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Erin M. Jacobson featured on Forbes.com

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Categories: Articles, Business, Music Contracts, Music Industry, Record Labels, Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

I am honored announce I am published on Forbes.com.  My first article for Forbes discusses Frank Ocean’s decision to go independent after his split from Def Jam.

Below is the text of the article and stay tuned as more will be published!

Checkmate:  Frank Ocean Goes Independent

By:  Erin M. Jacobson, Esq.

Originally published at Forbes.com.  Also reposted at Hypebot.com.

Frank Ocean has chosen the road less travelled for major label artists. He recently split with Def Jam, independently released his latest album, Blonde to chart success, and has refused to submit the album for Grammy voting consideration. While a major label deal was once the holy grail of industry success, what does it mean for artists in today’s industry?

Def Jam released Ocean from his deal in September 2016, a relationship described as “a bad marriage” by Spin magazine who also reported that Ocean’s release from his deal was negotiated. A condition of the split allowed Def Jam to distribute Ocean’s album Endless, while then freeing Ocean to release Blonde under his own imprint. In a recent interview for the New York Times, Ocean described his deal with Def Jam as “a seven-year chess game” and used his own money to buy himself out of his contract and reclaim his master recordings.

Ocean’s “seven-year chess game” refers to the seven-album deal structure typical for major labels. Major labels will sign an artist to a seven-album deal, meaning that the artist is obligated (often subject to pick-up options exercisable only by the label) to release seven albums with the label. This concept can be deceiving to those who don’t understand the structure because the length of the contract is tied to the number of albums released rather than a term of years. Fifty years ago the industry moved at a pace where an artist could release at least one album per year and then be done with the contract in seven years. However, artists today often take more than one year to write and record a new album, often not getting back in the studio until being on the road for almost a year after a prior album’s release. The reality of this schedule means that it often takes two years or more before a follow-up release and thus locks the artist into the contract for as long as it takes to complete the seven albums.

What is more unique about this situation is that Ocean not only bought himself out of the contract, but bought out the rights to his recordings as well. Major label (and most independent label) recording agreements stipulate that the label will own the artist’s recordings, as the label is usually fronting the money to make the recordings. Recording agreements don’t automatically come with the right to buy back masters; that clause is usually included via a good music attorney that knows to negotiate for it. However, many artists that have buy-back rights included in the contract don’t get to exercise those rights due to lack of funds. Ocean was in a privileged position in that he was able to accumulate enough of his own money to meet what was probably a hefty price for his freedom.

Ocean’s move towards independence echoes the increasing trend within the industry to control one’s own destiny and retain ownership of one’s work, a view shared by the majority of my artist clients. Today’s artists relish being independent, but the challenge is remembering that a music career is not only creative, it is also a business and needs to be run as such. Ocean seems to have that mentality. “I know exactly what the numbers are,” Ocean states. “I need to know how many records I’ve sold, how many album equivalents from streaming, which territories are playing my music more than others, because it helps me in conversations about where we’re gonna be playing shows, or where I might open a retail location, like a pop-up store or something.” This level of attention to detail is essential for independent artists looking to build a lasting career.

Ocean’s fame earned while he was backed by a major label puts him in an advantageous position because he has already accumulated a fanbase whose continued support will earn him a lucrative living as an independent artist. Artists in this position no longer need major labels because they have enough fame, opportunities, customer loyalty, and cash flow to finance their future efforts. It is much more difficult for artists still building their followings to achieve the same level of success outright, but many independent artists now look more towards making a living off of their music rather than superstardom. In today’s market, ownership and control of one’s work coupled with keeping a majority of the profits entice artists more than a major label’s deep pockets. As Ocean said:

It started to weigh on me that I was responsible for the moves that had made me successful, but I wasn’t reaping the lion’s share of the profits, and that was problematic for me.”

*This article does not constitute legal advice.

Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogues, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection.

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5 Music Companies That Will Disappear Within 5 Years

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Categories: Business, Digital Distribution, Music Industry, Record Labels, Tags: , , , , , , , , , , ,

Paul Reskinoff predicts that Pandora, one major label, Spotify, Live Nation, and MySpace will all be just a memory within the next five years.  Why?  According to Reskinoff, Pandora does not have a sustainable business model and its founder Tim Westergren has been liquidating his available shares.  The major label model continues to crumble in the digital age; Spotify and Live Nation have been continually losing money, and MySpace has lost its relevance.  Keep a watch on these companies to see if Reskinoff’s predictions become realities.

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Interview with Carl Caprioglio of The Oglio Entertainment Group, Inc.

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Categories: Business, Crowd Funding, Management, Music, Music Industry, Music Industry Interviews, Record Labels, Tags: , , , , , , , , , , , , , , , , , , , , , , ,

Today’s interview is with Carl Caprioglio of The Oglio Entertainment Group, Inc., a great independent record label that is a lot more than just a record label.

Oglio 20th Anniversary LogoNow in its 20th year, Oglio achieved worldwide recognition as a successful niche marketer of entertainment products. Oglio releases have received acclaim and significant sales success including a Billboard Top 50 hit benefiting the Make A Wish Foundation, and projects with Brian Wilson (Beach Boys), Cyndi Lauper, Robby Krieger (Doors), Ray Manzarek (Doors), Nerf Herder, Parry Gripp, Kool Keith, Ultramagnetic MCs, Rob Schneider, Jackie Martling (Howard Stern Show), Andy Dick, Craig Gass, and George Lopez. Oglio’s growth has been significant enough to earn a position on Inc. Magazine’s 1998 listing of the 500 fastest growing companies in America. In 2013, Oglio extended into the management space with the launch of “Manage It Comedy” – a service designed to help the working comic manage their business. Manage It Comedy helps comedians release their merchandise to market, build a web presence and use social media to market themselves.

1.     Describe a typical day at the office.

One of the great things about being in the entertainment business is that there is not typical day. That said, I do have a bit of a routine that starts with attacking my email in box and checking all the regular social media sites for my artists’ activities. Once I have a handle on the mayhem that has ensued since the last time I checked those places, I write up my daily priorities on one of my office white boards and get to work. My office is in Torrance, a bit of a drive from the media centers of Los Angeles, so I try to set up a lunch meeting or two each week. My workday ends with more email and project development from home after dinner.

2.     What is your favorite part of your job?

To quote the great Hannibal Smith from the A-Team – “I love it when a plan comes together.” Whether it is a record that goes from concept to release or a licensing deal or a new direction for my business, the most satisfying part of my job is that feeling of that success when it comes to fruition. It really isn’t tied to money (although that helps) but it is more about that great rush of satisfaction.

3.     What are some projects that you are currently working on that you can discuss?  

On the record side we have two new releases – one from the metal bash-up band Beatallica that combines the sounds of Metallica and The Beatles and the other from comedian Craig Gass of Howard Stern Show fame. They are wildly different projects but both are personal favorites.

Recently my attention has been moving toward artist management. Over the years a few of the artists on my label have asked me about managing them, but I liked the label side and didn’t pursue it at the time. I’ve come to realize that I enjoy the interaction with the artists and bringing that interaction to another level seems like a natural move. I can provide the bigger picture help they need and still handle the label side if needed. It seems like a logical move and I use much of the same skillset that have developed over the last 20 years in business.

4.     What do you think are the most important issues facing labels and artists at this time?

Top of the list has to be the idea that music should be free and that both artists and labels can make up the income by selling t-shirts or touring. As a label owner and a friend to artists, I’ve had many discussions about how “fans” find a justification for stealing music. Despite the perception that labels and artists were caught off guard, we could see this train coming, but unfortunately we weren’t able to do much about it. For me I simply underestimated people’s willingness to steal and the ease of which they justify their actions.

5.     What do you think is the most profitable area of the music industry for independent artists today?

For your typical independent artist, I’m going to go with the new broad definition of “merch.” Merch (short for “merchandise”) now encompasses music, t-shirts, hats, hoodies, iPhone cases, tote bags, jewelry, USB drives and anything else you can put on your merch table or sell on your website. At one time the music part of the merch table was controlled by the labels but now that control is back with the artist in most cases. My favorite merch items are USB drives in fun shapes that artists can load up with not only their music but also videos, art and even a recording of the show from that very night. One of my artists, MC Lars, sells a small metal USB robot loaded with the music, videos and art from his album “This Gigantic Robot Kills” and it is a best seller for him on the road.

6.     What other avenues are still profitable for artists?

I see PledgeMusic and Kickstarter as great avenues for artists with a fan base that can be mobilized. I have seen PledgeMusic and Kickstarter album campaigns that have raised substantially more than the actual recording costs. The extra revenue goes right into the pockets of the artists and the artists then have the ability to sell their music for 100% profit from the release date forward. This is a very powerful tool available to artists that have a following.

7.     What types of deals are mostly being offered now among the independent labels?

In 1999, Oglio started offering “profit split” deals to artists that brought us recordings ready to be released. At the time it was a very unusual proposal but we felt that the partnership feel made for a more positive and collaborative working relationship. We treated our artists like business associates and we set our plans based on our mutual goals. Those deals worked well for both sides and Oglio was able to work with some legendary artists that would not have normally been interested in an independent label. I see those joint venture deals becoming more and more popular as artists have more control and labels look for ways to mitigate the risk involved in recording costs.

8.     What is an independent label looking for when considering signing a new artist?  Is there any criteria an artist needs to have to even be considered for a deal?

At Oglio it starts with the music. We have to feel strongly about the music itself and also its commercial potential. Every artist feels that their music is fantastic but the point where we often disagree is what we can offer as a label and still make a profit on the project. If the artist doesn’t have a fan base, touring history and traction, it just might be too soon for a label to get involved. We often turn down artists with the suggestion to self release and play live shows while they gain the momentum we would need to get involved.

Thanks so much to Carl for some very insightful comments.  To learn more about Oglio, visit www.oglio.com.