Top personal artist managers Andy Gould, Arthur Spivak and Rick Sales predict a wide-open future for the music business but knock major labels; Thomas A. White reveals a shocker for artist's rights at NARIP event - A Report by The G-Man.
(PRWEB) August 4, 2004 -- Over three-quarters of a century's worth of experience in the business – that describes the three managers who shared their views at NARIPs recent "The Art of Artist Management" program. They are at the top of their game, as you might deduce from one glance at their client lists:
RICK SALES' acts:
Slayer
Fu Manchu
Bad Acid Trip
Death By Stereo
Escape From Earth
Abloom
Amen
ANDY GOULD's acts:
Rob Zombie
Rooney
Otep
Filter
Poets and Pornstars
Linkin Park
Powerman 5000
ARTHUR SPIVAK's acts:
Vanessa Carlton
The Calling
A Perfect Circle
Queens of the Stone Age
Yellowcard
Three Days Grace
The Distillers
As one attendee observed, their clients are "an interesting mixture of top-selling signed artists and developing acts." Music genres are so marginalized these days that a band can sell a million copies of its album (as Spivak/Sobol client Yellowcard did) and still be relatively unknown, even in a room full of people in the music business.
Presented by the National Association of Record Industry Professionals (NARIP) and moderated by NARIP president, Tess Taylor, the evening was fast-paced and full of humor.
Filling the Grand Ballroom of the Beverly Garland Hotel in Los Angeles, the event drew a cross-section of the professions in the music industry: managers, attorneys, publishers, radio execs, music licensing specialists, producers, artists, as well as social networking and marketing executives.
The hot-ticket atmosphere may have had to do with the excellent reputation of the panelists, but was undoubtedly helped by the size and diversity of The Firm (which handles motion picture stars and directors including Robert DeNiro and Martin Scorsese as well as owning the Pony running shoe company) and Sanctuary Group (a British-owned company which is a management organization, a record company, a promotion firm, a booking agency and more).
Because record companies are crumbling, we've turned into a full-service organization," said Sales, explaining Sanctuarys diversification. We have media people. We have press and television. We have radio. And we have people who just help us make videos. We've got the infrastructure. We know the record company P&Ls -- we own a record company."
Among the evenings nuggets from Gould, Spivak and Sales:
- "The failure rate of major record labels is 95%, so five percent of their acts are having to make up for all the failures." (Gould)
- "Record companies spend money in the wrong areas. Part of our job is to force record companies into marketing artists." (Spivak)
- "Record companies sell little pieces of plastic, they don't care about the artists behind the plastic." (Sales)
- "Of all the revenue streams, record sales are the lowest percentage, and are the one area most likely to suffer from improper accounting." (Gould)
- "While we all think the situation with record companies is really bad, radio is twenty times worse." (Spivak)
- "I think the culture's shifted. The major record labels are only interested in titles where they can sell millions of units. They never look at an artist and say 'Oh, we'll be really excited to sell 100,000 units.' But the indies do." (Sales)
Yes, there was a litany of mostly well-deserved abuse heaped on the major label record companies, but if you think that was strong, take a look at another of Gould's observations:
"It's impossible to get anything done these days because record companies are watching every penny while the dollars are flying out the window. They often pay enormous advances for bands that have no real reality base to be paid, and they're paying huge salaries to executives who have failed miserably at other companies. Then when it comes to us going in and asking for something that is basically paying for their salary, which is, 'let's market the records that we're involved with,' they start questioning: Why? Where? How? It's difficult on a good day and impossible on a bad day. They're spending $100 million on mergers that never go through and then when you ask to keep a band on the road for an extra $800 a week they're bitching at you. It's really tough right now."
"But with all the problems, this is the best time for someone to start in the music business," Sales pointed out. One reason: "We all use music in our lives more than ever."
Gould agreed, adding that "You guys have to figure out how to monetize the music business. That's exciting. Out of chaos comes opportunity. The music business is in f**king chaos. You guys may have the opportunity to do something about it." Spivak added, "This is a terribly exciting time for anybody who is entrepreneurial. The rules have changed so drastically."
One change is that many consider acts as brands, as does Gould who noted, "There are people who find it controversial."
Certain anomalies in California law were addressed, as when Spivak noted, "Management contract law in the State of California is flawed. You cannot do your job without being in jeopardy of being fired. So you do it anyway, and hope for the best."
In response to the question, "What happens when clients leave?," each panelist drew laughter with his reply: Gould: "F**k 'em." Spivak: "Lawsuits." Sales: "Well, my family's Italian, so...." In giving advice for those entering the business of artist management, Gould said, "Never work harder than your band. If you want it more than they want it, you're managing the wrong band." Spivak: "Always be candid; tell the truth." Sales: "Go with your passion."
The three were asked to rank by percentage the revenue streams for artists. Although they avoided giving actual percentages, Gould said that the major categories of artist income in descending order are touring, merchandise, music publishing, and record sales.
Then the state of the industry was back as a topic. "I'm sure you guys all read the Sony/BMG merger is going through," Gould said, "and my first thought was: I wonder which phone company they're going to sell that to? Because you know that's going to be the case. There's going to be someone else to deliver the music."
Many questions and comments came from the audience, but none more gripping than from Beverly Hills based artists' rights advocate Thomas A. White, who spoke of Senator Kevin Murray's bill in the California Legislature. "Senator Murray is a good guy, but the bill got corrupted," White stated. "It started out as an artist rights bill which provided that a fiduciary duty existed with respect to a record companys royalty accounting obligations to its artists. About six weeks ago, the Recording Industry Association of America (RIAA), which had very vigorously opposed the bill, withdrew its opposition. Beware of an artists rights bill" from which the RIAA withdraws its opposition! The bill was renegotiated and undermined, and in my view, corrupted. Its just been signed into law by Governor Schwarzenegger. The problem with the bill is as follows: recording artists will have only three years within which to cause an audit to be conducted. After that, theyll be barred. If an auditor finds under accounting, or an under reporting, or if they find theft, abuse or fraud, if they find embezzlement, according to the bill they must keep that information secret."
This drew gasps from some in the audience. "Its pretty shocking," White observed, "but thats how this bill got through the state legislature with no opposition from the RIAA."
White confirmed the high percentage of under-reporting of income to artists. "There has never been a royalty examination of a major label which didn't find an under accounting, and substantial levels of it. Royalty theft has become institutionalized," White said.
All three panelists agreed. "Whenever you do an audit," Gould said, "you'll always find that they owe you money. But they will say to you, 'Well, you know, it's a mistake.' It's not a mistake. It's fraud. It's always been that way and it continues to be that way. Every audit you look at, youll find they owe you money."
Nevertheless, people will always make music and there will always be a need for experts who know how to market it to the masses," said Taylor. Record companies continue to provide vital functions: marketing, distribution and banking.
"The future is right in front of us," Gould said. "I mean it. The future is in your hands. You will find the next Linkin Park. You'll find the next Perfect Circle. You'll find the next Slayer. It's out there. Find the band, believe in it and I promise you the future of artist management is sitting in this room."
Or reading this online at this moment.
The G-Man has his music on iTunes, at www.delvianrecords.com and at www.gmanmusic.com
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