Notes from "Making Money Making Records?"
Moderator: Hillary Johnson

This panel will focus on how to calculate your hourly rate vs. equipment/building expenses. Should you own or rent your space or just go freelance? What to do about deadbeat customers. What tax advantages are available to the studio owner. Is equipment leasing a good idea? How do I insure my gear? Promoting a studio or engineer/producer.

Panelists: Joe Chiccarelli, David Barbe, Mitch Easter, Don Zientara.

(descriptive words in Italics)

(apologies for any lack of clarity, or not knowing who said what.  This was one of the sessions before it dawned on me to go out and buy 8 video tapes, and tape the whole motherfucking conference.  But much of what was talked about is in here.)

(Different topics introduced by Hillary/talked about are written in blue)

This is the Music Business.  Can I survive doing this?

The answer is YES YOU CAN AND YES YOU SHOULD.

Sort yourself out with a manager?

Joe C. said I consider him necessary if he gets me one job per year which I wouldn’t have otherwise gotten.  Or if he can up my production fee or getme a new project.

He takes 15% of the income made.  He can make deals with the lables.  Handle all that shit.

Joe C - In LA it’s a must.  It’s so competitive there.  You need a couple of credits on major albums.  He can be like an agent, there to guide o help your career.

Mitch Easter – Southern accent like Peter Buck.  I have a manager.  I get a lot more money with him around. 

It’s harder to collect money on your own.  Dealing with lables is corrupt and only getting worse.

Q:  Have you ever had to go legal to get paid?

Dave Barbe – I never have a problem with the artist.  Usually the lable is the pain in the ass.  A round of phone calls hassling them usually takes care of it. 

Don – They can try to sell you a line of bullshit saying there’s a ‘committee’ set up to handle your account.  Can be up to 6 months before getting paid.

ASK FOR A DEPOSIT

John – I ask for a $100 deposit.  It’s usually a good way to gear the bad up psychologically.  Ensure that there is clear lines of communication between the studio, lable and artists.  Don’t have a situation where they are booking more studio time than they can afford. 

Use purchase orders 

Anyone tried doing musician management?

John – No.  I DIY.

GETTING PAID

Joe – I look for the first half of the fee on pre-production.  Sony and Universal:  It can be up to 6 to 9 months before I get fully paid.

Dave – 1 other tool towards getting paid is to send on another invoice to the lable with ‘interest’ (similar to a credit card bill).  Incorporating the balance owed + a finance charge.  Often you can get a phonecall that day saying how they ‘happened to send the money just before receiving the fax.’  I’ve never actually charged them the interest.

Getting a deposit is a good idea especially if the lable is unreliable or if the artist is insane (I forgot to write songs).

John – Keep an eye on the NET.  Watch for stories if a lable is going under.  Get your money before that happens.

Dave Barbe - I got fucked through Capricorn (which is now Def Jam records).  I recorded Juicifer and The Glands.  Capricorn had a good time in the earlier days with the southern explosion of the early 70;s with the Allman Brothers band etc.  They filed for bankruptcy before I could get my money.  Widespread panic.

Joe – I’d reiterate what John said. 

Don – If they’re trustworthy, then work with them.

Do you do spec work?  (definition; spec work:  Spec work is the dude with the studio bringing a band into record without expecting payment.  The speculation pays off if you were right and they go onto do good things (i.e. and sell records and pay you for your time).  If you were wrong, then you don’t get paid.  Does that mean you were wrong to speculate?  Help out a band you believed in?)

Don – Yes.  When you start out recording it’s 100% spec work.  If you trust yourself then they’ll trust you.  At the start you’re trying to establish yourself.  If you believe in them then “you really want to get in on that project.”  You feel what’s going on in the music.  You’ve got the resources to help this band, so help out.  (one can’t help but assume he is referring to Fugazi (among other bands) in these words.  The next bit he says gets a round of applause – mark).  It’s all about whether the “music makes goosebumps happen.”

Downside – Spec work breeds spec work – passion doesn’t necessarily pay the rent.  You do it if you can say “if I don’t get paid, I’ll survive.”

Mitch – I used to do spec deals in 1980.  I hate them.  It means that you’re barely surviving.  You’re equally broke all the time.  You need money to improve the place to enable you to offer something good.

Spec work can be the final nail in a downward spiral of pressure to reduce prices.

Dave – Engineers where I work get paid approximately $200 for a 12 hour day.  Spec work would amount to settling for a $75 payment for a 12 hour day.  Whereby you don’t look to get paid later.

Joe – Independent producer / A+R people ask me to do spec work.  Sometimes it can end up as a payment for a demo (can’t remember – Mark).  The words ‘demo deal’ are more or less forgotten words.  Everyone has home studios now, so they can do their demos at home.

Do you do contracts with Spec deals?  Does the artist get offended?

Mitch -  Why should an artist get offended if you ask for a contract?  Everyone has to give to make it work.  All the time in the studio the engineer is expected to be sensitive to the artists.  Why can’t it work the other way around?  Artists think of engineer’s needs.

Dave – I have 3 kids now so it would be fair to say that there’s an extra motivation there.  It was hard when I was single.  It’s not easier now.  My wife only works 10 hours per week, so cash needs to be coming in.

Sometimes I’ll say, “let’s record you now, you can sort me out later.”  I’ll ‘run a tab’.  Of course the biggest cause of business failure is cashflow problems.  So that’s why you should get people on a schedule, keep the work coming in. 

Don – People can actually value you on how much you charge.  I’m pro-spec, but it can be a grizzly existance.  So I sometimes offer a payment plan.  Why not borrow the money off you parents and owe them instead of me.  It’s a pain when you have to make that phone call, “It’s that time again.”  Time to pay me…

Hillary – Online credit card payment is also an option.

Stepping up from spec work – Royalties.

Don – A lot of book keeping is involved, radio/record sales.

Mitch Easter – As long as someone is collecting it for you, then it makes sense to go after it.

Joe – Spec work happens for me when I do someone who I think is fantastic.  The lable can then pay me when they hear the good work, “here’s $2,500.”

Major lables – Demo reels

John – 5 –12 songs on a demo reel is a good amount.  40 seconds per song. 

Don – A demo reel is pointless. 

Mitch – I can’t get you to sound like someone on my demo reel.  I recorded REM way back in 19…73 (everyone laughs), but still I get major lables not wanting to use me cos they don’t want their band ‘to sound like REM’. 

Don – Songs are what counts.  Even if the only equipment you have is a couple of 57’s you can still get a good sound.  The band practicing and being tight is the most important thing. 

Mitch – ‘WHERE’S THE SWAGGER?’.  (question of the weekend award - mark).  I’ve heard bands say, ‘look we need to succeed with this record. If it doesn’t suceed then I’m gonna get a job next year.’  Most bands these days are half arsed.  Where’s the confidence to change the world?

How do you spend your money?  Do you buy new gear?

John – Getting a control room and a good set of monitors makes a huge difference.  It’s unsexy and hard to do, but very worthwhile when it’s done.  Treating the walls with composite or fibre glass.  It took us a year to sort out.  But was worth it. 

Joe – Picking up a fender Rhodes for $100 in ebay or buy and sell.  Keep an eye out for bargains like that.  Know what you want to get then get it when you see it going for cheap.

Don – A second set of monitors is very important.  Be smart.  Think about what you’re doing.  What do you need to spend money on?  Getting that Fender Rhodes for $100, that’s the way to go. 

Questions

Statement rather than a Q – Alex – What’s the hurry?  Lots of those involved in the business describe themselves as a something ‘aholic’ (e.g. gear-aholic. I think).  Putting clients on credit is the price for being an addict.  Sell yourselves not your equipment. 

Q – J Robbins – Did any of you have any concrete business plans?  3 year plans?  Or did you make it up as you go along?

Most answer – No plans.  All make it up as we go along.  Sorry J.

Don – Get a small loan.  Plan.  Explain where you’re going to yourself.

Dave – There’s 3 of us involved in our studio.  We calculated our fixed costs.  The money required.  We looked at our competitors rates.  We then, based on those figures, started on the lower side of the rates.  Take time to establish yourself.

We keep asking how do we keep ourselves above water.

J – Did you hover at a loss for about a year?

Dave – Yes.  We generated customers and goodwill by an extra set of headphones here or a crate of beer there.  You lose a little money but get customers.

Q:  Chris:  Do you think an online demo reel is a good idea?  Instead of handing around a CD, here’s my card, check out my work?

Joe – Yes and no.  Sometimes you need to tailor your reel to the artist who may be getting it.  If he hated one track on your online reel, it might work against you.

Unrelated - Dave – Book the band in for a certain amount of time.  Tell them you’ll charge them the $6,000 over a 12 month period.  That works out at $500 per month.  It makes it affordable that way.  You can let them off a month here and there.  Don’t charge interest.  Simple calculation.  It’s been a good policy and has lead to 2 or 3 projects since.  People seem to dig it.

Q – Do you think the home recording studios are having an impact on setup studios?

David – The bulk of recording happens at home studios now.  (not sure if dave said this, someone did).  Often a band will record just the drum tracks with me and record the rest at home on their PC.  Overall I think it’s a positive thing.

Joe – I think it’s a very positive thing.  It helps to form alliances with artists who record at home.  They understand the process better.  The are recording artists.

Q – Burning CDs/ MP3’s and Napster.  Positive or negative?

Mitch – I think it improves the distribution of music.  What the industry will lose out in sales it will gain in exposure. 

John – I think it’s a huge positive factor.  More exposure to more music will encourage people to buy more music. 

Mitch – The audio on MP3’s is of a lesser quality.  Most people don’t care.

AND SO ENDED (sort of) A TRULY ACE SESSION.