How moving to a patronage model can help you escape music industry exploitation


The Safety Net

One of the primary reasons that the record label model has been able to persist for so long is because they represent legitimacy.

Especially today, artists are signing deals not because record labels are the only option, but because this is ‘the way things are done’.

Record labels represent a ‘safety net’ which many musicians find alluring. It makes sense! In many artist’s minds, a record label represents not just money but exposure and (most importantly) a sense that you’ve made it.

Signing with a big name like Universal or Warner or Sony (even if its through a subsidiary) feels like a safe bet — after all, these are the entities that have launched the careers of so many massive artists in the past.

Unfortunately, that isn’t quite how it goes. The reality is that many, many artists find themselves tied up in contracts that do not further their career but instead grind them to a halt.

Artists like Prince who sign multi-album deals might find themselves unable to release the work that the label doesn’t find marketable or forced to make creative decisions they disagree with.

Artists who take large advances might find themselves in debt after the cash is spent quicker than they realized, which was the case for the three artists behind TLC.

TLC released their second album, a total commercial and critical success, at the end of 1994. In 1995, the album netted the artists two Grammys for Best R&B Album and Best R&B Performance. Yet, between the album’s release and that Grammy win a year later, all three of the the artists would file for bankruptcy. "Everybody treats us like stars now, except our own record company,” said Tionne Watkins (known as T-Boz). “When we signed our contract, we were under the impression that if we sold a bunch of records they would give us a better deal. No matter how many records we sell or awards we win, they just treat us like dirt.”

Unfortunately, TLC had signed a contract agreeing to take away a meager 7% of album sales. After the other 93% is removed alongside additional ‘fees’ like marketing, production, and packaging(!), the three would each get only 20 cents a sale and the artists wouldn’t be paid anything until the record label fully recouped its costs. Because of this, the trio said that the very act of performing at the Grammy’s put them even deeper into debt.

"One of the great lies in the music business is when an executive tells an artist during negotiations not to worry about contract details and promises to renegotiate later,” said TLC’s lawyer, Eric Greenspan. “This is not just a problem for TLC, it's a problem for every unknown artist in the industry. Once you sign on the dotted line, you are at the company's mercy."

So let’s say that an artist manages to sign a deal that doesn’t lock them in and gives them a decent percentage of royalties. Even still, artists will be surprised at how little they receive in royalties while the record label takes the lion’s share. This is even more frustrating when you realize that those labels have ownership of the streaming platforms which the songs live on, meaning they’re double dipping while the artist is left with table scraps.

I’ve used examples from past generations because its easy to look back on these historical artists and see the fullness of the issues they had to deal with, but of course plenty of current-day artists are still dealing with these same issues. 

Even though it may feel great to have a deal with a record label, that record label has many, many more deals than the one they signed with you. Even though you bet your career on their support, they did notbet their business on you. As Kanye West said, “Artists have one career. Majors have millions.”

That lack of commitment is now playing out with terrible consequences. Artists have historically had to turn to the things that they can fully control such as touring and merchandise in order to make an income. Touring has been a win / win for both the artist and the label, as the label knows that tours will lead to more sales for current and future albums while the artist gets to keep the majority of the profits, on both tickets sales and merchandise sold.

Sadly, in a world changed by a pandemic, even this dynamic has changed.

COVID has drastically impacted artists income as touring has gone off the table. During this global crisis, record labels (surprise surprise!) did not come up with new and innovative ways to support musicians. Instead, artists had to continue signing the same deals and doing even more work, while the labels workload (and percentage shares) remained the same.

For many musicians, the ‘safety net’ that record labels have represented is seriously beginning to tear.

So, what can artists do about it, today?

They can take control and begin moving to the patronage model.

PART FOUR // Connecting to Your Audience >>>