Sunday, September 23, 2012

This Is Why Artists Hate Major Labels

James Taylor image from Bobby Owsinski's Music 3.0 blog
The prevailing wisdom in today's music business is that any artist signed to a major label (and many indies as well) will get shucked and jived out of hard-earned royalties in that rare case when an artist has a hit. It was certainly like that way back when the record business began, and even though artists have made great strides since then in protecting themselves, it's still happening now.

Case in point - iconic balladeer James Taylor. JT is suing his former label Warner Music Group (WMG) for several million dollars, and even after several audits where his accountants have found over 50 contract improprieties, he's still having trouble collecting. This is all laid out in a wonderful article over at Digital Music News by Paul Resnikoff called "52 Ways To Screw An Artist."

It takes a long time to get through every one of the points, so I'll summarize them here.

JT's accountants first did an audit way back in 2004 and found that he was underpaid by $1,692,726. After Warner's and Jame's representatives got together to hash things out, they settled on a figure of $764,056 and WMG immediately cut a check for only $97,857. After trying to get the balance paid over the next 8 years, WMG finally decided to officially dispute the remaining amount, claiming they owed just around $147k instead of the $666k balance, but of that money that even the label agrees is owed, they paid a grand total of $0.

So basically it turns out that JT finds that WMG owes him $1.6 million, they settle on a figure of $764k and pay him $97k and let him twist in the wind for the balance ever since.

What's funny is how blatant some of the royalty "mistakes" are, from charging manufacturing costs (which is on the label) as recording costs (which is owed by the artist) to paying a royalty rate under the agreed amount of points, and on and on.

But it doesn't end there. In 2010 JT initiates a second audit, and this time discovers that he's owed $1,147,559 for the three year period between 2007 and 2010. WMG basically blew him off and never responded to the audit inquiry. And that only appears to be the tip of the iceberg, as there were several additional revenue sources where royalties should have been paid that the auditors couldn't find.

The bottom line is that if James Taylor's high-powered accountants and attorneys can't get paid, you have almost no shot if you're a new artist. And the labels still wonder why artists want to go the DIY route?

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