New York 2006

Chapter 26 Issuance
After Luo Ji finished filming the music video for a day, he dragged his exhausted body back to the hotel. The hotel was a cheap express hotel near Hollywood.This is not because the financial director of YouTube is stingy. He was willing to provide Luo Ji with a high-end hotel, but Luo Ji refused. He wanted to spend all the production expenses on cutting edge rather than enjoying it.

Manager Braun had been waiting for a long time in the hotel. As soon as we met, he handed over the prepared information: "I submitted your single to major distribution companies before, but the conditions given at that time were quite harsh. , because we only have a single plan, not an album. But as the "Mom, I'm on TV" video has been played 1000 times, your online sales reached 3 in 20 weeks. The conditions of all major distribution companies are With the loosening up, they all submitted new contracts.”

Luo Ji picked up the document and flipped through it roughly: "What's going on with The Orchard publisher? The conditions are so good, and they only charge 15% of the distribution fee? This INgrooves publisher is also good, and they only charge 18% of the distribution fee?"

"Both of these two are independent record distribution companies, both headquartered in New York. They have distribution capabilities and can distribute your records all over the world. However, their publicity capabilities are too poor and they can only use good conditions to attract independent records. company."

Luo Ji spoke: "The most important thing for a singer is fame. As long as you are famous, you will get anything. We don't need to consider small publishers like this for the time being. I want to promote my music to the world so that people all over the world can listen to it." arrive."

Braun said: "Then there are only four major record companies left. Apart from the United States, Sony BMG has a relatively high influence in East Asia, EMI has a high influence in the UK, Warner Records is relatively mediocre, and Universal Music has a relatively high influence in Europe. Ligao. They have good publicity around the world."

"Ah."

Braun continued: "These four record labels. EMI gave the worst terms of 28% of the distribution fee and 10 yuan in promotional expenses."

Luo Ji was speechless: "The record industry is in such decline now. After major record companies laid off employees, many unemployed people founded independent record labels and signed singers with 360° deal contracts. The market share of independent records is rising rapidly. The four major record labels The market share is declining rapidly. However, independent record labels have no distribution capabilities. In order to win over customers and win over independent record companies, the four major record labels have already reduced the distribution fee from the previous 30% to 20%-25%. EMI Is the management of the company so brainless that they still charge 28%?”

Braun said: "I don't know what they think? In the past two years, EMI has often received negative news, and its market share has been declining rapidly. The management is also extremely chaotic. There are rumors that last year it suffered a huge loss of hundreds of millions of pounds."

"Then EMI will not be considered. What about the other three companies?"

Braun smiled happily: "Although I have some connections at Universal, the terms they offered were not the best. The one who offered the best terms was Sony BMG."

"Sony BMG?"

"Yes, maybe because the online advertising we did with Sony received a very good response. Their president Howard Stringer is very optimistic about you and offered to buy your record label for 500 million yuan, but you have to sign a three-album contract with the label for five years. .”

"Five million dollars? Howard Stringer?" Luo Ji was instantly knocked out and fainted.

Braun explained: "Howard Stringer is a big shot in the entertainment industry. He has been the CEO of Sony in the United States since 1997. He is in charge of Sony's business in the United States and the global film and music entertainment department. He has brought Sony's music and film business, which is on the verge of decadence, to It has developed into Sony's current pillar industry. He improved the unprofitable Columbia Film Business Unit and led the release of Spider-Man movies in 2001, making the film business group Sony's main source of profit. At the end of 2004, he led the merger MGM, and merged Sony Music and BMG into what is now Sony BMG."

"Such a big shot likes me and wants to pay me 500 million yuan."

"Yes, as long as you nod, the 500 million-meter knife will be yours immediately."

After all, he was a time traveler, so Luo Ji kept his composure: "Braun, what do you think?"

"The record industry is really in a slump now. If they can spend 500 million for this shell company of yours with real money, it is actually equivalent to them signing you for 500 million. It proves that they are really optimistic about your future. As long as you go in, you will definitely win. Get front-line treatment.”

"but?"

"But on the other hand, your video has been played more than 1000 times, and your online sales of songs have exceeded 25. Based on the current situation of 1:1 physical and online sales, as long as you sell physical records, you will sell at least 25 Ten thousand copies. And this is just a conservative estimate, because your song has not yet been promoted on a large scale. Looking at it this way, 500 million is actually not much, so you should think about it yourself."

Luo Ji thought for a long time: "I still just want to make my own independent record, can I just talk about distribution?"

Braun said: "This is not the last century. Independent records must give 50% of the shares to the publishing company. With the decline of the record industry in recent years, this rule has long been abolished. Like the big machine that released the album last month Records, they did not give shares to Universal Music Group. There are many independent labels that also retain 100% controlling shares."

Luo Ji spoke: "The record industry has indeed undergone tremendous changes in recent years. Now, in order to share the risk of cultivating a singer, these major labels often have to be shared by several record companies. On the contrary, independent record companies are more willing to compete."

"Yes." "That's it. You call and consult these large companies again. Now that my songs are so popular online, you try to mention that I only do physical distribution."

"it is good."

After several hours of communication, Braun brought the latest news: "Although your songs are very popular, your suggestion of only physical distribution has been rejected without exception. Everyone knows that online sales This is the future, and no record company dares to open this door now. As long as you want to take advantage of physical sales, you must give up profits from online sales."

"Ah."

Manager Braun continued: "Because of your exclusive broadcast agreement with YouTube, the MV of the song will only belong to you from now on. They have no objection, but they will not share the cost of the MV."

"I understand, have the release conditions been agreed upon?"

"Sony BMG still retains the legacy of the record company of the last century. The singers they cultivated are still popular, so they insist on buying shares in your record company, but the shares can be reduced to 30% and charge 20% of the distribution fee. Warner Records also said I hope to invest in your company, but my willingness is not as strong as Sony's. They said that if I can buy a stake, I will charge 20% of the issuance fee. If I can't buy a stake, I will charge 25% of the fee. I feel that there is still room for negotiation. But Universal is different. They only propose to issue your company. Records, no mention of buying shares. Charge 23%."

"What's going on with Universal Music Group? Why are the responses different from the other two companies? Are they not optimistic about me?"

Braun said: "This has something to do with Universal Music's strategy. Their parent company is in a major financial crisis, so they are reducing financial expenditures in all aspects. This also allows Universal Music to set goals and reduce most of the risks of the record. They are all transferred to those small record companies, and they only make money from distribution. You have also seen that in the past two years, Universal has hardly directly cultivated new singers, but their market share is still expanding."

Luo Ji thought for a while and said, "Then you can continue the negotiation. If the conditions are the same, choose Universal Music. The independent record companies that have signed contracts with them in the past two years have done well. You can go and talk about the distribution fee. Just these two Please sign the contract as soon as possible. By the way, one more thing, you tell them that we will do the online distribution ourselves."

"Why do you do this? Even if you do it yourself, you still have to give Universal a share. It's so convenient to hand it over to Universal together with the entity."

Luo Ji spoke: "Online distribution itself is not complicated, and the fees are not expensive. When the time comes, the settlement fees of the network will be settled directly to my company, and I will then distribute them to Universal. It is also a means of restraint for Universal."

"All right!"

Luo Ji actually has another consideration. With the development of online song sales in the future, online sales will one day surpass physical sales. Maybe one day Luo Ji will be able to abandon publishers and directly sell online.

Braun set off to negotiate, while Luo Ji lay happily on the bed imagining the grand occasion after the release of his song.An online single sells for 0.99 yuan, and he can get 0.7 US dollars in his hands.But the average wholesale price of a physical single can reach US$7, and he can get US$5 after excluding the distribution fee.It’s simply not too fun.

I definitely made the right move. Fame is everything. Without the popularity of the Internet, how would it be possible for a single to be released by publishing companies.

Luo Ji saw an article about his own experience posted by a young singer on Myspace.

At the age of 16, he formed a band and started wandering around. He usually went to major music festivals to make a little money.They can all compose songs and are quite talented.But due to the overall decline in revenue in the recording industry, no record company signed a contract for a long time.

Until the age of 22.They were approached by a record company to sign a contract, but they signed a 360° deal, which is a comprehensive contract.

Full-service contracts, in which the company provides them with an advance as well as support in marketing, promotion, touring and other areas.In turn, artists agree to give the company a percentage of incremental revenue streams, including everything from digital and online streaming, live performances, merchandise sales, endorsement deals and songwriting royalties.This is equivalent to selling yourself to a record company.

Even for this kind of selling contract, there are still a large number of singers rushing to sign it.

The record company took them very seriously and spent a lot of money to create the album, but in the end it only sold gold album sales and failed to become a hit. Now the whole band is traveling around and performing in commercials, making all their hard-earned money, and part of the income is still taken by the record company. Walk.

Luo Ji could think that if he had not become popular on the Internet, he would not be much better now.

(End of this chapter)