2021/02/10

Y2K Music Curse

Cake Y2K Curse

In response to yesterday's post, reader Scott W.  solicits learned opinions on music producer Rick Beato's claims of a Y2K Curse.


For those in too much of a rush to watch the video, Rick observes that a whole slew of bands that hit it big in the 90s fell off the map in the aughts. Right around the year 2000, in fact, almost like someone threw a switch.

Here's a partial list of bands Rick cites as victims of the Y2K Music Curse:
  • Cake
  • Blur
  • Live
  • Everclear
  • Collective Soul
  • Blues Traveler
  • 311
  • Gin Blossoms
  • Days of the New
  • Our Lady Peace
Rick is one of the top three or four sources I go to when I want to know something about the music industry. Ignore his insight and experience at your peril.

That said, there may be some apophenia at work in his Y2K Curse theory--nothing as coincidental as, say, the curse of King Tut, but he may be seeing a bit more smoke than fire.

Most of what he observed can be chalked up to a combination of:
  1. Third albums that failed to connect (A member of Jesus Jones told me outright that this is what happened to them.)
  2. The 1996 Telecommunications Act, which Rick does pin some blame on and author JD Cowan has written about at length.
  3. False positives - Some bands he cites as victims of the curse, most notably Live, stayed big into the aughts.
  4. Wild Cards - Other acts that fell prey to the curse owed their decline to issues within the band, e.g. artistic differences, personality conflicts, drug problems, etc. Blur and Oasis were two high-profile casualties of internal drama.
One major industry shift that Rick touches upon but gets bafflingly wrong is the grunge craze. The public did not, in fact, get tired of glam metal. What did happen was big hair bands' contracts came up for renewal in the early 90s, and rather than keep paying established acts the compensation their popularity demanded, the record labels cut them and signed garage bands who'd play for peanuts.

The wholesale replacement of glam metal with grunge was when the top-down realignment of the music industry really started. The industry's twofold problem was that grunge never matched the popularity of the genre it replaced, and record execs didn't think much beyond replacing their expensive labor with cheap labor. 

Sound familiar?

The industry was left holding the bag by the mid-90s when the grunge fad ran its course. A lot of the bands Rick names were themselves stopgap replacements for disappearing grunge acts--spaghetti that didn't stick to the wall.

A harsh reality obscured by the glitz and glamor of showbiz is that most acts, even those that meet considerable success, tend to fail. The perpetually stadium-packing supergroup was a Cold War phenomenon whose day is done, except for the few pre-90s megabands that linger on.

Most groups followed a career path that ran from Mom's garage -> playing friends' parties -> open mic nights at dive bars -> headlining local shows -> van tours of colleges in the tristate area -> B stage at the county fair.

A tiny sliver of bands got a break and found their way onto the lineup at one of the big festivals or were tapped to open for an A list act passing through town. Most of those bands blew their shot, but the percent of a percent that made good landed the coveted Big Record Deal.

That, according to an eye-opening article musician and author David Stewart passed along, was when our gun-slinging guitar heroes' problems really began.

All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies!

Here is the math that will explain just how fucked they are:

These figures are representative of amounts that appear in record contracts daily. There’s no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.


Advance: $250,000


Manager’s cut: $37,500

Legal fees: $10,000


Recording Budget: $150,000

Producer’s advance: $50,000

Studio fee: $52,500

Drum, Amp, Mic and Phase “Doctors”: $3,000

Recording tape: $8,000

Equipment rental: $5,000

Cartage and Transportation: $5,000

Lodgings while in studio: $10,000

Catering: $3,000

Mastering: $10,000

Tape copies, reference CD’s, shipping tapes, misc expenses: $2,000


Video budget: $30,000

Cameras: $8,000

Crew: $5,000

Processing and transfers: $3,000

Offline: $2,000

Online editing: $3,000

Catering: $1,000

Stage and construction: $3,000

Copies, couriers, transportation: $2,000

Director’s fee: $3,000


Album Artwork: $5,000

Promotional photo shoot and duplication: $2,000


Band fund: $15,000

New fancy professional drum kit: $5,000

New fancy professional guitars (2): $3,000

New fancy professional guitar amp rigs (2): $4,000

New fancy potato-shaped bass guitar: $1,000

New fancy rack of lights bass amp: $1,000

Rehearsal space rental: $500

Big blowout party for their friends: $500


Tour expense (5 weeks): $50,875

Bus: $25,000

Crew (3): $7,500

Food and per diems: $7,875

Fuel: $3,000

Consumable supplies: $3,500

Wardrobe: $1,000

Promotion: $3,000


Tour gross income: $50,000

Agent’s cut: $7,500

Manager’s cut: $7,500


Merchandising advance: $20,000

Manager’s cut: $3,000

Lawyer’s fee: $1,000

Publishing advance: $20,000

Manager’s cut: $3,000

Lawyer’s fee: $1,000


Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000

less advance: $250,000

Producer’s points: (3% less $50,000 advance) $40,000

Promotional budget: $25,000

Recoupable buyout from previous label: $50,000

Net royalty: (-$14,000)


Record company income:

Record wholesale price $6,50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000

Deficit from royalties: $14,000

Manufacturing, packaging and distribution @ $2.20 per record: $550,000

Gross profit: $710,000


THE BALANCE SHEET


This is how much each player got paid at the end of the game.

Record company: $710,000

Producer: $90,000

Manager: $51,000

Studio: $52,500

Previous label: $50,000

Agent: $7,500

Lawyer: $12,000


Band member net income each: $4,031.25


The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.

Repeat this process for the two albums left on the band's three-record deal, and it's no wonder why most bands that make gold records go back to playing the state fair.

Or at least they used to before the establishment made an end run around the process and just started manufacturing every popular act from scratch.

And since this blog's readership leans towards writers, it's important to understand that New York publishing is even more backward and evil than the record industry.

That 20 grand publishing advance up there? That's for a book the band's publisher paid a ghostwriter 40 grand to crank out.

Unless your craving for validation trumps your need to eat, you are well advised to steer far clear of legacy industry gatekeepers. The secret to avoiding the traps that musicians and authors all too often fall into is knowing the value of your skill and never settling for less.

Even if you're not an artist, you have skills that you can turn into income streams and use to heal the culture. 

My best selling author client Adam Lane Smith will show you how. Take his course today!

15 comments:

  1. I will say one MAJOR factor he didn't mention were the massive label mergers. He touched on the radio industry, but not the labels themselves.

    Many of the bands he mentioned as not making it didn't make it because they were dropped from their label and thereby had no more support. I mentioned how this happened with Less Than Jake and how they only got a foot in the door again because of another music fad, but still couldn't play everything they wanted to.

    He also doesn't mention that most of the bands that did make the 2000 cutoff died by 2010, such as the garage rock bands. They died because, as The Hives said, there was no more money in the record industry. This is why most bands tour and release select albums rarely these days. It just doesn't bring in the money.

    The industry's dead.

    ReplyDelete
    Replies
    1. JD
      What would be a possible solution?Streaming? Playing local venues?

      xavier

      Delete
    2. Bands make money playing live, but touring is a huge cost/time sink. Streaming would be a possibility, but either you shell out a ton for equipment to stream good quality sound, or you sound poor w out good mixing. Self released albums could do well, but you need the mailing list access so it's known. And even then, studio time is costly, as is mixing and mastering.

      Recorded music has largely killed live.

      Delete
    3. Plus, let's be honest, live sound sucks with few exceptions.

      Delete
    4. Alfred

      Thanks. That's a helpful analysis.

      xavier

      Delete
  2. Man this reminds me of african american musicans that got really screwed by the record companies and why there is no live music with instruments these days
    That cost the studios money and music these days is so cheap to release.

    ReplyDelete
  3. I saw Skillet when they were playing flyover state youth groups. My dad saw both Billy Joel and Lynard Skynard live in small venues in and around Memphis. Those days are over and may never come back.

    ReplyDelete
  4. Mom's garage -> playing friends' parties -> open mic nights at dive bars -> headlining local shows -> van tours of colleges in the tristate area -> B stage at the county fair."

    So I never got past the 4th step and you can add in not earning anything much more than complimentary drinks. Even when the music was tight and the musicians excellent.

    Forget warning the kids about drugs, teen pregnancy, or texting and driving; warn them about joining a band. Tell them "The money, the music, the hang." If the gig supplies at least two of the above, take it. Any less get out because I've wasted time in bands that literally had none of the three.

    For an interesting read, try Hitless Wonder: A Life in Minor League Rock and Roll by Joe Oestreich. A story about a hard-working band with solid material that got the record deal but got dropped eleven days later.

    ReplyDelete
  5. A few years ago, I read a convo on FB of a couple of music artists talking about where the real money is these days. Surprisingly, they said it was Youtube. Because of the way Youtube pays royalties to artists, that was the hot place to upload your music and get noticed. I don't know how good it is these days, with youtube trying to kill off its own userbase. Streaming services like Spotify aren't great for artists, because they pay so little, and discoverability is tough. It was really interesting.

    I read your Music Men post, too, and it was also interesting. I was just listening to spoof covers of songs that turn stupid pop songs into clever songs about videogames (Minecraft has some excellent stuff, and my kids just found an Among Us cover artist who has some pretty good production value). When the parody artists are producing better versions than the original material, something is wrong. Ex. Weird Al

    ReplyDelete
    Replies
    1. The truth about digital marketplaces, which internet autists like Wallstreetbets were the first to figure out, is that they're essentially games run by dumb algorithms.

      Spotify is no different. An upstart indie band cracked the discoverability problem by uploading an album that was just ten hours of blank tracks and asking their modest fanbase to constantly loop it in the background.

      Delete
    2. I do think it is YouTube still but yes it might not be in the future. The Petersen's are a Youtube/live blues grass family band that I follow. They along with metal cover band Frog Leap Studios seem to be making better and better videos with years of videos suggesting it is still lucrative.

      Delete
  6. Reading that case study I didn't make it past the first I think, four figures. Didn't need to. It's non-viable.
    Advance 250,000. Recording budget 150,000. We expect the expenses for recording to be no less than 150,000. Let's be wildly optimistic and say that all other expenses for a full year of whatever the job is are no more than that, ha, ha, HAHAHAHA! But OK. 250,000 - 150,000= 100,000. You're a four-piece, right? 100,000 /4 = 25,000. Below minimum wage, here in Oz.
    If all goes well, nothing gets more expensive than expected, and you miraculously make enough to pay back the advance, you are fucked. It gets /worse/ from there.

    ReplyDelete
    Replies
    1. Those are 1993 dollars, but you're still right.

      "If all goes well, nothing gets more expensive than expected, and you miraculously make enough to pay back the advance, you are fucked. It gets /worse/ from there."

      I don't doubt it, but I'd love to know exactly why that is.

      Delete
    2. The numbers as written can't support all the extra cuts being taken. I'd have to check it out and going over business numbers in detail still gives me PTSD, but I think ultimately it's a business that would be viable done organically, but with the cuts, takes, slices, and I suspect a very large hidden cost of finance, it gets frittered away to nothing.
      Or to put it another way, for most entertainers, the price they can charge converges on the marginal cost of production, and everyone who says otherwise is a thief.

      Delete
    3. Which would include most record company execs, managers, and A&R men.

      Delete