Rap Coalition

A HOW-TO RESOURCE FOR RAP ARTISTS, PRODUCERS, & DJs. Since knowledge is power, here is your best defense to succeed in the urban music industry...

Tuesday, March 28, 2006

Anatomy Of A Joint Venture (written 10/3/2005)

Well, by now you’ve probably heard… I did another one of those Wendy Day deals I seem to be famous for. This one was for a friend of Eminem’s out of Detroit—an OG who has been rapping for over 15 years and putting CDs out himself for the last 4 years. His name is Trick-Trick. He’s from the Ghetto (that’s one of his lyrics, not a socio-economic observation on my part). He has a business partner called Simen who is an awesome human being and together they make an unbeatable team of incredibly hard workers dedicated to success. Their entire team impressed me, and that is not easy to do.

After I did the Cash Money deal in 1998, I got too many phone calls from folks who had barely written a rhyme asking me to do a similar $30 Million deal for them. I got REAL tired of folks asking me to do for them what Cash Money had earned for themselves (they were incredible back then—they put out 31 CDs over a 6 year period, and were smart enough to listen to good advice from folks like me who understood how to succeed at a higher level than just regional sales in LA and TX). Let’s face it, Cash Money was good at what they did back then and smart enough to listen to good advice.

Since the Cash Money deal (which was finalized in March of 1998), I can count on one hand the number of folks out there who have been in a position where I felt I could actually get them a major deal worthy of doing. Most of them didn’t listen and ended up settling for bullshit deals (BG, and Trill Entertainment spring to mind). Some listened, and let me do what I am good at—and have gotten exceptional multi-million dollar deals (David Banner and Trick-Trick come to mind).

I have to give it up to Banner and Trick, for not being greedy or stupid, and for trusting the judgment of someone with experience--me. They have each experienced far more success because of their mindset and how they positively interact with others. They are the real deal. People help them succeed because they like them and want to see them succeed. While Trill allegedly have not paid their artists the hundreds of thousands of dollars they owe them from the royalties of their indie releases, nor is any of the original staff who built the label still down with them, WonderBoy Entertainment is the exact opposite. Trick-Trick is a partner in the label and has been paid every step of the way, and every team member who was working with WonderBoy at its inception, is still part of the company today—and paid. Doing business the right way and being trustworthy is the key to success in this business. At least the key to sustained success.

Because of Trick-Trick’s relationship, he was able to get Eminem to commit to doing a song with him. Marshall did not just hand Trick a hit single for nothing out of the blue. I am certain he watched what he was doing on the streets and realized that Trick had earned a helping hand. After numerous releases and mixed tapes, Trick was ready for the next step and Em gave him a helping hand in a single called “Welcome To Detroit City.” WonderBoy planned to put out the record themselves, not understanding the politics of major labels—Interscope would never allow an indie release featuring their #1 artist. Unfortunately, they did not discover this until after they had already spent a grip shooting a world class video for the single. The single leaked to radio, and Trick joined Em on the Anger Management Tour at his own expense, working the streets at every stop along the way.

This is where I entered the picture. In Atlanta, I came backstage to meet with Em and Trick-Trick to see what their plans were. If they were planning to use this hot single, those plans would have to include a major label for the release. I was so humbled by Trick-Trick’s personality that I arranged to meet his partner a few days later in Memphis. I was astounded. They both seemed too good to be true. And I had the proper ammunition to do my thing. I do NOT recommend anyone do this, but I felt so good about these guys that I never asked for a signed agreement—it was all done on our word and a handshake. My philosophy is that if I need a contract with you, we don’t need to be doing business together (unless you hire me to help set up and structure your label, in which case we will have a contract to get you into the habit of asking for everything in writing).

So while we met with attorneys to do the paperwork on the deal, I shopped the project to numerous labels. Some labels understood the value right away, others wouldn’t return my phone calls (ironically, the same ones who didn’t return my calls back when I was shopping Eminem’s deal in 1997. Hmmm….). There had been talk of a previous offer on the table from Universal for $350,000 and 18 points, but I knew that did not sound right for a project with a sales and radio track record, and a fucking Eminem single that was REALLY making Trick look dynamite (thank you Marshall, you are still as awesome as you were when I first met you, only now with more people pulling at you).

Without Trick or WonderBoy causing me any stress, we moved forward and worked out a joint venture deal (at Universal) for a share of profits and a little over $1 million for the first album. Universal is also forced to put out a second album for a similar advance provided the first one goes Gold (I don’t see any problem with that). Universal and WonderBoy will be partners in the Trick-Trick project and will make decisions together as they move forward. WonderBoy is willing to keep working as hard as they have been to date, only now they have the Uni pipeline (and bankroll) to help them achieve more, faster.

Why was Trick able to get such an outstanding deal? Well, I’d like to think he had a strong negotiator on his side (me) that understood what he was bringing to the table and expressed that clearly to the labels. But he also had a sales track record, some regional radio play on the single with Eminem, a history of radio play with two previous singles, a regional sales history, a world class video ready to go that was up to M-TV standards, and he had participated on the Anger Management Tour with Eminem, 50 Cent, and Lil Jon. He was able to catch my attention with more than just an Eminem single (I have turned down shopping many deals before that had a single by a multi-platinum artist, even Em). Trick-Trick had a package deal to offer: experience, sales, radio, regional awareness, and real hype. Everyone I know in Detroit knows who he is, and likes him (how rare is that?). But most importantly, he had a great attitude and a winning disposition. He was serious about himself and therefore easy for me to take seriously. He and his partner are extremely hard workers and did not slack for one minute even while I was shopping the deal. Everything I needed or the lawyer needed, they got us. I was an excellent shot, but WonderBoy supplied me great ammunition.

The last deal I shopped before Trick-Trick was an embarrassment for me. I shopped a deal for Trill Entertainment after hooking them up with a radio person who broke Webbie at radio (Gimme That, and Bad Chick—still to date the ONLY songs they have ever received radio spins on). After four months of having to watch my back because I did not trust either owner of the company (the artists are incredible—the label is not worthy of them) and explaining how things work in the industry over and over, I reluctantly had to walk away. Neither of them listened, and neither of them understood the industry even though I explained repeatedly. They were busting foul moves against the major labels, against their artists, against other artists and labels who featured their artists in hit songs, against their own lawyers, and against me. In my opinion, they were shadier than a forest.

The really sad part was that Trill Entertainment’s artists had done so much work on the streets that Lil Boosie and Webbie were the hottest things out there on the underground in the South! They were in a better position than Cash Money was when I met them and started shopping their deal: Trill had conquered a larger region, had sold more CDs, and were just beginning to get the radio play that is so important when landing a multi-million dollar deal with a major label. Sadly, they didn’t listen and took the first deal they were offered, signing for less money than they owe their artists in royalties from the previous releases (less than a million dollars), and a split that makes Trick’s deal stomp on them. They were not patient, smart, or likable. In fact, one could argue that they deserve what they got, as do most folks with short term vision.

I am not smarter than anyone else out there. I am not better at what I do. I am just committed, caring, and business minded. I look at deals from everyone’s perspective, because if a deal doesn’t benefit everyone and make both the label and the artist money, then there’s no point. I use my label connections to bring through exactly what the labels say they are looking for—reduced risk and projects that make money. My deals are structured so that the artist is a priority at the label and success is imminent. I believe that is why none of my deals have ever failed…in fairness, I have only done ten deals or so. But they are ten very happy and successful deals.

Tuesday, March 21, 2006

Wrestler Salaries
(According to PWI Insider)

Below is the World Wrestling Entertainment talent roster payroll that was taken from October of 2004 until February of 2006. The shown dollar amount beside each wrestler is the grand total that they earned from World Wrestling Entertainment in a one year period (downside guarantees, bonuses, and merchandise shares). Some wrestler's were given special privileges and bonuses in their contracts which can also be seen beside their total pay. All wrestler's contracts begin and end at different months of the year, there for each shown amount is what that particular wrestler earned in a 365 day time period between October 2004 and February 2006 (or however long they have been with the company). All dollar amounts were rounded up/down (Example: $244,766 would be $245,000)

- Ashley Massaro: $131,000
- Batista: $813,000 (First class flight tickets paid for every week)
- Big Show: $1,000,000 (Base salary)
- Bob Holly: $217,000
- Booker T: $375,000
- Candice Michelle: $64,000
- Carlito: $319,000
- Chavo Guerrero: $206,000
- Chris Benoit: $488,000 (First class flight tickets paid for every week)
- Chris Masters: $253,000
- Christian - $396,000
- Danny Basham: $130,000
- Doug Basham: $126,000
- Eddie Guerrero: $372,000
- Edge: $704,000
- Eugene: $189,000
- Funaki: $124,000
- Gene Snitsky: $292,000
- Gregory Helms: $277,000
- John Cena: $1,743,000 (First class flight tickets, hotel accommodations, and ground transportation paid for every week)
- John Layfield: $786,000 (Five star hotel accommodations paid for every week)
- Jerry Lawler: $204,000 (First class flight tickets, hotel accommodations, and ground transportation paid for every week)
- Jillian Hall: $52,000
- Joey Mercury: $134,000
- Johnny Nitro: $143,000
- Jonathan Coachman: $175,000
- Kane: $ 851,000 (First class flight tickets paid for every week)
- Ken Kennedy: $133,000
- Kid Kash: $62,000
- Kurt Angle: $1,023,000 (First class flight tickets paid for every week)
- Lance Cade: $118,000
- Lilian Garcia: $90,000
- Lita: $286,000 (Mostly downside paid due to lack of wrestling)
- Maria: $41,000
- Mark Henry: $300,000 (Base pay)
- Matt Hardy: $322,000 (Missed over $70,000 of pay due to firing)
- Matt Striker: $43,000
- Melina: $155,000
- Mickie James: $72,000
- Nunzio: $186,000
- Orlando Jordan: $145,000
- Paul London: $177,000
- Psicosis: $122,000
- Randy Orton: $711,000 (First class flight tickets paid for every week)
- Rene Dupree: $289,000
- Rey Mysterio: $414,000
- Ric Flair: $508,000 (First class flight tickets paid for every week)
- Rob Conway: $186,000
- Rob Van Dam: $220,000 (Only received downside and royalties due to injury)
- Rosie: $105,000
- Shawn Michaels: $1,045,000 (First class flight tickets, hotel accommodations, and ground transportation paid for every week)
- Shelton Benjamin: $366,000
- Simon Dean: $132,000
- Stacy Keibler: $178,000 (Only downside paid during absence)
- Steven Richards: $94,000
- Torrie Wilson: $260,000
- Trevor Murdoch: $48,000
- Triple H: $2,013,000 (Allowed the personal use of company jet (10) times per year. First class flight tickets, hotel accommodations, and ground transportation paid for every week)
- Trish Stratus: $618,000 (Receives 20% of all Trish Stratus merchandise sold)
- Tyson Tomko: $127,000
- Undertaker: $1,811,000 (First class flight tickets, hotel accommodations, and ground transportation paid for every week)
- Val Venis: $210,000
- Victoria: $275,000
- Viscera: $130,000
- William Regal: $225,000

Monday, March 20, 2006

The Financial Realities Of Rap

Rap music has hit a dull spot. It has lacked creativity for a couple of years now except for the random album here and there to break up the monotony. I'm more than just a fan of the music: I study the industry--under a microscope. One of the reasons it is so boring right now is because no one is taking any risks.

There is nothing new--just recycled formulas of what labels think will continue to sell. This is a justifiably sensible business decision, but a horrendous artistic decision. History shows us that boredom is what has killed musical art forms in the past. Remember disco? Remember the watered-down, commercial R&B of the late 70s? Rap emerged due to an outcry for an alternative form of popular music in the late 70s and early 80s, bringing a new and exciting answer to boring and redundant music of the day.

Independent labels sprang up overnight in reaction to the music. Many were based upstairs from the local club, in the local DJ's apartment, or at the fan's college dorm room pressing up the hottest club hits and selling them locally. Labels clamored to sign the hottest acts who performed the songs that packed the dance floors or who kept fans' attention the longest at the outdoor Park Jams, originally in The Bronx (NY). When the major labels saw the financial value of rap ten years later (proving once and for all it wasn't "just a fad"), the industry changed. Gone were the independent labels that scooped up the best talent on the streets who had invested their own limited dollars into the records. The majors were a step further away from the streets and played with other people's money. They relied on an employee's opinion of what was hot--an employee who collected a paycheck to make the record, not mortgaged his own house to make the record.

Since most label A&R staff were not connoisseurs of rap, or even people of color (remember it was a predominantly Black art form), they relied heavily on someone else's opinion--perhaps a friend of a friend, but someone else's opinion, nonetheless. And that someone usually had no accountability for failure. Perhaps the A&R person got lucky and had a cousin's uncle's best friend's neighbor's friend who knew somebody who went to the clubs in the Bronx where rap was born. Less lyrically gifted artists began to enter the marketplace while weak production emerged on wax. Employees at the Majors became the gatekeepers and trendsetters while the smaller labels run by fans (the Def Jams and Tommy Boys) and true opportunists (the SugarHill Records and Cold Chillins of the world who spotted a trend and capitalized on it) took back seats. The deep pockets were here. Records that once cost $15,000 to make began to cost $500,000 due to inflated costs. Some records that shouldn't have been made began to go into mass production to end up rejected by the final consumers as not authentic. For every one hit the majors had, ten failures followed; fickle consumers were blamed. People who didn't listen to it, but were profiting from it, were controlling rap.

In the 1980s, most of the rap acts had their own producers, most of which were often the DJ. In the 1990s, the DJ was made irrelevant and MCs became vehicles for great productions at the behest of the labels. This flipped the industry from an artist driven industry to a producer driven industry, while it also took control out of the hands of the artists and into the hands of the label who not only felt they understood the market better, but also had the access to the super producers. The value of the producer soared based on hits. Labels also outbid each other to give "production" deals to the Platinum producers-- not so much to have them bring talent to the label, but more so to guarantee access and fair pricing when they needed production work at a reduced rate. This increased the producers' prices and importance.

The cost to market a record began to climb as the majors raced to outspend each other. Radio costs soared sky high as labels realized the importance, and bought radio. Costs in the 1980s of $10,000 for minimal club and radio play, grew to $200,000 in the late 90s just to regionally test a song at radio, and upwards of a million dollars if it is to become a radio hit. Club and street team "maximum exposure" grew from a few thousand dollars per 12 inch in the mid-80s, to a multi-million dollar industry almost overnight in the 90s. A hot video, in 1990, guaranteed to air on Uncle Ralph's Video Music Box in NY or Yo MTV Raps, cost $25,000, compared to $500,000 today directed by a superstar director with no guarantee of showing on MTV or BET (and forget ANY M-TV or BET play if you have no BDS radio spins).

The rising costs didn't matter. It became a "Majors" game, meaning deep pockets. All the hot labels were backed by a major, with major distribution, with a full staff, with a real budget. It became a producer driven industry where at least two radio singles had to be name brand produced by one of the few platinum flavors of the moment. That's an extra $150,000 on the budget, even at the discounted "I know you" price. Add the requisite Platinum side artist to show the new artist in the light of other successful rappers: $80,000 each. If the label has a good relationship with the other major who owns the side artist, maybe they will allow the use of their artist. If not, they will charge a fee too. Sample clearance could add another $50,000 to $150,000. Tom Silverman said it best: "Back in the day, our variable marketing expense was 75 cents per record sold (net). In 2000, it costs us $4.50 per CD to market a record. A major label can't put out a record that isn't guaranteed to sell at least a million copies, or they don't make any money. Majors can't take a full shot for under $3 Million."

But what is the real price to pay? Artists aren't recouping--their share of the pie has become unreachable. Instead of giving away all their rights in a bad contract like ten or fifteen years ago, they are now spending away all of their possible profits to gain only illusive fame. There's more pressure to create hits--radio friendly hits. There's more pressure to sell records, and to sell records fast--first week sales are a key measuring stick of an artist's value at a label. There's more pressure on the artist to build his, or her, own buzz before the label will even commit to sinking the necessary competitive dollars into the project. The artist is forced to take less risk with creativity, and make a song that is proven to sell.

The heads of the fleeting "urban" or "Black music" departments started to get pressure from above. The employment door began to revolve. In order to protect one's job, the records had to sell. Since it is impossible to spend less in this incredibly competitive marketplace, the record has to sell more units to offset the higher costs to make and promote it. The quality of music goes down in direct proportion to the need to sell more records. The labels don't want to spend upwards of $3 million on a rap record to take a risk; they want a sure thing. The stockholders demand it. The value of a company is based on the price of that stock which fluctuates due to market demand for the stock, not demand for the music. The most recent risk reduction policy at the majors is to step in and scoop up projects that have been released on an independent level regionally, and that are showing promise at retail and at commercial radio. This has been in effect since the mid-90s. The majors still pick a loser every now and again because these variables can be bought or altered to appear better than they really are, and because the A&R employees are still a step away from the streets of these regions that are moving units. They don't know what's real and authentic. They can only guess.

So while the majors are outbidding each other to sign the safest records with the most leveraged risk, based on a formula for sales, what are we supposed to listen to? When will rap become again what it once was: exciting, passionate, and new?! Some changes will need to occur for rap music to take chances again:

-labels will have to stop spending huge amounts of money and start taking risks again
-labels need to hire A&R people who understand the streets and know what will sell and what consumers want to hear
-the industry will have to reign in the huge costs associated with selling a record (expensive radio promotion, exorbitant video costs, costly retail promotions, etc)
-artists will have to oversee budgets and make certain less money is spent so there is a chance of recouping
-artists will have to make records worthy of spending close to $20 to purchase
-artists and labels will have to embrace new technology and make it work in their favor

My biggest concern is that if some changes aren't made, rap is in danger of becoming extinct. At the very least, it will go back underground. If it does, once it loses its current place in modern culture, many opportunities for the artists will leave with it, such as endorsement deals, acting opportunities, television shows, concerts, commercials, etc. When it is no longer deemed financially feasible to be a rapper, many talented artists will seek job opportunities elsewhere. The world could miss out on something very special because it was more lucrative for an artist to get a job than to make an album.

Friday, March 17, 2006

How To Publish Your Own Magazine
By Julia Beverly, Publisher of Ozone Magazine
(Originally appeared in "JB's 2 Cents" Editorial Column--March 2006)

First of all, my disclaimer: I am far from an expert. All I know is what I've learned through trial and error, and I'm still learning as I go. But (special editions included) having managed to put out around 65 issues, I must be doing something right, so hopefully this will be helpful to anyone trying to start their own magazine or even another type of business. The tips in this piece basically assume that you are starting with little to no budget - if you are lucky enough to have found an investor willing to put five or six figures into your dream, you are probably smarter than me and should write an article for me to read.

Be Consistent
This is very, very important. Whether you've decided to come out monthly (12 times a year), bi-monthly (6 times a year), quarterly (4 times a year), or otherwise, you have to set realistic deadlines and release dates and do everything in your power to meet them.
Especially when you are first starting out, it's essential that your issue drops when you say it's going to drop, or you will damage your credibility with advertisers and therefore you will lose money. Think about it - if an advertiser pays you up front for an ad in a publication they've never seen, they are taking a risk. For the first year or two, advertisers would call me promptly on the release date to make sure the magazine was really out. These days, they ask out of excitement, not out of suspicion. They know it's coming. Until you've built a reputation and people have a reason to trust you, it's important to have your product out on time.

The advantage of having a monthly publication is cash flow; you can constantly be booking ads and can offer significant discounts on advertising for multiple months. The disadvantage, of course, is that you will also be spending a lot of money on a monthly basis, and you will be working your ass off constantly to meet deadlines. Advertising dollars tend to dry up near the end of the year - I assume this is why some magazines come out 11 times a year, usually with a combined December/January issue.

Keep in mind that you have to allow time for printing and distribution. The amount of time depends on your method of distributing the magazine (are you giving it out for free, is it subscribers only, is it sold on newsstands, or all of the above?). You have to allow 7-10 days for printing and several days for shipping. If you're using a distributor, they'll probably need around 3 weeks to put your product in stores. So if your magazine's release date is January 1st, 2007, you'll have the send the files to print the last week of November 2006. This is the reason why you'll see magazines with news items that seem dated. If an artist gets arrested, for example, you'll hear about it on the internet or the radio right away, and a few months later read about it in a magazine's "news" section.
For most hip-hop magazines you see on newsstands, there's probably about a two month gap between the time the article is actually written and the time it reaches you, the consumer (I'm writing this on February 9th, so check your calendar).

Picking A Name
No disrespect to anybody, for real, but if I see one more magazine named "Urban __" I'm gonna throw up. It's so generic and dime-a-dozen. Think of something original that's relevant to your magazine. Hater Magazine, for example, is a cool name for a magazine and I wish I had thought of it first. Your tagline should also be quick, original, catchy, and easy to remember.

Find Your Niche
Who are you targeting? A successful magazine owner knows the type of person who is reading, and what they want to read about. Many start-up magazines fail because they are only trying to cover the "stars." If I want to read about 50 Cent, I'll pick up XXL. If I want to read about Kanye West, I'll pick up Vibe. So why are you, a local indie magazine, trying to interview 50 Cent and Kanye West? They don't care about you and they don't need you, so even if you can get 10 minutes with them on the phone, they're not going to tell you anything interesting that hasn't been printed a thousand times already. Of course, there's nothing wrong with featuring major artists, but your main focus should be something unique to your audience. Focus on people who aren't getting the publicity you deserve. Seek out interesting stories that haven't been told.

Be Original
There are a couple of copycat OZONEs out there but we aren't saying any names. I'm just saying, do you, don't copy somebody else. I intentionally tried to make everything - from our layouts to the titles of our articles - totally different from The Source, XXL, etc., to give OZONE its own flavor. Also, there is nothing more boring than a magazine that prints press releases, label-provided bios, and stock images of the artists. Hire a photographer or go out and get pictures your damn self. Don't run the same photos that we've seen in forty other publications, and PLEASE don't try to pass off a press release as an "article" or "interview."

Dealing With Artists
If your magazine focuses on music or entertainment and you expect to be taken seriously, you have to act like a professional when dealing with artists. It's natural to be a little starstruck once in a while, but don't be a groupie. This goes for men and women alike. Asking to take a picture with them is okay sometimes, depending on the situation (FYI: the pictures you see by my editorial every month are usually not my request), but asking for autographs is generally a bad idea. Rapping/singing/entertaining is just what they do for a living. Don't get caught up in the smoke and mirrors and bullshit, just do your job and handle your business and you will be respected. Same goes for "modeling" magazines - don't be trying to fuck all the models.

With that said - this is still a business where your success depends largely on your relationships and your reputation. It's important to develop professional friendships with people in the industry. If you don't vibe well with one particular artist, try to develop a relationship with someone in their camp – the DJ, security, road manager, manager, publicist, label rep, anyone. Don't look at anyone as a peon. Treat everyone with respect, because in this business you never know where an intern or roadie might end up in a few years.

Media Passes/Access to Events
Sometimes the hardest part about dealing with artists is all the bullshit you have to go through to actually get to them. Depending on how tight the security is, you might have to get creative. There are two types of events: underground hood concerts thrown by local promoters, and major events put on by radio stations or corporations. Build a relationship with local promoters and show them some love in the magazine in exchange for getting access to their events. Those are show-up-early-at-the-door-and-talk-your-way-in situations. But when it comes to award shows or major events, you usually have to fax in a request for media credentials several weeks or even months ahead of time. Find out who the media contact is for that particular event, and. fax them a simple letter on your magazine's letterhead requesting passes and explaining what type of coverage you plan to give the event. Having a relationship with the artist can help you get access in certain situations, but don't depend on them to get you in.

Generally speaking, where there's a will, there's a way. If you want to get in to an event bad enough, you'll find a way. When one door is closed, another is open. That means if the front door isn't working, try the back. If one person tells you "no," ask someone else. Be persistent and aggressive to get what you need, but don't cross the line and disrespect the person/people in charge or you'll risk burning a bridge you might want to cross in the future.

Basic Business Skills/Follow-Through
Running around to the clubs and events and meeting artists is just the fun part. There's still a lot of business to be handled at the office that requires basic organizational skills. Having some type of corporate experience is helpful. If you're trying to get advertising dollars from labels, your paperwork game has to be right. Even though I get to hang out at video shoots and in VIP lounges and green rooms, whenever I get back to the office there's always a mountain of mail and faxes to sort through, and 15,051 unread emails in my inbox (seriously, that's a real number, so don't get mad if I haven't responded to yours). So, there's a lot of filing and typing and organizing and emailing and corporate America-type-bullshit that comes with running a magazine. If you don't have the tolerance for it, you may be in the wrong business.

Keep Your Overhead Low
It doesn't matter how hot your product is if the numbers don't make sense. Every issue, you have to be aware of how much you're making (advertising dollars + newsstand sales + subscriptions) and you also have to be aware of how much you're spending, total. If you're spending more than you're making, you have a problem, so you have to find a solution to the problem. That solution might be to find other ways to bring in revenue, or it might be to cut back on expenses.

Wearing multiple hats is also a solution to this problem. Most startup magazines don't have much funding, and don't bring in enough revenue to hire a complete staff. My solution to this problem was to do everything myself. In the beginning, I had no money to hire a photographer and writer for every article, so I'd just go do both myself. As OZONE's popularity has grown, so has the need for a full-time staff, and we are slowly developing into a company instead of a one-woman show. But all in all, it helped me understand the entire process. It's important for every CEO to understand every aspect of the company, and what better way to do that than by being hands-on?

Don't Be Afraid To Start Small
It's basic economics: supply and demand. Some magazines fail because they spend all their money printing a whole bunch of copies of the first issue, and the supply exceeds the demand. I actually had a debate with Bun B about this recently: Would Air Force Ones and Bathing Apes be as popular if they were available everywhere? I doubt it. In the same way, starting out small and staying consistent can help you build an enormous buzz (not to brag or anything, but OZONE is a perfect example of this). It doesn't make sense for you to print 50,000 copies on your first run. Start with 10,000, or even a few thousand, depending on the area you're trying to reach. If your product is hot, people will start talking about it. If there's a limited amount of copies, it will be harder to find and will increase the hype. As your audience increases, slowly increase the amount of magazines you print. Since the cost of printing each magazine is so high, you don't want to be printing extra copies unnecessarily.

Negotiate Printing Prices
When you're starting out, the cost of printing your magazine will be by far your highest cost. In my experience, some printing companies rank right up there with car salesmen and lawyers. They'll hit you over the head with high prices right off top, and if you don't complain or find other options, they'll continue charging you out the ass because you don't know any better. I interviewed photographer J Lash in OZONE once, and he quoted boxing promoter Don King as advising him, "You never get what you're worth. You only get what you can negotiate." This statement applies to all forms of business, especially magazine printing. Of course, this goes back to my first point: consistency. The more consistent you are, the more negotiating power you have. Don't just pick one printer, pay what they ask, and get comfortable using them. Renegotiate constantly. You should constantly get quotes from other printers, and if their price is lower, show it to your current printer and see if they'll match it. If you're a consistent client and you pay on time, they will at least try to come close.

You should also keep in mind that there are different types of printing presses, different paper weights, different types of binding, and many variables that can affect your price. Also, printers sometimes throw on additional costs (like UV coating, for example) which can add up.

You might find a cheaper price in another state or even another country, but the cost of shipping may negate those savings. The closer your printer is to your office, the more control you have. Having a face-to-face relationship and being able to knock on their door has significant advantages over dealing with faceless names via phone and email.

Page Count
Magazines are generally printed on large sheets which fit 8 pages (front and back), so when you're starting out it's most cost-efficient to put out a magazine in intervals of 16 pages. This means your magazine should be 32 pages, 48 pages, 64 pages, 80 pages, etc. Add 4 more pages if you want the cover to be thicker than the inside pages (this is also an additional cost). Magazines that are under 104 pages are generally "saddle-stiched" with two staples in the middle, which is cheaper but doesn't look as professional. Once you get over 104 pages (like the current issue you're reading) it can be "perfect bound," with the flat binding on the side.

Learn How To Use The Fucking Spell Check
One local magazine I saw had the title "Fat Joe and the Terrow Squard" on their cover. Needless to say, that magazine is no longer in business. If you aren't able to skim through your articles and spot typos, at the very least, run spell check on your entire document before you print it. Most programs, even Microsoft Word, will do this for you automatically. But even with spell check, the program will miss minor spelling errors or grammatical errors. For this reason, if time allows, it's good to read through (or have someone else who is good at catching mistakes) your entire magazine at least once before it goes to press. You'll never catch them all- no matter how hard I try, OZONE always seems to end up with three typos that slide through the cracks - but you should try your hardest. Printing obvious typos or false information reflects very poorly on your publication. Potential advertisers - major labels or corporate sponsors - will shy away from spending money with your publication if it appears unprofessional. This also applies to your media kit, advertising solicitation letters, and other correspondence.

Say Something!
Your articles should cause a reaction. They should be thought-provoking, amusing, educational, controversial, or at least vaguely interesting. Write about things you're passionate about and allow other writers to write about things they're passionate about. If you're bored writing it, the reader will be bored reading it. Again, PLEASE no press releases or artist bios. Calculate how much each page is costing you to print, and ask yourself if that particular article or interview is really worth the space. As a publisher, you have a lot of freedom. If an artist gives an exceptionally great interview, you have the freedom to make their article longer, and chop or eliminate boring interviews.

Graphics and Layout
You could write the most profound article of all time, but if your layout is bad or cluttered, your words will go unread. When it comes to layout, it's best to keep it simple. One common mistake is printing white text on top of a dark, cluttered background, which may not print out well. Many local magazine owners don't understand CMYK. CMYK is the color “mode” used by printing presses. When you send your magazine to press, the images are split up into four color “plates:” C (cyan), M (magenta), Y (yellow), and K (black). Occasionally, you'll see pages in a magazine that appear blurry, because one of the plates wasn't aligned properly. Many indie magazine publishers also don't understand photo resolution. Images on the internet are 72 dpi (dots-per-inch), but professional quality photos should be minimum 300 dpi. If you copy a photo off the internet (or scan an image from another magazine), blow it up, and print it, it will look like absolute shit once it comes off the press.

Adobe Photoshop and Illustrator are basically industry standard when it comes to designing graphics and images. But DO NOT use Photoshop to layout your text. For text - articles, cover titles, etc - use a layout program. Many publications use Quark for layout, which is a Mac-based program. Personally, I prefer PCs, so I use Adobe InDesign.

Photo Retouching
Now that digital cameras are so common, many indie magazines take pictures straight out of the camera and print them without retouching. This is a big problem, because images - especially from digital cameras - tend to look much darker in print. Almost every single image you see in this magazine has been individually retouched. Photoshop is essential for magazine publishing. If you don't have at least a basic knowledge of it, find someone who does. You can play around with layers, curves, brightness, contrast, hues, sharpness, healing brushes, cloning brushes, and lots of other fun stuff. You should also attempt to match the colors and brightness of your monitor to a print copy of your magazine; in other words, the final copy of your magazine should appear exactly the same as it did on your computer screen. If you're good at Photoshop, you can often salvage photos that appear too dark, airbrush out blemishes, make colors appear more vibrant and eye-catching, and the list goes on and on.

Hit The Streets, The Internet, And Everything In Between
Posting your articles online, whether on your own website or on other people's message boards, is a good way to create hype online. In the same way, but a little more time-consuming, passing out copies at clubs and in the streets can create hype. These are two equally important audiences: people on internet message boards, and people in the streets and in the hood, are both tastemakers in their own way.

Barcodes, Corporations, Trademarks, Taxes
I honestly hate dealing with this stuff, I don't completely understand it, and would hate to give you incorrect information. Still, that doesn't mean you should ignore these things. You'd be better off consulting an attorney or accountant like I do. If you're planning to sell in stores, you'll need a barcode, which requires a fee up front and minimal monthly fees to actually create the barcode image. A lawyer can help you file the necessary paperwork to register your company as a corporation (Inc. or LLC), as well as filing for trademarks and copyrights. Paying taxes, of course, are just as essential to your corporation as they are to you as an individual, so make sure your business is on point.

Subscriptions & Bulk Mailing
Your subscription cost should be minimal; enough to cover your costs but still competitive. In addition to your subscriber list, you should also have a comp list of people that receive the magazine for free every month: potential advertisers, label reps, DJs, writers, publicists, even artists. Collect business cards and comp key people in each market.

As your list grows, you will be faced with the fun task of mailing copies out each issue. When OZONE started, we were sending out magazines in manila envelopes and stamping them with "MEDIA MAIL:' which is a little cheaper than regular first class mail. But they still cost around $2 each, so the mailing was getting very expensive. I finally learned that the United States Post Office has a separate Business division which handles bulk mailings. If you ship more than 200 pieces per issue, you can apply for a bulk mail permit (it costs several hundred dollars, and you have to pay to renew it once a year). But instead of paying $2/each, you'll be paying more like $.50/each, depending on the weight of your publication. Plus, you can stick the label directly on the magazine instead of taking the time to stuff them in manila envelopes.

Although bulk mail is much cheaper, there are also several drawbacks. One is that the post office requires you to presort the mail by zip code. You can buy software to assist you with this, but either way, it's a pain in the ass and a complicated time-consuming process. Another major drawback is that bulk mail can take 2-3 weeks to reach the reader's mailbox. If you don't have the time or patience to handle mailouts in-house, another option is to outsource your subscriptions (pay another company to send them out for you).

I'm really not an expert on distribution, so you may want to seek out other resources on this aspect of magazine publishing. As far as I can tell, there are three basic routes you can take when it comes to distribution. One is to pass it out free as promo and depend on your advertising dollars as revenue. OZONE was given out free for about three years, and we still give out promo copies through street teams in certain areas in addition to the copies available for sale on newsstand. (We also sell wholesale to indie retailers.) This is a good way to get people talking about your magazine, because everyone loves free stuff, but you're also spending a lot of money on printing. Plus, it requires a lot of time, effort, and travel. The second option is to sign up with smaller distributors or wholesalers that will accept virtually any magazine and place it in a limited amount of stores. Unfortunately, most of them will charge you significant fees per store and shipping costs per magazine. You shouldn't expect to receive large checks. Even if your magazine sells well, by the time their retailer takes their percentage (usually anywhere from 50-60%) and the distributor deducts their fees, there won't be much left. Most of your revenue will still have to come from advertising, but at least you will benefit from the visibility of being seen on newsstands.

The third option, and the one which I am still learning about, is to sign an exclusive contract with a major distributor. You can basically count the number of major distributors on one hand. They're like the WEA or the UMG or the Zomba of the publishing world; all the labels consolidated into one. They deal with many of the smaller distributors and wholesalers mentioned above, but have the power to negotiate better percentages and fees. Major distributors take a flat percentage of your sales, reach out to chain stores to get authorization for new titles, and handle all the paperwork and headaches. They're also harder to reach, and much more exclusive, so they won't accept every magazine. They're looking for titles which are well-funded, well-connected, and established. If you're trying to link up with a major distributor, hiring a distribution consultant can help in the process but of course that means spending more money. Major distribution is not necessarily a good thing for every magazine. You have to wait til the time is right. If you're reaching a very limited specialized audience, you may want to be strictly subscription-based. Or, you may want to try the other methods above to build an audience first, which will give you more leverage when seeking a major distribution deal (Just like an indie artist seeking a major record deal).

Even after you've signed with a major distribution deal, that doesn't automatically guarantee you placement in major chains. Places like 7-11, Walgreens, and airport bookstores often charge hefty fees to place your magazine on their shelves. If you don't have an investor or a steady stream of advertising dollars already flowing in, pursue other distribution options first.

Haha! You didn't think I was gonna give up all the game in one issue, did you? I'm not a salesperson. Before I started the magazine someone told me, "If you just do what you love to do, the money will come," and I didn't believe him, but it turns out there's some truth to that statement.

- Julia Beverly, jb@ozonemag.com

Wednesday, March 15, 2006

The Money In The Music Business

Publishing is where the money is, in the music business. It is the ownership of the words and music of a song, and it is the thing that can bring in income for your grandchildren—it is LONG money. Although publishing can be quite cumbersome to understand, the most basic principle is that when an artist puts pen to paper or makes a beat, that artist owns the publishing. It's that simple. Whoever creates the words or music in a song, owns those words or music.

I think publishing is like real estate. When you make a song, you are the owner of that property. If there is demand for that property, it has value in the marketplace. Sometimes you sell off a piece of the land for money (but you NEVER give away your land for free, right??) and if someone else wants to use your property, they have to pay you rent to use it.

There are a multitude of ways to get paid from publishing, ways to split publishing with other folks (those who helped write the song, and those who did not), and a ton of ways that artists get screwed out of their publishing by others who recognize the value. One of the main ways to get paid from publishing is through “mechanical royalties.”

Mechanical royalties are the payments that Congress stipulates labels must pay based on copyright ownership and publishing ownership. These payments have nothing to do with recouping, but everything to do with who owns the publishing. Right now, that rate is about 9.1 cents per song.

When you sign to a record label and release your CD into the market commercially, that label has to pay mechanical royalties for every copy that sells. Since The Lox have been so publicly outspoken recently, let me use them as an example here. In 1998, when the mechanical royalty rate was 7.1 cents a song, Bad Boy released The Lox’s “Money, Power & Respect.” To date, they have sold 753,688 CDs of this release, according to SoundScan.

Since I do not have a copy of their contract with Bad Boy, to be as fair as possible, I am going to assume they had the least favorable terms in their deal, meaning they were to be paid at 75% of this mechanical rate, and only for a maximum of 10 songs (labels stipulate what your maximum is, whether 10, 11 or 12 songs per CD no matter how many you decide to put on the CD, and whether you get paid at 75%, 85%, or 100%--it’s a part of your deal to be negotiated, and the terms depend upon how much leverage you have in the deal). The math is easy: 7.1 cents per song x 10 songs x 75% = $.5325 per CD. So, when you multiply that total by the number of CDs sold: .5325 x 753,688 the total mechanical royalties for Money, Power, & Respect are roughly $401,338.86. The Lox are angry because they gave up the right to collect that four hundred thousand dollar check. They feel cheated because they feel they had no choice at the time and have chosen to speak about it publicly now.

On the radio recently, Sean “Puffy” Combs argued that they did have a choice and that they chose to be down with Bad Boy knowing the consequences of their contract. He further went on to surmise that they did not understand the business after all these years. In my opinion, it’s not that they don’t understand it, it’s that they don’t like the end of it that they are seeing at the hands of Puff.

Mechanical royalties are only one of a few ways artists get paid from publishing. There are also sales royalties and performance royalties--which are not administered by the record labels, and pay the artists every time their song is played on the radio, video, or live. The money is paid based on the percentage of ownership of the song. So if the artists owns 100% of the song, they get the whole check. If the artist owns just the music, which is half the song, then he or she gets half the money. If the artist owns the music with a sample in it that claims half the song, then he or she gets a check for 25%. This can amount to a nice chunk of change, especially when you consider that the song “Money, Power & Respect” was played at radio close to 200,000 times since its debut. Whoever owns the publishing for that song would collect that money.

Performance Rights organizations consist of ASCAP, BMI, and SESAC (which is still quite small). They police the radio stations, clubs, concerts, TV, etc (any place music is played or broadcast), all of whom pay a fee to play the music which the performance rights societies collect and split amongst their members based on the amount of times a record is played. Although the formulas change annually based on play, a Top 10 song played on commercial radio can earn a check in the hundreds of thousands of dollars range.

So why do artists give up their publishing? There are as many reasons for that as there are situations. Some labels ask that the artist sign over 50% of their publishing in order to be down with the label. To be down with a record label as hot as Bad Boy, No Limit, Death Row, or Cash Money was in the 1990s, that can be a difficult decision for an artist to make. They may figure it is worth losing 50% of their publishing to be with hottest label on the streets because that association may sell more CDs than if they owned 100% of the publishing at a less hot label. I have seen numerous artists give up 50% of their publishing to their label, and then sell or give away the remaining 50% because they are broke, or because that is the price they feel they have to pay to get away from the label down the road, as is the Lox’s case.

Before his untimely death, Notorious B.I.G. told me he sold his remaining 50% ownership in his publishing to Puffy just prior to the release of his first album. If that is true, the proceeds from that publishing today would account for millions of dollars. The investment Puff would have made buying that remaining 50% (Bad Boy already owned the initial 50%) would have been recouped in a matter of a few months, but would have affected Biggie for the remained of his career if they did not renegotiate (I believe they did renegotiate just prior to his death). It appears that the Lox had to give up the remaining 50% of their publishing to Bad Boy when they wanted to leave the label years ago. I called Puffy’s office numerous times for a quote for this story, but my phone calls were not returned.

In the 13 years I've been in the urban music business, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me of my cash, because I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door?

The best way to protect yourself is to learn as much as you can about the business, have experienced trustworthy advisors on your team like a manager and entertainment attorney, and understand what it is you are giving up before you make that kind of decision. When you are young and broke it’s easy to say you are willing to give something up to be down with a certain company, but when you find out years later what it is that you actually gave up, you might be really angry to learn that it amounted to someone else making millions of dollars while you made pennies.

Sunday, March 05, 2006


Michael London (DJ Shadow) just forwarded me this incredibly helpful article for DJs:

This is a list of sites for DJ's to check out for music downloads. Different sites have various requirements and restrictions. I have not put these sites in any particular order except for the Bumsquad NEW MUSIC STUDIO RELOADED site!!!!

1-BUMSQUAD DJZ NEW MUSIC STUDIO RELOADED-Old school, dirty south, remixes, indie music, Bay area heat, and much, much more!

2-DIGIWAXX-The Digital Waxx Service is for djs, on-air personalities, program directors, music directors, label executives and tastemakers in the music industry.
(Filling out the feedback gets on my nerves but, I am not mad at them. It is one good way to make sure the labels get some feedback for their product.)

2-NEW MUSICSERVER-NewMusicServer.com is available for Program
Directors,Mixshow jocks, Music Directors and Production Directors of radio stations.
(This is one of the best for radio clean music.)


3-PROMO ONLY MPE-PromoOnly®MPE™ Secure Media Delivery System is the music industry’s answer for fast, secure music delivery, enabling registered industry professionals to get promotional music directly from record labels as broadcast-quality digital files. Promo Only MPE is a complimentary, invitation only service from a trusted name in music distribution. (Get in touch with your Universal rep to get the hook-up!)


4-INDUSTRY SOUND BANK- Charges a subscription fee but I believe that if you are on radio or a mixshow jock, that fee is waived.


5-TJ DJ'S- TJ has free downloads and the cd/mp3 record pool. This is the spot to get that crunk down south club music. Holla at TJ or Keith to get the info!


6-KOCH RADIO HITS- Need that clean radio music from Koch records? This is the spot to get it at. Whatz up Dee!


7-CORE DJ'S-Check out the Where music lives forum for new music and old school hip hop.
Holla atcha boi Toney Neal to get the hook-up!


8-SIR CHARLES DIXON- All that I can say is that Charles Dixon is the man.
Mr. Independent promoter himself!!!! Check out his site to download different indie projects and take some time out to talk to him. He "gots" alot of knowledge about the dj and music game.


9-VOCALS ONLY- This site allows you get acapellas for remixes and production. Yes, there is a cost for the license to use these acapellas.


10-THE RECORD POOL.COM-The Record Pool is the hottest source for new and promotional music for todays DJ and the music Industry professional. Get music from the labels before it hits the streets. (There is a 7 day trial user sign up to see if this service will fit your needs.)


11-SOUNDCLICK.COM- Okay, you can get some free downloads at this site,but you have alot of groups trying to sell their singles here also. You have different music genres to choose from.


This site give you the chance to check out snippets of songs. You might can get the full songs on this site but I have not had time to really check and see if you can do that.


13-DIGITAL JUNKEEZ.COM- I Just found this site. When I click to download some music, it transfer me to the rapidshare site to download that track.


14-DIGIWAX.COM-digiwax.com is the hottest entertainment resource on the Web! Whether you're looking for the latest mp3s and ringtones, celebrity news, tickets to the hottest shows, or exciting new games, we've got it! (No, this is not a repeat! Notice the one X at the end of wax. This site gives you links to other sites to find the music you are looking for. The only problem is that they are mostly "pay to download" sites.)



Relevance and Authenticity.

These are two things that every artist must have. They are at the root of success in rap music. If you are not relevant (saying what people want to hear, in a way they want to hear it) or authentic (seen as legitimate by the fans) you will fail. Many labels sign artists lacking in one or both, and then scratch their heads when the project fails after they have spent hundreds of thousands of dollars.

And then once you have relevance and authenticity, you better have the talent, timing, and proper financing behind you to back it up. You can be the most relevant and authentic muthaphukka out there, but if no one knows you are out there, you are bound for obscurity. This is true whether you are signed to a record label or not.

This is true for everything, not just music—relevance and authenticity drives almost everything in life. I watched a DVD about Malcolm X’s assassination tonight (“Brother Minister”) and the reason Malcolm’s popularity and importance grew, and continues to grow even 41 years after his death, is because of his relevance and authenticity. Think about it. His “by any means necessary” voice, came at a time when the rest of the Black “leaders” were saying to “turn the other cheek.” Black folks had been turning the other cheek for so many years there were no more cheeks to turn. And along came a man who said “Enough!” at a time when people were ready to hear it (relevance). And he said it in a way that proved he believed it because he lived the message and breathed the message--he put his life on the line for people of color everyday (authentic). The timing of the message was right, and therefore it spread naturally. The self-reliance message still applies today.

So when I look at artists like DMC and MC Lyte putting out CDs, although I love them both dearly as people and for their contributions to hip hop, I have to ask myself if they are relevant today. I hope they are. Time will tell.

And when I look at labels like Koch that suffer failure after failure (even 50 Cent said in his Vibe interview in January 2004 that Koch is a graveyard where rappers go to kill their careers), I have to ask if the artists they put out are relevant and authentic. Since BG is both relevant and authentic, I am hoping he will be the first artist able to rise from the dead and resurrect his career with an experienced label behind him that puts a legitimate effort and proper budget behind him. Koch will have to remain thankful that the relationship they had with a lawyer who had his own distribution deal there, saw no conflict of interest in bringing BG there, and that it was strong enough for them to land the former star for the three releases they bungled (BG went from a double platinum superstar before landing at Koch, to selling a couple hundred thousand CDs once there). I imagine the law suit BG is said to be filing against them for monies owed isn’t making them quite so thankful, though.

Of course, Koch is not relevant or authentic, in my opinion. Not only does an artist need to be relevant and authentic, but so do all of their affiliations. A legitimate artist, signed to a bullshit label, rarely will succeed. Every now and again, a bullshit label gets lucky and has some success, but it rarely lasts, and never spreads to other acts.

I think the key to relevance and authenticity is having an ear to the street and knowing what is important and what is happening at the grass roots level. Some established artists are great at that while others are not. Many new artists excel at this because they are living at that level. That is why so many established artists rip them off (yes, I said it). This goes for production as well…

If you look at the truly successful artists who’ve sold a lot of CDs, they are usually the ones to do what they are doing first. For example, when production was glossy and smooth in the late 80s and early 90s, up popped WuTang with that gritty, raw, grimy RZA production. When east coast music was at a certain BPM rate, along came Lil Jon with his version of crunk to turn a spotlight on the south and sell a ton of CDs. Master P blazed a trail for No Limit by offering street lyrics in a do-it-big marketing package, first. The Fugees had a sound and style that no one before them had…blazing a trail for hip hop infused soul. Death Row took funk to a new level when east coast sample-infused rap was dominating. Eminem was a white boy with incredible lyrical skill—first (and apparently last, at least thus far).

So, all this to say: be relevant, be authentic, and if you can do it first, you are IN there in a big way! Oh, and have a label with a track record of success and real budget. An experienced staff at that label wouldn’t hurt either… you only get one career. Just ask Master P, if you can catch him between dances.

Friday, March 03, 2006

A Manager Can Make, Or Break, Your Career
By, Wendy Day from Rap Coalition

Whether you need a manager to help you with your career or whether you want to be one, you need to read this. A good manager can enhance and help the career of an artist or a producer. But an ineffective manager can ruin an artist’s career. People don’t go out of their way to hire someone to destroy them, but they do inadvertently choose folks who are inexperienced, not properly connected, and who possess no experience in management. I see this everyday. If we had better managers in urban music, there would be no need for Rap Coalition, and we’d have rappers with longevity like Bruce Springsteen, Aerosmith, and Madonna.

When artists call me and ask me to refer managers, I cringe. I can think of only a few people that I would personally hire if I wanted to be a successful artist in this business, and they are too busy right now to be effective for anyone other than the artists they already manage. How can I refer artists to someone that I’d never hire in a million years (I don’t), or how can I refer a few folks worthy of referrals, but whom I know are too busy to even find the time to return phone calls (again, I wouldn’t). So I never refer managers. This is a problem.

A manager is supposed to be the liaison between the artist and the record label. They are the person responsible for relaying the artists’ concerns and fears to the label. They are also responsible for offering constructive ways to fix problems. On the flip side, they are also the ones responsible for getting the artist to do what he or she needs to do, often a difficult task. Good communication skills, relationships, experience, and being organized are key for the person entrusted with this life-changing position. An artist who hires a friend is an idiot. An artist who hires a relative to manage his or her career is an idiot. While they may be trustworthy (we hope) and hungry (ambitious), they are not experienced or connected enough most of the time to do an even basic job of managing a career.

A manager is also responsible for obtaining opportunities for the artist to make money outside of the record deal (endorsements, touring, acting, etc). So few managers in urban music are good at this, therefore we now have a spate of companies setting up solely to do deals between urban artists and corporate America (myself included). If we had better and more skilled managers out here, these cottage industries would not be popping up all over to accomplish what an experienced manager should be able to do on their own (by the way, the manager usually still gets a percentage of that income even if someone else brings it to the table).

I recently looked in depth at the careers of three multi-platinum artists in rap (we only have 5 to 10 of these a year anyway) and see mismanagement, friends and family running wanna-be empires, and a lack of business skills as basic as returning phone calls. I see this industry in very basic terms: there are mis-managers who sit back and answer the phone (sometimes) and choose opportunities to bring to the artist from what is offered, and then there are effective managers who not only choose from the offers that come in everyday, but are also visionary enough to figure out what the artist wants to be doing, and goes and gets it for them. The three superstars whose careers I am currently analyzing have hired their friends (in one case, cousin) who “came up” with them to manage them. All three of them are terribly mis-managed.

One artist tried to do something about it, hired a second inept manager to come on board to help the first idiot, and now has a power struggle going on within his camp for control of his career. It doesn’t matter who wins the power struggle, the artist loses either way--they BOTH suck! His career as a star will be fading VERY soon because the artist never learned the importance of hiring a good, efficient, connected manager. The resulting power struggle (predictable) is now forcing away many of the good people within the camp who could have been helpful in the artist’s career. He has changed managers three times in the past 6 months, a bad sign for anyone trying to do business. I imagine he’ll be a “Behind The Scenes” story of a faded star in a minute, or a made-for-TV movie of the week of what could have been…

I, personally, think managing artists sucks. It’s a thankless babysitting job for the most part, and unless you happen to get to work with a Platinum superstar, there is not enough money involved in management for most folks to eat well. So many managers who could have been great, leave to start their own labels (where the REAL money is) or leave the music industry to get better paying jobs elsewhere. Some who work under the big management companies like Violator, The Firm, etc, leave to start their own management companies long before they have the proper connections and experience in place to do so, because they grow weary of working hard for little pay under others. They don’t realize the financial realities of the music business, and often jump into a worse situation.

My biggest concern, and the reason I am even writing this, is that management consists of shaping, developing, and controlling artist’s careers--their LIVES. If a manager fucks that up, they are fucking up another human being’s life. Most don’t look at that, they look at their own thirst for money. A manager, by contract, is supposed to have the artists’ best interests at heart. How many do you suppose can forego a benefit for themselves to benefit their client? Precious few.

I did a deal for an incredible artist at a major label. I kept telling him he needs a good manager to help shape his career. Six months into his first release, he STILL didn’t have one. He is afraid of choosing the “wrong” one (he got burned 5 years ago by a real scumbag touting lies of managing superstars--I would have had his ass thrown in jail for fraud, personally) so he has chosen none. He’s on his third release and still has no real representation. His career is suffering for it. I think that is a horrible mistake: the artist should NEVER be the bad guy at the label, it alienates the label staff--but the manager can be. They may hate the manager, but if they love the artist they will still work just as hard for him or her. If they hate the artist, his or her career is over. Politics reign supreme at record labels, and the staff works projects that are slam dunks, or projects they like…regardless of who the priority is at the label.

So how does an artist choose a good manager in this day and age where there are so many snakes, and so many inept managers with promising business cards? The best suggestion I can make is to look at the careers of other artists you admire--whose careers you admire, not music, and seek out that person. Is that artist getting opportunities that are usually afforded only to superstars, but isn’t selling as many units to do so? Is the artist getting a lot of awareness outside of what the label does for him or her? Do they seem to have a stream of income to fall back on besides being beholden to the label. Research, research, and then more research. Make certain that if you meet with a manager that they really did everything they say they have. Look for a manager who has great relationships with booking agents, entertainment attorneys, corporate America (for sponsorship of tours and endorsement opportunities), access to label presidents and A&R staff but who does not have a deal at any given label unless you don’t mind being put through their deal, and even film agents if you want to go that direction with your career. Follow up, ask questions, get references… after all, you only have one career, and a bad manager can end it prematurely for you.

Things to watch out for:
-a manager with a loyalty to any one label
-a manager who collects your money (they should NEVER touch your money, a business manager or accountant does that job)
-a manager who works at a label especially if it is your label, or a manager who owns a label and wants to manage you AND sign you to his label (this is called double dipping and is a breach of fiduciary duty).
-artists he or she has managed before but no longer does (ask the artists why they left)
-managers who promise to book you shows (that is NOT their job)
-managers who ask for more than 15% or 20% (max) of your entertainment income
-managers who want to sign you to 7+ year deals (watch out for those contract terms called “options” that extend the life of the contract automatically)
-a manager who wants to take or buy your publishing from you

If you want to become a manager, or be a better manager, the best thing you can do is work under a fully experienced manager to learn as much as you can. This will also give you access to their connections and relationships so you can begin to cultivate your own. This is a “who you know” business. You probably won’t make much money at first, but the long term benefits are outstanding. On average, managers get between 15% and 20% of the artist’s entertainment income. How amazing would it be to sit back in ten years and contemplate not only the millions of dollars you made in the music industry, but also the careers you built and the lives you’ve impacted along the way. Isn’t that what it’s all about anyway?

How To Get A Record Deal

I assume your goal is to get signed to a label (most likely because you don't know the negative realities of that if you have not read all the stuff at rapcoalition.org). Here's what labels are looking for, as talent has not mattered much since the mid-90s. Labels are in business to make money, and they will pick up ONLY what reduces their financial risk since the music business is so speculative (this explains why a gifted talent like Ras Kass sells 50,000 CDs while Master P, with no real lyrical skill, can sell 50 million CDs). What the labels sign is based upon what the public buys, like all good businesses.

There are two huge fallacies in this biz: one is that a banging demo will get you a good deal (in the 12 years I've been in this industry, I have yet to see one artist get a deal from a demo), and the second one is that a good connection can get you a deal. A good connection (like me) can only match what a label is looking for with the artist. So, if you put yourself in a position to supply what a major label is looking for (should that be your goal), I can make the match. Until then, there is not much I can do for you personally.

Right now you are probably asking what a major label is looking for…. In order to get offered a deal that is respectable, you will need to sell units regionally. The only ways I see folks getting deals these days is either to come up under a platinum recording act, like Nelly, Eminem, Juvenile, DMX, etc...or put out your record regionally and sell 30,000+ units yourselves. Then the majors will come around and take you seriously! If you decide to take this route, www.rapcointelpro.com probably has some helpful info for you. This is the only way I've seen folks getting deals for many years now, actually. I'll explain why in a minute....

I hear the same frustration from artists everyday regarding finding a deal. It is next to impossible these days to get a deal without either coming through a platinum recording artist who has a deal (again, Busta, Eminem, Nelly, etc); OR putting out your own record and selling units regionally on your own (again, like in excess of 30,000). The labels are looking to reduce their risk, and since there are already so many artists selling units around the country, they have an already established pool from which to choose new artists to sign. For example, there is a group in Houston who are selling 75,000 CDs right now, an artist in Baton Rouge, LA that has 300+ BDS radio spins and 24,000 CDs sold, and a bunch of artists in Atlanta with radio spins and sales in excess of 30,000 CDs each. Why would a label sign a rapper with a great demo, when they could sign a rapper that has some radio spins and sales already underway? Sad, but true!

It has been this way for awhile (since the late 90s) and I don't see any signs of it changing in the near future. Artists used to get discovered and signed by label A&R folks, but now it seems they get attention through moving units and signed (which, by the way, gives the artist better leverage and better deals).

To keep creative control or to get a label deal for more than one artist, you will need to put out multiple albums successfully, with each one out selling the one before. THEN the labels will allow you to retain control.

So, You Want To Be A Producer…

There are a handful of ways that spring to mind for a gifted producer to make money. First, I must say that not everyone who makes tracks is a producer. There are beat makers and there are producers. A producer makes music that suits a rapper’s talents. A beat maker makes beats. A producer is able to bring out the best in the artist on top of his or her track. A beat maker makes beats. A producer properly showcases a rapper with music that fits the artist’s style and image regardless of the producer’s signature sound. A beat maker makes beats.

OK, having gotten that out of the way, here are some of the ways a producer can make money in the rap music business:
Sell tracks to labels and artists
Develop new artists and bring talent to a label
Production deal (difficult in this economy)

How To Sell Your Production

The way to sell tracks is to network with artists and label A&Rs (at conventions, at clubs, through introductions from friends, etc), and set up meetings to then play your music. This is a "who you know" business, and either you need to have a manager who is connected who will sell your tracks for you, or you need to get yourself connected by networking directly in NY or LA (mostly NY for rap). This is not a one time event. You must keep your name in the mind of the A&R person, because although you may not be right for the project he or she is working today, your sound may be ideal for a project next month, next year, etc.Once you have a Platinum or Gold hit, it will be far easier for you, obviously. But to find someone to take a chance on you with no track record is a bit harder...much like trying to get a credit card without any credit... your best bet is to get to NY, meet as many people as you can, and hustle your beats! If you are not good at this, find someone who is.

For a producer, being signed exclusively to a label or artist is not necessarily a good way to experience success. Neither is being a smaller producer signed to a larger producer. The “paying dues” process can be long, arduous, and costly in terms of credit and publishing. Decide upfront what you are willing to give up to follow your dream, and learn from those who went before you about what is acceptable and what is not (in other words, supplying production that a famous producer receives all the credit and money for, is NEVER acceptable). Avoid “work for hire” at all cost! Here’s a clue: if the last producer left because he got jerked, chances are you will get jerked too, no matter HOW famous the person is you get to work for. Quit being star struck!!

Developing New Artists

If your goal is to get an artist that you have discovered signed to a label (most likely because you don't know the negative realities of that if you have not read all the stuff at rapcoalition.org), here's what labels are looking for, as talent has not mattered much since the mid-90s. Labels are in business to make money, and they will pick up ONLY what reduces their financial risk since the music business is so speculative (this explains why a gifted talent like Ras Kass sells 50,000 CDs while Master P, with no real lyrical skill, can sell 50 million CDs). What the labels sign is based upon what the public buys, like all good businesses. This is why it is called the music BUSINESS instead of the music art forum, or the music friendship, or the music opportunity…

There are two huge fallacies in this biz: one is that a banging demo will get you a good deal (in the 12 years I've been in this industry, I have yet to see one artist get a real deal from a demo), and the second one is that a good connection can get you a deal. A good connection (like a powerful attorney, or a friend at a label, or a deal broker, etc) can only match what a label is looking for with the artist. So, if you put yourself in a position to supply what a major label is looking for, perhaps a match can be made. Until then, there is not much anyone can do for you personally. The bad news is that labels do not always know what they are looking for, and often can’t put it into words. This is where SoundScan helps.

In order to get offered a deal that is respectable, you will need to sell units regionally. The only ways I see folks getting deals these days is either to come up under a platinum recording act, like Nelly, Eminem, 50 Cent, Jay Z, DMX, etc...or put out a record regionally and sell 30,000+ units yourselves. Then the majors will come around and take you seriously! If you decide to take this route, www.rapcointelpro.com probably has some helpful info for you. This is the only way I've seen folks getting good deals for many years now, actually. I'll explain why in a minute....

I hear the same frustration from artists everyday regarding finding a deal. It is next to impossible these days to get a deal without either coming through a platinum recording artist who has a deal (again, Busta, Eminem, Nelly, etc); OR putting out your own record and selling units regionally on your own (again, like in excess of 30,000). The labels are looking to reduce their risk, and since there are already so many artists selling units around the country, they have an already established pool from which to choose new artists to sign. For example, if there is a group in Houston who are selling 75,000 CDs, an artist in Jackson, MS that has 500+ BDS radio spins and 24,000 CDs sold, and a bunch of artists in Atlanta with radio spins and sales in excess of 30,000 CDs each, why would any label sign a rapper with a great demo, when they could sign a rapper that has some radio spins, proven marketability, a fan base, and sales already underway? Sad, but true!

It has been this way for awhile (since the late 90s) and I don't see any signs of it changing in the near future. Artists used to get discovered and signed by label A&R folks, but now it seems they get attention through moving units (which, by the way, gives the artist better leverage and better deals). To keep creative control or to get a label deal for more than one artist, you will need to put out multiple albums successfully, with each one out selling the one before. THEN the labels will allow you to retain control once you’ve proven that your success is not a fluke.

Production Deals

I have not seen many production deals lately except for maybe The Neptunes. However, this is a deal that a producer does exclusively with one label for a set price. Under that deal, the producer gets an overhead budget and brings to the label an agreed amount of artists and is paid additionally as each artist is delivered. This is a production driven industry, and a smart label is able to control the market on producers, until it got too expensive to do this. Also, platinum producers have become more savvy, and learned that making upwards of $100,000 to produce one track for a superstar is far more profitable than doing a deal with a major label even for ten times that amount and being tied to that one label for 5 to 7 years (far longer than the length of most rap producers’ popularity).

So there you have it!! Brush up on your skills, be the best producer you can be, and make unique and different music. Set a trend, don’t follow it!!! If you hire folks to do what you are weakest at (on the business side) you will win in this game. And maybe you’ll even get to spend the bulk of your time doing what you love most: producing!!