There’s an old saying about trust — it takes years to build, seconds to break, and a lifetime to repair. Repairing trust requires an industry-wide commitment to come together for the long haul to rebuild the music market place. The buzzword of the music industry is ‘transparency’ – perhaps it should be ‘simplicity.

Robert Horsfall is one of the UK’s most respected music lawyers, with clients across both the label and artist communities. He calls for a revolution in the music industry’s approach to recording contracts in order to create truly long-term relationships between artists and labels. Robert have been a lawyer in the music industry for 35 years, mostly working with artists and managers but also working with and for major labels and indie labels. His music consumption has moved from vinyl to cassette to CD to downloads to streaming and now back to vinyl.

Our industry will always be about new technologies and new rights issues and involve debates about who owns the pie or how it’s sliced up. Two of the first contracts I saw as a young lawyer were Cat Stevens’ 1967 contract with Decca and his 1970 contract with Island. Oh, how very simple things were in those days.  Is it a co-incidence that some esteemed critics consider 1971 the healthiest ever year for music?

Last year, Robert handled a ‘360’ contract with a major label. “I was so physically and emotionally exhausted by the process of reading and amending it, that at the end of that very long day, I did a word count. The 74 page contract was 38,004 words long. That got me Googling and I came across a site that gives the word count of famous novels.The Great Gatsby is 47,000 words; The Lion, The Witch and The Wardrobe is 36,000 words.”

That Cat Stevens / Island contract in 1967 was 2,458 words. What’s more significant though, is this: the Island contract was a three-album deal. Cat released those three albums – all classics – in April 1970, November 1970 and October 1971. He was out of contract, a free agent, within two years of signing to Chris Blackwell. But… Cat happily and consensually carried on in business with Island, making six more albums for them, before he retired in 1979.

New contracts were put in place by grown-up people being grown-up: “If it ain’t broke, don’t fix it.” What’s more, when Cat – now Yusuf – returned to making music in 2006, he renewed his relationship with Universal, the new owners of Island Records.

Manic Street Preachers were signed to Columbia in 1992, probably on a six-album deal. They have gone on to make 12 albums for them.  Other “lifers”, if we call them that, include Bruce Springsteen and Bob Dylan with Columbia; Dire Straits and Mark Knopfler with Phonogram.  Billy Bragg talks about his 11 albums with Cooking Vinyl, over a 24 years period under seven different contracts.

Back in 2004, Robert worked on a book looking back at a 30-year-long gestation of music industry contracts. I wrote about a mythical label called Harmony Records and its innovative ‘360’ contract.  In a follow-up book in 2009, Robert wrote again about Harmony and listed its business philosophy as a ‘Decalogue’, which included: We are in a partnership with you; We trust the relationship and believe we will be in business together for a long time; We will stick together in sickness and in health; and Our business model is about paying you royalties and not forever leaving you un-recouped.

The greatest partnership of all perhaps, a marriage, has wedding vows of less than 50 words (multiplied by two, of course).

And if new business models can be calibrated differently then maybe this industry’s A&R hit-miss ratio might improve – with greater profits for investment in new signings.

Artists need to surround themselves with the best of breed, a dream team. It’s not about the money – it’s about getting muscle and validation. Of course, labels take big risks with new artists and, like any business, they must get a fair return on their investment.

Robert has no problem with the concept of a ‘360’ deal. He, like many others, originally welcomed them in the hope – perhaps naïve, with the benefit of hindsight – that they might help labels sustain more long-term careers. But the ‘360’ deal needs to be fair and balanced.

Asking for a share of gross live income without, for example, some guaranteed tour support is difficult to accept. If new business models can be calibrated differently then maybe our A&R hit and miss ratio might improve, with greater profits of investments in new signings.

Sadly, today’s contracts are too long, too intricate, too overreaching – and too prone to fostering resentment at some point or in some way. The best way to achieve a greater balance is to have the contract limited to three albums. If the relationship is a healthy one, the deal can then get re-calibrated. The deal can be adjusted up, down or sideways, as it were, to reflect success, lack of success, new technologies, new opportunities or changed dynamics.

They had Adele for three albums and I imagine they are quite sanguine about her deciding to move over to Sony, considering she is now in the “blockbuster” world, better suited to a global powerhouse.

If you ask around about the meaning of the word “partnership”, people often say “a relationship of equals”. The word evokes trust, respect, transparency, loyalty and fidelity. All these people are investing time, money and resources, but they are trusting the relationship.  No other creative or sporting sector signs up the talent for as long as some major labels sign artists for.

If the label is making a big cash investment I don’t expect 50% royalty – but I would like to see around 30% to 35%, potentially escalating on break-even or recoupment or after a period of time. Of course, many indie labels still work off a 50/50 profit sharing model.

Fundamentally, though, we must move to more simplified documents, otherwise the whole system is in danger of collapse. The reality: if you are an emerging pop or dance act wanting mainstream support from radio, TV, press and streaming services, then you probably need some kind of ‘360’ deal with a major label. But other types of artists need different models better equipped to manage economics, expectations and aspirations.

This more diverse landscape needs to flourish for us to have other methods for gauging success versus failure. Otherwise, we will carry on with a high attrition rate of acts getting dropped, great executives and managers getting fired and vast sums of money getting lost.

More and more artists, especially those with empowered management or with support from brands, are bypassing the major label system altogether. The Big Three are responding to this with greater flexibility in their deal models. We need indie labels to flourish too, even if as a feeder system to the Big Three.

We’ve got a bunch of bands we consult with – they’re not necessarily seeking stardom or riches, which is incredibly healthy.

Leave a Comment

Your email address will not be published. Required fields are marked *