This third edition of Confessions is dedicated to scams born from the emerging power base of the independent music scene.
The first edition of Confessions was released in 1998. Back then, unless signed to one of the majors or their publishers, you probably weren’t making enough scratch to attract the attention of scammers. Thus the majors became this website’s focus and, as a result, readers thought I automatically favored indies.
This edition, written in 2005, sees an entirely new music business landscape: one where artists, producers, writers, and managers are making good livings outside the major label system. A natural reaction to this has been an empire of new ventures that advertise services claiming to help the emerging (or indie) artist in ways that majors used to. They offer things like independent A&R services, digital distribution, low-cost manufacturing, online marketing, instant publicity, e-tailing, and just about every other service that a large label performs for its artists.1 Some of these companies are legit. Some are not. Since the indie expansion many musicians have opted into bad deals because they put their trust in someone who seemed down to earth ahead of reading the fine print, or ahead of common sense. So here is a new rule to think about:
Always remember that scammers must appear to be charming in order to succeed. This is true whether they emerge from a limo with a linen business card or wear Birkenstocks and have a bitchin’ Web site. When song-sharks worked for the Majors they were easier to recognize. But in just the past few years over 1,000 major-label executives were fired, and their jobs downsized. Where did they go? Many started their own companies and are doing what comes naturally to them: targeting artists and seducing their money—now with a cooler new “indie” vibe.
In my investigations of smaller companies within the music business, I have also discovered that there is such a thing as a “front.” That is, a person (often in his 20s) who is sent to conferences and road shows to promote an “indie” product. But the company whoe’s paying for his ticket and hotel room (and extras) has sent this particular dude more because of his hipness and enthusiasm for music than for his actual industry (or product) knowledge. This person may not actually know that he is pushing something that can hurt artists. (He’s probably too stoked at the free ride he’s getting on the company dole to even think about it.) He many not even know what his higher-ups or investors are planning in the next year or two or what deals were made without consulting him.
If you think this is far-fetched, I direct your attention to several recent situations where VPs and even CEOs were kept in the dark and made promises that ended up hurting tens of thousands of people: WorldCom, Enron, and Arthur Andersen, the world’s largest, oldest and most respected public accounting firm, to name a few known situations; and in the independent music community, MP3.com, Napster (the original one), and several other companies that we’ll talk about in this edition, many of which are blindly speeding towards a similar fate.
Let’s take a look.