When I was a young kid growing up in New Orleans, I would listen to music relentlessly. I also watched as many movies about music as I could. Many things attracted me to music. There were the obvious sex, drugs, and rock & roll. But there was also the glamour of traveling all over the world and making money doing the thing you love the most. Long before the tech-bros came to dominate the world’s attention and suck up all the money, there were musicians…
Musicians were not only cool, but they were rich. They lived in massive mansions and castles. Many in fact still do. There is a lot of money in the music business, but where does it all go, and who gets it (mostly)? Well, record companies and distribution companies certainly get a lot of it (about 97%). There are also contractors in the business: musicians (side-men), composers, songwriters, engineers, mixers, and producers.
Here’s a “Jeopardy” question for you… of all those people involved in record-making, who makes the most money?
The simple answer is songwriters, and there’s a good reason for it.
Artists, bands, producers, mixers, and everyone else involved in the creation of the actual record are paid in “points.” Points is legal shorthand for percentage points of the net profit of the sales of mechanicals (vinyl records, CDs, DVDs, etc.) to the music fans. So if you worked on the record as a producer or a mixer you would frequently get an upfront fee, and also points on the record. If the record was a blockbuster, like Michael Jackson’s Thriller; or, in my case, Ready to Die (The Notorious BIG), or The Score (The Fugees), or Secrets (Toni Braxton), you’re talking about millions of records or CDs sold. So you would think if you are participating in the back end you would be a millionaire. The sad truth is that less than 1% of mixers and artists ever made a dime of royalties. That is because the record companies have always used an arcane method of accounting called recoupment.
Recoupment is the process labels use to make sure all the bills are paid before any royalties are disbursed. In other words, no one gets paid until ALL of the expenses are recouped.
So of course that involves studio time, travel, hotels, gear rental, transportation, marketing (blow and drugs), promotion (hookers and trips to strip clubs), and of course lots of expensive executive dinners that run into the thousands of dollars. Yes, all expenses must be covered before anyone gets paid. And of course, if they haven’t spent enough money marketing the music (that includes payoffs/payola to the DJs to play the record), there are always imaginative ways to spend more money, which is at the discretion of the record company. In most cases, this game goes on for years, and in many cases, decades. There are many cases of famous bands (like The Byrds, who testified to Congress about songs like “Mr. Tambourine Man,” which sold millions of copies as a single) who have never been paid out a cent in decades. Not a cent. This same magic accounting practice is also still employed by the movie studios, which is why Joel Silver, the producer of the first Batman movie, famously said, “Fuck you, pay me $1 million and no royalties. I know I’ll never make a dime from you cocksuckers.” Colorful accounting is usually met with colorful language.
So who makes money when a single or album sells millions of units, or gets millions of streams? The songwriter (and the publisher), that’s who. In the case of The Byrds, Bob Dylan wrote the song and had already recorded it. The Byrds did a “cover” of “Tambourine Man.” So why is being a writer better than being a performer?
Royalties for songwriters don’t go through the money fraud mill of the record companies, because the money is collected separately by a PRO — a Performing Rights Organization like BMI, ASCAP, and SESAC.
These are the ones for America, but there are PROs for almost every country in the world, with the exception of a few. China, Iran, and North Korea do not have PROs. But South Korea does, and k-pop pays out billions of dollars to bands and the songwriters who pen their hits. Songwriters get paid directly from the sales and airplay of the songs, as well as when they are performed live (except in the US).
So you might say, “Hey Bassy Bob, are you an idiot? Why did you spend 30 years engineering, mixing and producing pop records, and not just become a songwriter?” It’s a fair question. In some ways I was an idiot, but I was really good at mixing and producing, and I loved it, so I followed my heart. I did get involved in songwriting pretty early on. I signed my first publishing deal with BMG Germany in 1991. I was signed by Hartwig Masuch, who is now the global head of BMG rights management. I was writing all the time, making beats, working on songs with fellow songwriters in NYC. But when it came time to, let’s say, write an interlude for a major record like Mary J Blige’s My Life, and you’re already working for the producer (who in this case was Puff Daddy), you had to ask for songwriting. That’s where the music business can get pretty gnarly. You see, the person who controls the publishing, whether they ever touched a keyboard, or programmed a beat, or came up with a vocal hook, makes the money. And in this case, making that ask might have gotten me fired. So I bit my lip and kept it moving. In the case with Puffy, I would go on to do scores of records and remixes with him, and I did get paid very well as a mixer and producer, well enough to live a good life in NYC, but; But, no long-term income. So this is a cautionary tale to all you talented musicians, engineers, mixers, producers just starting your careers:
If you make a contribution to creating a work of art, get publishing (or writers if you can).
You won’t regret it. In most cases these days, I negotiate a publishing stake on everything I work on, regardless of what it is I do for the song. Even if I have to negotiate a lower fee and get publishing, I go for the publishing, because those little crumbs over the years add up to your retirement!
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