How To Get A Record Deal Today

How To Get A Record Deal image

If your goal as an unknown band, solo artist, or singer/songwriter Is to write a great song or songs, record a demo and “shop it” to record labels with the hopes of getting a deal, you’re wasting your money. That ship has sailed long ago; whether you like it or not, or want to believe it or not, that business model is over. Listen, you MUST understand that major label record companies haven’t been “developing” talent for quite some time. They are not going to develop you either. No matter how good your song is. Of course, there are record deals out there but the rules have changed significantly and you need to know what the labels will and won’t do so you can avoid wasting time being naive.

How To Get A Record Deal?

How To Get A Record Deal image

If you’re gonna play, BE A STUDENT OF THE GAME, not a hopeful marginally talented moron; that’s so yesterday.

To get your deal, you will have to do most of the heavy lifting; you will be responsible for your own development. To get your deal, you will have to understand the way the old record business worked so you can effectively eliminate that outdated approach from your business plan and recognize the structure of the new record business. This is MISSION CRITICAL if you truly want to succeed as an artist today.

So let’s review the old way so we can clearly identify the differences between the old way and the new way to create a frame of reference based on FACTS:

Remember Bruce Springsteen?

Can you name his first two records in less than 10 seconds?How To Get A Record Deal Slippery when wet image

Remember Tom Petty?

Can you name his first two records in less than 10 Seconds?

How about Bon Jovi?

Can you name their first two records in less than 10 seconds?

Was your first thought “Born To Run“, “Damn The Torpedoes“, and “Slippery When Wet” respectively?? All these records were the first “Biggies” for each artist; all of them the 3rd release. These artists were developed by their record labels.

To get the deal back-in-the-day, they had to have raw talent, star quality, undeniable drive, and 1 or 2 killer songs.

Ahh, the good ol’ days of development, these were the days when there was a lot of money to be made selling music. Major labels had 500 signed artists, and only 50 of them were lucrative (that’s only 10% for the mathematically challenged), but those top 50 made SO MUCH MONEY selling records that it covered all the costs of the record production and promotion for the 450 deadbeat acts, the first money losing records and promotion of the 50 profitable acts, the huge record budgets, tour support, ridiculous corporate overhead, development of all 500 artists, plus a (gasp) PROFIT.

Wait record labels made money selling music??

Well, they USED to.� Let�s check out some business numbers to really get a clear picture of how much it has changed.

As a point of comparison, a 45 single (a record single with a bonus B-side) in 1978 cost roughly .89 cents.� In 2013, 35 years later, a single download costs .99 cents.� WOW, do you see where I�m going with this? �Here�s another way to think about it, in 1978 you could buy Tom Petty�s �Damn the Torpedoes� for $8.00; counting inflation today that same $8.00 is worth $28.17!!� NOBODY is paying $28 bucks for a record these days!!

So it becomes quite clear how the main product that the music business was founded on has been devalued; almost to NOTHING.� So you see why the major labels are struggling.� Their main �cash register� has gone from the equivalent of $28.17 per record to .99 cents per download, because nobody is buying records anymore; only singles; consumers are sick of buying crappy CD�s with only one or two hits�but that�s another conversation.

View a 45 here if you don�t know what it is.

So while you are making plans to take over the world, you must account for the fact the first and largest �cash register� from which the whole record business was set up is gone.� No mas.

Take a deep breath�relax�this is actually a good thing, but if you are going to succeed as an artist and make a living, you need the facts.

The first fact is that if you are serious about making a living as an artist, you must (and your parents want to hear this, btw) put on a proverbial suit and tie and think about this as a logical, well informed business person for a minute, not as an artist; look at the big picture, objectively, from 30,000 feet so-to-speak.� The old record business had a lot of hurdles (so does the new record business but stay with me here�we�ll get to that soon) the biggest of which was the velvet rope.� You had to know somebody to get �in�.� A song, a GREAT song, a SMASH HIT song was enough to get signed, but you had to get it to the right people first.

Why the velvet rope?

In the old record business (from which a lot of you are basing your business plan and future on) a record cost at How To Get A Record DealVelvet Rope imageleast $250,000 to make (in a massively expensive recording studio).� Then about $750,000 to promote it; that�s 1 Million dollars!!� That�s a huge investment ON A BET THAT HAS A 90% CHANCE OF FAILURE!� You see, back in the old days, the bet was worth it, because there was so much money to be made (just on record sales alone), that the proverbial �juice” was worth the “squeeze�!!!

The net result to you is that you still have to get past that tricky velvet rope to bet your future on a business model with a 90% failure rate.� The major label business model is the same today only they don�t make money selling records.� So where does the money come from?� We�ll get to that shortly.

The good news is that there are record deals out there but they are vastly different than the old days so singers and songwriters need to be aware of what these deals look like to have a chance at getting one and being a student of the game.

Let�s think of this as a different business to hopefully create a frame of reference.� Let�s say you have invented the world�s best new tech widget.�� Now, you need capital, you need $$$ and a truckload of it to build the team that will develop, market, and promote this widget.� So, you bust your butt getting through the red tape and the velvet rope to pitch your idea to investors who are willing to listen.� In this business meeting you will need to ask these investors for 1 million of their hard earned dollars to get you started.

You say, �I need 1 million dollars to help develop this amazing widget I invented�How To Get A Record Deal shark tank image

They say, �Great, let�s see it�� �How, do you know if it will sell?�

You say, �I drew out this sketch on a cocktail napkin, and I know it will sell because I�m awesome; it’s my dream, something I’ve wanted to do my whole life.�

They say 2 words, �Not Interested.�

Where�s the business plan?

Where�s the proof of concept?

Financial Risk

Why would they be interested?� They are taking all the financial risk!!� You showed up to this meeting with an idea, maybe some blueprints, enthusiasm, and a lot of hope, but NO NUMBERS, NO BUSINESS PLAN, etc.� Would you give a stranger 1 million dollars of your money without some sort of proof that there would be a return on your investment?�� Would you give a stranger 1 million dollars without some kind of social proof that the widget has value in the market place?� Would you give a stranger 1 million dollars who showed up at a business meeting unprepared; but asking for money anyways?

In today�s music business record labels are not developing talent, they are buying small businesses.� They want PROOF that your music has value; proof that people will buy it.� Because they aren�t developing talent, they simply don�t care about your artistry or your song, or how good everyone in the band is.� Frankly, you could fart into a microphone on 10 tracks and call it a record; if you move 20,000 units on your own, you�ll get some labels interested.� Think about it, that makes sense right?� If the labels are out of the development business, WHY WOULD THEY CARE ABOUT YOUR MUSIC???� Think of the record labels like a bank or an investor.� THAT�S WHAT THEY ARE NOW.� it still costs at least 1 million dollars to break a new artist as the labels are still stuck in the old school way of breaking an act; radio promotion.

Radio

Yes, radio is currently still the most effective way to break an artist, however it�s extremely expensive, there is NO GUARANTEE that it will work at all.� Kelly, my business partner, had a producer credit on a major label release in 2012 where the label spent at least 1.5 million of someone else�s money and they accomplished absolutely nothing.� Moreover, country music radio is the only format that is regularly and effectively breaking new artists.� Rock and Pop radio is dead with regards to breaking new talent; the only new artists you hear on the rapidly declining rock and pop radio formats broke somewhere else, like TV or YouTube.� (Think about it, Gotye, The Script, Daughtry, Karmin, Macklemore, all these artists broke on TV or YouTube FIRST; radio play was secondary.)� So because radio is the go-to promotion plan for the major labels, the cost to them is the same and therefore the risk is the same.� As the Majors are no longer in the business of developing talent, you simply can�t be upset at the fact that they no longer care about your song.� It doesn�t matter, that is not what they are interested in.� They want to move product.

Next, let�s talk about what the deals look like today and then hash out a strategy to give you the best chance to actually get a record deal.

Now that nobody is making money actually selling records, where exactly does the revenue come from?

360 Deal

Enter the 360 deal.

As an artist, I used to hate the idea of this deal, but if you think about it objectively from the perspective of the guy How To Get A Record Deal 360 imagewho is risking all the capital (AKA the record labels), it makes sense.� The approach now is built from this standpoint:� If the label is spending the money to create the brand name, then why shouldn�t they participate in all the revenue streams that the brand name creates?� So labels say if we are going to spend 1 million dollars on you, then we want to participate in the revenue streams that are created from this brand like:� Publishing, Master recording licensing, ticket sales, merchandise, and any other ancillary revenue streams the artist can create based on the brand name the label has paid to create.� BTW, this is exactly what American Idol requires.� They take half of everything for a set amount of time in exchange for creating your “brand” on their hit TV show.

Now, every deal is different and EVERYTHING is negotiable, however, you need to have LEVERAGE at the table to negotiate; much more than your hopes and dreams and some good songs.� Again, they don�t care about your song, so while a hit song was once leverage, now it no longer matters.� So how do you create leverage?

For starters, you need to realize that YOU have to be in charge of everything and nobody, no record company is going to �make it� for you.� Anytime you put too much faith in something or someone outside yourself, you end up disappointed.� Don�t believe me?� Ask Billy Joel, who lost MILLIONS to his brother-in-law whom he trusted to manage his money; that was family!!� Ask Oprah�one of her favorite quotes, �Sign your own checks��I wonder what happened to make that one of her favorite quotes?� Now, do you really think a record label is going to �make it happen for you?� You, the artist, is SOLELY responsible for proving that your music has value in the marketplace.� You, the artist, is responsible for creating your core audience.� You, the artist, are responsible for creating momentum.� You, the artist, is solely responsible for your own development.� Think about it, if you were the record label with 1 million dollars to spend, wouldn�t you want to know that the artist had something significant going on already???

Record labels are now marketing and distribution companies, they are no longer developing artists.� Once you truly realize this, you�ll figure out why the approach to get them interested must change to be effective.� Record labels want to see a profitable artist, with ticket sales, merchandise, music sales, etc.� They feel once you are profitable, if they come in and throw money and infrastructure into the mix, they will be adding fuel to the proverbial fire.� Essentially, their business model is no longer about creating the momentum but adding capital to your preexisting momentum to take your business model to a higher level.

What do record labels expect today?

Well, there is simply no excuse for a poor sounding record or crappy songs.

Back in the day, a record cost the equivalent of $28 in today�s money; it was expensive and worth every penny.� You cherished the music.� You collected the records.� Now the music is free�so the only way anyone will pay attention is if the music is AWESOME.� The song has to be AWESOME.� The recording has to be AWESOME.� Anything short of that and you are going to lose.� Any recording that comes with a disclaimer is dead.

Back to development�you are responsible for that.

Think about it.� What have you done exactly to develop yourself and �raise the bar� of your music??

Are you frustrated right now?How To Get A Record Deal frusration image

What are you frustrated about exactly?

What have you done to rectify the issue that is making you frustrated?

When record labels were developing talent, they put a great TEAM of people around the artist.� This team was made of people who made their living everyday in their respective lanes; i.e. songwriting, producing, engineering, managing talent, logistics, marketing, packaging, etc.�� Does that sound corporate?� It is.� You need to think of yourself as a business, a SERIOUS business.� The good news is you can find these teams if you are looking for them.� There are organizations and people out there who understand artist development and understand that since the record labels no longer occupy the development space, there is a niche to be filled.� You just have to be aware they exist, then actively search for them, and ask the right questions when you start courting them.� Any money you have to spend on a recording will be much more effectively spent on a development team.� Make sure you are AWESOME.

I have found the truly great artists are the ones who are extremely aware of their strengths and weaknesses, they understand their lane, and are able to �cast� the necessary team around them to strengthen the weak spots.

Are you good at creating melody but average at lyrics?� You need to seek out a lyricist.

Are you good at writing lyrics but have no sense for creating melody?� You need a writer with a sense of melody.

Are you an average singer?� Many of today’s top stars are extremely average, but they have surrounded themselves with people who make them sound like STARS!!

How much are you dialed into the marketplace?� Are their subtle twists you can do to your songs that will garner more attention and less competition?� In other words, are you doing something different or are you trying to copy your favorite artist?� This is a job for a talented and enthusiastic producer.

The good news is that it is easier than ever before to make a living with your artistry.� Anyone can replace their crappy $30,000/year job with revenue from their music.� Anyone.� If you make this your first goal, you will be well on your way to creating what you need to have before you approach a record label for a deal.� I have seen this with my own eyes.� I have seen artists who had day jobs 2 years ago and focused on a goal; now they are playing 250 dates a year because they WORKED HARD!!!

Wanna Be Famous?

However, if you goal is to be famous, then spend your time auditioning for reality shows.� This is a far more effective way to get your 15 minutes than success in the new music business.� You don�t even have to worry about talent!!� I mean, if Snookie can do it, anyone can, right?

Record labels would like to see that you can sell out your local venue, they want to see 7,000 friends on Facebook and/or Twitter, they want to see 10,000 downloads or sales from CD units they can track, they want you to be PROFITABLE.� Again, record labels are buying small businesses.� They want to see you making money already.� They figure if they add some zero’s at the top they can help create more zeros at the bottom.

One of my favorite marketing guru�s in today�s music business is John Oszajca.� John has created the Music Marketing Manifesto (this is worth looking into btw�you can see it here).� I am quite sure there are several competing businesses like John’s out there but I like him.� His product teaches you EXACTLY how to effectively market your music online.� Whether you choose John or some other program, you must get the knowledge on how to market your music online.� This knowledge leads to trackable sales; which leads to today’s record deals.

To paraphrase John from an interview I heard between him and his former manager, you need to think of yourself as a channel.� You will need more than 12 songs a year; in fact, you will need constant content coming out.� You will need to become an expert in relationship building online.� Today�s professional performer must know how to make this happen.

At the end of the day, you can make a living as an artist in the music business.� But the days of rock stars being above and removed from their audience are over.� Check out Amanda Palmer (here) and Mindless Self Indulgence (here); these are the rock stars of tomorrow.

Don�t believe in crowdfunding?� You better. �Starting May 1, 2013 Warner Bros Records will fund all new record projects through Kickstarter.com.� In fact, if you have 1000 people contribute to your cause, you automatically qualify for a deal with Warner Bros.� If you have $100,000 funded to your cause, you automatically qualify for a deal with Warner Bros.� As the great Bob Lefsetz said, most of you will take that deal so you can tell mom and dad you made it.� The smart ones will realize at that point, they don�t need a record label any more.

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