer ownership of a trademark to the label. With the rise of international music markets/touring/and festival dates, trademarks take on new meaning. Should an album be released in Germany, Japan, or Norway, who owns the trademark? Who’s authorized to use the trademark? Knowing how to file for a mark, where to file for a mark, and how to use a mark should build its way into developmental discussion in order to assure bands have the proper business foundation to maximize their income streams.

Watch the detailed video here, but for trouble viewing check it out HERE

Martin F. Frascogna is an entertainment attorney at www.frascognalaw.com where he specializes in music globalization and indie artists. He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships opportunities into the appropriate global territories. He co-authored the American Bar Association (ABA) book: Entertainment Law For the General Practitioner, which is used by entertainment attorneys around the world. Currently Frascogna has clients in 23 countries on 6 continents. Feel free to contact - Martin F. Frascogna (mff@frascognalaw.com or marty@frascognamusic.com) or on TWITTER

How To Sell 1 Million Albums & Owe $500,000

You constantly hear horror stories of bands that sell millions of albums but end up owing the label hundreds of thousands of dollars. Surely these are tall tales, dreadful nighttime legends that musicians tell their children? It’s impossible to sell so much yet make nothing, right? Actually this ghastly folklore is way to true and unfortunately commonplace. Selling 1,000,000 albums and owing the label $500,000 is easy, typically secured by the thoughtless stroke of a pen. Bands are lured in by the large signing bonus weighed against the hefty fees to hire an attorney, therefore bypassing the legal process all together and jumping on the fast track to financial disaster.

Recording contracts are monsters. Filled with confusing terms, misleading passageways, and big hairy ghoulish language. Somewhere within the 50+ pages you get lost and this doesn’t happen by happenstance rather by contractual design. Before blaming labels for constructing misleading contracts, know that several sections of recording contracts are extremely valid. Labels simply place these sections in contracts as a starting point. If negotiated by the artist, the terms can be shifted to become mutually fair. If they remain untouched and unnoticed, well that’s just smart business practice by a label. The key is to notice the terms, identify the confusing sections in order to find the starting point for negotiation. On that note, in every recording contract you’ll find eight hot button negotiation points hidden deep within the legal language. By no means is this an exhaustive list nor should these elements replace an entertainment attorney. Attorneys will know how to locate these elements, negotiate these elements, and anticipate the counter arguments. This quick list is to serve as a guide to help identify some of the confusing terminology. The eight areas, if gone unnoticed and un-negotiated, can place a successful band that sells 1,000,000 records in a financial hole owing over $500,000. Soak up the sections so you can experience financial success instead of running from the Italian collection goons.

1. Artist Royalty – recording contracts are like partnerships, a partnership in which the band will receive an artist royalty on units sold. As this figure varies pending on the label, it’s important to understand how (and from what) the artist royalty percentage applies.
2. Wholesale / Resale – will the artist royalty percentage apply to the wholesale price of the product or to the resale price of the product? Pending on the negotiated stance, gross earnings can immediately be slashed in half.
3. Breakage Fees – labels will incorporate a breakage fee that’s pawned off to the artist unless negotiated otherwise. For example – a label will incorporate a 10% deduction on all items shipped just in case they are damaged within the shipping process.
4. Uncollected Accounts – because the music business is a giant consignment industry, what happens if a music store goes bankrupt? Where does the product go? Who gets it? As an insurance policy to protect from such circumstance, labels typically incorporate an “uncollected accounts” aspect to the contract.
5. Free Goods – in order to promote a new album the label must send that album to radio stations, venues, and industry movers and shakers. Why should they absorb these costs? Instead, recording contracts deflect these costs onto the artist as a promotional or free goods fee.
6. Container Charge – ever stop to think about what a label invest in? Labels invest in the song and multiple songs make up an album. When a consumer purchases the album other components play a part in the consumer exchanges. For example – the jewel cases, the album booklet, the disc duplication, etc. As far as a label is concerned these are just add on expenses which they shouldn’t be responsible for because their financial investment is in the song, not the jewel case. Guess who’s paying for it then? Here’s a hint – not the label.
7. Reserves – this is a straight monetary amount or a specific number of products that the label will set aside for various purposes. Nonetheless, the artist not the label will absorb the reserves portion.
8. Advance – the advance is the grey ghost to any recording contract. The upfront incentive always looks attractive but there several arms to the advance that people fail to recognize. Any way you cut it, “advance” translates into “a loan which must be paid back.”

Typically the artist royalty (Point #1) doesn’t apply until after all the other elements identified have been deducted first. Because of this, these eight negotiation elements can chop up a hefty gross income into crumbs. As these eight topics can’t be discussed in exhausting detail through an informal blog, the video (below) provides a deeper view into terminology and financial examples. If you want know how each element, if negotiated improperly, can be detrimental to a group even after selling 1,000,000, watch the video. Fifteen minutes of viewing may save you $500,000. For problems viewing CLICK HERE



Martin F. Frascogna is an entertainment attorney at www.frascognalaw.com who specializes in music globalization and independent artists. He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships into the appropriate global territories. He co-authored the American Bar Association book: Entertainment Law For the General Practitioner, which is used by entertainment attorneys around the world. Martin works with indie level musicians who operate on a budget. Allowing musicians to acquire legal services on the front end through a budget, opposed to billing high rates, has lead Frascogna to have clients in 23 countries on 6 continents. Feel free to contact - Martin F. Frascogna (mff@frascognalaw.com or marty@frascognamusic.com)
Follow on TWITTER (@Frascognamusic)

Concert Posters and the Rise of Legal Rights

Concert posters have long been the standard when promoting gigs. It’s simple, efficient, and people generally love seeing these unique pieces of art. In today’s DIY market coupled with fading music sales, artists are beginning to rely heavily upon poster design as an additional merchandise revenue stream but few realize concert posters/design pack a hefty legal punch. In short: Who owns the concert poster? The band that’s performing? The designers who designed the poster? Perhaps the venue that booked the artist? If you don’t think these issues are important, think again. Concert posters are quickly becoming the hottest piece of merchandise, not only for growing indie acts but major artist as well. Indie bands with limited edition numbered prints have been able to sell good designs for $100, therefore banking more on posters than CD sales. Take an established group with a vintage concert poster back from the 60’s and it may sell for $10,000+. I can’t touch upon the global issues concerning concert posters due to the enormity of the content, nor will I address all the legal implications in detail, however I do suggest using the information below as a solid foundation, a brief flicker of insight into the multitude of issues that can quickly snowball out of control.

Use of concert posters have traditionally worked as follows: A music venue and/or promoter books a band and subsequently hires an artist to design a concert poster surrounding the performance. The band provides the venue/promoter with photography and logos who in return passes the information off to the poster designer. With new technology new methods are used. Now it may be common for a band to design a concert poster and later provide the poster to certain venues showcasing the venue logo/information. Others may hire poster designers who design, print, and distribute the poster. Regardless, every scenario identified consist of three major legal components, often ignored, which (especially in today’s music market) inevitable come back to bite someone in the ass. When these components are combined two questions emerge: who owns the poster and who owns the poster design? In order to touch upon these questions, let’s review the three legal components and how they’re used.

1. Trademark:
If you’re in a band and you haven’t filled for a trademark – listen up. Trademarks (ones which are rightfully filled for, granted, and owned) must be licensed when used by anyone other than the trademark owner. For example, if I own the trademark for BAND X, when I play at a venue, who ever uses the concert posters to promote must be granted a license in order to use the mark. If a poster designer uses BAND X in a design, he must have a license to do so. If you don’t own the trademark, you’re mark is open on the market (i.e. Anyone can use it and they can use it without your permission). However, when concert posters are designed it’s typically authorized by a handshake deal, telephone call, or it’s simply implied. All the more reason a performance contract is relevant in order to address who owns the rights to (a) use the mark and (b) who owns the poster. Let’s say for example a designer builds a killer concert poster for an upcoming show. The band owns the trademark but didn’t license the mark for use. Well at this point we’ve got a stout legal issue. Because the band didn’t regulate the mark, a design will suggest it was simply implied that they could use the mark to promote the concert. In part he is correct. Consider five years down the road, the band signs with a major label, they tour heavily and begin selling millions of albums. The “vintage” concert poster becomes a collectors item. The poster designer can begin printing, reprinting, and selling the design and the band receives nothing. Had the band issued a “proper” performance contract with a limited license, they would enjoy in the income stream. I use the term “proper” simply because bands will cut corners by using form contracts they find on the internet. Because these are relatively new rights that bands are taking into consideration, form contracts will not cover such areas.

2. Copyright:
This is perhaps one of the most scandalous topics following the Vampire Weekend album cover infringement. Instead of covering that litigation story in exhausting detail, let’s look at a realistic working model. Band X provides their promo photo to a poster designer who in return places the group picture into a poster design. Smart tactic considering the band will receive more visibility. However, who owns the rights to the band promo photo? Did the photographer who took the band picture license the photo to the group? Has it been purchased following a work for hire contract? Maybe it was the cash/photo exchange that simply implied the band now owns the photo? If it’s the later, which it typically is, the band does NOT own the photo, the photographer does. Without securing the rights, guess who will come a calling if the band sparks in popularity and the poster is being sold as additional band merchandise?

3. Right of Publiciity:
Right of publicity is typically the topic that gets promoters and venues sued. In short, right of publicity authorizes monetary damages when someone’s image, photo, or likeness is used for commercial gain without their consent. For example, if VENUE X or DESIGNER X begins selling concert posters following a gig, but didn’t receive authorization from the band in order to do so. In this scenario they are subject to litigation because they have infringed upon the bands image. Problem in today’s informal market, bands typically sign performance contacts (a) without reading, or (b) without issuing their own. This has consequences because they usually give away rights; rights they didn’t even know existed in the first place. In order to recoup cost, venues will sell unused concert posters or poster designers sell designers on websites in which they create. In short, someone else is making revenue in which should have/could have been redirected to the band.

As an attorney I cringe at talented musicians who don’t secure their product and rights because they didn’t want to spend money to hire legal counsel. However, I also understand that contracts are frowned upon in the informal indie music market. I can assure one thing, the talented musicians and bands that run their career like a well oiled business which control their legal rights, products, and image are the “professionals” - they work in the business and make a living in this business. It’s important to know your legal rights, know how to use your legal rights, and spot legal issues as they arise. With the increased popularity of concert posters as a merchandise product using these rights are now more relevant than ever. Couple this with the increased DIY generation, the international marketplace and decreased music sales and you’ve got a recipe for intellectual property disaster. Knowing how to use your rights becomes a mandatory second language if you want to be successful.

Martin F. Frascogna is an entertainment attorney at www.frascognalaw.com who specializes in music globalization (ie: expanding fan bases and international markets). He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships into the appropriate global territories. He co-authored the American Bar Association book: Entertainment Law For the General Practitioner, which is used by entertainment attorneys around the world. Martin works with indie level musicians who operate on a shoestring budget. Allowing musicians to budget for legal services as opposed to billing high rates has lead Frascogna to have clients in 23 countries on 6 continents. Feel free to contact - Martin F. Frascogna (mff@frascognalaw.com or marty@frascognamusic.com)
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concert poster designed by Louis Frascogna

Know When to Listen, Speak and Revolt

Being a musician can often times be a disheartening line of work. Not only is the industry ultra competitive from a musical perspective, talent runs deep from the United States all the way to the Ukraine so emerging from a pack of other talented individuals can be downright mindboggling. In order to break away from the masses, music has to be treated as a profession not a hobby. Becoming a professional in the industry (whether that be a label/band/artist/writer/or manage) means you generate livelihood from the craft not dabble in it part time. So how is this accomplished? That answer is way to complex and vague to be addressed in an informal blog post so I’ll give the quick and dirty answer- know when to listen, speak, and revolt. Meaning, bands should know when to integrate certain professionals into their career, how to locate the ideal team members, and how to identify the warning signs that something may be out of whack.

Frequent readers may accuse this article of being biased because it will soon address the critical need to have an entertainment attorney. “Yes” I’m an entertainment attorney and “yes” this article will be biased so take what you want from it. However, I do encourage every reader to pay attention to the moving and sometimes conflicting pieces at play throughout a band’s career progression. It’s these elements that are meant to be the crux of discussion. In its most simplistic and traditional form, music professionals will eventually integrate the following components as careers venture out of the hobby stage and into the professional realm: entertainment attorney, agent, label, management, public relations rep, and business manager/accountant/bookkeeper. Obviously in today’s DIY industry, bands can provide some services themselves, others they can’t. The ideal situation is to find a multitude of people all working towards one common objective – your career advancement. How to begin building this team deserves a deeper look.

1. Listen
Listening can be one of the best tools in a business toolkit. Here, let’s refer to this aspect as the “gathering stage.” Listen to what’s going on in the industry, gather information as to who are the effective labels, how do they position artists, who appears to be the competent management firms working on the top albums, who are the top attorneys, etc. This should be an easy process but somehow people make it complicated by allowing others to steer direction. Most bands I come across start backwards. Instead of gathering information and determining what the band needs to progress, bands sometimes let others infiltrate their progression process and ultimately dictate what they need. Unless your dealing with an industry professional you’ve determined needs to be on your creative dream team, never adapt simply because someone claims things will progress faster if you work with them. If it’s too good to be true, it is. Instead, listen and gather information. Determine who needs to be on the bands creative dream team, begin researching the relevant parties, obtain contact information the best you can and then organize the information from a “best case scenario, second best, third best, etc..”

2. Speak
Once information has been gathered, it’s time to approach the dream team. This topic can be another blog within a blog, so I’ll again give the quick approach, which will scream bloody bias. The choices are twofold: (1) begin approaching managers, agents, and labels on behalf of the band, which is almost guaranteed to be a waste of time and money, or (2) begin, approaching entertainment attorneys first. All will be hard to get a hold of, all will be too busy, all will be assholes, and all of them will be disinterested (initially). Here’s the difference, by connecting with a competent and respected entertainment attorney on the front end, you’ve essentially paved your route to other industry professionals. Good firms work with labels, managers, agents, PR, etc. on a daily basis. When you find that special dream team attorney component, speak up and tell them everything you’re looking for. It’s important to first see if there’s a creative fit. Remember firms are like hospitals – they can’t reveal information on particular clients (this includes who their clients are) unless granted permission to do so. That’s why it’s important to do research about the firm (or attorney) prior to communication, and why conversations should be based upon the creative energy. How does the attorney bill, what legal components need to be in place, what the attorney’s approach for progression, etc. You’ll know right out of the gate if there’s a good creative match involved but ultimately it’s your time to speak up, explain what you’re looking for, communicate who’s ideal management, who’s the ideal label, what you need from investors, and so on. Just speak speak speak speak. The alternative to the attorney approach is to spend money, time, demos, and creative juices approaching managers and labels. This is an option, but remember you’ll need an attorney to eventually monitor those contracts and in addition, consider the fact you should never sign a management, label, publisher, or agency contract without an attorney’s viewing. Otherwise your eventual legal retainer will be allocated to clean up an almost certain mess as opposed to allowing your attorney to focus on advancement. Best to acquire legal on the front, not the back.

3. Revolt
Attorneys can see problem areas emerge miles before they actually take place. If you don’t have an attorney let me communicate some instant tips for when it’s time for a band to step up and revolt. One, if you sign with a label and the label partners you with management and/or an attorney – REVOLT. The label has just pushed you upon two parties which will have the labels interest at heart, not yours. Whenever there’s a likelihood of conflicting interest, always bring in a third party to evaluate. I wish I could speak positively about all my fellow entertainment attorneys, but reality is some can focus on their best interest, not the client’s. These are situations to avoid especially if you see them teamed up with a label. Two, management suggest a particular attorney to represent the group – REVOLT. Unfortunately the common tiff lies between management and legal so if you see a situation where management has a buddy who’s an attorney and they recommend him, question the circumstances. Why? Legal is hired to protect their client. This means calling bullsh** when they see it, developing crafty contracts to eliminate unfavorable situations, and conflicting with parties who don’t progress their clients career. Sometimes this even means negotiating more favorable contractual terms for long term growth as opposed to a quick drop in the bucket which may benefit the manager more in the immediate. Managers typically sell the moon and then grab you with a contract, which solidifies none of the expectations previously presented. This isn’t every manager and management firm (there excellent ones amongst the masses), however when a manager recommends a particular attorney, REVOLT, and ask why they were recommended and what’s the history between the two. It may be a glowing recommendation (acceptable), or it may be an unforeseen partnership (not acceptable).

The supreme situation is to find a creative team that works well together. The nucleus of a creative team should revolve around the band’s interest and goals. When a situation can be created which clearly outlines everyone’s responsibility, specific approach for achieving those goals, and the accountability involved – a quality situation has been formed. A band’s creative team should compliment one another. Should management struggle with contacting the relevant labels, legal should use their resources to assist. Should an agent have run into troubles with a particular venue, maybe management can help. In short, never settle. Never settle on a manager just because you think you need one. Never select an attorney just because you thought they could help. Never sign with an agency because they promised you lots of dates. All decisions must be strategic and have a purpose. Once you find that creative team, trust the process and let them all perform.

Martin F. Frascogna is an entertainment attorney who specializes in music globalization (ie: expanding fan bases and international markets). He consults with several labels both domestically and internationally in efforts to expand rosters and sponsorships into the appropriate global territories. Martin mainly works with indie level musicians who operate on a shoestring budget. Allowing musicians to budget for legal services as opposed to billing high rates has lead Frascogna to have clients in 17 countries on 6 continents. Feel free to contact - Martin F. Frascogna (marty@frascognamusic.com)
TWITTER @frascognamusic