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...

Monday, October 30, 2006

Something that we, in rap, have known for a long time:


Artists produce albums on own

Digital music cuts out studios


Hall & Oates are set to appear within the next few weeks on the "Today" show and "Extra" to promote their first ever Christmas album.

But the duo hasn't had a record deal in years. Rather than partner with a major label, Hall & Oates has released "Home for Christmas" on their own three-year-old label called U-Watch.

"We're putting out records to our fan base," Hall & Oates' Daryl Hall told the Daily News.

Artists are singing a different tune as they increasingly bypass the major record companies to make CDs - solo.

The age-old model of an act being shackled to a record label is growing colder than Michael Jackson's last album.

Everyone from one-time teeny bopper heartthrobs Hanson, to quirky pop act Barenaked Ladies, to hard rockers Motley Crue are on their own.

Singer Sarah McLachlin plans to go indie after finishing up her current contract with Sony BMG, her manager said. Even little known rock acts like the Format are trying to get launched outside of the major label system.

Jimmy Buffett, a pioneer of do-it-yourself labels, has a top 20 release this week. And two of the biggest acts of all time answer to no music major. The Eagles, no longer signed to Warner Music Group, just struck a deal with WalMart that will put their next releases exclusively in Wal-Mart stores. Garth Brooks took a similar route after parting ways with his longtime label Capitol Records.

"This is the future," said rock manager Terry McBride, whose clients include McLachlin and Barenaked Ladies. McBride expects nearly all of his acts to part with their record companies over the next few years.

The vast majority of recording artists are still signed to major record labels. But the indie trend is growing louder, thanks to changing forces in the music biz, said prominent music attorney Fred Davis.

Some artists have been been forced to go solo because their sales have peaked and the majors no longer want them. "The major labels are going for the quick sell," said Roy Trakin, senior editor of Hits magazine.

The rise of digital music sales has made it easier for artists to cut out the middleman. Almost any artist can sell songs on iTunes.

The Internet is also shifting the power away from the majors. While once artists depended on their record companies to promote their songs to radio stations and MTV, now social networking sites like MySpace.com are the place to break records.

If done successfully, going the independent route can be more lucrative than a record deal. Artists get to keep the rights to their master recordings and potentially capture a much bigger share of their record sales - $5 to $6 per album vs. the standard $1 to $2.

Hanson's most recent album, put out on the act's own label 3CG, sold a modest 150,000 units in the U.S. and 600,000 worldwide. But because the band did it on their own, they pocketed $2.4 million, said the band's manager Allen Kovac.

There are big disadvantages to trying to sell records without the deep pockets and marketing muscle of the majors. "You have to realize you will never have a No. 1 record," Hall said.

Hall and partner John Oates, work hard to keep costs down. "I don't spend a million dollars on a record," Hall said.

Without a record company backing them, the duo had to be creative about getting their latest CD into stores.

Because they lack the budgets to pay retailers for prime shelf space, they struck an exclusive deal with music retailing giant Trans World, which controls chains like Sam Goody and F.Y.E. The deal assures them prominent display in Trans World stores.

"You have to be flexible," Hall said. "If you've been around a long time, you can do things differently."

Friday, October 20, 2006


A very important aspect of selling your own record is getting it into the stores. There's no shortcut here; hard work is the only way to do this unless you have an incredible buzz, a recent sales track record, or a fool proof guarantee of record sales to the retailer. The important aspect in this equation is leverage. For example, in Atlanta right now Shawty Lo from D4L has a hot CD and it may be easier for him to get this record into stores than for Lil Weavah to get his CD into stores because Shawty has a track record of success from D4L, and his name is more recognizable to retailers and fans.

There are three things a distribution company looks at when deciding whether or not to distribute a record label: The quality of the product (music), the flow of the product into the pipeline (does the label have enough product to release something every few months), and the economics (does the label have enough financing to be a real record label and cause "push" and "pull" through the retail stores).

"Push" is getting the retail stores excited about carrying the record so they'll order it for their stores, and "pull" is getting the consumers into the store to buy the record. Retailers are in business to sell records, be informed about artists and their releases, create store loyalty, provide a local service (sort of a music industry center in their local area), and make a nice profit. I find that if you treat them as such, and with respect, they are happy.

The stores don't owe you anything as a new label-- bear in mind they've seen many, many labels come and go. It's your job to convince them you are serious as a label: understand their strengths and difficulties (competition in local markets, credit concerns, etc), and support them financially through price and positioning and through co-op advertising (not always financially easy to do as a small label--it's tough to get a better position in the store than Sony or UNI, unless there is some incentive for a local store to hook you up--liking you is good motivation, bringing the artist through on promotional tour to sign autographs is another good motivator).

In a perfect world, retailers want to carry product that will fly off the shelves at breakneck speed regardless of the price they are charging. Read that again, it's important-- retailers want to carry product that will fly off the shelves at breakneck speed regardless of the price they are charging! Just having a good album does not insure this. Proper set up, a strong buzz on the streets, strong awareness of the project, radio play, a healthy budget spent properly and efficiently, added to good music does insure this.

Bear in mind that when a record sells at a discounted price, the retailer is not absorbing this loss, the label is. The label reduces the wholesale price by a percentage often by offering more units for a fixed price to make up the percentage difference-- for example a 10% discount might be offset by offering one record free for every ten ordered instead of lowering the invoice by 10%. By the way, this free "11th" album is considered promotional ("free goods") and the label is NOT responsible for paying artist royalties on that unit (which is a very good rationale for artists to limit their "free goods" in their recording contracts). Sorry labels, gotta look out for the artists!

Because most new labels don't have a track record or the proper financing to have flow of product yet, getting distribution even locally through a legitimate distributor is difficult. The goal is to have enough leverage to negotiate from a position of strength instead of when you need something. And waiting until you no longer need distribution is hard as hell. That means you have to go to each retail store, convince them to carry your record (often on consignment), and then convince them to pay you for it. Once the record is selling sufficiently, it's no longer a struggle, but it's still time consuming to go to each store to pick up your money and deliver more records.

Once the record starts selling, or has an incredible regional buzz, the distributors will become interested and you just need to ask what they can do for you that you can't do yourself. Is what you'll gain worth giving up 20 or 25% of the money? Sometimes yes, sometimes no. A regional distributor (like Select O Hits) can expand your coverage area (provided you can afford to expand your area with promotions). But you must weigh the cost of that service.

When a distributor looks at your company, preferably through a business plan so they can see where you've been and where you're going, they are looking to see how feasible and realistic it is for you to last over the long haul. Do you have proper staff in key positions: retail sales, radio promotion, video promotion, marketing, publicity, street promotions, finance (very key position), etc. These positions can be outsourced as necessary, but the distributor needs to know the company has the potential to last in an industry where most have zero staying power.

Do the artists or owners of the label have experience and connections in the industry? Have they ever sold a record before in their lives? How have they done it? What is the likelihood they'll be able to do it again? Do they understand how the industry works? Will they still be in business down the road or will they fold if things don't go as planned? Are they properly financed or are they in over their heads? Properly financed means enough money to press, create and fill demand, and repeat this process for a few records in a row without depending on immediate income to sustain the company.

It takes anywhere from $200,000 to $1 Million per artist to properly promote a rap record regionally and takes conceivably 90 to 120 days to get paid after the consumer buys the record, less reserves (the amount of $$ the distributor keeps to offset returns from the retail stores-- usually 25% is kept and then liquidated in 6 to 9 months, depending on who negotiates the deal and your level of power in the negotiation). Can this label sustain that kind of commitment or will they run out of money half way through the first project? What is their reputation in their local home base? Have they sold records before? Do they understand how the music business operates? How hard do they work? Will they continue to work hard or will having a distributor make them lazy? How serious are they about putting out records? What's their vision--where do they plan to be next year? In 5 years? In 10? These are the questions a distributor is asking themselves about you and your project.

If a distributor likes all the answers they ask about the record label (both to themselves and others), they then choose to distribute the records for a period of time (most likely 3 years) and set the percentage they are willing to split (80-20 is great, with 20% going to the distributor and 80% to the label), the length of time in which they are willing to liquidate reserves, and the amount of advance they are willing to part with, if they advance monies at all--most do not.

The more risk they take and the more they give you upfront, the less you will receive on the back end split. The skill in securing a banging distribution deal is how badly they want you and how much power you have when approaching them.
So what’s a label to do? First of all, let’s clear this up out the gate: not every person putting out a record is a record label. A real record label has a small staff, it has more than one release in the pipeline, and it is properly funded. Without the proper financing, someone releasing a record is just that--someone releasing a record. Without being a real record label, there is no “juice,” no clout, and no leverage to insure payment. Please understand the difference between being an independent record label and being an entrepreneur trying to control one’s own destiny (and marketing).

Someone who comes to a distributor with zero experience selling records, one album with no set plan to have others follow, and asks for an advance to market that record, is deluding himself (or herself) into thinking he (or she) will get paid. Without pipeline [“Pipeline” is the release of subsequent albums that a distributor would be able to recoup any monies from, if there were returns on a prior release therefore it is another form of leverage to insure payment from a distributor] it will be difficult to get paid. And even worse, that person is making it harder for everyone out there who has a plan, has a roster of projects to release (pipeline), and has their own financing.

Distributors have lost so much money on poorly planned record releases over the years that they tend to shy away from new projects now. It is harder than ever to get a distribution deal, and harder than ever to get paid. It used to piss me off when I saw the bullshit some distributors chose to release, but then I realized that the average distributor knows NOTHING about rap music or what’s hot on the streets, other than “is it selling or not,” so when someone arrives on their doorstep with the “hottest CD in the world,” they tend to take a chance on it. Guess what happens when they lose $50,000 on “the hottest CD” in the world, a few times in a row! It gets harder for everyone, and the distributor stops taking such a high risk on new records. Unfortunately, that’s where we are right now. The market is overcrowded with mediocre music that doesn’t stand out.

For someone who really wants to release a record, and I am STILL a huge proponent of this, it’s not hard to just do it right! This is not rocket science. It’s easier than selling most stuff on the street--and legal (although some of the records I’ve heard lately ought to be illegal). But just understand how it works, what a distributor is supposed to do and not supposed to do, and be able to look at things from the perspective of others: the distributor, the retail store, the promoter, and the radio station. Easy, right?

A Distributor is the person who gets a record from the pressing plant to the retail stores. That’s it. They sell it for $10 or $11 to the retail store, and in a perfect world they keep 20% and give you between $7 and $8. They distribute the record. Involved with that is warehousing the CDs that have not shipped yet, keeping track of the money by invoicing stores and recording the payments (and chasing money that’s due), having their sales staff talk to retail stores about it (hopefully), and collecting the returns which is the left over product the stores were unable to sell.

Returns are the scourge of distributors. Not only do returns cost them money in shipping, but also they take up valuable space and staffing in the warehouse, and fuck up their books financially. So if a release has a lot of returns (or even the threat of a lot of returns), that label will lose their distribution deal and it will be next to impossible to get paid. Retail stores remember the labels whose product gets returned, and it makes it that much harder for the label to sell more records to the retail store next time, no matter who the distributor is.

I’m going to repeat myself here: a Distributor is the person who gets a record from the pressing plant to the retail stores. It is YOUR responsibility to get customers into the store to buy your record. How you do that is your problem, NOT the distributor’s problem. You are responsible for making the album, marketing the release, promoting the album, building awareness of your artist and the release, and increasing sales. YOU are responsible for the cost of that, NOT the distributor. The distributor doesn’t bill you for the cost of their relationship with the retail store, nor should you depend upon the distributor to pay for your costs to market the record. If you need an advance from the distributor be prepared to give up most of your control, all of your leverage, and a bigger part of the profits (provided you get paid at all--if the distributor is funding your release, it’s not rocket science for them to figure out you can’t afford an attorney to sue).

I do not hear many good stories about distributors in urban music, maybe a handful in the past ten years. Most distributors lack the necessary relationships with urban retail stores and chain stores to be effective, and very few pay when they are supposed to. I have seen distributors ship product early (way before the release date), bootleg records, renege on advances, stop working records due to convoluted threat of lawsuit (and then do a side deal with the person threatening to sue), lie, ship records overseas where they can not be tracked by SoundScan, freeze payments for no reason, declare bankruptcy, not liquidate reserves, etc.

The only way to guarantee that a distributor will not operate solely on their own self-interest, IN MY EXPERIENCE, is to sell enough CDs to control the situation. This is how labels are able to get paid enough from one release to put out another. This is how labels control their situation instead of being ruled by their distributors. This is how Cash Money was able to grow into the powerhouse that allowed me to get them an outstanding major distribution deal. This is how you can, too.

Although there are such things as pressing and distribution deals (P&D deal), a distributor should NEVER be allowed to control the pressing of the albums until you have a life long relationship with the distributor. By arranging for pressing yourself, you can control the payment of previously sold records (“I’m not shipping you another 15,000 units until you pay me for the 30,000 sold last month according to SoundScan”). This is the leverage the distributor uses at retail stores to get paid, so use the same leverage to get your money, if necessary. By pressing the record yourself, the bootlegging possibility of your record is reduced. Control your own pressing. The distributor will want to control the pressing obviously, because it guarantees they’ll get the product when they need it (they may be afraid you’ll run out of money before subsequent pressings), and because it’s another way to make a few extra dollars profit. If they pay 60 cents a CD, they can charge you 90 cents a CD and make an extra 30 cents per each unit pressed.

About 4 to 8 weeks before the release date, the distributor sends a copy of the album to all the retail stores they have accounts with (this doesn’t mean all the retail stores in your market, so find out who they do not sell to, and sell them directly or through a “one stop”. When selling directly, get as much money upfront as possible; it may be the last money seen from that store unless the release is super hot and they need to pay to get more in stock). The distributor solicits “pre-orders” which tells them how much demand exists in the marketplace for the release. This tells everyone immediately whether or not you’ve done a good job setting up the release. This is the moment where the distributor gets excited about the record or banishes it to the bottom of the sales list.

If they are excited about the release, they will set up sales programs (discounts that actually force the sale of more records, and/or price and positioning (where you pay for a premium location in each key store for the release to be displayed). A good amount of pre-orders will make the release a priority for the distributor, which means the sales person will mention the record on their weekly calls within the top ten releases or so. With unimpressive pre-orders, the release gets regulated to the bottom of the list, which the sales person may never get to mention depending on the length of each weekly call. This position can get turned around if sales miraculously pick up, but obviously avoid this position at all cost, even if it means pushing the release date back until a stronger buzz is built. This reinforces the importance of your own staff calling retail stores to sell the release in tandem with the distributor’s sales efforts.

Once the distributor gets your record into retail, the goal is to have it sell as quickly as possible off the shelves. One way to ignite retail is to ram the song down the throats of radio listeners so that they fall in love with the song. The way to ignite radio (and subsequently retail) is to have, what I call, an "oh shit" song (a song that makes people grab their heads and exclaim, “Oh shit!!”). It's a song that's catchy with a memorable hook that people keep in their heads all day, whether they want to or not.

Almost every album Def Jam puts out, sells. Some labels have the opposite track record where almost every release guarantees a return. Why would a retail store stock it!?! Let's look at this logically: if you owned a record store and every unit I sent you had to be shipped back eventually, would you continue to take a risk? Consider how small the average retail store (or the urban section of a chain store) is, and that every record that sits on a rack is taking space away from Jeezy, or Jay-Z, or T.I., or Paul Wall, or Snoop that will most likely sell. If you made a living from selling records, what would you choose to have in your store: Jay Z or an unknown rapper from a label or distributor that has every record returned? This stigma also exists with distributors. There are some distributors, just like there are some record labels, that retail stores will not do business with because they’ve been burned too many times. You do not want to be that label, nor do you want to be coming to a retailer through that distributor, so do the research before choosing a distributor.

Call retail stores in the local and regional area where you want to do business and ask who the best distributors are for the type of music you want to sell. And set up the release properly. A good set up takes three to four months to build a strong buzz. Putting out your own CD can be very rewarding…provided you know what you are doing, and do it properly.

Wednesday, October 18, 2006

Radio Play
By, Wendy Day from Rap Coalition

I have been consulting independent urban record labels and artists for many years now, and the most misunderstood aspect of this industry is radio. So few understand how radio really works, and an even smaller amount of indie labels and artists understand how to get their records played at radio. Because of the lack of information and knowledge, radio promotion remains an area where one can lose a large amount of money very quickly. And most do.

I have a friend in Detroit who paid $25,000 to a radio promoter on the recommendation of popular radio host at a local station there. My friend did not receive one spin anywhere in the country. He was eventually told the single did not research well and that it was not a radio single. It was too late in the project to hire anyone else. Could he have been told that prior to spending the $25,000? Provided it was true, yes. My guess is that he was taken for a ride and that the radio promoter (whose name I never even heard before), and the guy who had referred the scam “promoter,” made a quick come up on $25,000 for no work.

Just last month, I got a call from a doctor in Texas who has invested in a project, but is totally clueless about the music industry. He name dropped some people in the industry who are excellent at what they do at radio, but not for people like him. When I tried to explain how it all worked, my answer did not fit his vision of how he wanted it to work and he disappeared quickly off the phone. I imagine he will soon be parted from even more of his money by folks who pick up on what he wants to hear, and tell it to him. What is it about this industry that makes folks act like idiots? As I pull up the BDS to see what spins his artist is getting, I see he still hasn’t figured it out. Sadly, the artist has placed his career in this guy’s hands. Who really loses? The artist.

There are quite a few legitimate radio promotion people and companies out there in urban music. I do not understand how the other bullshit names keep coming up over and over again, attached to horrific stories of fools and their money soon parted. Don’t people check references? Are they so new to the industry that they lack any resources to call and ask for opinions? Perhaps there are just that many con-artists out there to make a quick buck, I don’t know.

Radio is a format that reaches hundreds of thousands of people, all day and night. Most markets have at least one urban radio station, and some key markets even have two or three competing stations for listeners and ad dollars. Please understand that radio exists to sell commercials. It doesn't exist to contribute positively to the culture, it doesn't exist to inform the community, and it doesn't exist to break new and innovative music. In fact, it’s anything but. A grip of research has been done by all of these huge wealthy radio conglomerates, and the research shows that when a listener hears a song where they can’t happily sing along, they change the station to hear a song where they CAN sing along. When the listeners change the channel, they miss commercials, and the station's ad price drops because the amount of listeners drops. Simple economics.

Think about it logically for a minute. I have two words to say: Laffy Taffy. No one has enough money to have paid for that song to play as much as it did. Yet the song was a hit record. Radio played it because kids requested it, it researched well, and ad sales went up. Downloads occurred by the millions.

So how do you get your song played on the radio?

This isn't an easy answer, because the truth is just that many will never get radio play. If an artist does not make music that fits the format of the radio station and is of competitive commercial quality, their music won't get played on most radio stations. Without a real budget, they won't get radio play. Without a "hit record" today, they won't get radio play. There are just too many other folks with bigger budgets, deeper pockets, and better connections to fill the few slots available at radio today. It's more competitive than ever. The main thing is stop looking at radio for what you WANT it to be, and see it for what it really is--learn the game before stepping on the playing field!

Back in the day, rap music wasn't accepted on commercial radio formats, so no one worried about getting on the radio. Word of mouth was key for spreading rap music, and for a few hours a week, college radio played some. It was easier to get onto college radio back then, than commercial radio today. Somehow, artists felt they were missing something if they could not get added to radio. This increased need for radio play has gotten out of hand today. Now a radio station might have only 4 or 5 available slots to fill with new songs, but there are 50 new records vying for those few spots--with budgets, with well-connected radio promoters pushing them, and with established artists and well-known producers. How will you compete?

The best way to attract radio attention, is NOT to head up to the station to drop off a CD of your newest song. You need to blow it up in the clubs and at the street level first. Back the record up with other promotion and marketing efforts. Let the radio DJs come looking for you because your song gets so hot on the streets and in the clubs. If you have a truly hot record, it will end up at radio. That is the definition of a hit record. David Banner's Like a Pimp, Webbie's Girl Gimme That, Webbie's Bad Chick, Magic's I Drank, I Smoke, Acafool's Hatablockas, etc, all started out as songs that hit the clubs and streets hard (mostly because there were no budgets available for radio play initially). But the songs started to grow legs on their own, and radio embraced them. You can't buy that kind of authenticity (and many have tried). But there is no way around the fact that if the radio powers-that-be do not think your song fits their format, sound, or necessary quality, you will NOT be getting any radio play. Period.

So, when you hear the more commercial artists getting spins, and you want the same push for your music, you may have to go back and rethink your sound, your production, and/or your style so you fit the format. Also, it’s important to have a good reason why you are going after radio play. Many stations are interested in knowing that you have a complete plan for your project rather than just wanting to hear your song on the radio. Learn the correct language and use it to communicate your intentions. Are you planning on dropping a CD with legitimate independent distribution? If so, what is your release date? When are you going for adds at radio? Are you backing up your promotional efforts with a complete campaign? Or are you trying to secure radio spins to capture the attention of bigger record labels? [In my opinion, this is a half-assed way to try to get a deal. If it was this easy, anyone with money could secure a deal for a $50,000 radio budget. In my thirteen years of experience, I have yet to see someone become successful from getting a deal solely from radio spins--in fact, I have seen many, many, many fail. Because of this, I do not normally shop deals based on radio play. If you look at the SoundScan chart for any given year, not one of the top thirty or forty rap artists got their deal from getting radio play, yet most did get good deals from selling CDs regionally.]

Is it possible for a regional artist or indie label to gain acceptance at radio? Yes. But it all depends on the song, the timing, and the reasons behind it. And most importantly, it depends on your connections and whether or not you have done the proper research on radio. Every city or town with an urban radio station has people who understand how it works. Find the LEGITIMATE people who can inform you. Do research on the internet. Ask people who have done this SUCCESSFULLY before you. It is my hope that this article serves as a good starting point.

This article appeared in the September issue of Ozone Magazine.

The Roots’ Black Thought is on the list of DEF JAM artists (Method Man, LL Cool J) who are not exactly elated with how their projects have been handled by Def Jam.

“I’m critical too,” Thought said last week in New York about the company. “I’m critical of Def Jam too and the way it’s run. I’m just trying to fulfill my obligation, work hard and keep it movin’. Sometimes you got too much on your plate: When you should be concentrating, your focus is elsewhere. But I’m no diva about it, you have to be self-sufficient with any label.” Thought says the Roots owe Def Jam one more album.

Quote courtesy of playahata.com