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The music industry can be a scary place: Bands with little music industry experience often get taken advantage of. Let’s face it, there isn't a college course on how the music industry works. Most people draw their own conclusions and often get scammed. Below are a few schemes to avoid.
Read more: 5 alternate ways your band can make money
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A group of “managers” exist that actively target desperate unsigned bands. It sounds great having a manager approach your band: “We love your band,” they say as they inconspicuously leave out your actual band name (because it’s a copy-paste letter). Then they lay it on you: “We charge our bands a monthly fee to manage you.” Most inexperienced bands often think that’s just the way the industry works, but it’s not! What the majority of these “managers” do is stack a catalog of bands (which you’ve never heard of before), collect checks and never really end up doing anything for your band. A few months later, they stop returning your emails (when you wise up), and you’re left worse off than you were before. First and foremost, a legit manager will never charge you an up-front amount to manage your band. The industry standard is around 15 percent of your band’s revenue. If the band isn’t making money, the manager doesn’t get paid (we call this incentives). A good manager will make or break a band. Make sure you pick one who is passionate about your music and not strictly a payout.
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Merch is the driving force for any band. The more sales you make, the more you can shovel into your band. (Obvious, right?) Every now and then I will receive an email from a company proclaiming, “We want to print and sell your shirts for you.” They push their platforms as they tell you to “just sit back and collect checks.” What they forgot to tell you is their printing and fulfillment charges are astronomical. Meaning if you printed the same T-shirt yourself, it would cost $4.25 a shirt. Looking into the fine print from the company, you notice their fulfillment charge to the band is $14 per shirt, effectively stealing your brand and making 99 percent of the profit from any sale.
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It is pretty common for many bands to be offered a “tour buy-on.” I myself have purchased a ton of “buy-ons” for smaller artists. In theory, you are effectively contributing finances which are then used to market the tour better. When a band doesn’t draw yet, money is often your only real leverage. “We paid an agent $10,000 to be added to this unsigned tour, and all the shows are empty/getting canceled,” an unsigned band wrote me. While spending money on the right tour makes sense, spending $10,000 on a tour filled with bands who have no tour history doesn’t. In a situation like this, an “agent” just lined their pockets and sent you down Shit Creek without a paddle.
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MCN? What is MCN? “MCN” stands for Multi Channel Networks. These are companies that consume other people's YouTube channels under their umbrella. As my label’s videos continue getting more subscribers and plays, I start receiving tons of emails: “Hey, join our network, we will expose your channel to way more people and optimize it so you get more plays.” What they don’t discuss up front is that all they plan on doing is adding keywords to your YouTube (which you could do yourself), or control your UGC (fan videos with your music/you’re probably already doing this and don’t know it). In exchange, they collect a substantial percentage of any money you make. They often lock you into an auto-renewing multi-year contract (in the fine print). I’m sure some solid MCN companies exist—just make sure they contribute to your growth and don’t leech off of it.
Pay to play
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If you’re an unsigned band, you are probably accustomed to selling presale tickets to your concert. It’s a necessary part of concerts nowadays, unfortunately. The cost associated with a concert can be tremendous. Venue rental, fliers, the guarantee for the headliner—it all adds up. To play it safe, promoters require bands to sell presale tickets to cover the opportunity, which is fair. However, on the flip side, promoters exist who aren’t really trying to cover their bottom line (costs), but instead exploit local bands. Example: Band sells 100 tickets to play a local showcase filled with 10 local bands. The venue is smaller and was practically free to rent. With such low overhead for the event and no headliner (therefore no guarantee), the promoter just made a decent amount of money (and didn’t pay a single band). So next time you get asked to sell presale tickets to an all-local event, ask if there is a “pay scale.” A pay scale effectively lays out what percentage you get paid based on how many tickets you sell.