Another Glimpse into the Sausage Factory that Is Music Industry Accounting

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I am fascinated by the music business and how it totes up dollars and cents owed to various parties that contribute to making music I listen to every day.

Of course, it’s easy for me to be fascinated, as I don’t have to buy dinner or pay the mortgage with royalty checks from music I’ve made.

Recently, Tim Quirk from the band Too Much Joy posted a recent royalty statement that he received from TMJ’s former label, Warner Brothers. Even funnier (and more depressing) than the invoice itself is Tim’s essay describing how “unrecouped” bands (those that haven’t paid back their advances to the label) are treated and how cavalier (or malignant) the accounting is for those bands.

Tim now works at Rhapsody, so he knows how digital distributors account for the music they stream or download. As a result, he is able to poke holes in the corporate lackeys’ lame stories about why, for example, there are 12 outlets reporting sales for two of their albums but zero digital sales for a third album.

He is pretty humble, though, when he talks about bands like his who haven’t recouped their advances. Too humble, in my view. He takes at face value the label’s contention that they need to pay “money-making artists” like REM before they worry about giving minor bands an accurate accounting of their indebtedness. And, when you look at owing a label over $350,000 for albums you made more than a decade ago, it seems as if worrying about potential inaccuracy of a few tens of thousand dollars is pointless.

On the other hand, if the studios’ approach to measuring bands’ revenues is so cavalier and self-interested, I would have no confidence in the $350,000 number either. Who’s to say that’s accurate? Who’s to say, perhaps, that Too Much Joy shouldn’t be getting checks from Warners instead of hassles?

Here’s my favorite song from the band:

Another great reference on the artist’s perspective of the music business is Jacob Slichter of Semisonic’s memoir “So You Wanna Be a Rock & Roll Star.”

UPDATE 12/3: This essay by producer Steve Albini crisply lays out the situation bands face. In the hypothetical example he devises, a new band sells 250K albums and, somehow, still owes the label money!

(Hat tip Felix Salmon)

Image source: http://www.flickr.com/photos/gallery-art/3497849677/

Original Post: http://caddellinsightgroup.com/blog2/2009/12/another-glimpse-into-the-sausage-factory-that-is-music-industry-accounting/