Why You Won't Get a Record Deal and Why It Doesn't Matter

5 reasons why the death of the record deal is good news for your band.

Ultimate Guitar

Picture a rock star. Strutting across the stage, singing or playing his instrument in front of tens of thousands of screaming fans. Pulling his or her best rock face and driving the opposite sex wild. Get that image in your head for a bit, maybe hear some of the music. Now answer me the following question:

How old is the person you're thinking of? How old are they today as you read this?

Chances are whoever you're thinking of is currently in his or her 40's or older, in your mind's eye or in reality. The analysts Deloitte did a study in 2011 and found out that 40% of the top-selling bands in the USA had a lead singer in their SIXTIES. Of the top 50, only one was in their 20's and that was Britney Spears, whose breakthrough hit was 14 years earlier.

What the hell happened? Where's the next generation of rock stars? Open up a copy of Kerrang or Rolling Stone and there's plenty of pretty young things in the pages, posing and pouting, but the statistics show they're not selling as many records or pulling in the crowds on tour compared to the dinosaurs. In 2009 (and the 5 years before), 25 new artists sold 100,000 albums or more in the UK. In 2011 that was down to 16, and two of those were headed by one or other of the ex-Oasis Gallagher brothers, who have a combined age of 87. What's going on?

There's a number of factors at work here. Young music fans, those that are fans of trendy new bands, don't have as much money to spend as their elder siblings and parents, and the global recession hasn't helped. They also tend to pirate music more, cutting these artists' incomes yet further.

Big record companies are in trouble. In November 2011, EMI, one of the giants of the music business, was split up in two and sold off to stop it going bankrupt. The fat cats are looking very thin. Blame the economy, blame piracy, blame bad management, but the big record firms are in big trouble, and they're retrenching.

Earlier that year, a friend of mine tried to broker a deal between a leading unsigned UK band and one of Europe's largest record companies. The response he got from the label's A&R guy was blunt: "We love the band. But company policy now is only to sign artists who have sold at least half a million albums, or are former members of bands who have. Last year we had to stop paying royalties for three months just to stay solvent. Any unproven band is too big a risk."

This is it, everyone. The era of the big record deal for the emerging artist is over. The big labels are leaning more and more heavily on their back catalogues, and sending their wrinkly rock dinosaurs out on tour instead of the next big things. The big record companies are in a death spiral, and won't sign anyone, and this means you.

Here's why this is really good news for you and your band:

1. You Can Make More Money With Less Sales

One guy who doesn't have a record deal these days is Mark King, bassist and frontman with the hugely successful '80s funk-pop outfit Level 42. If you want his solo albums you order them from him or his affiliates. In 2003 he was interviewed by Q magazine and asked if selling CDs off a website wasn't a bit of a comedown after his years of world tours and platinum sales. His reply: "When I was a platinum unit-shifter back in the '80s I made 10p from every album I sold. Now I make 10."

That's the downside of a major label deal. They'll give you a lot, but take a lot in return often from 95-99% of the retail price after all deductions. If Mark King's figures are right, the emerging UK artist that sells 100,000 copies will only make 10,000 ($15,000) from record sales if they're signed to a big label. They'd literally make more money flipping burgers. An artist using Mark King's model and only selling one tenth as many records, a mere 10,000, will make 100,000, ($150,000) more than the Prime Minister. Whilst you'll have to deduct your expenses from that, you're still laughing compared to the guys on a big label with ten times the record sales.

2. You Don't Need To Put Big Money Down

In the past, one of the reasons you needed a big label deal was that being an aspiring rock star was a ludicrously expensive undertaking. Albums cost hundreds of thousands of dollars, videos just as much, and touring cost so much you'd think they heated the venues by burning money. Only a huge and wealthy record label could front a band that much cash.

That's all changed now. The typical recording budget for the kind of band I work with is about 3000-5000 ($4500-$7500) for a full album. If you use a digital syndication service like CD Baby (and you should), global distribution for your album to almost every territory on Earth, something that used to cost eye-watering amounts of cash, is yours for a one-off payment of about $60. Music video costs have dropped through the floor as well. Typical costs are about the same as the album recording costs above, though I was once offered a pro shoot for a little as 1500 ($2250). That's $450 per member, about the same as your typical suburban guitar-slinging dude spends on Xbox games in a year.

Touring is still expensive, but I know bands that have done month-long European tours for about 10,000 ($15,000) with costs that low, you could break even if the tour sells well.

So basically you are looking at the whole recording-distro-video-tour cycle costing about 20,000 ($30,000), the price of a small family car.

3. You Can Do Things Yourself

You can cut that 20,000 down to size as well. Not only has technology cut the costs of these things, it has also made them easier to use and within the grasp of people who don't have years of training behind them. A camera that is good enough to shoot a music video is not only now affordable for the average Joe, it's also sophisticated and automated enough that all Joe has to worry about is pointing it in the right direction. He no longer has to spend a lengthy apprenticeship learning how to seamlessly splice bits of film together in order to edit the video, he just has to watch some YouTube videos on how to use MovieMaker.

So if you have the artistic vision, you can acquire the necessary technical skills to make it a reality quicker, cheaper and more easily than before. You don't need to hire a cameraman, mastering engineer or tour manager if you have the skills somewhere within your band, and that 20,000 figure starts to shrink.

The first album I produced back in 2010 was recorded, mixed and mastered entirely with equipment owned by the band. Because we had the equipment and skills in the band to do everything from composition, arrangement and recording to mixing and mastering, we didn't spend a single penny on studio time, session musicianship or external services except 100 for artwork. That meant that the only other cost was travel, as the various band members travelled to each other's houses to record their parts. We did the entire, professionally released and critically well-received album, for less than 100 ($150) per band member.

4. You Can Dictate Your Own Terms

Of course some of the big things that come to mind when thinking about a big-name record deal are the horror stories. Steve Albini's infamous 1992 essay "The Problem with Music" set out in graphic terms how a major-label deal could go sour and ruin the careers and lives of the musicians signed to it. The reason the record companies could behave that way, said Albini, was that theirs was the only show in town. As we have discussed, the costs and skills needed to record and release an album, do a video or two, and go on tour were far beyond the means of the bands. It was a case of sign the contract or stay in your garage forever, and some labels abused that monopoly. That is of course no longer the case, and the major-label deal is only one of many alternatives for musicians wanting to make money from their recordings.

You can still get a record deal, if you want one. Independent labels are doing well, as are one-man "micro-labels" that are less traditional labels than brokerage services, helping the bands they work with cherry-pick services such as promotion, distribution and production depending on what they need. They'll write a contract for you depending on what your band needs, and what it can do itself. Have a mixing genius on board but need help with promotion? There's a deal for that. Have everything sorted but just need a label to act as an advocate to help have your band taken seriously in the industry? There's a deal for that too. The only downside of these deals is that these small labels don't have as much, or any, cash to inject into the project. There's good news about that though.

5. You Can Raise Your Own Cash

Now that the price of professional music activity is down to a sensible level, the rock and roll dream is now tantalisingly close for anyone with a guitar and some talent. I'm guessing that includes you, right? There's only a few thousand dollars between where you and your band are right now and everything you've dreamed of. Don't believe anyone who tells you otherwise.

Of course, if there's one thing we all know about aspiring musicians it's that they're usually pretty broke. $30,000 is a lot of money for someone who delivers pizza for a living and spends all his spare cash on Marshalls. Even between the members of a band, that's probably too much to ask of low-income young people in a bad economy. How do you lay your hands on that kind of cash?

The latest and most exciting way to raise funds for music is crowdfunding. Sites like Kickstarter and Indiegogo let you pitch your band and your project to the general public, and your fans, or indeed anyone, can contribute as little or as much as they want in exchange for varying rewards, which you set. Maybe for $1 you get a thankyou on the band's Facebook page, for $10 you get a CD, $20 gets you a CD and a T-Shirt, maybe for $500 you'll play a gig in someone's front room or something cool like that. You don't have to give these people any of these things until you've got all the money you've asked for, so think of it as getting paid up front for the album just like an album advance, except without the awkward "record company owning your soul" bit that ruined all those parties back in 1992.

Take a look around these sites. See how much money some of these people are making. They're not better than you. In fact some of the music there is truly terrible but the people making it are making thousands of dollars in pledges anyway and you could have that too in a month from now. This is the final piece of the jigsaw for young bands, who can finally replace the one thing that the record companies could offer.

So there it is. Get out there and record, there is literally nothing to stop you. I've even put together a free video series covering the essential points of recording what to do, what not to do and the important choices, to get you started on recording your masterpiece. Sign up for it here.

About The Author: James Scott is a producer, songwriter and audio engineer from London, UK who works with unsigned and small-label artists to get them ahead in the industry.

43 comments sorted by best / new / date

    The music industry has vastly changed in the last few years. The stereotypical "rock star" who sells millions of records and sits by his pool at one of his several mansions is mostly dead... and that's a GOOD thing. If you love playing and want to make a career out of it you still can but you're not gonna win the "get signed" lottery anymore. It just takes more work, more dedication and BETTER MUSIC. The playing field is being leveled and the people who benefit the most are hard working musicians with something unique and exciting to contribute.
    I'd like to be the stereotypical rockstar who sells millions and sits by his pool. As long as I'm enjoying my own music though.
    I'd like to be the stereotypical rockstar who sells millions and sits by his pool after a good day of working hard on the next record. Selling millions to people who want to buy it because they like it, not because it's being shoved down their throats, of course.
    Great article, altho... I dont see a major problem in marketing... I see a problem in early stage development of a band; for example you need time to put together 12 'great' songs, you need probably a solid 2000 to record them in a proper way, then you need a PR agent (its not easy to get a gig anymore) that will cost you 200-300 a month (if you have a good deal)... Dont get me started with the gear (Currently I have cca 5000 in my rig)... I'm just pointing out that to start with is more essential than after you've been 'found'...
    As always, great article, James. As far as the act of making music goes, this generation couldn't have it better. Promotion, however, is the one thing that stumbles many, many people. Could we have a future article on what steps you think an artist should take to garner good promotion?
    amazing article ! I could really relate to most of this (even being a pizza driver myself). my band recorded our first EP last year and plan on recording a second EP in a few short months with the help of kickstarter so hopefully that works out. anyway, this is something from our first EP if anyone's curious:
    not really a huge fan of people randomly plugging their stuff, but this is actually very catchy. Kudos.
    thanks man. I agree with you but I thought it was an appropriate situation for it. just an example of I'm sure one of the many bands that follow these points
    Well sometimes you gotta do a bit of self promotion, if you believe in it enough to sink money into it you aught to have enough faith to suggest it in a good context.
    holy shit! that solo at 1:30, your'e ****ing amazing!!!!! amd love the singing to so ****ing cool
    Not my cuppa joe, but damn man kudos none the less. Easily as good/better than most radio rock, professional enough I could imagine hearing that in the charts or something. Well done.
    I'm usually extremely critical of articles like this, but yours was very well done. I believe your funding numbers are a bit optimistic but the bottom line that it can be done, and done well, for far less than in the past is spot on!
    here's the offer...the band is from the US, they're 3 years old with very little international exposure. they've already released their album independently. It's their 3rd release, 2nd "Full Length". so far it has sold 2500 units in the 1st 3 months and now album sales are starting to decline heavily... An indie-Record Label wants to come in and Re-Release that same album to the "world" 12 months later with a deluxe (bonus track) version available For a bit more $ and pay the band 16% PPD . They also want another "Full Length" album and a 4 song "EP" before the "contract" will be complete. included in the deal is a Co-Pub deal, 75/25 in favor of the band across the board. they offer a $100k advance for all 3 albums and the co-pub deal. no time limit for release. 50/50 on merchandising except for the US, artist retains 100%....and Exclusive Booking rights for a 12% gross fee outside of the US and Canada..... good deal? bad deal? ok deal? what would u change?
    James Scott
    I think you should talk to an entertainment lawyer - the devil is always in the detail.
    Good article man, I'm inspired. I can deduct the cost of a music video, none of the guys I jam with are into the whole video thing and I for one don't think you can actually make a good music vid (Seriously? One example? They all totally suck). Hell, if it costs as much to do a video as it does for a whole album, might as well save that money and make a second album instead
    If you want to make a professional looking video you can't really use MovieMaker, but great post though
    I agree with that, but I'm pretty sure more people have access to a Windows machine than an iMac or MacBook Pro with Final Cut Pro. Of course, some of us are such lucky bastards that we have access to both
    My band has resorted to DIY recording from our home studio, we have literally started from nothing. The band is purely member driven with no outside help. Please feel free to listen to our music. We play Heavy Metal, but are diverse in our style, we do have softer material. https://www.facebook.com/smackhandle
    You forget that it isn't just about sales and how much money things cost and how much you get in return. There are advantages that companies like record labels offer which a unsigned band isn't always able to provide for themselves. Big record labels are a bit extreme in their model since they are fairly out-dated in how the industry works nowadays in my opinion but their capitalist approach prevents them from downsizing to a point that better suits it. It's all in bigger money for the big cheeses than it is for the Artist. If they were to down size they would find it easier to sign more bands, take more risks, and eventually potentially have a more suitable business model for todays music environment. Being part of a label isn't just financial backing. If you are a new act, being part of a label means you are part of a community of excellent contacts from great directors, producers, and the sort and not to forget the other artists on the label itself. I'm sure many of us wouldn't pass up on an opportunity to be a support band for the tour of a stadium selling rock band even if they are in their 60's! Its a huge promotion opportunity. A band I am following the progress of quite heavily is the UK based band, The Howling. Over the course of a few years they have gone from an idea to playing at Download Festival this year. They sell out every single London show they do, and they haven't released a single purchasable record yet. In my research I found links to suggest that they are working with Raw Power Management since they have had various opportunities supporting a few of the bands which are or have been linked to that company. This is undeniably a big factor in their current successes. If you were to sign to a label such as 'PIAS Records' in the UK, a relatively small label in comparison to Warner for sure, you would be at the luxury of many opportunities to progress your career that you would otherwise not be able to gain from.
    James Scott
    That's why I said the right deals are out there if you want them. The balance of power has shifted away from bands and towards small labels and independent artists. You can name your own terms for a deal rather than be forced to accept a one-sided contract from a mega-corp. However, plenty of bands I know are able to build up great relationships with directors, producers and other artists without needing a label to do it for them. The decoupling of the record industry means that even the top people are out seeking their own business rather than having EMI or whoever do it for them. And you don't need a label to get on a tour, I know several independent artists who have got A-list tour support without a major-label deal. And the firm you mentioned is a management company, not a record company. In days gone by the record company would have parachuted management into a band on signing them, the Howling went out and got a management deal themselves, and they were free to do that on terms that suited them.
    Ah yes, sorry I misread that bit.. Running on 4 hours sleep here. I think an interesting case study would be Gallows signing to Warner for a 1 million deal. If I am correct they actually just spent that money on investing into everything they needed to be able to sustain themselves in the future without huge funding from the record label. They were dropped from the label but still got the contacts, the promotion, and the equipment to go ahead by themselves.
    In relation to the topic though, I think the key aspect of it all is the more people you know, the cheaper everything is. Develop a working social network of people in different aspects of the industry and you won't have to pay the full cost of everything. For example I am friends with both a guy who owns a studio, and a photographer/film maker. In return for me promoting their skills to other bands I meet, they provide me with either incredibly cheap, or free services.
    James Scott
    Absolutely correct - developing good relationships is key to getting places in music. It's not a matter of who you know - it's whether they like you or not!
    Love the article! My band have pretty much been all about the DIY idea, but we hired a cheap producer do help us get started. Turned out to result in an alright demo. He didn't let us get too many takes though, so we could maybe have been better off with doing it ourselves. The internet (Facebook and the UG forum actually)have been a huge help, so it has become easier to get attention compared to before. Anyways, here is the demo: hope you like it!
    UG really don't want me to post the link for some reason... And now I can't even edit my own comment, so here goes my second attempt:
    It has growling vocals, but I hope you like it!
    I agree with your article. But I have a question. With this knowledge, this power, and the ability to be able to do all of these things, why is it so hard for younger musicians to break free of the 90's mentality of "Label or Bust"? I myself am recently coming to terms with this, after much experience, and can't seem to convince my fellow bandmates otherwise.
    James Scott
    It's become part of the culture and folklore of rock and roll - so many books, films and stories have been written about the pursuit of the record deal that it's hard to get it out of people's heads. Many of the industry dinosaurs haven't been unsigned artists for decades, and the advice they are giving young musicians is hopelessly out of date. Perhaps the statistics at the start of this article will go some small way to help?
    I think its also because many unsigned bands work their ass off in all the wrong ways, only to end up still playing gigs to a crowd of only friends. They feel like they tried it independently and that the only way to be their idols is through a record label. Essentially that is partially correct if they have no contacts and lack required skills and opportunities to gain these contacts.
    I run http://www.theneverendingstage.com a site that helps artists, media and Industry unite. I Strongly feel many try to cut corners in all the wrong areas. Music is a Long term commitment that extends beyond expectation, goals and profits. If a project Your in goes off the charts and Your following increases 100 fold then Your wow but if Not never give up on developing Your talent, potential and progress across the board. I hope this helps some who are feeling panic. Yes Making Money is a great goal but Not every business offers right away money and there are many parts to just the music business. If Your a band and You must have goals and expectations and income You must make like any business You may set goals and if it don't happen give up but - Music and Business Never were meant to blend but somehow they can for those willing to tough it out and see it through in the long haul where at the least You get to live Your dream. The money and other additional aspects are Money dreams and demanding two dreams to occur well Good luck but hey Never give up on your dreams!