Be ware of stuff like this

Just some general advise for anybody who regularly gets stuff like this in their email.
Be real wary and suspicious before signing up with anybody.

>Subject: Fan Mail: SCHMANGE
> Regarding the materials on your web site. I am interested in the
> materials on your site. Statue is a major independent record company
> and would like to discuss the possibility of releasing this material and
> doing some radio promotion on it. If your record is available for
> licensing and distribution please contact me at your earliest
> opportunity by sending me an email to [email]wr@statuerecords.com[/email] Best Regards,
> Warren Ryan Manager A Statue Records Group Los Angeles
> [email]wr@statuerecords.com[/email] Statuerecords.com

Initially, a newby would probably get real excited about being contacted by a record company A&R manager being offered a 'record deal'

However, first thing to do is check the website of the 'record company'.

On first glance it looks like there's a ton of artists I've never heard of. They've been in business since 1985 and not one success story!

Next thing to do is to do a google search of newsgroups and the web for any info on this record company...

Then write the A&R guy a letter..... ie,

Dear sir,
Before discussing anything further, I'd like to get an opinion from you regarding the rumours that are being spread about your 'record company' on the internet.
In particular those contained in threads such as these...

http://forum.cubase.net/forum/Forum21/HTML/010753.html
http://comeg.proboards6.com/index.cgi?board=chat&action=display&num=1083542150

It seems like you have a huge number of artists 'signed' to your label and I don't really recognize any of them.
Do you have any verifiable success stories? How do you feel about me contacting other artists 'signed' to your label?
Are you strictly a distribution company or are you actually financing the distribution and publicity required?
Are you charging a 'sign-up' fee?
What are the terms of your contract?

I'm still waiting for an answer but I'll print it here if they have the nerve to reply. If they reply honestly, and are above board, then they have nothing to worry about and it's worth looking into further.
If they hedge and haw with you... stick it in the trash and warn other people about it.
There's too many people out there wanting to take advantage of new people to the music business and prey on their lack of knowledge of how the business works. I'll reserve judgment for now, but more than likely this is a company that will sign you to a limited contract to distribute your CD (which you will pay for). They'll also tie up your rights and royalties to previous and new releases. They may also take a percentage of your publishing.

Never sign a contract without a thorough check by a qualified entertainment lawyer and never be afraid to ask questions. In fact, grill the hell out of them... if you get the slightest bit suspicious... walk away.

... just some lessons learned from a coupla decades in the music bus. :cool:

Great advice.

Thats interesting.

Thanks for the "heads up" Schmange. So what, this company just scours the internet looking for unsigned talent to prey upon? That's pretty shady to say the least.

Still not quite sure what to make of it. I got a reply with a sample contract attached.

It's in MSword format here...
http://s93744050.onlinehome.us/RecordingContract.doc

I'm gonna spend a few days picking it apart in detail & see how it goes. I'm a little concerned about the way he avoided directly answering some of my questions... almost like a pre-written script...and I don't like the obvious name dropping of a 'famous' movie.
But hey, it doesn't cost anything to ask questions. Figure it this way... if they're legit, they won't mind me being cautious and grilling them on their business. ie, they won't mind me 'considering' their offer for a few weeks or more and contacting an entertainment lawyer. If they're shady they'll either get impatient and stop writing or get pissed off and move on to the next mark.

Sounds like a thorough and sound plan of action there Schmange. Keep us posted.

Well... if you read through the contract it pretty much sums up what you'd be getting yourself into.
They say they'll put a CD and packaging together and list you on their website. It doesn't spell out what the design and artwork would be like or whether you'd have approval over the 'look' of your CD.
You have to pay $100 to be listed on their site or they have the right to remove you from their catalogue if you fall below 10 units per month.
They have the right to increase their rates at 10% per year, which means in 10 years they would own 100% of your music, worldwide.
It's also questionable from the wording of the contract whether you actually retain ownership of the masters and publishing.

So far it just looks like this one company with a plan to put together a pay per MP3 site where you can also buy artists CD's that they distribute.
They have the rights to the first 100 cd's that you sell (ie, no royalties) and there's also no royalties on any CD's distributed to radio stations or anywhere else for publicity. Plus no royalties on any CD's sold at wholesale or below.
No mention of how they plan to prove what is sold and where....
They only pay royalties twice per year.

This is basically a distribution deal and not a very good one. I can get CDBaby distribution for about $35 plus $20 for a barcode and manufacture the CD's myself. It looks a little less professional because it's a CDR with inkjet liner notes but it only costs about $2 - $3 per CD to make them, the quality of the sound is identical and I can sell a double CD (which is what my next one is) for $10 and still make a profit.
CDBaby also uses 21 other distributors like Apple iTunes, TowerRecords.com etc... as part of the deal where people can download individual tunes. There's no contract that you can't get out of and with 29 songs I stand a much better chance of selling songs individually.
Not to mention there's no freebies given away for publicity. No 10% increases per year....etc etc..

As far as shopping to tv/film and multimedia companies, I question how effective their company would be considering how many artists they would need to have signed onto their site to stay in business. ie, how much attention would they be able to give to my CD when they have 200 other bands to worry about?
It's just as easy to sign up with a few publishers and shop the CD's yourself.

Last but not least, the negative threads I found on the internet pretty much spelled out what I just said above and killed this deal before it even started.

If I'm gonna sign with anybody, I need to know everything there is to know about who I'm dealing with first. If anything negative comes up, I tend to believe the comments from people who aren't out to make a buck.

Anyways... here's a rough draft of my email to them.

http://s93744050.onlinehome.us/Questions.doc

Check back same bat time, same bat channel.

Sounds like there are too many "loopholds(sp?)" to me.

Originally Posted by: schmangeStill not quite sure what to make of it. I got a reply with a sample contract attached.

It's in MSword format here...
http://s93744050.onlinehome.us/RecordingContract.doc

I'm gonna spend a few days picking it apart in detail & see how it goes. I'm a little concerned about the way he avoided directly answering some of my questions... almost like a pre-written script...and I don't like the obvious name dropping of a 'famous' movie.
But hey, it doesn't cost anything to ask questions. Figure it this way... if they're legit, they won't mind me being cautious and grilling them on their business. ie, they won't mind me 'considering' their offer for a few weeks or more and contacting an entertainment lawyer. If they're shady they'll either get impatient and stop writing or get pissed off and move on to the next mark.

Well, what annoys me most about that contract is that it's written in ALL CAPITALS. Very obnoxious. Stupid lawyers.

Now, about that 10% increase per year; after reading through that section, it says that it applies to the price that they'll charge on your CD. That means that, for example, they'll charge $7.95 for a full length CD, but they reserve the right to increase that price to $8.75 the next year. I guess the reason they would stipulate that in the contract would be so that you couldn't complain that they're charging too much for your CD and that the high price is killing sales.

And, also, a 10% increase per year for 10 years doesn't equal a 100% increase. It actually is a 135.79 percentage point increase (e.g. from $100 to $235.79). Which does not correspond to a 10% decrease per year. A 10% decrease in the 25% royalty you get per the contract would whittle down to 9.69% (or a 15.31 percentage point drop) in 10 years.

OK, now I look like a real nerd. Back to work!

The "ALL CAPS" is a little trick that is done to try to make you skim through and not read the fine detail. Sometimes it can be used to grab your attention, like in a title, and other times it can be used to defer your attention, like in the body of a contract. That's a dead givaway there's something in there they know you wont like.

http://acapella.harmony-central.com/forums/showthread.php?s=&threadid=739798&highlight=spewbag

Someone else got an email from them... you might want to read this thread from harmony central forums !

yeah, after spending some time reading the contract it's pretty obvious that it's a really shady sounding deal. Anyways.. I wrote em back and told em that unless they could adequately answered all my concerns, the answer would be no. It'll be interesting to see what kind of reply I get..if any.

This kinda stuff always reminds me of the first scam I ever came across.
Years ago before CD's became popular, so called "record companies" would advertise in local papers for you to send in demo tapes along with a $10 'processing' fee.
Basically, they'd keep your $10 and collect as many high quality Maxell tapes that they could get their hands on. The tapes were bulk erased and either sold for cheap to recording studios ... or re-used for their own demo's.

There are similar 'publisher' scams now where you pay a 'processing' fee of $30 to get access to a list of 'record companies' or indie filmmakers accepting demo tapes for soundtracks.
90% of the addresses on the list are either taken out of a book like the Indie Bible or they contain nothing but a yahoo.com email address (which obviously never works because their in-box is always full)

Personally, I don't even trust Taxi. $300 per year just to get a small list of contacts every once in awhile. And they have to approve every track you send in first.
The person listening to your demo could be just about anybody (high school students?) and considering the volume of material they get, they probably only listen to a small amount of your material.
So if the demo person is having a bad day or doesn't like your hair or something and checks off the [NO] box, you're screwed. Your music is rejected and you're not allowed to have it listened to by anyone else for that ad, plus you aren't allowed to know who the demo was supposed to be for.
The funny thing is the Taxi board where they have a forum where you can post your Taxi success stories. Last time I looked there were only 8 threads.