10 Music Business Myths

January 28, 2014
1. Copyright must be registered.

The truth is: copyright arises automatically when an original work is created and recorded – whether in writing or sound recording or some other way.

 

2. Everyone who has a number one hit must be a millionaire.

The truth is: record royalties are very low. An artist doesn’t need to sell anything like the number of singles (or albums for that matter) that it would take to generate £1 million in royalties to get to number one.

 

3. Drummers can never claim a share of songwriting royalties.

The truth is: they sometimes can, if they help to write a song, even if their only contribution is the drum part.

 

4. Artists would be better off if they did not have to pay their managers’ 20% commission.

The truth is: 80% of something is better than 100% of nothing. A good manager makes much more money for their artists than the manager takes from them.

 

5. Copyright cannot be infringed if you take fewer than e.g. six notes, two bars, or whatever.

The truth is: copyright infringement is a matter of quality not quantity, so any attempt to set a fixed rule is wrong.

 

6. The more album options a company asks for, the better the deal – it shows how much they value the artist.

The truth is: the company isn’t obliged to make or release all the albums in the deal. So, if the artist is successful, the more albums in the deal, the longer it will be before he can look for a better deal elsewhere.

 

7. A contract with a headline royalty rate of 15% is always better than one with a headline rate of 14%.

The truth is: 15% of what? You have to read the whole contract to be sure. The 15% royalty might be calculated on only 90% of sales, giving an effective rate of 13.5%.

 

8. The music business is needlessly complicated.

The truth is: it takes a lot of people to write a song and turn it into a record, and they all have to make a living. Thousands of businesses want to use music in hundreds of different ways, and the payments they make for the music they use have to be set, collected and distributed to all the people who made the music possible. If the music business is complicated it’s because the world is complicated.

 

9. All an artist needs to get out of a recording or publishing contract is a good lawyer.

The truth is: good lawyers cost a lot of money (and they can’t always get an artist out of a contract anyway – ask George Michael). It is much cheaper to pay a lawyer to check a contract in advance.

 

10. Lawyers, accountants and business advisers are just parasites who make life more complicated for artists. Artists would be better off without them.

The truth is: before artists got into the habit of using professional advisers to check their deals, many got paid nothing at all. If the world were a better place, professional advisers wouldn’t be needed. But it isn’t, so they are.

 

A version of this article originally appeared as Module 7 in “The 10 Minute Music Business MBA” in Nigel Parker’s book “Music Business” published by Thomson Sweet and Maxwell

 

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