Comments on: ‘No embed!’ says EMI

By: Indiana Gregg

Indiana Gregg — Mon, 25 Jan 2010 00:22:12 +0000

@monkey I guess that most bands are willing to take any opportunity. In something as risky and speculative as the music industry, who could blame them. All they hear about is ‘record deals’. So, it’s natural for them to turn to labels for support. It’s kind of odd really, if you think about it. If you start a business and have and ‘idea’ or a ‘plan’, the natural thing to do is to seek angel investment. I think that what has happened in music over that past 50 years or so is that musician’s have been a little bit brainwashed into thinking that they only have the ‘label’ alternative. But, it’s been because radio and tv fell into that same line of thought. The PR was kind of bought out by the labels. A sort of trust was established between the media and the labels. Now, it’s still the same, but, the advent of internet and digital is slowly changing the power and control I guess. That’s putting things back into a proper playing field. IMO

By: Monkey D. Luffy

Monkey D. Luffy — Thu, 21 Jan 2010 02:17:55 +0000

No doubt it’s a pain in the ass, the funny thing is I bet a record contract is no thinner than VCT deal, the only difference being the average band doesn’t read it. Hey, thanks for providing some details, sad to say even now I think a lot of up and coming bands STILL see a record contract as the only way to get financing, as this article shows.

By: Indiana Gregg

Indiana Gregg — Thu, 21 Jan 2010 00:22:53 +0000

PS: having said all that, there are some things about VCT’s (not necessarily VC’s) that any band or artist doing a deal should look out for. A lot of times with some of the VCT shemes, the money has to go out before ‘year end’. So, in some situations, it can really mess up the ‘marketing’ drive. For example, if you are releasing product “A” and you end up releasing in the quarter 1 or 2 of a calendar year, you will have to spend all the money by the end of quarter 2 (even though it doesn’t make sense to do such a short term campaign) because the financial year ends in April (as an example). This could mean that although your business plan was to market over a given period time, you could be squeezed into exposing over only a few months. So, you have to be careful about calculating a time frame from which the monies are released (after due dilligence… accountants and lawyers don’t really work to ‘deadlines’, they are paid by the hour, trust that if the say ‘it’ll be done in 6 weeks, that really means around 4 months). Actually, this is probably a lot more to deal with than the average band or artist would want to. And, in the time it takes to actually read through a VCT deal, you could probably record another album (that’s how thick the paperwork is. We’re talking 4 thick Bible’s worth reading on A4 sheets.)

By: Indiana Gregg

Indiana Gregg — Thu, 21 Jan 2010 00:05:06 +0000

and by the way, it was $2.4 million dollars US via Venture Capitalists for that record (for a one territory release). So, if it can be done as a tiny unknown independent like myself, I’m fairly sure that anyone could do it (at least in 2006 they could. The financial world has changed a bit. However, if you can show them the money, they will follow with money.) The good thing is, by doing that, I’m not tied into anything. We were able to keep our commitments and did exactly what was planned. Plus, nobody could tell us whether our fans were allowed to embed videos or anything else. Having said that, there are areas where the major labels have a firm hold, for example national radio, prime time TV spots, etc. So, there are advantages and disadvantages. Like they said, EMI has to answer to their shareholders… so, any band or artist who does a direct deal with VC’s will have to answer not only to their fans, but, also (directly) to their shareholders. So, you really have to do everything that your business plan says (and then some) and if it goes tits up, you need to be able to prove that you put forth well beyond the ‘best endeavour’ clause. But, in the long run, it’s very good for bands to establish themselves and run themselves as a business anyway (no matter who your investors or ‘bank’ is.) IMO

By: Indiana Gregg

Indiana Gregg — Wed, 20 Jan 2010 23:45:06 +0000

@monkey It actually doesn’t take much study of Venture Capitalists to do a deal. It does take a solid business plan (e.g.marketing plan). I have had experience with VC’s & VCT’s. That’s how my last record was funded (not by a record label. We simply created our own label).

By: Monkey D. Luffy

Monkey D. Luffy — Wed, 20 Jan 2010 20:57:36 +0000

including the costs of pressing CDs, advertising, and making videos. We make our videos ourselves, and we keep them dirt cheap, but still, it all adds up, and it adds up to a great deal more than we have in our bank account, which is why we have a record label in the first place.

Has anyone in a band tried getting venture capitalists to invest in them as opposed to signing a record deal? It seems like as hard as record deals are to come buy, if they are good enough to get an offer from a label they should be able to scare up some venture capitalists to provide financing. I’m sure that requires some serious studying as to how venture capitalism works, as well as researching how to contact VC’s, but if it can be pulled off isn’t that a better option than being the record labels bitches like these guys are?

By: SteelWolf

SteelWolf — Wed, 20 Jan 2010 15:32:40 +0000

hile our duty is to our music and our fans, theirs is to their shareholders

Ain’t that the truth.