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Indie Alert: Are these people really scammers?

By: Anthony MacFarland

Recently my email box has been flooded with music topics and questions ranging from scams to self-promotion, labels and distribution. Let's proceed.I will be covering lots of very cool music info for you to absorb. Learn it well and keep yourself informed.

| Name Dropping | Paying For Reviews | Value of Review Services

| Indie Label Deals | Major Labels | Artist Development Companies |

| Managers and Management Services | Compilation Companies | Single Song Sale Companies |

Here are the facts about scams and this is the only phrase worth learning, "There are no scams, just illegitimate companies that do not provide the services they indicate." This will keep our indie brethren safe from slander lawsuits and properly informed. Most of the time the word scam is used irresponsibly and illogically. Be careful with that word, as it could cost you a pretty penny.

The majority of so-called scam companies probably don't even know they are perpetrating a scam. Remember, the Internet is new and world-wide, so many people will have delusions of grandeur thinking they will make a lot of cash off of bands by providing a service. But the issue is, are the services real???

The word scam is now overused and borderline pretentious. I gave up my NMC Scambuster division 8 months ago because I became bored annoying "scam" companies. Yes, I was also tired of being physically threatened and potentially sued. Yes, I put a lot of scam companies out of commission and saved many indie brethren a lot of hard earned cash. But in the end, scambusting was monotonous and energy absorbing. Sort of fun though!

Name Dropping
Legit industry music people do not have to flower their conversations with "who" they know. They have the track record and don't mind showing you their resume or letting you know their past and present employers. I always approach industry service people like this: "Well, if I have to pay you thousands to provide a service, I would like to know where every cent goes!" Look for companies that quote prices up front and have a ready itemization ledger for you to review. Negotiate with them. :)

For example, I have personally dealt with or worked with guys like Michael Shapiro (Fleetwood Mac/Wilson & Phillips/Starship) all the way to the current John Alcock - current major label advisor (produced Thin Lizzy, J.Entwistle, The Who). Also, I'll be co-producing with Ken Scott shortly (Duran Duran, Beatles, Supertramp, Missing Persons, David Bowie) for my own album. I have been offered contracts by many major industry people. Yes, I have contacts up the wazoo.

B I G D E A L!!! Who cares? It's name dropping! It's no big thing!

Bottom line - What can someone do for you that will help your career?
Is the service they provide worthwhile to you?
Does it make sense?
Do you want to stay indie or go major?

That's all you need to know - the real facts. Just because someone has good contacts, it doesn't mean a thing. What's a contact if they don't like your music? Worthless. That's why it's vital that bands know up front if a potential contact has real interest in reviewing their music material before they go with the company. Never pay to be reviewed!!! You pay for services.

Paying for Reviews
If the fee is low and the person reviewing you is a genuine modern-day A&R person or a producer with track record, then maybe. This is a gray area but not necessarily a ‘scam.' To say a review service is an outright scam is wrong. Why? Because you pay producers like Steve Albini (Nirvana) and Daniel Lanois (U2) to review the artist material and to use their knowledge to make songs better for commercial appeal. To say reviewers are scammers is basically calling anyone in the review industry a scam. Geez, I think we've found the new witchcraft of the late 1990's, Everyone's a scam. Look before you leap and watch what you say. Stay away from slander lawsuits.

Judging the Value of the Review Services
This really concerns how much value an individual musician or band place on having their music reviewed. Some bands aren't sure about their song structure or can't make an unbiased opinion of their own music. That's understandable. Especially when all of your friends say you're good. A review service may be specialized in several music genres. Check out their credentials first.

Indie Label Deals
Legit industry people will not charge the artist if they are signing them to their label. There is an exception - they may be a low-budget indie who are willing to construct a worthwhile deal to make you a 'partner' in the deal. Deals like this require legal counsel by notable industry music attorneys, not Uncle Bob's lawyer friend. Do not venture into deals on your own or you will pay dearly. I know, I currently work for an international new age label that has sold millions of albums and has had many licensing deals which went sour.

Some indie labels are actually compilation labels. Most of these labels do pay for the compilation CD fully themselves. Sometimes an indie will structure a deal with a band, We'll distribute and promote you to radio and you manufacture product as needed. Clear the contract with an attorney first.

Major Labels
When you say major label, you are saying "SHAREHOLDERS & CORPORATE MANDATES". When you say Indie Label, you could be saying you're poor and have no real distribution or big promotion budgets. Major labels were once artist-driven development companies. Today, they are professional dart throwing machines and they can't even get that right? Once in a while they land a Spice Girls or a Hanson, but since most Majors are owned by unrelated corporate giants like 'Matsushita,' the term Artist Development and Endurance has been put on the back burner - sad but true.

Corporate mandates have pushed A&R executives to meet the specified revenue increases by a certain time period or they face cleaning out their desks. That's reality, real people under pressure. The shareholders demand these corporate mandates. The shareholders could be any relative of yours or even the bank that
protects your money. It's an incredible monetary web that reality weaves. No one is an island if you're in the music biz. So it is important you read and learn about the industry you're in or you can remain a weekend warrior band and not suffer ulcers.

If someone presents you with an awesome proposal which costs you thousands and has you thinking you'll be famous, then most of the time it is safe to say it is not legit. No one can make you famous unless they are rich and willing to dump thousands of $$$ into your career! They must have general licensing to one of the six major majors or else you will be facing indie distribution hell and 5000 unsold CDs in your living room. Never pay someone to make you famous unless they are willing to meet you halfway with a few hundred thousand dollars!

Artist Development Companies
Artist development companies are becoming more abundant because of recent layoffs within the major music industry. So there will be a lot of ex A&R reps out there starting their own artist development companies. This is a gray area and one must be very careful not to slander these people or you could end up losing your house and guitar equipment. Try to avoid these development companies, they need a lot of money. A few will be legit and if so, they won't be afraid to tell you who their contacts are. Why? Because this is the late 90's - you can reach any contact they have through industry source books like ‘The Music Industry Source Book' (grin). Many established bands use these type of companies because the artist developer has good rapport at major or indie labels, but make sure it's true first. If you can't afford this service, don't even look into it. It costs thousands. Moreover, their services should be properly itemized on how they plan to spend your thousands. If there's no itemization, look elsewhere or do the legwork yourself. I call these folks
music brokers. They essentially have liaisons with many industry people and radio personnel. I know several, but they are very selective as to who they work with. Be careful you are not dealing with a company that doesn't share their contact base with you for referencing or a printed "pre-clearance verification" for you to review. If they are secretive, then say goodbye. They may be a scam - why risk it? Name dropping is quite powerful in this biz. Don't be lured in with carrots that look and feel good. They may end up tasting like sour grapes.

Better solutions for these ex A&Rs to make money: They should turn themselves into real management companies or booking agents. Maybe even start a management service company and charge for designing bio kits or promotion schedules for new artists. But not charge thousands like several companies I know.

Managers and Management Service Companies
If Joe Shmo MGMT SVC says he will professionally package your band and mail it to MCA Records contacts he has, he should charge you for the mail materials, the gas to the post office and back, and the follow up long distance calls to that label. Don't forget the 2 to 3 hours that Joe Shmo worked on your behalf. If Joe Shmo asks for a percentage of a signing deal or finder's fee, tell Joe Shmo to offer you a professional MGMT deal or finder fee quote and he gets no up front money except a monthly stipend to cover office costs. This is very normal for "new" non-established management companies. Established companies can afford not to ask for monthly stipends because they generally work with established artists. Remember, managers are contracted to work for the artists. Artists do not work for their management companies! Respect goes both ways. If you have a know-it-all manager who likes to tell you what to do in a disrespectful manner, then it is time to fire your manager. It is so easy to break management deals - ask any "real" music attorney :)

The type of companies and services that bands should seek to help their career are management service companies who are knowledgeable in the music biz and if they have publishing knowledge, that's a plus. Track record is important, but what you should mainly look for in management service companies is - a good organizer, a good speaker or rep for the band, a good designer, sensible business person, a team player, music knowledge laden, verifiable industry contacts if they are not new to the biz.

Fees - if they are not contracting themselves as professional personal or business management, then ask to see if they sell services like bio kits, graphic design, or if they would do subcontract work in music promotions. Some management companies now provide publishing in-house. Remember, never publish your work with someone who isn't going to promote your song catalog. It does not make sense to publish with someone who doesn't at least post a few of your songs in their own management promotions or samplers. Think about this before you assign certain rights to your songs to a company.

Compilation Companies
Here we go again... Sorry to say, Compilation companies are really looked down on by industry people. Most of the people I have worked with in the major industries think compilations are scams and highly unethical. But with careful this theory. I have deemed that not all of them are based on the following realities:

Definition of scam - Doing something for someone for monetary gain but not delivering the expected goods or services.

Logic - There is nothing wrong with a company being paid to coordinate an activity as long as they do what they say. When they don't do what they say, it is an illegitimate service. But one must always weigh the monetary value against the service any company or individual proposes. This makes sense in all cases. To
deem any comp company a scam is quite ridiculous unless the facts are undeniably real.

What about the phrase, ‘value for services?' How do you gauge this for all bands? You can't! In fact it is irresponsible to typecast all compilation companies as scams. There are a few who are sensible and knowledgeable.

More Logic - Some bands join compilations just to be on one. No other reason. Maybe they're rich, or they like being part of a team effort to release something which is cheaper than buying a thousand CDs on their own. Or, they see it as real value to some degree. But it is highly unethical for a third party to denounce compilation companies in general. Some bands refuse to buy thousand CDs knowing they can't move a thousand CDs! Maybe we should call CD manufacturers who sell 1000 CDs to indie bands as scams too??? Not once have I received a "how to" book from a CD manufacturer on moving a thousand CDs - hehehehe - just being mean. See? we can call anything a scam if we put our mind to it. Be careful of that word again!

Here is the logic behind anti-scammers who say compilation companies are illegitimate scammers:

    The compilation company contracted 20 bands to one CD and charged them $200 a piece.
    Okay: $200 times 20 = $4000.00
    Let's see what a legit compilation company does:

    1. Prints the specified number of CDs. Example: 1000 CDs with "4 page booklet". Average price: $2400.00 for professional standard issue. Discount houses: $1700 to $2300.00
    2. Mailings to 300 radio stations $700 for postal fees and packaging.
    3. Inter-office materials: paper, long distance follow up calls, etc. $300 to $500

    What's left? $500 dollars maybe or less? Number of hours a comp company commits to this project should easily answer for the need for $500.00!! If you don't think so, I'd like to see someone coordinate 20 bands for a comp in 10 hours. Don't forget the promotions, follow up time and industry knowledge learned by pro comp companies.

    NOTE If Items #2 and #3 are not performed - then the comp company is an
    illegitimate service. Please remember this fact.

A good comp company:

If they charge for their service - they give a receipt!

They will tell you exactly who they are presenting their comp to and they will provide you with that information without any hassles. This is the late 90's, no legit compilation company will hold that information from you. If you decide not to use that company and bypass them for their contacts, then so what? The comp company shouldn't care in this day and age. Bands buy into comps because they like the people at the comp company and their track record for getting comps out and doing all the interoffice hassles. There will always be many bands who do comps because they like doing them! Personally, my band likes comps but my record contract will only allow so many those are genre-specific as well I would do Kathode Ray compilations if I wasn't signed in a heartbeat. Dave's a great guy and hard worker.

If you pay for a comp, you better get some CDs in return so you can recoup your costs for the compilation. Some anti-comp people say that compilation companies get rich off selling the other CDs - hahahahahha!!!!!!! Since when??? Ask Mercury Records how much money they lost on the Kiss Tribute album and that was a specific genre comp. :)

People in general don't buy eclectic comps. Bands could possibly sell 30 to 50 on their own but few of them actually do. A comp company could try to sell off the extra CDs but they'll go broke doing so. I know, I watched many try. No, comp companies can't get rich selling off the extra CDs!!!! If they do, I would want to be on that comp and demand a royalty for my song!

Comps were intentionally designed by indie bands to offset their own costs to put out a product for A&R review. Today, there are many efficient companies that can do the comp process better than most indie bands. Some of these comp companies are really dedicated in getting their artists heard.

Permit one time licensing only for that one song you release to the compilation company and limit the number to only what they propose. If their contract says they can print as many comp copies they want, then tell them to send you a record contract with an advance proposal.

Make sure the compilation is going out to the places you expect it to go out to. If there twenty different bands on the comp, then verify your band will be pointed out at the right radio stations for airplay or A&R review. Note: Unfortunately, most comps are trashed by many A&Rs, but there several who do listen to comps. Especially, the famous Foundations Forum Comp. Ask the comp company if they have solid contacts with A&R who have pre-cleared reviewing of the compilation. If so, it may be a good shot for $200 to $300. It might be! Just be careful about comps and get the facts up front.<

Telltale signs of a possibly illegitimate compilation company:

They have reprint rights to create more comp copies than the initial number specified. This wouldn't make sense anyway. If they do, they have to write up a real licensing contract with each artist on the comp that
will outline the logic in this. Seek a lawyer regarding "undying comps."

The hiding of their so-called industry contacts. This is the late 90's. There is no need to hide contacts anymore. All information on industry contacts is publicly available now. Join a music organization. Sometimes certain people who are in the major music industries preferred to be referenced as "pre-cleared contact" on comp company references to new artists. This lets the artist know up front that the comp company has a good rapport with that A&R or radio person. Sometimes it is not good for artists to directly solicit the major music industries or larger indies because of time consideration or proper submission formats. Warner Brothers tells you exactly how to get a hold of them at their main phone number. They tell you to join a music organization and secure contacts that way or affiliate with an affiliate of their company. How does one do that? Find a damn good manager or management service company.

Bands forming their own compilations:

Go for it!

Make sure an agreement is drawn up between all bands participating on the comp to protect each others' interest.

Find one or two people to coordinate the activity. Award this person or people with a few more CDs for their hard work. Tip! You might seek a management service company or record label person who can help make the comp happen. Subcontract them if necessary. But, never sign a comp over for continuous reprint rights!!! Bad move. Band cooperative comp masters should be destroyed once the agreed upon number to print has been reached unless there is a possible reprint in question. In essence, if you are a true indie, you subcontract services if you can afford it by real industry people who know the biz. If you do subcontract these people to help your career, do not expect to be rich and famous. Bad mistake. Be real about it. This is the music biz we're in comrades. Signing on the dotted line doesn't mean a thing. A verified $300,000.00 promotion schedule behind you does.

Single Song Sale Companies
Believe it or not, but the NET is still a new place that is constantly changing from day-to-day. As new NET technologies emerge, so do new money-making opportunities for the entrepreneur spirit. But sometimes this spirit can be quite dangerous to the unsuspecting musician who has invested so much time and money into their craft.

Recently, a slew of new companies have hit the NET looking for bands to contract individual songs for resale on the NET in an exclusive manner. What they do is ask the musician to give them exclusive right to their song so they can sell the song by downloading it to a customer's hard drive for a fee. On the onset this looks very good if you can get alot of people to make it worthwhile. Of course the musician is paid a royalty rate and possibly a percentage of the profits as each time the song sells.

On the other hand, this is quite dangerous to the music artist. If a band or solo project contracts out their song for a number of years to a company for the purpose of resale under exclusive terms, the band may be facing a major dilemma if a third party, a record company for example, takes interest in the band. Keep in mind, the band that has contracted to an exclusive agreement with these single song sale
companies has just forked over their rights to the songs when they signed the single song deal. This means complications for the band, the single-song sale company and the record label.

The problems that arise are, the single-song sale company wants a return on their investment for promoting and selling the band's song to the NET public. That is why there is an exclusive arrangement with the artist that ties up a song or songs for a few years or more. This exclusivity can be a bad situation for a band that seeks a record deal.

How's that? Record companies generally do not want to get tied up in litigation or bickering with another company for the use of an artist's song or songs. It's much cheaper and simpler to sign bands that are free and clear from exclusivity deals. Keep in mind, any single-song sale company can put a price tag of their own choosing to release the song from the exclusivity deal with the artist. This can be quite expensive and very unattractive to a record label that may not be interested in such a situation.

Basically, it is up to the band (with their lawyer) to negotiate any exclusive deals with non-record companies to prevent possible future problems that could occur in signing to single-song sales or the assignment of publishing rights for the artist's songs. I'm pretty sure there are single-song sale companies out there that are very good to work with and do not plan to monopolize the NET and kill the dreams of new artists!

There are no real music scams out there, just misinformed people trying to make a living in the music biz. If you sense a company is doing something unethical, tell them nicely and keep a running track record of your conversation with them. They probably don't know they're even pulling off a scam!! It does happen and there is ALWAYS room to educate. I have educated many companies in the past in the wrong way by directly calling them scammers. Today, I tell them that their activities are questionable and I do not see a real service value. Usually, they'll respond nicely if you are nice. If something doesn't make sense to you, I guarantee it will make sense to another band. "No on can judge the value of services for another!" If a company does not answer questions to your liking, then look elsewhere - that's it.

I recently came across a music company that is providing radio promo services for indies. They said that they can make a lot of bands famous because they have a lot of radio contacts. Their fees were in the several thousands and their radio contact base was with low watt stations. I advised them to lower their prices because 10 watt stations are not very appealing. Also, I told them that they can't make anyone famous, the listeners do. 10 watt stations are limiting but they can create a grass roots buzz if the band is good. Look at REM.

A friend of mine said the above company was a scam. I told my friend to get a life. Be real, only dumb musicians will pay for overpriced radio promotion services. An indie radio promoter for 1998 should charge for the mailings, long distance calls, and their time they expect to work on your project. They also should "itemize" their services and the little costs that go in between for envelopes, etc.

Ask for your money back if the services aren't performed as indicated. Keep your receipts. If they do not pay you back for lack of service, then you can cry "SCAM!" Never ever say a certain company is a scam publicly without solid proof indicating so (stay smart) - we call this slander in the USA mainland. You can lose everything you own for slander. Fact - not fiction. Go to the legal library and research the statistics. I have read many cases on scams and seen misinformed people lose their shirts because they had no proof or legal receipts of transactions. If you see a scam, then avoid it - done deal. Just a short bad rain storm. Also, each US state varies in regards to valid receipt documents for court cases. Consult your attorney regarding your state laws or possible legislation regarding commercial service transactions.

If you've been scammed, and you have no proof, then eat the loss and learn. Or you can spend thousands dragging the case to court. 9 out of 10 times you'll end up on the losing end unfortunately. Sad but true.

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