The phrase “Industry Standard” has no meaning. It’s mirage, a diversion to throw bands off their game. The words have become so overused in all aspects of the music industry that people now take “industry standard” at face value. Yes, some rates/percentages/payments have a standard translation, but the meaning is based upon common practice from year to year. Because the industry changes daily, when someone drops the “industry standard” bomb on you, challenge it. Unfortunately people don’t combat the phrase and bands typically become steamrolled because of it. Who are you to question it? If a label offers your band a deal at a 13% royalty and they tell you the industry standard is 12% – question them and you appear avaricious. If an attorney is willing to work with you and they claim the retainer rate is $15,000 based upon the industry standard – how do you know any different? Who are you to question industry standard? Exactly! The words are nothing more than a negotiation tactic. Belittle the other party, flex your experience muscle and surely they’ll accept “industry standard” at face value because you’re operating at a level in which they hope to achieve. Confront it. Challenge the words every time you hear it whether coming from an attorney, manager, agent, label, producer or publicist. Bands aren’t the only group taken advantage by the phrase, producers hear it from labels, agents hear it from managers, managers hear it from attorneys, and so forth. It’s truly the evil cycle. Here’s 3 ways to dismantle someone when they drop the term:
1. Demand an Evaluation
When you hear the words, ask the following question – “based upon your professional experience what makes that the industry standard?” Make them give examples. Make them clarify why the trend is different now as opposed to previous years. Push it. If you hear some fumbling and grumbling or any answer resembling “that’s just the way it is” – you just delivered a chink to their negotiation and reputational armor.
2. Matching Terms
If the offering party is holding strong with their “industry standard” argument, ask if they’ve ever issued better terms. When they say “no” your reaction should be “GREAT, than you’ll have no problem implementing a favored nations provision in our contract, right?” Essentially if the offering party ever issues more favorable terms to a client in the future, your terms must match it. Take advantage of this contractual tool (i.e. favored nation provisions, aka favored nations clauses, favored nations, most favored nations, or favored nation customer). This drives people crazy. They find themselves so deep arguing in favor of the “industry standard” that they’ve backed themselves into a corner and can’t reject the favored nations provision request otherwise they appear flighty.
3. The Second Opinion
It seems so basic, but seek a second opinion. The offer received may very well be “industry standard” but tell the offering party that you’ll need to confirm their figures by seeking a second opinion. If they understand your request, they’re likely shooting you straight with the offer. If they resist – walk away – you just dodged a bullet.
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