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 finds 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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http://www.youtube.com/watch?v=cztk_FyEOK0

What’s So Great About Argentina?

Let’s start with the disclaimer – as of recently, Argentina is often cited for having major currency issues, uncontrollable inflation and spiraling crime.  Even so, Argentina is a “must have” for Artists looking to grow an international fan base.  With a population of 41,000,000, Argentina is the most visited South American country.  Despite the negative press, the World Bank still ranks Argentina as a Upper/Middle income economy.  Couple the disposable income, large 30 yr. old age demographics, tourism and a booming city like Buenos Aires; and Argentina will likely become a global music hotbed in the coming years.

Music Trends

Referencing growth in the Latin American markets specifically refers to the big three: Argentina, Brazil and Mexico.  These countries alone make up 80% of the entertainment market in Latin America.  Digital sales in Argentina, in comparison to other countries have escalated to disproportionate levels – noting a +416% growth in digital sales in 2012 (much like Mexico’s market).  However, unlike Brazil, where there has been a boom in streaming services and visual content, Argentina has yet to hit that curve.  Despite the streaming deficiency, Argentina and Brazil have fantastic trade relations, and given Brazil’s upcoming global exposure (READ), Argentina’s musical infrastructure will increase in order to meet the Brazilian’s standards and touring channels should open up between the two countries.

What You Need to Know & Do

Argentina is fragmented into 6 macro regions.  Although penetrating each region is drastically different, the only focus for Artists should be the city of Buenos Aires.  Often called the Paris of the South, Buenos Aires is the most visited city in South American (beating out Rio De Janeiro) and is the 2^nd most visited city in Latin America (behind Mexico City).  To have success in Argentina, you must have success in Buenos Aires.  For newcomers to the area, focus on colleges in Buenos Aires or the Palermo neighborhood.  Pending on your musical style, it’s best to organize touring around the Universities and participate (or attempt to participate) on one of the three major festivals.  (1) Quilmes Rock takes place in April and contains several international based acts.  Although genre classifications vary from country to country, Rock in Argentina means Rock Music.  It’s rare that the festival roster ventures into Alternative Rock, Folk/Rock, Metal, etc. (2) Creamsfield Buenos Aires, typically takes place in November and is a massive EDM festival, while (3) Buenos Aires Jazz Festival also takes place in November and caters more to sophisticated jazz fans.  Both Creamsfield and Jazz Festival issue contracts to international Artists, both major and indie.

If you’re looking for label assistance, you won’t find much in Argentina alone.  Label discussions should take place regarding the big Latin American market (Brazil, Mexico, and Argentina), but make sure to address the different techniques you plan to use in each country (reference previous post on Brazil and Mexico).  Major and indie labels, promoters, managers and agents will have a larger presence in Brazil.

What You Need to Avoid

A few things you’ll need to avoid if you’re looking to gain traction in Argentina.  One, do not focus on promotions via social media or YouTube.  This is drastically different from the Brazilian and Mexican forms of promotions.  In Argentina, print media remains king.  If you’ve set a promotional budget, it’s important to spend it 1^st on print and 2^nd on radio.  Two, streaming and music videos do poorly in Argentina.  Billboard Magazine claims that internet based music revenue is generated via track sales (49%) while only streaming (1%) and music video consumption (1%) lag far behind.   Three, Latin repertoire dominates the charts as roughly 80% of radio is controlled by Latin Artists (but rarely Artists from Argentina).

Final Tips

• Focus all expansion efforts around Buenos Aires
• Spend money on print advertising
• Develop tours for Argentina & Brazil around November
• Capitalize on The World Cup & Olympics coming to Brazil.  Touring in Argentina means you’ll be touring in Brazil as well
• Assure that you have digital distribution, as track sales have shot through the roof
• Any EP release will be fine in comparison to album releases, as they statistically out number albums sales in Argentina
• Put little effort into developing visual strategies unlike the Brazilian market where Artists must focus on a YouTube presence
• Gain traction at the University level – regardless of your genre
• Seek label partners for marketing in Latin American.  Discuss with labels your strategy in the three key Latin American markets (Mexico, Brazil and Argentina by referencing the earlier articles)

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What’s So Great About Mexico?

With a population of over 115 million, Mexico creates a potential hotbed for multicultural acts.  Couple impressive music statistics (referenced below), with the booming nightlife in Mexico City, brand presence and passion for music, Musicians can’t afford to keep Mexico off their list.  Mexico City houses several buzzing streets ideal for Artists, which subsequently has provided a developing infrastructure for mid level touring Artists and bands looking to score a festival gig.  Mexico is also cost effective for Artists looking to expand their fan base without breaking the bank.

Music Trends

Three important takeaways recording Mexico’s music industry trends.  One, digital sales in Mexico have shot through the roof.  In 2010, Mexico generated less than 13 million digital tracks sales.  One year later in 2011, Mexico sold more than 135 million digital tracks (thanks iTunes).  Naturally other channels should increase as well, such as streaming services, subscriptions, mobile content, etc. but that’s not the case in Mexico.  Subscriptions services make up less than 4% of the market, streaming contributes less than 18% and mobile content is a dismal 8%[1].  Take away number two – brands are finally figuring out how to spend money in Mexico.  Billboard reports that major companies have spent less money on bilingual marketing campaigns in the United States, but in Mexico brands have begun spending money by the truckloads (more on this later).  Lastly, the government is becoming highly interested with coupling talent and tourism.  This means that bands of all types (major and indie, domestic or foreign) now have the opportunity to work with the Mexican government if they can propose a way to increase Mexico’s tourism in specific areas.  In such, the campaigns come with production and/or tour financing[2].

What You Need to Know & Do

To navigate the Mexican market, Artist’s need to work in reverse.  Meaning, establish success in Mexico first, afterwards parlay the success into your home country.  A major misconception is that acts must first have success in their home country prior to penetrating the Mexican market.  Not true.  Additionally, unlike Brazil, the Mexican market is totally dominated by international talent – not local bands.  In fact, only 2 Mexican Artists landed on the top digital sales charts in Mexico in 2012.  “International acts” does not mean you have to be Top 40 Acts.  Bands from all over the world are having success in Mexico.  The hipster/indie market is growing quickly in Mexico, paving way for an exploding indie label market (or market presence).  Again, unlike Brazil where an online presence proves important, in Mexico mobile marketing is the way to get your name out.  Although Mexicans don’t purchase their music via mobile devices, they do use Text Messaging/SMS more so than most Europeans, Americans and Asian markets.  Specifically, nearly 70% of Mexicans have noted to text message in the last 30 days, more so than e-mail, view videos, or download music.  To promote in Mexico, you must build up a mobile/text message database, not e-mail addresses or mailing address.  This information helps secure brand endorsement.  Brand partnerships have increase substantially within Mexico, as top companies like Pepsi, MasterCard, AT&T, Coca-Cola, Honey Bunches of Oats, and State Farm are merging with Artist who can help create a cross-over atmosphere[3].   If you’re an American act, focus on developing strategies to cater to Hispanics ages 15-24 as they represent a key buying marketing in the U.S. and outnumber Non-Hispanics Whites in America.  If you build a fan base from that age group within Mexico, brands will come knocking down your door in the U.S. (work in reverse).   Oddly, success in Mexico translates into partnership appeal for larger U.S. companies; but U.S. success (1^st) doesn’t necessarily have the same draw.

What You Need To Avoid

Novelty items may be hot all around the world, but if you attempt to sell vinyl or bundles in Mexico – good luck.  As stated earlier, stick to digital development.  Nobody cares if they can find your music on streaming services, YouTube, subscriptions providers and so forth – just make sure you’re listed in all digital stores.  Additionally, there’s no need to sink major importance into merch, as sales remain minimal.

Final Tips

• You don’t need a label to have success in Mexico – you need contacts.  If you don’t have contacts, I recommend purchasing the Billboard International Buyers Guide.  It’s expense, but worth it
• Don’t be scared to develop marketing campaigns and pitch them to AT&T, Pepsi, State Farm, or Coca-Cola – they’re spending money on indie/major Artists in the area
• Focus on digital distribution.  Steaming services (at the moment) are irrelevant
• Penetrate the 15-24 age demographic
• Focus touring efforts around Mexico City.  More so, attempt to work with the W Hotel.  The hotel chain is known for creating campaigns around Musicians
• Don’t sell vinyl
• Build your presence in Mexico City and expand outward

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What’s So Great About Brazil?

Simply based upon economics and demographics, Brazil is set to explode like no other country on the globe.  With a population of 196 million and the 6^th largest world economy, Brazil will see an added economic injection within the next 4 four years.  In 2014 Brazil takes the grand stage as host of the FIFA World Cup.   In 2016, over 10,000 athletes from 193 countries will grace Brazilian soil during Olympics.  These two events alone are estimated to boost Brazilian tourism beyond 165 million visitors within 3 years and generate unprecedented economic impact on tourism, not to mention added media attention.

Music Trends

Brazil ranks 5^th in the world with digital users, however the digital music market was only recently introduced (and mildly at best).  With a 909% increase in digital music sales[1], Brazil is primed to see another massive explosion with the growth of smartphones and streaming services.   The amount of Brazilians with smartphones has been estimated to grow from 12.6 million in 2012, to 33 million by 2016[2].  In collaboration with these figures, Brazil offers the lowest streaming cost (Per Month Compared to Per Capita GDP) at $7.49[3].  Because Brazilians are more willing to bundle these cost with their already existing mobile provider, services such as Deezer and Rdio have taken control of the region. However the most interesting statistic applicable to musicians is Brazil’s growing infatuation with YouTube.  Based upon the amount of videos viewed and produced, Brazil ranks 6^th on a global scale.

What You Need to Know & Do

Three key elements (i.e. World Cup, Olympics, and a rapidly growing economy) will generate international company / brand movement into Brazil.  The influx of new brands means an influx of new marketing and advertising strategies.  This all translates to opportunity and licensing for bands.  Given the rise of Anti-360 Deals, all types of Artists (indie and major), can generate unique partnerships and visibility. (TIP 1 & TIP 2).  Bands that don’t want to form partnerships -no worries- just start thinking like an Advertising Agency and understand the market trends.  According to Brazilian Advertisers ”Projects that don’t have a defined purpose for being in Brazil, don’t work in Brazil[4].”  The typical problem Artists (and most labels) face while importing to Brazil is that they carry the same marketing and promotional tactics used in their home country.  Wrong.  “In the case of the Brazilian market, the product has to be relevant to the life of Brazilians.”  What’s relevant to Brazilians you may ask?  According to research, (a) Brazilian Pride, (b) Family Life, and (c) Happiness / Optimism.   With these elements in mind, understand Brazil is chopped up into 5 major macro-regions, and the marketing approach will vary greatly pending on region of choice.  For example – in NorthEast Brazil non-Brazilian Artist’s should focus on tapping into the local culture such as carnivals, dance events and local music.  Here, implementing music tactics and genres that may work in San Diego will fall flat in Rio Grande do Norto.  Penetrating local radio also becomes key, while social media relevance provides very little.  To the contrary, head to Sao Paulo and all sorts of international music, media and creative campaigns are embraced.  YouTube becomes a primary tool for establishing a foothold in Brazil, but again, campaigns should be specifically geared towards Brazilian’s passions (referenced earlier).

What You Need To Avoid

Rethink your point of reference.  You can not have success in Brazil by implementing the same marketing and music business strategies.  “Just come in and think that a project will automatically work because it did in your home country is very naïve” according to Brazil’s Trade Director.  Frequent readers understand my position on controlling all intellectual property (copyrights and trademarks), but Brazil consistently ranks as a “problematic country” according to the International Intellectual Property Alliance’s Special 301 Report.  Additionally, trademark owners must resubmit for trademark protection in Brazil because Brazil is not a member of the Madrid Protocol (ie. – they’re on a total different system).  Additionally, traditional music marketing methods can prove difficult in some areas.  For example, outdoor advertising has been illegal in Sao Paulo since 2007 so good luck handing concert posters.  Lastly, local repertoire still dominates most of the music markets in Brazil but this will change with the upcoming World Cup and Olympics.

Final Tips

• Formulate partnership deals with brands
• Develop Brazil specific YouTube campaigns in order to establish relevance
• Confirm that you’re set up on all streaming platforms relevant in Brazil – especially Rdio and Deezer
• Develop relationships with the growing number of indie labels in Brazil in order to license product during the 2014 World Cup and 2016 Olympics.  The infrastructure has developed in Brazil where licensing has become achievable for all Artists – not just major label Artists
• If you don’t license product to a label, find a digital distributor specific for Brazil
• If touring, do not take physical product.  It doesn’t move as quickly as digital product, plus you’ll be taxed heavily
• Develop your project and/or marketing plan around the macro-regions
• Establish social media relevancy in Brazil prior to approach booking agents
• If you’re going to spend money on development, spend money trying to get on radio
• If you’re going to spend money, spend money developing YouTube campaigns
• Don’t feel your music must be Brazilian.  It doesn’t.  With the World Cup and the Olympics approaching, music of all genres will be in demand
• Explore Brazilian passion points
• Exploit film incentive opportunities, as Brazil’s film market continues to expand, therefore creating attractive incentives for video based

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[1] Billboard Volume 125 No. 11

[2] Billboard Volume 125 No. 11

[3] Billboard Volume 125 No. 12

[4] Marketing Weekly – “Breaking In Brazil”

Ten years ago Canada made a valid attempt to attract movie productions away from LA and NYC by offering tax rebates.  In a continuation of the trend, individual U.S. States began drafting legislation to lure video production business within their borders.  In an apparent arms race, States drafted unique legislation, often offering tax incentives, rebates and tourism packages. With increased production options for filmmakers, lower budget projects ($5- million) ventured away from LA, NYC and Canada simply due to economic efficiency. Lobbying conversations morphed from “come to our State and produce a $15+ million movie and we’ll give you a State tax deduction of X amount” –into – “come to our State and spend only $50,000 and we’ll give you a 30% cash rebate.”  Additionally as the U.S. States silently battled for business, the international film industry became stronger and more relevant, developing their own legal infrastructure and incentives to generate business.  Currently, film business has exploded on a global scale.  Nearly every country in the world offers incentives (dictated by their laws) to drive movie productions into the area, which in return, boost the local economy and tourism.

What does this have to do with the music industry? With hundreds of different laws and incentives available, it’s impossible to address the details in a single blog post, therefore I’ll be brief – film incentive legislation boils down to three concepts: (1) spend, (2) incentive, and (3) production.  Spend – Pending on the country or State, local legislation will identify the monetary amount which must be spent on “movie production” (i.e. local spend) in order to qualify for the incentives.  For example, California may have a spend amount of $15 million+, while Finland may have a spend amount of only $50 thousand+.  Should an Applicant spend the minimal monetary amount and meet the local spending requirements, they may qualify for an incentive.  Incentives – Again, pending on the country or State, legislation will address what incentives apply based upon the local spend amount.  Many apply tax breaks, while others apply rebates.  What countries and States offer has become so competitive that the incentive programs continuously grow more attractive.  “Rebates” will remain the primary focus of this article because they often mean a cash payment based upon the amount spent.  *Production – Perhaps the most crucial component of film legislation boils down to the definition of “production.”  Larger movie economies (e.g. LA) may define “production” as a motion picture financially supported by a studio release, or a motion picture containing global distribution.  Other areas may be less stringent, defining “production” as any project containing a film component (i.e. music video, documentary, etc.).

Again, how does all of this apply to the music industry?  Legislation changes almost as rapidly as technology, however, currently, several countries and U.S. States have drafted (or drafting) legislation to attract music related projects.  If implemented, it could create widespread growth within music for majors and indies alike.  Even without new laws, music projects already fulfill many of the requirements existing under the incentive structure. If applied correctly, every dollar spent on recorded music, marketing content and/or music video production within the music industry could qualify for a film incentive.  EXAMPLE – Pending on the location of production, Warner Music Group (WMG) could spend $100 million annually in recorded music, music video production and online marketing content; and the mere inclusion of a video camera (during any project) could qualify as a “production” – therefore triggering an “incentive.”  It doesn’t matter if a majority of the expenditures may be allocated towards recorded music, as the recording becomes a production expense (same as the cost of a movie set).  Additionally, think of the added content value of capturing the visuals and the advertising price tag that could be generated.   Many countries around the globe offer upwards of a 30% rebate, pending the local spend amount.  Additionally several countries loosely define “production” allowing any captured visual element to fulfill the legal definition.  Therefore it is plausible the music industry could increase profits by 30% by doing nothing except applying film incentives to their business model.  Even an indie group on tour for eight months could feasible document the experience and qualify their total tour expenditures as a “production” expense.  The film incentive doesn’t apply to only major, or only indies, it applies to everyone. The scenarios are endless

Is it really that simply?  Yes and No.  Legislation already exists on a global scale, dictating what options are available for filmmakers from Idaho all the way to Nigeria.  The legal structure has been developed (which is usually the hard part). However, make no delusion; film incentives are no easy handout.  Although law(s) exist which provide these incentives, the application process is daunting, requiring experience, local contacts within film offices, detailed filings, paperwork with the relevant Department of Revenue, audits and meticulous production planning – all prior to actually making a project.   However, the payoff for the music industry as a collective unit is obtainable and awesome.  Obtainable to the extent that potentially every dollar spent on recorded music, online marketing content and music video production from 2012, could generate a 30% increase (via global film incentives) in music industry profits during 2013.  What a 30% increase could do for the music industry is so transforming that it doesn’t even need to be specifically addressed here.

While lecturing on this topic at MIDEM during a closed door session for Label Executives, I was asked the blunt question, “Why hasn’t anyone heard about this?”  Allow me to address this question: (1) Industry Executives have become fixated on the slow bleed caused by piracy, downloads, and streaming.  (2) Industry Executives rarely explore “the globe” for solutions, rather they remain fixed on their specific country.  (3) Music Industry Executives don’t understand movie law, film incentives, or movie productions – nor should they be expected to.  (4) Should any applicable law exist to boost music sales, Music Industry Executives naturally rely upon their respective In-House Legal Counsel to educate them on the options available. However, In-House Counsel only focuses on “internal” label issues and administering contracts – therefore exploring film incentives doesn’t fit the job description.  Additionally, I was asked, “This sounds like a great theory, but practically speaking it can’t work – right?”  Practically speaking it does work.  We exploit these possibilities for clients (both labels and artists) all around the globe on a daily basis.  Frankly, it’s somewhat disturbing that more industry business/labels/professionals don’t capitalize on existing legislation.  Global film incentive is a big business, and only now has the legal profession taken notice.  Many attorneys at our firm (myself included) will be contributing to a new publication for The American Bar Association (ABA) exploring this very topics – additionally, how it applies to music.

What’s wrong with the music industry has nothing to do with downloading, streaming, piracy, etc.  What’s wrong with the music industry is a total lack of collaborative and creative thinking.  As an industry, we need to become less concerned with our individual roles and how we profit personally, and more concerned about how we can all grow as a unit.  Growth has to plotted, strategized and managed within a communal effort.  Tom Silverman’s plan of growing a $100 Billion Dollar Music Business is absolutely correct. However, we can have even larger growth.  Total up the amount of music industry expenditures in regards to recorded music, music videos and marketing content – now add 30%.  It’s available right now.

If you haven’t read Techdirt’s Mike Masnick report about why the sky is rising (not falling) within the music industry – Read It. Now more than every opportunities exist around every corner.  Sometimes it takes opening your eyes and exploring a different viewpoint to find the path.  That path for music is with movie rebates – it’s literally raining free money.  The music industry has an abundance of growth options – a potential 30% increase to be exact.  Let’s all wake up and take advantage of the opportunity.

Want More?  Stay Connected.  Read the full story over at the MIDEM BLOG

Non-traditional deals are fairly new to the industry so not many are in existence.  Luckily, the firm I’m with has seen its share (we’re the only to see deals from two key labels), so in order to present this unpublished information, this article will break down every component of a major label offer against components of a non-traditional offer.  The major label offer analyzed in this article is recent (2012).  The non-traditional deal(s) evaluated are also recent (2012), but due to the lack of non-traditional offers in existence, this article explores a combination of clauses spread across three key offers.  What the article will not address is the negative aspects of non-traditional deals and the positives aspects behind some major label offers (they do exist).

Sixteen contractual differences will be presented.  In all cases the specific language in non-traditional deals (NTD), or lack of language, will be referenced and; when necessary for comparison, the conflicting language in major label deals (MLD) will be examined.   If you don’t want to read the article in its entirety (I won’t be offended), scan over to find the top five differences, indicated with (*).  These five areas were addressed in my 2013 MIDEM lecture titled: “The Anti-360 Deal – Viable Business Alternatives For Artists.”  Feel free to watch the entire presentation here:

*1.       “Label X shall provide or arrange for, at its own costs and expense, the provisions of a recording facility, recording equipment and personnel, including but not limited to producers and engineers.  Such cost will not be recoupable.”

Differences:  MLD typical classifies recording expenses as a recoupable cost as NTD does not pass the expense along to the Artist.

*2.       “Artists retains all rights to the compositions and receives 100% of all record royalties.”

Differences:  MLD will start at 10%-12% record royalty to the Artist, NTD will hover around 50% – 100%.  Yes, 50% – 100%.

3.       “All recorded material shall be mutually agreed upon, but in the event of dispute, Artist’s opinion shall prevail.”

Differences:  MLD will always dictate the final decision and in many cases      rarely allow for “mutual” creative input.

4.       “If Artist wishes to record a composition not composed by an individual within the definition of ‘Artist’, Artist shall inform Label X in writing and Label X, in its reasonable discretion, approve the proposal.”

Differences:  MLD discourages any additional recordings by the Artist.

5.       “If the Artist has, prior to signing this Agreement, recorded original musical compositions (“Prerecorded Compositions”) that the Parties mutually agree to utilize as any of the at least twelve (12) required Recorded Compositions, the Parties shall work together to establish the licensing terms of such Prerecorded Compositions for the purpose of fulfilling Artist’s obligations under this Agreement.”

Differences:  MLD will first demand that all prerecorded material be given to the label.  If negotiated properly, the label may purchase the prerecorded material at a reduced rate but acquire the copyrights.  NTD will not demand the copyrights, rather ask for a proper license – meaning the Artist retains the intellectual property and the label can use the track(s) for a specific amount of time.

6.       “Label X may make ‘making of’ or ‘behind the scenes’ Documentary regarding the recording of the Recorded Composition.  Artist also agrees to provide at least sixty (60) minutes of interview(s) with Label X personnel or designees for potential use by Label X and such interview(s) shall also be within the definition of ‘Document.’

Differences:  As several MLD may generate video product, rarely, if ever, does the label agree to such terms in the initial contract.  With a NTD, they will promise to release such footage as opposed to it being optional at the labels    discretion.

*7.       “Artists shall be required to perform and/or make personal appearances in venues designated by Label X for at least three (3) times during the First Year of this Agreement.  The cost and expenses incurred by Artist in attending and providing Performances shall be the responsibility of Label X, including performances fees at the then going performance rate.”

Differences:  Not only will the label pay for and provide venues for certain performances, NTDs will also pay for the performances itself.  MLD will actually take a percentage of tour revenue, regardless of the expenses incurred by the Artists.

8.       “Label X will not object if Artist allows its fans to record or film Artist’s live performances of the Recorded Composition for free placement on the Internet.”

Differences:  MLD demand that Artist’s monitor, police, and sometimes litigate unauthorized material generated by fans.  NTD view fan footage as a marketing asset.

9.       “During the First Year, Label X may, in its discretion, arrange for, at its own costs and expense, the creation of an audiovisual work or works (individually referred to as a ‘Video’).  In creating the Video, Label X shall arrange for the provision of a script, filming locations and facilities, film equipment and personnel, including but not limited to producers, directors and engineers approved by Label X in its reasonable discretion.”

Differences:  NTD will incur all video cost, unlike MLD which pass music        expenses onto the Artist as recoupable expenses.

10.   “Label X may, in its sole discretion, arrange and pay for a promotional agency, organization or personnel to assist in the promotion of the Artist or any of the results of Artist’s activities under this Agreement or the exploitation of any of Label X’s rights under this Agreement.”

Differences:  Marketing/Promotion expenses are rarely recoupable in NTDs.

11.   “Label X may, in its sole discretion, arrange and pay for a booking agency for the Artist.”

Differences:  Notice NTD incur “booking agency” costs on behalf of Artist, therefore the Artist does not have to pay an agent or booking fee.  Essentially all touring revenue becomes the Artist’s.

12.   “Artist agrees that Label X may make arrangements for the rental or leasing company to purchase a tour vehicle at any time.”

Differences:  NTD embrace travel as a form of marketing and will likely incur all travel expenses (even tour buses).

13.  There is no “Grant of Rights” contract in a majority of NTD deals.  Meaning, Artists do not have to give away photos, videos, or albums.  If requested by the label, the label will only license the material and pay a licensing fee.

Differences:  MLD will demand photos, videos, etc. and rarely offer to purchase such material; therefore Artist never recoups their previous expenses.  Additionally the label will acquire the copyrights in their entirety as opposed to licensing.

14.   “During the term of the Agreement, Label X shall have the option to purchase from Artist, at a reasonable cost, pieces of memorabilia used by Artist upon mutual agreement between the Parties as to the pieces selected.”

Differences:  Not a clause typically seen in MLD’s but within NLD, labels offers to “purchases” the referenced material as opposed to demand it for free.

*15.   “In connection with the sale of any Merchandise under this Section, Label X shall pay to Artist a royalty equal to fifty percent (50%) of Label X’s net receipts derived therefrom, after deducting any and all costs and third party payments relating thereto and taxes, reasonable administrative fees and promotional fees (‘Merchandising Royalty’). 

Differences:  MLD pays Artists between 8% – 30% on Merchandise sales only after a laundry list of deductions.  Additionally, MLD does not guarantee merchandise distributors, while NTD will provide guaranteed sales outlets awithout deducting “distribution fees.”

*16.  Within NTD, the labels do not demand Fan Club rights and online revenue.  Additionally, the labels will incur the cost of website development and Fan Clubs.

Differences:  Within a MLD, these referenced elements would be demanded by the label, plus the cost for such development would be classified as recoupable expenses.

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1.  New Mainstream Genres Will Be Created

The amount of new genres generated each year really doesn’t impact the overall industry landscape.  Now, I’m a proponent of niche markets, which the industry doesn’t lack, but rarely (if ever) do niche genres change the overall mainstream music economy and landscape.  The big genres (ie. The Big Five) remain consistent: Pop, Rock, Rap/Hip-Hop, Alternative and Country.  This year however things will change.  Acts have already tackled the mainstream marketplace essentially operating as genre nomads.  Seattle white boy rap, Columbus Schizoid Pop, Nigerian alternative, Scandinavian soul/country – all have roots totally disconnected from the Big Five.  Not only do most of these genres reach a mainstream audience, their also blazing new genre classifications which impact the creative path of upcoming bands.  What’s interesting is that the influence is no longer coming out of the Big Five, it’s coming from the genre homeless.  For new artists and/or labels, don’t conform to fit the current market – there’s a place for you, I promise.

2.  Watch Out World – Here Comes Africa

Until now, the continent of Africa has essentially remained untouched by the music industry.  Due to the rapid revenue decline from majors and traditional industry related businesses, these companies are starving for dollars.   Hungry mouths see the most heavenly oasis within the continent of Africa.  Let’s first discuss some surfaces statistics:  Africa has an expanding middle class, 65% of this middle class is under the age of 35, and it’s the second largest continent and the second most populated.  Now, let’s go under the surface with some music related stats:  iTunes will launch in Nigeria, South Africa, Kenya and Ghana during 2013, the continents largest mobile subscriber (Africa MTN) is twice the size of the largest subscriber in the U.S., mobile sales in Nigeria alone totaled over $150 million.  Want more?  The largest film industry in the world resides in Africa, which also has it’s own internet channel attracting 25 million views per month, A&R departments have been rapidly signing domestic artists geared for global takeover, and pretty much everything on the radio consists of domestic talent compared to figures in 1999-2000 where 80% of radio was foreign talent.  What does this all mean?  For starters, the digital marketplace is about to become a warzone.  Secondly, it means there’s an industry infrastructure in Africa.  Even though international success has been occupied with North American A-list talent, the foundation is now there for all types of global acts, regardless of their industry status.  Indie bands struggling to make a buck in North America or Europe now have the opportunity to penetrate the second largest continent in the world.  Tour season has the potential to be endless, label options multiplied for artists; and sync possibilities has exploded for all types of artists with the built in movie partner of Nollywood.  Wherever you are, and whatever you do, make certain Africa is a target for your 2013 career progression.

3.  Label Contracts Will Change

Last year brought a flood of new “non-traditional labels” into the industry.  Not only has the industry had to embrace these newcomers, many of these labels continuously generate mainstream success by out performing the majors.  The legal structures behind these label deals are so pro artists that they’ve been dubbed “The Ant-360 Deal.”  In no conceivable formula can major labels continue to offer traditional, multi-rights deals and compete with these new non-traditional, anti-360 offers.  The once justified trump card presented by majors, “we have more success than non-traditional labels” is no longer valid.  These new label players will inevitably change the contractual landscape.  Changes will result in better deals, more transparency and creative support from major labels, otherwise the entire contractual label landscape as seen today will drastically change.

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For indie bands looking to expand into international territories, the dream often looks unrealistic.  How do we fund a tour?  How do we promote?  How do we get heard? How do we sell product?  All legitimate questions, however expanding into international territories can be highly obtainable when approached correctly.  Realistically, it’s easier for indie bands to expand into international territories as opposed to major acts.  Whether based in the United States or Finland, use these 5 basic steps to help your indie band achieve an international head-start.

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@frascognamusic or mff@frascognalaw.com