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Music heads: What's the difference between 'advanced checks' and 'royalty checks' ?

Mr. Met

Mr. Met

So Amazin
BGOL Investor
:roflmao::roflmao2: I see why niggas need lawyers before they get within sniffing distance of a contract.

This short 3 minute video should be required watching for any upcoming recording 'star'.


Dick Griffey answered Howard Hewett out of 2 sides of his month when questioned about the cash.

He wasn't even passive aggressive about his gangsta, he was downright demonstrative towards that nigga.:lol2:

You can imagine what the initial sit down was like.

Switch Dick with Puff, Clive, Mottolla, Birdman, it all looked the same to me.

These cats got more forks in their tongue than the White House kitchen.

Are these dudes that slick or are artists that dumb/desperate?

Maybe cats just hearing what they wanna hear.


 
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It's pretty simple. An advance is just what it sounds like...money paid to you in advance of any sales. This money has to be recouped (paid back) before you receive any royalties. Usually other monies have to be recouped as well, such as production budget, any money spent by the label for you to tour, etc. Artists are on the very bottom of the totem pole in terms of receiving royalties.....everyone else gets paid first. And if you arent writing and/or producing your own music, your royalty percentage is gonna be hella low. This is how artists can make a record and tour for a year and be broke when they get home....in debt to the label in a lot of instances. Then, if you didnt have a cross collateralization clause in your contract, monies owed from the first record carry over to the second record so you end up having to recoup the money spent on the second record before you see a dime from the first record.
 
My man is correct..truth is most artist never see royalty checks just becuase they accepted that advance.

Crazy thing is niggas never knew that they didn't have to take that advance money and could have just took a little bit of per diem to live day to day.
 
I AM GDFOLKS said:
My man is correct..truth is most artist never see royalty checks just becuase they accepted that advance.

Crazy thing is niggas never knew that they didn't have to take that advance money and could have just took a little bit of per diem to live day to day.
Click to expand...
Even if they took no advance - they wouldn't see a penny unless the project went gold back in the days, now it needs to go platinum before they get a whiff of mechanical royalties
 
ViCiouS said:
Even if they took no advance - they wouldn't see a penny unless the project went gold back in the days, now it needs to go platinum before they get a whiff of mechanical royalties
Click to expand...
True but they had more of a chance if they didn't take a large lump sum up front.
 
Contracts in the entertainment industry are a muthafucka. Minus whale go over them with a fined-truth honeycomb, or else the execs in music & tv are gonna fuck you long-term. Know what you're worth ... know what's coming up front, and what the perks are long-term. Royalty checks are basically like syndication / rerun $ in the world of TV. Knowing you've put in the work and it's gonna pay off down the line as you've compiled a body of work. Like that shithead Dustin Diamond was saying years back in an interview in the 90s or early-00s on Muchmusic. They'd asked him if he ever regretted pigeon-holing himself as "Screech" on Saved by the Bell for so long ... i.e. - only being known as the geek. He said he didn't feel bad as he was compensated well during the show's run, and the syndication checks were still coming in with the show being shown in many markets and countries.
 
I AM GDFOLKS said:
True but they had more of a chance if they didn't take a large lump sum up front.
Click to expand...
:smh:
if they didn't / don't have a good lawyer - it doesn't matter...
even with a good managment team and lawyer, the game is rigged that the average artist is not supposed to make real money until 3 albums deep- if they are lucky
 
ViCiouS said:
:smh:
if they didn't / don't have a good lawyer - it doesn't matter...
even with a good managment team and lawyer, the game is rigged that the average artist is not supposed to make real money until 3 albums deep- if they are lucky
Click to expand...
not to mention management, lawyer and agent eating off your cut.
 
ViCiouS said:
:smh:
if they didn't / don't have a good lawyer - it doesn't matter...
even with a good managment team and lawyer, the game is rigged that the average artist is not supposed to make real money until 3 albums deep- if they are lucky
Click to expand...

Then from the sound of the clip and the scenario they painted it's better to go independent.

Performing in front of a packed crowd at Wembley was like currency to them.

The science of how they play up the fame and downplay the cashflow is incredible.
 
Mr. Met said:
Then from the sound of the clip and the scenario they painted it's better to go independent.

Performing in front of a packed crowd at Wembley was like currency to them.

The science of how they play up the fame and downplay the cashflow is incredible.
Click to expand...
in the proper hands fame = cash

But being indy isn't for everyone- very few have the talent to learn and hone their art AND learn the business
you might be a talented musician singer or rapper - but writing a song within genre and for intended format is a skill you still have to learn.
Same for recording. Unless you know or are put intouch with the right people its difficult to put together professional work from demo to mastering on a limited budget....
Then there is the legal from publishing to copyright and last and just as important is the marketing and maybe branding
 
silentking said:
It's pretty simple. An advance is just what it sounds like...money paid to you in advance of any sales. This money has to be recouped (paid back) before you receive any royalties. Usually other monies have to be recouped as well, such as production budget, any money spent by the label for you to tour, etc. Artists are on the very bottom of the totem pole in terms of receiving royalties.....everyone else gets paid first. And if you arent writing and/or producing your own music, your royalty percentage is gonna be hella low. This is how artists can make a record and tour for a year and be broke when they get home....in debt to the label in a lot of instances. Then, if you didnt have a cross collateralization clause in your contract, monies owed from the first record carry over to the second record so you end up having to recoup the money spent on the second record before you see a dime from the first record.
Click to expand...
I've been in the biz for a while now, and haven't heard it better put.

Well done.
 
on top of all that......royalty checks are normally dished out on a quarterly basis.
a mufucka could sell a million records in the first week, and still not receive a royalty check for another 3 months.
if a nigga is broke goin in on a deal.......you see why they are quick to accept that advance money and even sign
over their entire publishing without giving it a second thought, just to have some money in their pockets.
These cats get suckered into that shit,.....signing 3 album deals and realize that they are fucked not too long after doing
the first album. But its too late by then.....and they end up in the same situation that The Lox and many other artists were in.
Niggaz end up trying to tour as much as they can, and as soon as they can, because that money is immediate.
 
The advance is what you get to do the album. usually half up fron, the other half when they accept your masters.

You get royalty checks after you pay back the advance, and the marketing and video's and every penny the label "says" they spent on you project. If you have a standard 12 poit deal, you are basically taking out a loan with 88% interest.

Meaning if the sales come in, and after shipping costs, 20% for free goods etc, 1 dollar profit happens. The label gets 88 cents, and you get 12 cents. Now the funny part is, if you got an advance of 100,000 bucks, they keep your 12 cents per dollar profit until you pay back the 100K, plus the 75K for the video and the 100K from marketing.

The group I was in used to sell around 200-3550K units each album. We would generate around 1.2 million in cash for the label but we would be upside down because we were signed to a label, that had a label that had a production/imprint deal. So instead of paying us royalties, they would just give us another advance.

The only $ you make is publishing unless you are a mega act back in the day. I still get a few grand a year for songwriting/publishing and statements from labels saying I owe them $$ LOL
 
LordSinister said:
The advance is what you get to do the album. usually half up fron, the other half when they accept your masters.

You get royalty checks after you pay back the advance, and the marketing and video's and every penny the label "says" they spent on you project. If you have a standard 12 poit deal, you are basically taking out a loan with 88% interest.

Meaning if the sales come in, and after shipping costs, 20% for free goods etc, 1 dollar profit happens. The label gets 88 cents, and you get 12 cents. Now the funny part is, if you got an advance of 100,000 bucks, they keep your 12 cents per dollar profit until you pay back the 100K, plus the 75K for the video and the 100K from marketing.

The group I was in used to sell around 200-3550K units each album. We would generate around 1.2 million in cash for the label but we would be upside down because we were signed to a label, that had a label that had a production/imprint deal. So instead of paying us royalties, they would just give us another advance.

The only $ you make is publishing unless you are a mega act back in the day. I still get a few grand a year for songwriting/publishing and statements from labels saying I owe them $$ LOL
Click to expand...
man, please go into further - especially the issue on fighting for a recording budget (part of the advance)that the artist has to payback at a markup, administrative fees... and now how much tighter it is with 360 deals...
 
ViCiouS said:
man, please go into further - especially the issue on fighting for a recording budget (part of the advance)that the artist has to payback at a markup, administrative fees... and now how much tighter it is with 360 deals...
Click to expand...

I'll give you a bit of history. Back in the day, I mean wayyyy back, hip hop artists used to get great budgets. I heard a story of how Audio-2 and Lyte had decent budgets and then the execs found out they were sampling and recording to 8 track at home. Artists after them on the label got vastly reduced budgets. It was thought that rap records were made cheaply, so there was no need to pay for big budgets, or top notch studios. Also other bands on labels got what was called "tour support". That included instruments, rehearsal studios etc. We couldn't get our major to give us anvil cases for the 1200, or even a portable dat machine.

As far as advances go, the standard model of the record deal should be put to rest. Most people get their buzz on their own and should not be locked into one of those TLC deals with shitty points.

The new deals and even the kind of deals E-40 got back in the day are much better, but we signed our deal in the late 80's and barely got in. We were signed to a guy, that had a production deal with a label that had a distribution deal with a major. So we had 2 middle men and it took 3 albums for us to get rid of them.
 
LordSinister said:
The advance is what you get to do the album. usually half up fron, the other half when they accept your masters.

You get royalty checks after you pay back the advance, and the marketing and video's and every penny the label "says" they spent on you project. If you have a standard 12 poit deal, you are basically taking out a loan with 88% interest.

Meaning if the sales come in, and after shipping costs, 20% for free goods etc, 1 dollar profit happens. The label gets 88 cents, and you get 12 cents. Now the funny part is, if you got an advance of 100,000 bucks, they keep your 12 cents per dollar profit until you pay back the 100K, plus the 75K for the video and the 100K from marketing.

The group I was in used to sell around 200-3550K units each album. We would generate around 1.2 million in cash for the label but we would be upside down because we were signed to a label, that had a label that had a production/imprint deal. So instead of paying us royalties, they would just give us another advance.

The only $ you make is publishing unless you are a mega act back in the day. I still get a few grand a year for songwriting/publishing and statements from labels saying I owe them $$ LOL
Click to expand...

hqdefault.jpg
 
LordSinister said:
I'll give you a bit of history. Back in the day, I mean wayyyy back, hip hop artists used to get great budgets. I heard a story of how Audio-2 and Lyte had decent budgets and then the execs found out they were sampling and recording to 8 track at home. Artists after them on the label got vastly reduced budgets. It was thought that rap records were made cheaply, so there was no need to pay for big budgets, or top notch studios. Also other bands on labels got what was called "tour support". That included instruments, rehearsal studios etc. We couldn't get our major to give us anvil cases for the 1200, or even a portable dat machine.

As far as advances go, the standard model of the record deal should be put to rest. Most people get their buzz on their own and should not be locked into one of those TLC deals with shitty points.

The new deals and even the kind of deals E-40 got back in the day are much better, but we signed our deal in the late 80's and barely got in. We were signed to a guy, that had a production deal with a label that had a distribution deal with a major. So we had 2 middle men and it took 3 albums for us to get rid of them.
Click to expand...
with a few changes you're telling the standard story I keep hearing... I know an artist currently consigned to only ghost writing and doing festivals - back in the day (90s) they were unwise and signed to a guy under a production deal - to a label subsidiary that was 2 parent labels labels away from a major on distribution...
very bad start -
the artist then ghost writes and ghost produces singles for 2 acts in the "family" both singles got real hot - so the label gives her a recording budget but the guy takes half and puts it in to one of the acts, that got hot, album instead and partied the other half away.
He gave her credit and publishing on some of her work on the other act's album and made her ghost the rest selling her the theory put in dues now but she'll get hers next.
almost 20 years later she still hasn't had her own project - that album she put in work on went multi platinum - so she is still getting some publishing royalties but she hasn't done her dream and the royalties are nothing compared to what she'd have if she was about her business- worst part- she still isn't on top of her business, still doing "for work" deals etc

IMO - TLC's contract was fair for unknown talent - but after the first album their management should have renegotiated

Any artist that can build their own buzz and direct sales doesn't need a label... but IMO most artists can't do the business.
Chief Keef and Co. built buzz and got bookings. Got signed directly to a major with IMO very generous terms and thresholds... they were handed a sub label with a budget, and they did nothing with it and couldn't leverage their online presence and buzz into selling 250k units.

My guess is that industry contracts will survive - even though the deals smart artists that don't stay indy will sign will be live performance based (LiveNation) -I think 360s are here to stay - especially since so many in the industry don't know anything about the business
 
ViCiouS said:
:smh:
if they didn't / don't have a good lawyer - it doesn't matter...
even with a good managment team and lawyer, the game is rigged that the average artist is not supposed to make real money until 3 albums deep- if they are lucky
Click to expand...
A good entertainment lawyer was good to have but not really needed if you could understand and comprehend english.
Contracts are not that complex if you just read the shit.

People were signing shit before even reading the contract.
 
An Advance = Payday Title Loan at 88 percent . You will never get it paid off.
 
I AM GDFOLKS said:
A good entertainment lawyer was good to have but not really needed if you could understand and comprehend english.
Contracts are not that complex if you just read the shit.

People were signing shit before even reading the contract.
Click to expand...
true - many signed without reading -
I recommend a lawyer unless you have experience reading and negotiating complex business agreements.
As I said before most artists are ignorant of business - even the knowledgeable don't know what should be negotiated or how to even read a contract with continuous terms, event triggers, clauses, goals etc- hidden by breaking them up in various sections and subsections and attachments.
I guarantee if you get a proper label contract and hand it to a contract or entertainment lawyer - they will not be able to tell you the full terms and penalties until they have read the document more than once, and written pages of notes
 
LordSinister said:
I'll give you a bit of history. Back in the day, I mean wayyyy back, hip hop artists used to get great budgets. I heard a story of how Audio-2 and Lyte had decent budgets and then the execs found out they were sampling and recording to 8 track at home. Artists after them on the label got vastly reduced budgets. It was thought that rap records were made cheaply, so there was no need to pay for big budgets, or top notch studios. Also other bands on labels got what was called "tour support". That included instruments, rehearsal studios etc. We couldn't get our major to give us anvil cases for the 1200, or even a portable dat machine.

As far as advances go, the standard model of the record deal should be put to rest. Most people get their buzz on their own and should not be locked into one of those TLC deals with shitty points.

The new deals and even the kind of deals E-40 got back in the day are much better, but we signed our deal in the late 80's and barely got in. We were signed to a guy, that had a production deal with a label that had a distribution deal with a major. So we had 2 middle men and it took 3 albums for us to get rid of them.
Click to expand...


what was the name of your group???
 
ViCiouS said:
true - many signed without reading -
I recommend a lawyer unless you have experience reading and negotiating complex business agreements.
As I said before most artists are ignorant of business - even the knowledgeable don't know what should be negotiated or how to even read a contract with continuous terms, event triggers, clauses, goals etc- hidden by breaking them up in various sections and subsections and attachments.
I guarantee if you get a proper label contract and hand it to a contract or entertainment lawyer - they will not be able to tell you the full terms and penalties until they have read the document more than once, and written pages of notes
Click to expand...
That subsection shit was always the place where they put some real suspect shit that you always had to get clarification from their snakey ass...magically they would say "hey we missed that, let us give you a re-draft tomorrow". :lol:
 
ViCiouS said:
Any artist that can build their own buzz and direct sales doesn't need a label... but IMO most artists can't do the business.
Chief Keef and Co. built buzz and got bookings. Got signed directly to a major with IMO very generous terms and thresholds... they were handed a sub label with a budget, and they did nothing with it and couldn't leverage their online presence and buzz into selling 250k units.
Click to expand...
Chief Keef's team was a band of bone heads...I can't even understand how they got that sweet deal from Interscope in the first place.
Glory Boyz could have took that opportunity and been making some mean green right now.

What I assume is they took the money for the sub label and fucked it off instead of putting some artists out there to keep the momentum going while Keef worked on his debut.

If you listen closely to his debut album you can tell that they started off using the recording budget the right way and then 30 percent into the creation they started getting jaded, lazy and reckless....that is the real reason that the shit didn't sell.

ViCiouS said:
My guess is that industry contracts will survive - even though the deals smart artists that don't stay indy will sign will be live performance based (LiveNation) -I think 360s are here to stay - especially since so many in the industry don't know anything about the business
Click to expand...
I would say 360s are the industry standard now, at least for these rap cats.
A regular recording contract will probably go to acts that sound like Adele, rock/alternative. country singers and Disney type singers.

I think we all seem to forget that those type of artists and genres still sell good records. Rap is dead as far as sales unless you are Drake,J-Cole, Lil Wayne etc.
 
Internet and mp3's drastically changed the game. its nothing like it used to be. Most labels now will only do 360 type deals, where they can eat off everything you do cuz record sales aint shit. My business partner was a finance exec at IGA in the mid 2000's and he was like "Jimmy aint even givin a fuck about sellin records no more. He's tryin to build brands. He's signing skateboarders and cats that dont even do music." I came up in the biz right when everything was changing. Soon as I just about had the game figured out.....new rules.
 

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