[The following article, spanning the next 6 pages, can be found 
in its orignal format at http://www.holemusic.com/speech/index.html.  
No text has been modified, added, or deleted;  formatting only 
has been modified.  It is copied here to provide a permenant 
record of thoughts and facts that shouldn't be lost.]

Courtney sounds off on the state of today's sordid and malicious recording industry in an uncensored quasi-essay that provided the basis for her speech at this year's Digital Hollywood in New York.

Love does the math, delves into the industry's darkest fissures, exposes the miscreants, and welcomes the future's "radical democratization" through the course of her writing in an effort to dispel the corporate-engineered myths that have long plagued artists.

Within, Courtney ponders the Recording Association of America, piracy, new options and equity for artists, tipping/music as a service, and new models for musicians sponsorships.

Today I want to talk about piracy and music. What is piracy? 
Piracy is the act of stealing an artist's work without any 
intention of paying for it. I'm not talking about Napster-type 
software.



I'm talking about major label recording contracts.



I want to start with a story about rock bands and record 
companies, and do some recording-contract math:



This story is about a bidding-war band that gets a huge deal 
with a 20 percent royalty rate and a million-dollar advance. 
(No bidding-war band ever got a 20 percent royalty, but whatever.) 
This is my "funny" math based on some reality and I 
just want to qualify it by saying I'm positive it's better math 
than what Edgar Bronfman Jr. [the president and CEO of Seagram, 
which owns Polygram] would provide.



What happens to that million dollars?



They spend half a million to record their album. That leaves 
the band with $500,000. They pay $100,000 to their manager for 
20 percent commission. They pay $25,000 each to their lawyer 
and business manager.



That leaves $350,000 for the four band members to split. 
After $170,000 in taxes, there's $180,000 left. That comes out 
to $45,000 per person.



That's $45,000 to live on for a year until the record gets released.



The record is a big hit and sells a million copies. (How a 
bidding-war band sells a million copies of its debut record is 
another rant entirely, but it's based on any basic civics-class 
knowledge that any of us have about cartels. Put simply, the 
antitrust laws in this country are basically a joke, protecting 
us just enough to not have to re-name our park service the Phillip 
Morris National Park Service.)



So, this band releases two singles and makes two videos. The two 
videos cost a million dollars to make and 50 percent of the video 
production costs are recouped out of the band's royalties.



The band gets $200,000 in tour support, which is 100 percent 
recoupable.



The record company spends $300,000 on independent radio promotion. 
You have to pay independent promotion to get your song on the radio; 
independent promotion is a system where the record companies use 
middlemen so they can pretend not to know that radio stations 
-- the unified broadcast system -- are getting paid to play their 
records.



All of those independent promotion costs are charged to the band.



Since the original million-dollar advance is also recoupable, the 
band owes $2 million to the record company.



If all of the million records are sold at full price with no 
discounts or record clubs, the band earns $2 million in royalties, 
since their 20 percent royalty works out to $2 a record.



Two million dollars in royalties minus $2 million in recoupable 
expenses equals ... zero!



How much does the record company make?



They grossed $11 million.



It costs $500,000 to manufacture the CDs and they advanced the 
band $1 million. Plus there were $1 million in video costs, $300,000 
in radio promotion and $200,000 in tour support.



The company also paid $750,000 in music publishing royalties.



They spent $2.2 million on marketing. That's mostly retail advertising, 
but marketing also pays for those huge posters of Marilyn Manson in 
Times Square and the street scouts who drive around in vans handing 
out black Korn T-shirts and backwards baseball caps. Not to mention 
trips to Scores and cash for tips for all and sundry.



Add it up and the record company has spent about $4.4 million.



So their profit is $6.6 million; the band may as well be 
working at a 7-Eleven.



Of course, they had fun. Hearing yourself on the radio, selling records, 
getting new fans and being on TV is great, but now the band doesn't 
have enough money to pay the rent and nobody has any credit.



Worst of all, after all this, the band owns none of its work ... 
they can pay the mortgage forever but they'll never own the house. 
Like I said: Sharecropping. Our media says, "Boo hoo, poor pop 
stars, they had a nice ride. Fuck them for speaking up"; but I 
say this dialogue is imperative. And cynical media people, who are more 
fascinated with celebrity than most celebrities, need to reacquaint 
themselves with their value systems.



When you look at the legal line on a CD, it says copyright 1976 Atlantic 
Records or copyright 1996 RCA Records. When you look at a book, though, 
it'll say something like copyright 1999 Susan Faludi, or David Foster 
Wallace. Authors own their books and license them to publishers. When 
the contract runs out, writers gets their books back. But record companies 
own our copyrights forever.



The system's set up so almost nobody gets paid.



Page 2









Original Text By Courtney Love Copyright © 2000 Courtney Love


Remaining Text Copyright © 2001 Aj Effin ReznoR, ReznoR Allied
Technologies.  All rights reserved.