A really simple way is just to use Official Street Buzz.com... Sign Up. Your Fans Vote. You Get Paid!
Here are some traditional ways:
1. The Street Buzz: This is perhaps the biggest buzz you will need as an artist. When I say the "streets" I don't just mean the urban or lower middle class areas. Your street buzz means average people that you see everyday in or around your community. Your number one goal should be to be the most talked about, listened to and respected in your area. No major labels will come your way if you don't have a strong street buzz in your area. If you genre is R&B, Country or pop, having a street buzz might not be as important as if you were a rap artist. For rap artists, having a strong street buzz is a must to make it, no exceptions! An easy way to gain a strong street buzz is to be as social as you can when it comes to putting your musical talent out there. Remember the golden rule when it comes to obtaining a street buzz, "give to get". For best results, have those closest to you (your group or family) help you promote. To gain a big street buzz, most artists have a "street team". Street teams usually pass out your flyers, CD's, Videos and other promo tools to promote you. Bottom line, keep your name circulating everywhere in your city or town.
2.
The Internet Buzz: Welcome to the new age of promotion. Learning how to promote yourself on the internet could possibly lead to the biggest buzz you've ever seen. I've have personal experience of what good advantages an internet buzz has to offer. Not only will you be known down the street, you'll be known in another country possibly! Having your music online at places such as Soundclick, Myspace, CD Baby, Music Submit etc. will showcase your talent to thousands, maybe even millions of unknown ears. The internet buzz could enable you to sell tons of CD's and other merchandise that has to do with your music. A lot of musicians make a good living off selling their music independently online. When I was 17 I put my first CD on CD Baby and sold over 3000 copies in 4 months. It might not sound like a lot, but it was the biggest amount of CD's I had sold online for my first time. Not only did I sell CD's in the U.S. but I also went worldwide as I call it to sell CD's in Australia and Japan. While you are sleep, you could be making lots of dollars from your music online. Just because you're sleep doesn't mean you can't make money from the billions of internet searchers online. Since there are so many people online, you're music is guaranteed to be heard by someone new. Learn to use a site like Myspace to put you're music out there like never before. With the new features of Myspace, you now have the option of selling your CD online, making connects, listing your shows and even make your own band merchandise for free. The keyword to succeeding online is "Networking". Networking means reaching out to everyone you can that's either related in the field you're in or other connections that will help you get to where you need to be. The internet is not like being in person, there should be no nervousness or shyness about contacting someone since it's not face to face, there should be no excuses!
We removed the last section of this article because it was not true.
Source
Sunday, February 13, 2011
Is Your Favorite Rapper Making Money?
Believe None of What You See...
Who is the incredible bonehead who said rappers make mad loot? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be crazy paid and livin' large, this puts an incredible amount of pressure on the artists to appear wealthy. And it's not just the fans; I can't tell you how many times I've been out with rappers along with people in the industry, and the industry slobs have expected the artists to pick up the dinner check. I've even seen people cop an attitude if the artist doesn't pay for everything. This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist's entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket).
Once an artist releases a record, the pressure is on to portray a successful image to fans, friends, families, and people around the way. People expect the artists to be well dressed, drive an expensive car, etc. Think about it. Don't you expect artists "to look like artists?" Would you admire Jay-Z as much if he drove a busted old 1990 Grand Am instead of that beautiful, brand new, top of the line Bentley?
Sadly, when an artist gets signed to a label deal, especially a rap artist, he or she receives somewhere between 8 and 13 points. What that means is 8% to 13% of the retail sales price, after the record label recoups the money it puts out (the advance, the sample clearances, the producer advances, usually half the cost of any videos, any cash outlays for the artists, etc.). The artist has to sell hella units to make any money back. Here's an example of a relatively fair record deal for a new rap artist with some clout in the industry and a terrific negotiating attorney:
ROYALTY RATE: 12%
We're going to assume that there are 3 artists in the group, and that they split everything equally. We're also going to assume that they produce their own tracks themselves.
Suggested retail list price (cassettes) $10.98
less 15% packaging deduction (usually 20%) =$ 9.33
gets paid on 85% of records sold ("free goods") =$7.93
So the artists' 12% is equal to about 96 cents per record sold. In most deals, the producer's 3% comes out of that 12%, but for the sake of brevity, in this example the group produced the whole album, buying no tracks from outside producers, which is rare.
Let's assume that they are a hit and their record goes Gold (although it is rare that a first record blows up like this). Let's also assume they were a priority at their record label and that their label understood exactly how to market them. So they went Gold, selling 500,000 units according to SoundScan (and due to the inaccuracies in SoundScan tracking at the rap retail level, 500,000 scanned probably means more like 600,000 actually sold).
GOLD RECORD = 500,000 units sold x $ .96 = $480,000. Looks like a nice chunk of loot, huh? Watch this. Now the label recoups what they've spent: independent promotion, 1/2 the video cost, some tour support, all those limo rides, all those out of town trips for the artist and their friends, etc.
$480,000
-$100,000 recoupable stuff (NOT advance)
--------
$380,000
-$ 70,000 advance (recording costs)
--------
$310,000
Still sounds OK? Watch... Now, half of the $380,000 stays "in reserve" (accounting for returned items from retail stores) for 2 to 4 years depending on the length specified in the recording contract. So the $70,000 advance is actually subtracted from $190,000 (the other $190,000 is in reserves for 2 years). Now, there's also the artist's manager, who is entitled to 20% of all of the entertainment income which would be 20% of $310,000, or $62,000. Remember, the artist is the last to get paid, so even the manager gets paid before the artist.
So the artists actually receive $19,333 each for their gold album, and in two years when the reserves are liquidated, IF they've recouped, they will each receive another $63,000. IF they've recouped. Guess who keeps track of all of this accounting? The label. Most contracts are "cross-collateralized," which means if the artist does not recoup on the first album, the money will be paid back out of the second album. Also, if the money is not recouped on the second album, repayment can come out of the "in reserve" funds from the first album, if the funds have not already been liquidated.
Even after the reserves are paid, each artist only actually made 50 cents per unit based on this example. The label made about $2.68 per unit. This example also doesn't include any additional production costs for an outside producer to come in and do a re-mix, and you know how often that happens.
So each artist in this group has received a total of about $82,000. After legal expenses and costs of new clothing to wear on stage while touring, etc, each artist has probably made a total of $75,000 before paying taxes (which the artist is responsible for-- remember Kool Moe Dee?). Let's look at the time line now. Let's assume the artists had no jobs when they started this. They spent 4 months putting their demo tape together and getting the tracks just right. They spent another 6 months to a year getting to know who all of the players are in the rap music industry and shopping their demo tape. After signing to a label, it took another 8 months to make an album and to get through all of the label's bureaucracy. When the first single dropped, the group went into promotion mode and traveled all over promoting the single at radio, retail, concerts, and publications. This was another six months. The record label decided to push three singles off the album so it was another year before they got back into the studio to make album number two. This scenario has been a total of 36 months. Each member of the group made $75,000 for a three year investment of time, which averages out to $25,000 per year. In corporate America, that works out to be $12 per hour (before taxes).
OK, so it's not totally hopeless. Since we're using the fantasy of a relatively fair deal, let's look at publishing from a relatively fair perspective. There are mechanical royalties and performance royalties to figure in. Mechanical royalties are the payments that Congress stipulates labels must pay based on copy right ownership and publishing ownership. These payments have nothing to do with recouping, but everything to do with who owns the publishing. Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records (home of Black Xuede) is financed through the publishing that the CEO has purchased over the years. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music. Where it gets confusing is all the different ways to get paid on publishing, all the ways to split publishing with other folks, and all the ways artists get screwed out of their publishing. In the 8 years I've been doing this, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me of my cash, I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door?
Bill Brown at ASCAP breaks it down more simply than anyone I've ever heard. He compares publishing with real estate. When you make a song, you are the owner of that property: the landlord. Sometimes you sell off a piece of the land for money (but you NEVER give away your land, right??) and if someone else wants to use your property, or rent it, they have to pay you rent to use it. I love that analogy. It's so crystal clear!
A copyright is proof of ownership of a song, both lyrics and music. If there is a sample in the music, you are automatically giving up part of the song, at the whim of the person who owns the rights to the original song (not necessarily the original artist). In order to "clear the sample," you send your version of the song to the owner of the original composition or whomever owns the publishing (and to the owner of the master, meaning original record label or whomever now owns the master). Then you negotiate the price with those two owners. Some are set in stone and you get to either agree to their price or to remove the sample. On DJ DMD's last album (22: PA Worldwide on Elektra) he spent close to $100,000 in advances and fees due to the sampling on his album. It came out of his upfront monies (advance) and he bears the burden of paying for it all, even though Elektra released and owns the record. Proof of copyright is easy to obtain by registering your song with the copyright office in Washington DC. You call them (202.707.9100) and ask for an SR Form (sound recording). You fill out the form, listing all of the owners, and mail it back to them with a copy of the song (a cassette is good enough) along with the Copyright fee (around $25 or so). This way, if someone steals your song, or a piece of your song, you can sue them for taking it and for your legal fees. With the "poor man's copyright" (mailing your tape to yourself in a sealed envelope with your signature across the sealed flap, and then never opening it when it arrives back to you with a postmark proving the date), you can not sue for damages and it's more difficult to prove your case. The copy right fee may seem like a lot of money to some, but it's nothing compared to what a law suit would cost you.
Performance royalties are money that is paid for the performance of your song. The money is paid based on the percentage of ownership of the song. So if you own 100% of the song, you get the whole check. If you own just the music, which is half the song, then you get half the money. If you own the music with a sample in it that claims half the song, then you get a check for 25%. Ya follow? Performance Rights organizations consist of ASCAP, BMI, and SESAC (which is still quite small). They police the radio stations, clubs, concerts, etc (any place music is played or broadcast), all of whom pay a fee to play the music which the performance rights societies collect and split amongst their members based on the amount of times a record is played. Although the formulas change annually based on play, a Top 10 song played on commercial radio can earn a good chunk of change in the hundreds of thousands of dollars range.
There is another kind of royalty artists receive when their records sell: mechanical royalties. These are paid based upon a pre-set limit placed by Congress which increases automatically every two years. In 1998 and 1999 it was .0715 cents per song, but on January 1, 2000 it increased to .0765 per song. Record labels put caps on mechanical royalties (the slugs) at either 10 songs, 11 songs, or 12 songs, no matter how many songs actually appear on the record, and you get what you negotiate for. Also, there's a slimey little clause that restricts payment of mechanicals (because God knows labels don't make enough money as it is) to anywhere between 75% and 85%. This evil deed is called percentage of statutory rate. Here's the difference those few pennies make as it pertains to an artist's royalty check (I refuse to even consider illustrating the worst bullshit deals such as 10x at 75%) provided they own 100% of the song:
# songs stat mechanical 100,000 sold 250,000 sold 500,000 (Gold) 1,000,000 (Platinum)
11x 85% .6639 per album $66,390 $165,975 $331,950 $663,900
11x 100% .781 per album $78,100 $195,250 $390,500 $781,000
12x 85% .7242 per album $72,420 $181,050 $362,100 $724,200
12x 100% .852 per album $85,200 $426,000 $852,000 $1,704,000
10x 85% .6035 per album $60,350 $150,875 $301,750 $603,500
I based the above chart on the old 1998-1999 rate of .0715 per song, so I could use my friend Fiend as an example. His first album came out in April of 1998 when the stat rate set by Congress was at this rate.
The dollar figure above represents monies due an artist (regardless of recoupment) per album based on ownership of 100% of publishing. So for example, Fiend who is signed to No Limit, provided he owns 100% of his publishing (I can dream can't I?), if his deal gives him 11x rate at 85% (I hate it but it won't kill me) then on his first album, There's One In Every Family, which came out 4/28/98 and sold 565,977 SoundScan units, No Limit would have paid him (hopefully) $378,369.77. If No Limit owns half of Fiend's publishing, he would receive $189,184.88 provided he wrote all of his own songs (which he did, except the verses by other artists who appeared which lowers the ownership percentage and dollar amount) and provided he made all of his own beats (which he did not; he features outside producers on this album like Beats By The Pound).
So there you have it, the real deal on how much money an artist makes. You can subtract out now another 28% to 50% of all income, including show money, (depending on the artist's tax bracket which is determined by how much income was made within any given calendar year) for the IRS who get paid quarterly (hopefully) by the artist's accountant. If the average artist releases a record every two years, then this income must last twice as long... I think about this every time I see my favorite artists flossing in their music videos drinking champagne or every time I see them drive by in a brand new Benz...
Source
Who is the incredible bonehead who said rappers make mad loot? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be crazy paid and livin' large, this puts an incredible amount of pressure on the artists to appear wealthy. And it's not just the fans; I can't tell you how many times I've been out with rappers along with people in the industry, and the industry slobs have expected the artists to pick up the dinner check. I've even seen people cop an attitude if the artist doesn't pay for everything. This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist's entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket).
Once an artist releases a record, the pressure is on to portray a successful image to fans, friends, families, and people around the way. People expect the artists to be well dressed, drive an expensive car, etc. Think about it. Don't you expect artists "to look like artists?" Would you admire Jay-Z as much if he drove a busted old 1990 Grand Am instead of that beautiful, brand new, top of the line Bentley?
Sadly, when an artist gets signed to a label deal, especially a rap artist, he or she receives somewhere between 8 and 13 points. What that means is 8% to 13% of the retail sales price, after the record label recoups the money it puts out (the advance, the sample clearances, the producer advances, usually half the cost of any videos, any cash outlays for the artists, etc.). The artist has to sell hella units to make any money back. Here's an example of a relatively fair record deal for a new rap artist with some clout in the industry and a terrific negotiating attorney:
ROYALTY RATE: 12%
We're going to assume that there are 3 artists in the group, and that they split everything equally. We're also going to assume that they produce their own tracks themselves.
Suggested retail list price (cassettes) $10.98
less 15% packaging deduction (usually 20%) =$ 9.33
gets paid on 85% of records sold ("free goods") =$7.93
So the artists' 12% is equal to about 96 cents per record sold. In most deals, the producer's 3% comes out of that 12%, but for the sake of brevity, in this example the group produced the whole album, buying no tracks from outside producers, which is rare.
Let's assume that they are a hit and their record goes Gold (although it is rare that a first record blows up like this). Let's also assume they were a priority at their record label and that their label understood exactly how to market them. So they went Gold, selling 500,000 units according to SoundScan (and due to the inaccuracies in SoundScan tracking at the rap retail level, 500,000 scanned probably means more like 600,000 actually sold).
GOLD RECORD = 500,000 units sold x $ .96 = $480,000. Looks like a nice chunk of loot, huh? Watch this. Now the label recoups what they've spent: independent promotion, 1/2 the video cost, some tour support, all those limo rides, all those out of town trips for the artist and their friends, etc.
$480,000
-$100,000 recoupable stuff (NOT advance)
--------
$380,000
-$ 70,000 advance (recording costs)
--------
$310,000
Still sounds OK? Watch... Now, half of the $380,000 stays "in reserve" (accounting for returned items from retail stores) for 2 to 4 years depending on the length specified in the recording contract. So the $70,000 advance is actually subtracted from $190,000 (the other $190,000 is in reserves for 2 years). Now, there's also the artist's manager, who is entitled to 20% of all of the entertainment income which would be 20% of $310,000, or $62,000. Remember, the artist is the last to get paid, so even the manager gets paid before the artist.
So the artists actually receive $19,333 each for their gold album, and in two years when the reserves are liquidated, IF they've recouped, they will each receive another $63,000. IF they've recouped. Guess who keeps track of all of this accounting? The label. Most contracts are "cross-collateralized," which means if the artist does not recoup on the first album, the money will be paid back out of the second album. Also, if the money is not recouped on the second album, repayment can come out of the "in reserve" funds from the first album, if the funds have not already been liquidated.
Even after the reserves are paid, each artist only actually made 50 cents per unit based on this example. The label made about $2.68 per unit. This example also doesn't include any additional production costs for an outside producer to come in and do a re-mix, and you know how often that happens.
So each artist in this group has received a total of about $82,000. After legal expenses and costs of new clothing to wear on stage while touring, etc, each artist has probably made a total of $75,000 before paying taxes (which the artist is responsible for-- remember Kool Moe Dee?). Let's look at the time line now. Let's assume the artists had no jobs when they started this. They spent 4 months putting their demo tape together and getting the tracks just right. They spent another 6 months to a year getting to know who all of the players are in the rap music industry and shopping their demo tape. After signing to a label, it took another 8 months to make an album and to get through all of the label's bureaucracy. When the first single dropped, the group went into promotion mode and traveled all over promoting the single at radio, retail, concerts, and publications. This was another six months. The record label decided to push three singles off the album so it was another year before they got back into the studio to make album number two. This scenario has been a total of 36 months. Each member of the group made $75,000 for a three year investment of time, which averages out to $25,000 per year. In corporate America, that works out to be $12 per hour (before taxes).
OK, so it's not totally hopeless. Since we're using the fantasy of a relatively fair deal, let's look at publishing from a relatively fair perspective. There are mechanical royalties and performance royalties to figure in. Mechanical royalties are the payments that Congress stipulates labels must pay based on copy right ownership and publishing ownership. These payments have nothing to do with recouping, but everything to do with who owns the publishing. Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records (home of Black Xuede) is financed through the publishing that the CEO has purchased over the years. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music. Where it gets confusing is all the different ways to get paid on publishing, all the ways to split publishing with other folks, and all the ways artists get screwed out of their publishing. In the 8 years I've been doing this, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me of my cash, I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door?
Bill Brown at ASCAP breaks it down more simply than anyone I've ever heard. He compares publishing with real estate. When you make a song, you are the owner of that property: the landlord. Sometimes you sell off a piece of the land for money (but you NEVER give away your land, right??) and if someone else wants to use your property, or rent it, they have to pay you rent to use it. I love that analogy. It's so crystal clear!
A copyright is proof of ownership of a song, both lyrics and music. If there is a sample in the music, you are automatically giving up part of the song, at the whim of the person who owns the rights to the original song (not necessarily the original artist). In order to "clear the sample," you send your version of the song to the owner of the original composition or whomever owns the publishing (and to the owner of the master, meaning original record label or whomever now owns the master). Then you negotiate the price with those two owners. Some are set in stone and you get to either agree to their price or to remove the sample. On DJ DMD's last album (22: PA Worldwide on Elektra) he spent close to $100,000 in advances and fees due to the sampling on his album. It came out of his upfront monies (advance) and he bears the burden of paying for it all, even though Elektra released and owns the record. Proof of copyright is easy to obtain by registering your song with the copyright office in Washington DC. You call them (202.707.9100) and ask for an SR Form (sound recording). You fill out the form, listing all of the owners, and mail it back to them with a copy of the song (a cassette is good enough) along with the Copyright fee (around $25 or so). This way, if someone steals your song, or a piece of your song, you can sue them for taking it and for your legal fees. With the "poor man's copyright" (mailing your tape to yourself in a sealed envelope with your signature across the sealed flap, and then never opening it when it arrives back to you with a postmark proving the date), you can not sue for damages and it's more difficult to prove your case. The copy right fee may seem like a lot of money to some, but it's nothing compared to what a law suit would cost you.
Performance royalties are money that is paid for the performance of your song. The money is paid based on the percentage of ownership of the song. So if you own 100% of the song, you get the whole check. If you own just the music, which is half the song, then you get half the money. If you own the music with a sample in it that claims half the song, then you get a check for 25%. Ya follow? Performance Rights organizations consist of ASCAP, BMI, and SESAC (which is still quite small). They police the radio stations, clubs, concerts, etc (any place music is played or broadcast), all of whom pay a fee to play the music which the performance rights societies collect and split amongst their members based on the amount of times a record is played. Although the formulas change annually based on play, a Top 10 song played on commercial radio can earn a good chunk of change in the hundreds of thousands of dollars range.
There is another kind of royalty artists receive when their records sell: mechanical royalties. These are paid based upon a pre-set limit placed by Congress which increases automatically every two years. In 1998 and 1999 it was .0715 cents per song, but on January 1, 2000 it increased to .0765 per song. Record labels put caps on mechanical royalties (the slugs) at either 10 songs, 11 songs, or 12 songs, no matter how many songs actually appear on the record, and you get what you negotiate for. Also, there's a slimey little clause that restricts payment of mechanicals (because God knows labels don't make enough money as it is) to anywhere between 75% and 85%. This evil deed is called percentage of statutory rate. Here's the difference those few pennies make as it pertains to an artist's royalty check (I refuse to even consider illustrating the worst bullshit deals such as 10x at 75%) provided they own 100% of the song:
# songs stat mechanical 100,000 sold 250,000 sold 500,000 (Gold) 1,000,000 (Platinum)
11x 85% .6639 per album $66,390 $165,975 $331,950 $663,900
11x 100% .781 per album $78,100 $195,250 $390,500 $781,000
12x 85% .7242 per album $72,420 $181,050 $362,100 $724,200
12x 100% .852 per album $85,200 $426,000 $852,000 $1,704,000
10x 85% .6035 per album $60,350 $150,875 $301,750 $603,500
I based the above chart on the old 1998-1999 rate of .0715 per song, so I could use my friend Fiend as an example. His first album came out in April of 1998 when the stat rate set by Congress was at this rate.
The dollar figure above represents monies due an artist (regardless of recoupment) per album based on ownership of 100% of publishing. So for example, Fiend who is signed to No Limit, provided he owns 100% of his publishing (I can dream can't I?), if his deal gives him 11x rate at 85% (I hate it but it won't kill me) then on his first album, There's One In Every Family, which came out 4/28/98 and sold 565,977 SoundScan units, No Limit would have paid him (hopefully) $378,369.77. If No Limit owns half of Fiend's publishing, he would receive $189,184.88 provided he wrote all of his own songs (which he did, except the verses by other artists who appeared which lowers the ownership percentage and dollar amount) and provided he made all of his own beats (which he did not; he features outside producers on this album like Beats By The Pound).
So there you have it, the real deal on how much money an artist makes. You can subtract out now another 28% to 50% of all income, including show money, (depending on the artist's tax bracket which is determined by how much income was made within any given calendar year) for the IRS who get paid quarterly (hopefully) by the artist's accountant. If the average artist releases a record every two years, then this income must last twice as long... I think about this every time I see my favorite artists flossing in their music videos drinking champagne or every time I see them drive by in a brand new Benz...
Source
Sunday, January 23, 2011
What happens when the CD factory closes?
PITMAN, N.J.--In this corner of the music universe, you won't find many limousines, groupies, or people lighting guitars on fire.
(Credit: Sony Corp.)
While the public often associates the music business with jet-setting rock stars and lavish living, this place is marked by minivans, Phillies and Eagles fans, and, very soon, people without work.
Pitman, which has 9,365 residents and is about 17 miles southeast of Philadelphia, is home to one of Sony's two remaining U.S.-based CD-manufacturing plants--until March 31. After that, the company will shutter the facility and 300 workers will be out of jobs. A Sony spokeswoman recently cited an ailing U.S. economy and sagging interest in physical media as the reasons for the closure. A longtime employee sized up the situation more succinctly for CNET last week: "The CD is dying."
The plight of those 300 workers isn't likely to get much attention in Silicon Valley. The prevailing wisdom in tech land is that the compact disc--the dominant music-distribution format for nearly three decades--has outlived its usefulness, just as the vinyl LP did. Why lug around CDs, which typically come with 15 songs, when an iPod and similar devices enable owners to stick the equivalent of 2,000 discs into their pants pocket?
Fair point, but many would argue innovation isn't the only reason CDs look long in the tooth. After a decade of rampant illegal file sharing, they'd argue, the plant closure is a sign that the CD just couldn't compete with free.
Digital masters
Sony once operated three CD-producing facilities in the United States but will soon be down to one. In 2003, Sony closed a CD plant in Springfield, Ore. In that case, 277 jobs were lost. This also isn't the company's first experience with a dying music format. Many have already forgotten that Sony played a key role in ushering out the vinyl era. Sony began development of an optical digital audio disk in the mid 1970s. In 1979, the company teamed with Phillips to do more study. The first album released on CD and offered to the public was Billy Joel's "52nd Street" in October 1982.
Billy Joel's '52nd Street' album was the first to be released to the public on compact disc.
(Credit: Sony)
Sony's Pitman plant survived the vinyl-to-CD transition. The facility was built in 1960 by Columbia Records to press vinyl albums, according to Sony's Web site. It started churning out CDs in 1988, the same year Sony acquired Columbia, which produced that groundbreaking Joel CD. The artist Patti Smith, known to many as the "godmother of punk," once considered working at the plant during the late '60s but moved to New York instead, according to her book "Just Kids."
For the major music labels, the CD represented a golden era, said Jac Holzman, the man who discovered The Doors, co-founded Elektra Records, and is one of the music sector's leading tech voices. The CD prompted music owners to upgrade vinyl libraries.
But by selling CDs, the poobahs at the record labels also placed the equivalent of digital-master recordings in every home, Holzman said. They had no way to foresee how the CD would enable ripping, iPods, peer-to-peer networks or how those things would slam into their business like a wrecking ball.
No file-sharing scapegoats
On Thursday, three employees spoke to CNET in the parking lot of the Sony facility, a block-long building with a windowless facade and surrounded by a snow-covered field. The employees acknowledged that online piracy and the iPod likely had a hand in killing their jobs. The men, however, didn't appear to be looking for scapegoats.
One man, who refused to provide his name for fear of angering Sony managers, said it's pointless to lash out. He said piracy has burrowed too deeply into our culture to do anything about now. "My teenage daughter does it," he said. "I told her 'Hey, you know you're putting your dad out of a job?' She's a teenager. They don't understand. What they understand is they want music and it's available someplace for free."
He said the truly worrisome trend for him was when the CD began to lose longtime friends. "They stopped putting CD players in cars and I knew things were bad," the worker said. The CD was once a staple of a car's dashboard but the past several years, car manufacturers have searched for ways to tap into Web-distributed music.
Eric Weaver, a 22-year-old who has worked as an IT worker at the Sony plant for four years, is a good example of what the labels are up against. He said he sees some positive aspects to music file sharing. He said he no longer even bothers to rip to his computer the free discs Sony offers employees. So, that means he buys his music from iTunes or Amazon, right?
"Well, some of it," Weaver said. He shrugged and smiled. "Some of it I get from other sources."
The new buggy-whip makers
Pitman appears to be one of the impact points, where changing consumer tastes, technology, and a down economy collide. So, what then is to become of the plant's workers?
(Credit: Sony)
Victor Morales, another Sony worker, told reporters from NBC 10 in Philadelphia that he and his wife were nearly ready to buy a house but must rethink their plans. One female worker told the news outlet that she was "devastated" and called her coworkers a "second family."
Some of Sony's employees are hoping to ride out the CD a little longer. They are trying to secure jobs at Sony's last remaining CD-manufacturing facility in Terre Haute, Ind.
Besides the employees, the closure of Sony's operations in Pitman could affect the entire area. Michael Batten, Pitman's mayor, said the town is only 2.2 square miles in size and Sony's CD plant accounts for 72 acres. "There was a time when Sony paid $1 million in taxes," Batten said.
To make up for the shortfall, Batten said "we're just going to have to cut where we can."
Clancy's Pub is getting squeezed in this Sony cutback, too. The bar/restaurant across a narrow two-lane highway from the facility is a favorite hangout of the plant's workers. At the bar, bulky men wearing baseball caps and boots stuck with snow sip drinks and watch sports. The only music gear in the place are two electric guitars hanging on a wall as part of a beer ad.
Mark Leotti, the bar's manager, said Sony employees and their spending have steadily decreased over the years, meaning waitresses and bartenders as well as the restaurant's owners feel the pinch.
It would be easy to write this off as a music industry problem, but one has to wonder how much life is left in the DVD. Sales were down 13 percent last year as video services that use the Web to deliver movies to customers' homes appear to be catching on.
Sony employees interviewed said the Pitman facility used to make Blu-ray discs. Those jobs were cut last year
Source
(Credit: Sony Corp.)
While the public often associates the music business with jet-setting rock stars and lavish living, this place is marked by minivans, Phillies and Eagles fans, and, very soon, people without work.
Pitman, which has 9,365 residents and is about 17 miles southeast of Philadelphia, is home to one of Sony's two remaining U.S.-based CD-manufacturing plants--until March 31. After that, the company will shutter the facility and 300 workers will be out of jobs. A Sony spokeswoman recently cited an ailing U.S. economy and sagging interest in physical media as the reasons for the closure. A longtime employee sized up the situation more succinctly for CNET last week: "The CD is dying."
The plight of those 300 workers isn't likely to get much attention in Silicon Valley. The prevailing wisdom in tech land is that the compact disc--the dominant music-distribution format for nearly three decades--has outlived its usefulness, just as the vinyl LP did. Why lug around CDs, which typically come with 15 songs, when an iPod and similar devices enable owners to stick the equivalent of 2,000 discs into their pants pocket?
Fair point, but many would argue innovation isn't the only reason CDs look long in the tooth. After a decade of rampant illegal file sharing, they'd argue, the plant closure is a sign that the CD just couldn't compete with free.
Digital masters
Sony once operated three CD-producing facilities in the United States but will soon be down to one. In 2003, Sony closed a CD plant in Springfield, Ore. In that case, 277 jobs were lost. This also isn't the company's first experience with a dying music format. Many have already forgotten that Sony played a key role in ushering out the vinyl era. Sony began development of an optical digital audio disk in the mid 1970s. In 1979, the company teamed with Phillips to do more study. The first album released on CD and offered to the public was Billy Joel's "52nd Street" in October 1982.
Billy Joel's '52nd Street' album was the first to be released to the public on compact disc.
(Credit: Sony)
Sony's Pitman plant survived the vinyl-to-CD transition. The facility was built in 1960 by Columbia Records to press vinyl albums, according to Sony's Web site. It started churning out CDs in 1988, the same year Sony acquired Columbia, which produced that groundbreaking Joel CD. The artist Patti Smith, known to many as the "godmother of punk," once considered working at the plant during the late '60s but moved to New York instead, according to her book "Just Kids."
For the major music labels, the CD represented a golden era, said Jac Holzman, the man who discovered The Doors, co-founded Elektra Records, and is one of the music sector's leading tech voices. The CD prompted music owners to upgrade vinyl libraries.
But by selling CDs, the poobahs at the record labels also placed the equivalent of digital-master recordings in every home, Holzman said. They had no way to foresee how the CD would enable ripping, iPods, peer-to-peer networks or how those things would slam into their business like a wrecking ball.
No file-sharing scapegoats
On Thursday, three employees spoke to CNET in the parking lot of the Sony facility, a block-long building with a windowless facade and surrounded by a snow-covered field. The employees acknowledged that online piracy and the iPod likely had a hand in killing their jobs. The men, however, didn't appear to be looking for scapegoats.
One man, who refused to provide his name for fear of angering Sony managers, said it's pointless to lash out. He said piracy has burrowed too deeply into our culture to do anything about now. "My teenage daughter does it," he said. "I told her 'Hey, you know you're putting your dad out of a job?' She's a teenager. They don't understand. What they understand is they want music and it's available someplace for free."
He said the truly worrisome trend for him was when the CD began to lose longtime friends. "They stopped putting CD players in cars and I knew things were bad," the worker said. The CD was once a staple of a car's dashboard but the past several years, car manufacturers have searched for ways to tap into Web-distributed music.
Eric Weaver, a 22-year-old who has worked as an IT worker at the Sony plant for four years, is a good example of what the labels are up against. He said he sees some positive aspects to music file sharing. He said he no longer even bothers to rip to his computer the free discs Sony offers employees. So, that means he buys his music from iTunes or Amazon, right?
"Well, some of it," Weaver said. He shrugged and smiled. "Some of it I get from other sources."
The new buggy-whip makers
Pitman appears to be one of the impact points, where changing consumer tastes, technology, and a down economy collide. So, what then is to become of the plant's workers?
(Credit: Sony)
Victor Morales, another Sony worker, told reporters from NBC 10 in Philadelphia that he and his wife were nearly ready to buy a house but must rethink their plans. One female worker told the news outlet that she was "devastated" and called her coworkers a "second family."
Some of Sony's employees are hoping to ride out the CD a little longer. They are trying to secure jobs at Sony's last remaining CD-manufacturing facility in Terre Haute, Ind.
Besides the employees, the closure of Sony's operations in Pitman could affect the entire area. Michael Batten, Pitman's mayor, said the town is only 2.2 square miles in size and Sony's CD plant accounts for 72 acres. "There was a time when Sony paid $1 million in taxes," Batten said.
To make up for the shortfall, Batten said "we're just going to have to cut where we can."
Clancy's Pub is getting squeezed in this Sony cutback, too. The bar/restaurant across a narrow two-lane highway from the facility is a favorite hangout of the plant's workers. At the bar, bulky men wearing baseball caps and boots stuck with snow sip drinks and watch sports. The only music gear in the place are two electric guitars hanging on a wall as part of a beer ad.
Mark Leotti, the bar's manager, said Sony employees and their spending have steadily decreased over the years, meaning waitresses and bartenders as well as the restaurant's owners feel the pinch.
It would be easy to write this off as a music industry problem, but one has to wonder how much life is left in the DVD. Sales were down 13 percent last year as video services that use the Web to deliver movies to customers' homes appear to be catching on.
Sony employees interviewed said the Pitman facility used to make Blu-ray discs. Those jobs were cut last year
Source
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