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Question for Matt: Cost of Doing Business

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I've always been intrigued with the recording process for albums, like how much they cost to make. For example Queen's Night At The Opera cost £40,000 (£500,000 at today's rate), and was considered at the time the most expensive recording ever. Inevitably being outdone by other acts like:

Fleetwood Mac - Tusk $1.4 million
Korn - Untouchable $4 million
Garth Brooks - In The Life of Chris Gains $20 million


But you can probably chop most of those costs into mixing/mastering, promotion, booking space, and lots & lots of drugs.

Ever since I became a MGB fan I loved the fact that Last of the Ghetto Astronauts cost around $5,000 to make, because you don't hear it in the final product. Regardless of all the "electric guitars" being recorded with an acoustic, it can still hold it's own next to the more expensive/ better produced albums out there. So I began to look at the least expensive albums recorded by bands and was quite surprised:

Nirvana - Bleach $606.16

Cowboy Junkies - The Trinity Sessions $900
Sublime - '40oz. to Freedom $1000


Just to name a few. Mind you these were recorded in a recording studio, there's rare commodities like Bruce Springsteen's 'Nebraska' & Bon Iver's 'For Emma, Forever Ago' that came into this world on a cassette machine.

Now my curiosity is currently with Underdogs, Matt left his old label and made the album independently. Dave Porter wrote in 'In A Coma":

 

 

After Kidnapping my CEO from his ski holidays, I brought him to the Vancouver studio where Matt and company were in the midst of recording Underdogs. From Prime Time Deliverance to Apparitions to Invasion 1, it was great to hear his songs were ringing true and could bridge over to the mainstream without abandoning their soul.

 

So Matt was already in the studio before any major labels came sniffing around, not to mention he somehow brought in the great Warne Livesey to produce, mix & engineer. I wouldn't be shocked if the rest of his discography costed around $100k per record to make considering he had the backing of Universal. But I'm still left wondering how the hell did Underdogs get funded & put together, what the hell the financing possibly could have looked like for a young Canadian guy just trying to get by in the 90's. 

If anyone has any knowledge about this topic, or if Matt can share his memories about how the whole process for that album worked it would be wonderful. I've spent quite some time in Greenhouse Studios & it's a very historical place, I absolutely love it there. I knew that the upstairs lounge room is where Matt wrote Rico, I always sat on the couch thinking "So this is where he wrote that monstrosity". 

I love Rico though.

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I could be wrong, but wasn't Matt signed to Universal/Darktown for this whole album and recording?  Dave Porter mentions not being overly taken by Matt until hearing Gen X Wing from Raygun in the In a Coma booklet.  My understanding has always been that he signed the band at that point, re released Ghetto and Raygun on the Darktown label in 1997 and began recording Underdogs with that contract.  

Again I could be mistaken, but that's how I always thought the timeline went.  

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Dave Porter was talent hunting but didn't care for Matt in the beginning, so he waited a few years.

 

By this time though (when he actually started to like Matt's music) I had finally been won over and was prepared to offer Matt a deal, it was too late. While I had been watching and waiting, he was signed by a label in Los Angeles called Private Music. As luck would have it, Private Music would be bought by a larger conglomerate not long after, and Matt left the company with the Raygun E.P in hand. 

By 1996 the industry was all over him...


So I imagine Darktown & Universal came along during the making of Underdogs & signed him. But just from what I've found online it seems he went into that recording studio independently.
 

Matthew Good Band recorded and independently released 1995’s Last Of The Ghetto Astronauts. The album gained airplay on local alternative stations and eventually sold in excess of 20, 000 copies, leading to a recording contract with the US label Private Music. The band recorded the Raygun EP for the label, but owing to record company machinations were released from their contract. They recorded their second album, Underdogs, independently at Greenhouse Studios.

Sidenote is I can't really find anything about Darktown records, Matt seems to be the only artist under that label & only for Underdogs. So it might have been a short lived relationship that got bought out by Universal. He was with A&M previously only for a distribution deal so they likely wouldn't have given Matt any money to go off and make something.
 

A distribution contract with A&M Records and extensive radio play of the singles ‘Everything Is Automatic’ and ‘Apparitions’ confirmed the band’s popularity, however, and the album went on to achieve platinum sales.
Edited by mrtrufflepig

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A lot of the huge cost of those 70s records was just straight studio time.  Back then, bands would go into the studio with nothing written, then spend their time in the studio writing the songs, recording them over and over again until they reached the final product.  (Some bands felt that was necessary to get away from distractions.)  In later, more budget-conscious years, bands tended to find their own spaces to write music, in their rehearsal spaces or at home.

 

I can't speak for Greenhouse Studios, but some studios established themselves as being artist-friendly, offering time for cheap.  Smart Studios, where Butch Vig earned his pedigree, spent the better part of ten years recording indie albums on small budgets.

 

The reality is that you can make a cheaply-recorded record sound expensive with a solid mixer.  A lot of 90s alt-rock bands got around the cost issue that way - spend the money on the mixer.  (You'll find a lot of 90s albums mixed by Andy Wallace, who, in my mind, is 75% responsible for the sound of Nirvana's Nevermind.)

 

Btw - that Bleach figure has always been a bit misleading.  Five of the eleven songs on it were recorded at different sessions (a 1/88 demo session and the 7/88 "Love Buzz" single session) that were already paid for.  (They tried re-recording several of them during the sessions, but preferred the original versions.)  So the total actual cost was more than that.

 

I have a feeling Avalanche is the big cost-winner in MG's catalog.  It says a lot when you can afford to bring in a full orchestra for your session. :D

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I'm not sure how much this adds to the conversation, but I also vaguely remember something about how after the Audio of Being was recorded, because the band broke up, Matt was like $1M in debt to Universal/the recording studio. I wonder how much of that was the actual recording ...

Also, with regards to Avalanche, I also kinda remember him saying that the VSO was $20, 000 a day or something along those lines... AoB and Avalanche definitely the big money records.

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One of my favorite artists Jeff Buckley, signed a $1 million dollar deal with Columbia & his infamous record Grace cost $700,000 to make if I remember correctly from his biography. Then his life went to shit financially, at his peak of his career of all places. 

 

 

Yet when he went to buy a house in Memphis, for just $40,000, Buckley realised just how in debt he was.

“The house was a real doer-upper,” Apter said.

But there was no money in the bank, he couldn’t even buy a car. Jeff signed both his publishing and recording deals with Columbia. They call it cross collateralising, it’s like having two mortgages. He took a chunky publishing advance, I heard it was as much as a million dollars but I think he only got about $100k in the hand. Grace alone cost close to seven figures to make.

 

 


Debt doesn't just accumulate from recording albums unfortunately, touring & music videos add up quickly among 100 other things a label can stick to you. Underdogs is one of the best sounding albums in my library, which is why I'm just so damn fascinated about how the hell it got put together haha. 

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Last of the Ghetto Astronauts is easily one of my favorite MG albums and my favorite MGB album, but I can definitely hear some of the production limitations on the album.  Something about it sounds a bit thin, like the guitars and the keys.  For the production price though it still sounds great, & has a charm to it.

Edited by Moonlight_Graham

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It's interesting to think that they went into Astronauts as a three-piece since Dave was only brought in to play keys. If they ended up not liking Dave, would they have just continued as 3 or still looked for a guitarist. 

 

Surprisingly, not a single electric guitar was employed in the recording of this album. All guitars heard on the album were either acoustics or acoustics run through Marshall amplifiers. (The difference is fully realized when one listens to the electrified "Haven't Slept in Years" on Raygun.)

Has there ever been an answer on why Matt used acoustics instead of electrics?  if he didn't own one at the time, he could have borrowed or rented one. It would have made a difference, not that I don't like the current version of Astronauts. 

Edited by mrtrufflepig

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It's interesting to think that they went into Astronauts as a three-piece since Dave was only brought in to play keys. If they ended up not liking Dave, would they have just continued as 3 or still looked for a guitarist. 

 

 

Has there ever been an answer on why Matt used acoustics instead of electrics?  if he didn't own one at the time, he could have borrowed or rented one. It would have made a difference, not that I don't like the current version of Astronauts. 

 

 

The version of the story that I've heard is that he was writing and performing acoustically until someone told him he was writing rock songs. So, he didn't own one. My understanding is that it didn't really occur to him ...

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This is a great thread.  I literally didn't know anything mentioned above.  Please continue and tell us more about the recording process.

 

I've often wondered how/why artists become indebted to record labels.  Can someone explain this?

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That's a long question my friend, I can link to some great articles. I remember during Matt's Q&A his answer for everything was usually "economics", I never really understood what that meant until I started digging.

MusicianDivide.jpg

Those costs broken down:
 

 

SLRP: The suggested list retail price of a CD is currently $16.98, while the standard wholesale price — what retail stores pay the label per CD — is about $10. Once the retailer gets the CD, they can sell it for however much they’d like — hence “suggested.” Artist’s royalties are a percentage of the retail price. Superstars can get 20 percent of the SLRP, but most get 12 percent to 14 percent.

 
Packaging charge: 25 percent of the SLRP goes back to the record company immediately for what’s called a “packaging charge” — that’s the label literally charging the artist for the plastic case in which his or her CD is sold.
 
Free goods: In essence, “free goods” are a roundabout way for labels to discount records so stores will be more inclined to buy them. So rather than sell Best Buy 100,000 records at the regular wholesale price, the label will sell them 100,000 records for the price of 85,000. The artist is then paid for the 85,000 CDs, not the actual 100,000 sold to the retailer.
 
Reserves: Records, especially records by newer artists, are generally sold with the caveat that retailers can return to the label whatever copies they don’t sell for a full refund. Thus to ensure they don’t lose too much money on artists, record labels will sometimes pay artists for only 65,000 copies out of 100,000 copies, just in case 35,000 (25,000 if you consider the free ones) are returned. If the retailer ends up selling all their copies, the label will then pay the artist the balance owed, which can sometimes take years.
 
AFTRA and AFM: These are the musicians unions. Singers join AFTRA (the American Federation of Television and Radio Artists), while players join AFM (the American Federation of Musicians). If an artist cuts an album, he has to join a union, which will then take $63.90 in base dues plus 0.743 percent of the artist’s first $100,000.
 
Record advance: Unlike touring fees, of which the record company can only recoup half, record advances are 100 percent recoupable. That means that if the label fronts an artist $75,000 to pay for whatever he or she needs to record an album–studio time, new instruments, etc. — the artist then owes the label that initial $75,000, regardless of whether the record is a success or not.
 
Distributor: Music distributors are entities designed to promote and distribute records. The major labels maintain in-house distributors, while most all indie labels use private distribution companies. For smaller bands’ records, the distributor can take as much as a 24 percent cut of the SLRP; bigger bands might only be charged 14.2 percent.
 
Songwriter/publisher: If an artist doesn’t write his or her own music, someone else has to. And someone who writes a song must first go through a music publisher, whose job it is to place that song with a recording artist who will agree to perform it. If an artist buys the song, the writer and publisher then receive 9.1 cents for every copy of the song sold, a sum they must then split.
 
Personal manager: This manager guides the career of the artist and gets about 15 percent of the artist’s gross earnings.
 
Business manager: This manager is the artist’s money man, making sure the musician repays his debts and invests his earnings wisely. A business manager charges 5 percent of an artist’s gross.
 
Lawyer: While it’s not always the case-many charge hourly-some artist’s lawyers charge 5 percent.


source: http://minorityfortune.com/liabilities/how-much-musicians-really-make-in-the-industry-part-i/


From the little guy to the big guy, every artist has to deal with it. Some get stepped on more than others, but it goes to show how we assume even the most popular artists have it good, when it fact they don't. Even Mozart had to find investors & funds to keep working. The system existed since the dawn of time, that's why we stick it to the "MAN". 

https://www.youtube.com/watch?v=37oJqWp4rJM


Top 10 Artist vs Label battles, 2. dedicated to our recent loss Tom Petty.
 

2. Tom Petty vs. MCA (1981)
Tom Petty took a hard and vocal stand in 1981 against his label's plans to raise the price of the band's highly anticipated fourth album "Hard Promises" to a premium of $9.98. Holding back the release of the album and threatening to name the record "Eight Ninety Eight," MCA relented, but by then, Petty had already long won the respect of the people while also proving himself a master in the game of chicken. In 2002, Petty would up the ante releasing "The Last DJ," an apocalyptic rebuke of the entire music industry.
Winner: Tom Petty

Source: http://www.billboard.com/biz/articles/news/1196982/artist-vs-label-from-petty-to-nelly-ten-infamous-music-industry-spats


As I was flipping through my Buckley book earlier today I stumbled upon another example of how quickly debt can add up.
 

Merri Cyr described the shoot for 'Last Goodbye' as a clusterfuck. Cyr, to her credit, did her best to defend Buckley. When she learned that the catering for the clip was coming to somewhere around $10,000, for two days worth of food - the rumoured cost of the video was in the vicinity of $300,000.


Then you take a step back and look at how big some of Matt's music videos used to be, renting out the pacific Coliseum? someone's paying for that. I can't stress how important this new documentary being filmed about the 90's Canadian rock movement is our VH1: Behind The Music version of what happened to our favorite bands, it's ugly. Hopefully Matt can meet up with the director and get interviewed because all his peers are in the movie, his story is just as important.

https://www.facebook.com/RaveDrool/videos/673489176183062/

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Here's how it used to be:

 

Artists get an advance from the label to record an album.  Essentially, the artist won't receive another dime from album sales until that advance is paid off.  However, the label also puts a lot of the promotions cost against the artist as well.  What essentially happens is that, after creative accounting, the advance is almost never paid off, so the artist never gets another dime from the album.  (Some bands opt to take larger advances, spend less on the album, and pocket the rest, knowing that's about all they'll get from the label.)

 

In the old days (specifically speaking about US major labels), an album would seemingly have to sell over three million copies before the artist would get a payout.  Basically, it had to sell so many copies that the label could no longer hide the revenues through creative accounting.

 

Back then, bands basically accepted that they would make most of their money through songwriting royalties, merch, and touring, so they tended not to worry about album sales and let the labels keep what they could grab.  Today, album sales are so small that most major labels require artists to sign what are called 360 deals, where the label gets a cut of the merch and touring revenue.

 

In my mind, it's made a bad industry even worse.

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But the positive side to such a gloomy sight is some of the most popular artists today are on indie labels or independent. There's artists getting popular off social media alone, guys like Mac Demarco, Chance the Rapper, Bon Iver that sell a ton of albums with no major corporation pushing them into debt. Reality is that major labels are becoming irrelevant with the power of social media. There's always going to be the top of the food chain that can get their songs on the radio, soundtracks, decent festival slots.

 

But a growing number of musicians are starting to grow in popularity on their own without having a disgusting amount of debt. So I can agree that there's an incredible amount of benefits with joining a major label that can get you into rooms & shake hands with important people, or throw stupid amounts of cash at you with an IOU attached to it. But at the end of the day it is a business. More cons than pros in my opinion. 

The same can be said about the film industry, indie films have been slowly creeping into the mainstream & getting alot of recognition. 

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I'm surprised that Top 10 "artist vs label" list doesn't include Prince vs Warner Bros. Heck - the guy changed his name to an unpronounceable symbol in order to get out of his contract and performed with the word "Slave" scrawled on his cheek.

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That's a long question my friend, I can link to some great articles. I remember during Matt's Q&A his answer for everything was usually "economics", I never really understood what that meant until I started digging.

 

MusicianDivide.jpg

 

 

 

Firstly, thanks for the background info!  Secondly, this infographic is pretty shocking.  I always knew the artists were getting next to nothing but I didn't realize it was this little.

 

I remember years ago MG talking about an advance.  I think he owed the label a pile of money when MGB broke up.  Crazy.

 

Today, album sales are so small that most major labels require artists to sign what are called 360 deals, where the label gets a cut of the merch and touring revenue.

 

In my mind, it's made a bad industry even worse.

I totally agree.  That seems like a horrible direction to take art. 

Edited by patrickjnixon

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Sidenote is I can't really find anything about Darktown records, Matt seems to be the only artist under that label & only for Underdogs. So it might have been a short lived relationship that got bought out by Universal. He was with A&M previously only for a distribution deal so they likely wouldn't have given Matt any money to go off and make something.

 

I can't find anything online that supports this but going from memory, I think Matt created Darktown and was going to release Underdogs under this label prior to brokering the deal with Universal?

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Wow, I never considered it might be his old label. 

I watched Sonic Highways today & came across an interesting fact that producers actually get paid 'points' off albums sold. "Producers are, in fact, paid a percentage of the artists' royalty. So, for instance, an artist earning a 17 percent royalty (under their recording contract) might agree to pay the Producers a 4 percent royalty. This leaves the artist with only 13 percent."


Steve Albini recorded The Pixies & Nirvana, had this to say about the subject on Sonic Highways:

 

 

the session I did with Nirvana (In Utero) was conducted under the same terms as I'd do any session with any band then or now, we'll figure out how much it's worth to do the session, you pay me and bob's your uncle. Within the music industry my business practices are somewhat unusual. Normally a band would be paying royalties to the producer, engineer or whatever. from an ethical standpoint i think it's an untenable position for me to say to a band "I'm going to work for you for a couple of weeks, then for the rest of your fucking lives you're gonna pay me in tribute". 

 
If I spend a certain amount of time on a record and im paid for the time I worked, then im content. I just dont see any reason to extend the bands obligation beyond that, that's an unusual position within music industry. Totally normal if you're a plumber or a carpenter, spend a X number of hours working on a house & get paid for your time "Hey look the house is still standing after 20 years, maybe I should get a bonus for that?" - Steve
 
I can only imagine what Steve Albini could have made had he taken points on that record, but rather he decided to be paid like a plumber, a shot shit plumber, but a plumber. - Dave Grohl


I agree with the idea that the producer is there to document the moment for the band, not take part in ownership. It makes sense why Rick Rubin is worth $250 million though. 

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Guest girl

Debt doesn't just accumulate from recording albums unfortunately, touring & music videos add up quickly among 100 other things a label can stick to you.

 

I wonder how much the music video for Guns N' Roses' November Rain cost, the greatest masterpiece of all time. It is still timeless to this day. I noticed that it had 874,597,795 views on YouTube today. I can't fathom that number. I must have watched that video a million times.

Edited by girl

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Wow, I never considered it might be his old label. 

 

I watched Sonic Highways today & came across an interesting fact that producers actually get paid 'points' off albums sold. "Producers are, in fact, paid a percentage of the artists' royalty. So, for instance, an artist earning a 17 percent royalty (under their recording contract) might agree to pay the Producers a 4 percent royalty. This leaves the artist with only 13 percent."

 

 

Steve Albini recorded The Pixies & Nirvana, had this to say about the subject on Sonic Highways:

 

I agree with the idea that the producer is there to document the moment for the band, not take part in ownership. It makes sense why Rick Rubin is worth $250 million though. 

 

He's had a pretty long and varied career.  The number of artists he's worked with is very impressive.

 

It is bizarre for the producer to get royalties from the album.  They're looking to make the most money they can like everyone else, I guess.

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I wonder how much the music video for Guns N' Roses' November Rain cost, the greatest masterpiece of all time. It is still timeless to this day. I noticed that it had 874,597,795 views on YouTube today. I can't fathom that number. I must have watched that video a million times.

I just added another view.  hahah  Love that song and video!!

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There ya go girl, got it off wiki.

 

"Particularly, it can be noted for its large budget (about $1 million, including Seymour's dress) and sweeping cinematography by Mike Southon, which won an MTV Video Music Award for Best Cinematography. It is one of the most expensive music videos ever."

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