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Song pluggers beware: Pump Audio is taking a bigger cut of the pie.
The song pitching website was recently acquired by Getty Images, one of the web's largest repositories of stock photography. With their foray into stock music libraries, Getty has decided to change the deal for independent songwriters.
In a recent email I received, Pump said the following:
"As we plan for the future growth of our offering to the global music licensing client base, we have determined that to fully support the 400+ person Getty Images sales staff and invest in marketing and technology needs that we must make adjustments to the current revenue split system. By making these changes, we intend to accelerate the pace of our growth and achieve our goal of becoming the largest music licensor in the world.The new model will be as following:
1) Licensing fees will now be 35% to the artist, 65% to Pump Audio/Getty Images
2) This change will take place as of July 1, 2009. Any royalties payable through June 30, 2009 will not be affected by this change
3) Performance royalty splits will remain at 50% of the publisher’s share
4) Those that don’t accept the new split will have their music removed from the system no later than December 31, 2009.
5) The rights you granted to us in the original contract do not change"
So essentially you have no choice - take the deal, or be removed from their catalog.
Keep in mind, most deals of this type have traditioinally been 50-50, so this could start an alarming trend to cut into the songwriter's income. Add to that Pump Audio exploits a loophole in copyright law by registering songs into their own publishing company under a different title, I'd have to move them further down my list of preferred songplugging companies.
--- I recently had someone write me to ask this question, so I thought I'd post it for everyone. ---
Q: How can an artist avoid getting taken
advantage of in a major label contract?
A: Bypassing the first question, which is "Why
do you WANT a major label deal?", let's move on to the
assumption you DO want a deal. There's a couple of
things that can make a major difference in how your
contract reads - and if you're eating filet mignon or
ramen noodles!
1. Be a well-developed act, with a track record
of success.
Essentially, the less you need the label,
the stronger your bargaining position.
The most important thing you must understand is that
labels do not develop artists anymore - except of
course for the pre-packaged acts like N Sync (which in
their case and the case of their copycats like LFO and
98 Degrees, the label didn't develop them, either).
Labels are looking for artists and bands who have
already built a track record of product sales, concert
dates, big mailing lists and extensive media coverage,
including a big online presence - and you can include
film and TV placements here as well.
In other words, major labels are looking for a band
with a strong established following which they can
attempt to leverage on a national or international
level. There are two main reasons an artist signs with
a major label: money and connections. But keep in mind,
all that label money is recoupable against your
royalties and earnings.
If you want a major like Elektra or Island to be
interested in you, you almost need to be at a point
where you don't really *need* them - you just want to
expand beyond your own capabilities. (Also, if your
group is developed to this point, you are in a MUCH
stronger position in contract negotiations.)
Some artists simply "use" the label, in order to gain
popularity and name recognition, then dump them at the
earliest possible convenience to work indie again. A
good case study is Trent Reznor. Read about his
"Ghosts" independent release, and you'll see what I
mean. He made over $1 million in one week - without a
record label taking an 80 percent cut.
If you're a fan of the old "Behind The Music" series on
VH-1, check out the story on MC Hammer. When he
started, he was a DJ selling CDs out of his trunk, to
the tune of almost 40,000 units. When Capitol
approached him with a deal, he did the math and told
them, "I'm making more money selling my 40,000 than if
I went platinum with you." He walked away from the
table! A few weeks later, Capitol came back with the
biggest contract in record company history.
2. Do your best not to give up all your
publishing!
It's a common thing in major label
contracts for a new artist to assign all publishing to
the label's publishing companies. In contract
negotiation, the labels will make it sound like it's
not a big thing, but how big does 50% of earnings and
all control sound to you?
I've actually heard of labels signing an artist that's
a very good songwriter, but not much of an artist.
Their goal? Get the publishing on his songs. Then they
put out one album, promote it poorly and cut him as an
artist, citing poor sales. But now they've got his
songs, and maybe even signed him into a long-term
songwriting contract, so they get control of all his
future songs!
If you really want the deal with a major, you may have
to take a split publishing deal - you'd retain 50% of
publishing, along with your songwriter royalties. But
again, this is only an option if your performing and
sales records are strong enough to put you in that
bargaining position.
My advice to anyone looking at a major label deal: try
to sign a deal for as short a length as possible. A
savvy artist looks at the label not as a savior to
their career, but as someone they can use to further
it. Major labels can get you visibility on a national
or international level - if you leverage it properly,
you can become a household name like Trent Reznor. Then
you split from the label, leverage the name recognition
the label built for you, and forge out on your own.
Yes, you'll still probably sell fewer records. But when
you're now keeping 100% of the sales, you don't have to
sell as many as when you were getting 20% (recoupable
against expenses of course, meaning often 0%).
BTW, "recoupable" is a VERY big word in record
contracts. Know it well!