By Emily White.

Photo: Sydney Wayser by Shervin Lainez.

With the emergence of the digital age leveling the playing field for artists, enabling them to record and distribute their music worldwide in the early 2000s, major labels in particular (for lack of a better phrase) freaked out.

And rightfully so.

The recording industry generated incredible profits on brick and mortar music products for the better part of 50 years. Within a fraction of that time, the way we all consumed music completely changed formats. But unlike the conversion from vinyl to 8-track to cassette to CD as in years past, this time music as a product became an intangible good.

Rights Holders Miss A Huge Opportunity

From my perspective, major label and other rights holders missed out on a huge opportunity to embrace technology and chose to fight it instead. Really a shame as it’s tough to beat out evolution. As people even outside of the industry know, many major labels desperately tried to “replace” this “lost” revenue by offering all-rights or “360” deals to artists, particularly between 2005 and 2010.

I remember the first time one of my acts was offered a “360” deal by his label, which at the time had a standard recording agreement. It was a nice dog-and-pony show with everyone excited, nothing we hadn’t seen before when being pitched by a corporation. However, we asked the head of the label what the company knew about touring. His response? “Well, nothing.” It was hard for us to understand why we would then want to cut these folks in on touring when it was the band’s number one revenue stream. So we waited out the deal and made the artist more money than he ever did on that label by releasing creative and quality direct-to-fan bundles for the fan base we had built. The band continued to tour profitably without outside help.

But we were lucky, the band was relatively established and much of the work to build its fanatical base was done by the band and its core team. However, we all agree that the label helped establish the artist overseas and bring in second and third tier fans by incorporating top-down marketing initiatives.

The Importance of Fan Lists

Unfortunately these fans don’t always stick around for the long-term if a radio hit doesn’t happen again, but it was nice to see their faces at shows while it lasted. I’m confident we retained info from at least a few of those more mainstream fans and they happily bought future releases and continued to come out to shows. (Side note: this is the key even when you’re on top of the world! Retain retain retain fan e-mail addresses and data because your art might not be the hottest thing next time around but at least you have an established fan and customer base to whom you can continue to release music and from whom you can generate direct revenue for the rest of your life).

So now that it’s 2012, what’s a new artist to do?

Although it is exciting that world-class recordings can be created everywhere from hotel rooms to home studios, it has also created a lot of competition.

How does an artist stand out? The music must be incredible.

Look at Alabama Shakes. That band is spreading because the music hits you on such a visceral level that you HAVE to tell everyone you know, it’s impossible NOT to. And it’s easier than ever of course to do so with social media, smart phones, twitter and beyond.

But even if an artist has built up a nice following and the word is spread organically, I believe that an artist has the best chance for success when there is a foundation of a grass roots campaign taking care of and retaining the fan-base intertwined with top-down marketing initiatives. This grabs the attention of the more casual music listener in addition to breaking through the noise of an ADD society that is bogged down with a media onslaught from all angles at all hours of the day.

Top-Down Marketing

That top-down marketing often comes in the form of a larger partner. I am biased, particularly as I feel lucky to have been schooled under wonderful managers.

A manager is a key component to building up the team and finding the best partners when the time is right for his artist. Team building can also begin with a passionate agent, attorney, or other trusted person, but we can all agree that the manager is often at the center of helping guide the artist through the many options now available.

This is what I find SO EXCITING about the modern music industry. Not only can an artist build up leverage if he wants to bring on a partner by landing syncs, building up his fan-bases on free platforms from Facebook to Fanbridge, but I now see more options than ever in types of deals now offered and in partnerships that we can create together.

Brendan Benson

Photo: Brendan Benson by Keri Smith Esguia

As an example, when I started managing Brendan Benson two years ago, he was wrapping up his 4th solo album cycle on as many labels. Although there were great people and champions along the way, he went from majors to indies (he was signed to a major in his 20s and was told by label execs they wanted him to be “the next Beck” - why can’t he just be Brendan Benson? – and was then signed to promising indies that folded shortly after releases). Brendan is a gifted all-around musician, a world-class producer, multi-instrumentalist, brilliant at recording in addition to writing, plus he performs as a solo artist and is co-leader of The Raconteurs. So there was no reason why he couldn’t get in the studio last year and make the record HE wanted to make. I told Brendan to get in the studio – I didn’t want any outside opinions to get in the way. This freedom resulted in Brendan producing SIX albums for himself and other artists within one year in a variety of styles. Also, I witnessed a family evolving around Brendan’s music and - whether he likes it or not - his own brand.

It was hard for me to justify “shopping” Brendan’s record based on his past experiences going the traditional route. In addition, my concern about signing with a traditional partner was not the enthusiasm of the staff or individual folks involved, but the uncertainty of them even being in business in a few months. And while Brendan was making records I saw exactly that happened: promising labels closed up shop, their staff got re-shuffled, and other changes occurred at established companies.

So self-releasing Brendan’s music was a no-brainer. Especially since we had spent the past two years rounding up his fan base which had been scattered around the Web and had never been tapped into to as a community. Now that we know who those fans are, Brendan continues to put music out to them directly and will grow that core fan-base forever.

Because he’s an established artist, it was important to me that certain traditional promotion and retail elements would still occur. I was pleasantly surprised by the “label services” options that are now popping up from Thirty Tigers to Mom + Pop to Frenchkiss to Razor & Tie and others. This means that established and experienced companies now offer their services to artists who need help to set up the record, put the plan together, and manage assets and physical production elements. Under this type of deal, the artist is often allowed to retain rights to his master, which is extremely important to artists on my roster, especially if they create the recording themselves without the help of an outside investor or company.

Available Options

With all of the background information laid out on Brendan, let’s look at a few of his options that were available to us in late 2011:

1. Sell the master to an indie or major (hopefully not in perpetuity) and pray that the staff remains consistent for at least 6 months and ideally for a year or longer. Even though Brendan paid for the initial recording, if we went the major route the label would likely want a piece of additional revenue streams from areas with which Brendan doesn’t necessarily need help.

2. Bring in an outside investor as a person or company to foot the bill for promotion or have Brendan himself fund the cost of hiring a publicist, radio team, and other elements needed to spread the word on the record. Note these types of investors generally expect to share in all revenue generated by the artist in exchange for the up-front capital they provide.

3. Ask our publisher to get involved with funding promotion for the master. This point isn’t totally relevant to the article so I’m won't break it down further. Spoiler: we did not go this route. I mention it as an option for artists as many forward-thinking music publishers (such as Peer Music) put together options that help promote their writers who are also recording / performing artists since labels can't always be counted on to assist as they did in the past.

4. Start our own label in conjunction with a label services team and customize the additional team members we feel are necessary to the project and who are passionate about Brendan and his music.

The concerns over Option One have been discussed, mostly with regard to the teams not always staying in tact or not knowing enough about all of an artist’s revenue streams to justify cutting them in.

Option Two sounds like a good idea on paper, and sometimes the individual investor model works, if all an artist needs for a bit is someone to foot the bill for touring and promo until he breaks. Also, I see value in having team members around an artist who have music business experience because it’s important that the folks guiding an artist have the basics down. Considering I have to explain “master side” and “publishing side” to people I work with fairly often, having a rich uncle foot the bill may get people involved who have decision-making authority but who may not have the industry knowledge and big picture perspective to make the best call for the artist.

I have had a close perspective on the large investor model partnering with all revenue streams or rights of an artist because I worked at Michael Cohl’s Live Nation Artists. This company did the big “360 deals” for Madonna, Jay-Z, and developing (at the time) country artist, Zac Brown Band. The first thing I noticed was that this was an extremely expensive division of the largest concert promoter in the world and that we weren’t going to have income for at least a few years. Money was spent, which didn’t seem sustainable since there was no revenue, and we were laid off 7 months later. I saw this happen again last year with a company that wanted to partner with artists ; I thought they overspent on promo and asset creation. Despite their best intentions they aren’t around any more either.

Photo Shoot: $13,000 or $400?

I’m probably one of the only managers in the music industry who will ask a label or 360-style company to spend LESS money than what they propose. Case in point, I saw $13,000 spent on a photo shoot by one of the above companies. The photos were OK. Meanwhile, I had Sydney Wayser put together her ideal artistic vision for an album photo shoot, from location to concept to photographer. The shots were some of the most stunning I’d seen. The cost was $400.

If a company will invest in all rights of an artist, we need to work together to be smart about this as business people, since everyone is trying to turn a profit, and for the sustainability of the artist’s career.

Artist Managers: The Original 360 Deal-Makers

In the end, managers are the original 360 deal-makers. We take a cut of all revenue but that also incentivizes our work to ensure that every detail is handled to create and find more revenue for our acts because that is the only way we get paid. However, we don’t generally own artist rights, which is an important difference in what I describe vs. an all-rights deal with a company.

I think the industry needs to reverse engineer itself and work backwards to fairly compensate artists and their teams based on the income that comes in. This makes more sense than just projecting income and then spending a ton of money and wondering why we’re in the hole at the end of the project and unable to do more projects.

I’m all for the traditional 360 model if it can work. I have friends on the road right now touring with The Naked and Famous, who are exploding due to a major label supporting aspects of their career that go beyond recorded music.

But I worry about the acts you don’t hear about who are raking it in on the road and whose rights are tied up with companies. And for those artists and the rest of us, there are ways to partner with the artist in all areas in a fair manner in which everyone works together. This is why Brendan ended up launching Readymade Records and Publishing.

The Readymade Model

The team around Readymade releases are custom to each project and for the most part, the team members are commission-based. Instead of paying team members based on projected revenue that we can’t guarantee, we work backwards. All team members receive a cut of sales and master-side sync revenue for a year following the release date. Brendan created the music, I as his manager am used to working on commission and getting paid later, so why should the publicist and radio promo folks be paid first? And although we value our promotion team’s expertise and skills, why put the project in a hole to pay those folks up front? By incentivizing everyone’s work we not only extend the album cycle but also give the team members a shot at making themselves much more revenue than if they would have charged their flat fee up front.

Do I think a commission-based team is THE model for everyone? Absolutely not, every act is different. But it’s right for Brendan and his music just like a major label 360-deal seems to be working for The Naked and Famous. 2000-2010 was a wild decade and as I mentioned, it seemed like the only way to partner with a company during 2000-2005 was an all-rights deal. But these days artists have far more custom options available in how they put their deals together whether big, small, or with oneself and a hand-picked team of trusted advisors.

The “traditional” all-rights 360 deals with major labels still exist and probably will as long as they do. But what an exciting and creative time we live in during which there are so many options available to artists in how they want to release their content. It’s overwhelming (which is why this article is so long), but if we break it down, we can learn from each other and figure out the best plan for our artists and their music.

Because that’s why we’re here in the first place, remember?

Editor's Note: Author Emily White speaks at a NARIP event on Thursday, April 19th, 2012 at SAE Institute in New York on the topic of 360 record deals. The program will include a mock negotiation between Emily White and two attorneys of a 360 deal. For more info, click here.

About the Author

Photo: Emily White by BriAnna Olson

Emily White is a co-founding partner at Whitesmith Entertainment, a Music & Comedy Management and Consulting Firm based in New York and Los Angeles. Whitesmith clients include Brendan Benson, Sydney Wayser, GOLD MOTEL, Eric Burdon of The Animals, The Big Sleep, & Urge Overkill in their Music Division. In 2012, White launched Readymade Records & Publishing as a sustainable release and marketing platform home for Brendan Benson's output of music, which is not limited to producing 6 albums including his own over the past year. White's background spans the industry, including positions at Michael Cohl's Live Nation Artists, Madison House Inc., tour management, PR, radio, TV and concert promotion. In her early career, White was integral in Developing The Dresden Dolls' worldwide and worked directly with Imogen Heap, The Fiery Furnaces, Secret Machines, Paolo Nutini, Angelique Kidjo, Taj Mahal, Jonah Smith, Die Mannequin, and Zac Brown Band. Additionally, White sits on the board of direct-to-fan technology non-profit, CASH Music. Follow Emily on Twitter @emwizzle

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