ON POINT ENTERTAINMENT

Hip Hop Glamour Mentality VS. Major Label Reality

By, Money Bailey (reprinted from Four Thousand Eighty; Issue #35)

The successes of Nas and LL Cool J are not very common within the hip hop game. Videos tend to flood our minds with visions of tinted Benzes, Versace, Hilfiger and sparkling jewelry. Stacks of money are thrown all over marble top tables like plates of red beans and rice (supporting ill-usions).

To be frank, most artists don't own any of the clothes, cars or houses that appear in their videos. If you are Snoop or Dre, of course you do, but the majority of hip hoppers on TV are just giving us what we want to see--the glamour of hip hop. I'm always cautious when an MC states:
"I wanna get signed to a phat major label." Although I can't blame the MC, this statement has been the root of evil over and over again, from the downfall of MC Hammer to the not-sosuccessful debut of The Fugees. Major labels have always been puppeteers on the stage
at musical stardom--snipping the strings of vibrant rap acts only to introduce new trendier puppets. At one time everyone wanted a major label deal. However it takes more than a record deal to make money in the rap game--especially the rap game. The popularity of sampling and the non-popularity of hip hop concerts has dramatically decreased the amount of income rappers earn. A $500,000 advance may seem like a lot to your 2-man rap group, but by the time your album drops, you'll be down to nothing and unless you sell mad records or write original material (music included), you can expect nothing more.

MYTH #1
MAJOR LABELS DON’T NEED RAP ARTISTS. (I DON’T THINK SO…)
First, let's dispel this myth. Most major labels do not care about MC NoName. I've worked underneath major label radio promotion guys who couldn't tell you a thing about the urban releases they were supposed to be promoting. This might not be common practice in all major labels, but when most of the music business rotates toward alternative, pop, and country you have to realize which genres come up short. Frequently rap is one of the ignored genres. If you need proof, check out Billboard. Of the 20 albums certified multi-platinum in September 1996, only 4 were rap albums. Why is this, you wonder? Here's why: The big money labels are colossal because of artists who consistently sell albums. Pop, country and rock represent genres that will always be embraced during their entire lifetime simply because millions of albums means millions of dollars. 99% of the industry's rap artists are not this fortunate. Violence and the nonexistent East vs. West war have scarred the rap business. No one at the higher levels wants to deal with it--ask anyone on the top floor at Warner Bros. If you are a rhymer who is cutting edge, you may try finding an indie label or releasing your own material before approaching a major label. Beware though. Although indies may be responsible for the survival of rap, acquisitions and buy outs by the majors are resulting in "neo major" labels. Anyone can list a number of big money labels but only a handful of multi-platinum rap acts exists. That ought to tell you something. If you've got a pulse and half a brain, you know that most labels can weasel the rhyme out at any artist--rap or otherwise.

MYTH #2
AN ADVANCE MEANS YOU LIVE PHAT LIKE SNOOP OR DRE
So what's the deal behind the deal? Try reading through a 25 page recording agreement. From the setting of the term and options, to the calculated royalty rate. record labels generally get away with robbery. What does it take to get paid? Not an advance, that's for sure. Take the tale of 2Stupid, a successful hip hop duo. They hire a manager and an elite attorney to negotiate and secure a record deal. (Hint: If you think you don't need an attorney you're wrong. If you think you can get close to staying in major label negotiations without a manager or attorney, you're even more wrong. Due to the precedence set by countless lawsuits, it is essential to have these players when approaching a major label.) So 2Stupid does just that and within six months the deal is set. This is what 2Stupid gets: $500,000 in advance money and $350.000 to cover recording costs. Of the $350,000 for recording, $100,000 is to secure the production skill of three phenomenal rap producers for this first project. But wait, the drama gets worse! 2Stupid wants to "keep it real" and refuses to record clean radio edits. The label acknowledges this refusal by eliminating funds for indie promotions, marketing and publicity. The label's argument is this: Profanity and excessive lyrical bloodshed mean no airplay so why waste money on independent promotions? In other words, all promoting must be done by in-house staff (BIG MISTAKE!) So let's assess the bill. $850,000. 2Stupid doesn't mind because five hundred g's means Jeeps and Karl Kani... or does it? If you know music industry practices, you know it's not that simple.

A band is often surrounded by what Donald Passman calls the "team of advisors." These include the business manager, accountant, and lawyer.

A business manager, as the name implies, manages an artist's finances. Needless to say, you don't need a business manager until you are receiving enough money to justify the expense. However, when you get to that point, a business manager is a very important individual. A business manager monitors the bands' income, expenditures, budget and insurance. Most importantly, they will be aware of the tax consequences of your career. As all bands realize, the entertainment industry does not take taxes out when they pay you. I challenge the band to find me a show they played where their net pay was $273.54 after taking out social security, state and federal taxes. It just does not happen. When you make enough money, that tax bite can come pretty hard come April 15th.

There are no requirements to be a business manager. Most business managers are CPA's. An accounting degree is not essential, however, be sure that your business manager is skilled at complex financial transactions. Also be sure that he is familiar with the entertainment industry. This criteria is essential because the entertainment industry has many unique aspects which differ from general business. Try to find a business manager who charges hourly as opposed to a percentage of your income. If the business manager insists on a percentage of income, try to include a cap so that if your album goes triple platinum, your business manager does not get to retire. Never agree to pay a business manager more than 5% no matter how much money he says he can make you or save you.

Another important member is an entertainment attorney. The entertainment industry is built on contracts. Lawyers write them and lawyers break them. Before you sign anything, it is advisable to have an attorney look at it. Most attorneys charge by the hour or a flat fee. Some, however, will want a percentage of the band's income. As with all other members of your entertainment team, avoid this if you can. An attorney who takes a percentage of a band's income may create a conflict of interest. Be wary of a lawyer who does this, even if they are merely shopping your tape. Since they are getting a cut, who's interest is she looking out for? I don't know any lawyers who do work before getting paid. It is wise to consider a retainer to an attorney so when you do have a legal question or problem, you can call them up and get advice and apply it toward your retainer.

Another member of your team is the talent agent. This person books your shows. There are different levels of talent agents from those who work only in a particular city to regional to national. Have you ever wondered how a band plays 150 shows across the country or how a band from Georgia plays at a night club in Cleveland? Talent agents book these tours. They have the contacts and they route their bands across the country. A talent agent is almost a necessity if you plan on touring outside of your region.

Talent agencies are generally governed by law and union agreements. New York and California have stringent laws regarding talent agents. Most reputable talent agents are members of various entertainment guilds/unions such as AFM, AFTRA, etc. and abide by their constitutions and bylaws. These guilds have standard contracts between the artist and the talent agency. A standard fee for a talent agent is 10%, but it may go as high as 20%. There are some local talent agents who specialize in getting bands shows in a certain region. They generally prefer bands who want to perform for a living, including week nights. If you want to play only Saturday nights, a local talent agent is not what you need. Getting shows means perseverance. Send your tape to the club and be willing to accept playing any night the owner requests. Don't expect to start out playing Saturday nights. Pay your dues. For the full- time band, however, a talent agent can be a big bonus.

The most important member of your team is the producer. She is the one who makes you sound the way you do on your tape. Since the entertainment industry is driven by recorded music, what you sound like on tape is crucial to your success. A producer can make your sound soar or make you sound like a dull drone. Initially, most producers will want to be paid a flat fee. This is understandable because most bands just don't make it. Sorry to disappoint you, but 95% of bands never get out of their basements. Therefore, it is hard to convince a producer to take a chance and produce your band for future royalties.

When you get to the point of recording an album for a record label, things change. Producers generally want money upfront, which is called an advance, and a percentage of the royalties from the sale of the record, which is called points. Producers almost without exception receive three percentage points on a record contract. The key to picking a producer is listening to her prior work. Find a band whose tape you like the sound of and find out who produced it. It is likely that the producer has a style that you want your music to possess.

All of these people play an important role in a band's development. Chose these people carefully. You should be comfortable with them personally as well as professionally. Check the reputations of the persons you consider hiring since your reputation is also on the line. You will be known by the people you surround yourself with. Each player fulfills a role.