Piracy simracy, this is the real threat to the record biz that technology
allows:

NY Times
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July 4, 2004

D.I.Y. Meets N.R.L. (No Record Label)

By FRED KAPLAN


IN the last decade, Maria Schneider, who regularly wins prizes for
best composer and best big-band arranger in jazz, has made three
albums on the Enja record label. Each sold about 20,000 copies very
good numbers for jazz. She didn't make a dime off any of them. On two
of them, she lost money.

So recently, she went off the grid. She became the first musician to
sign with a company called ArtistShare. Rather than go through labels,
distributors and retailers, ArtistShare sells discs over the Web and
turns over all the proceeds (minus a small fee) to the artist.

Her new CD, "Concert in the Garden," went on sale last Thursday
exclusively through www.mariaschneider.com. If it sells one-quarter as
many copies as any of her previous discs, she will do better than
break even. If it sells half as many, she will earn tens of thousands
of dollars.

"Making an album takes lots of time and effort," Ms. Schneider said in
her apartment on the Upper West Side of Manhattan. "It takes me two or
three years to write the music. Then there are the rehearsals, the
studio time, the mixing and mastering. It would be nice to get
something back for it. The thought that I could actually make a profit
off my records that's unbelievable, really."

To make this new album, Ms. Schneider put up $87,000 of her own money,
which she had earned from commissions, music clinics and guest
conducting. Almost $40,000 went to pay her musicians for four days'
work in the studio. By the eve of the disc's release, online orders
had brought in $33,700, strictly through word of mouth.

Record labels are still vital for many musicians. They get the CD in
the bins; they advertise it; they put up the money to produce it in
the first place.

But for those who already have a following and some capital, the new
way has appeal. "The guy who's doing this is on to something," said
Michael Cuscuna, a veteran producer for the Blue Note jazz label. "For
a lot of artists, it makes sense to take control of their future."

That guy is Brian Camelio, a 38-year-old musician and computer
programmer, who started ArtistShare after he heard stories from too
many friends one of them Ms. Schneider about frustrating experiences
with record labels. His roster is growing. Recently, he persuaded the
jazz-guitar giant Jim Hall to sign up and record a trio album. That CD
will be available on www.jimhallmusic.com in September. It cost
$18,600 to make. Pre-orders have already brought in $11,042.

Going this route was a strange step for Mr. Hall, who is 73. "I'm
still in the kerosene age, I don't know how to use a typewriter," he
said. "But I've known Brian for a few years. He was so enthusiastic
about this. So I thought I'd give it a try."

Other friends-turned-clients include the jazz bassist Todd Coolman,
the pianist Danilo Perez, the keyboardist Rachel Z and Trey Anastasio,
the leader of the rock band Phish, which recently announced that it
would break up after its summer tour.

Rock musicians have been recording live concerts and selling them over
the Internet, as CD's or MP3 downloads, for years. But Mr. Camelio's
twist is new in two ways. First, he sees the Internet not as a
supplement to labels and record stores but as an alternative. Second,
he's marketing more than music.

On Ms. Schneider's Web site, fans can order her CD for $16.95. For an
additional $35 to $95, they also gain access to printed scores,
rehearsal sessions, interviews, post-concert question-and-answer
sessions and commentaries, including a two-hour audio stream of Ms.
Schneider analyzing several of her arrangements.

On Mr. Hall's site, for $60, fans can watch him give a guitar lesson.

"The key thing was when I realized that anyone could download music
for free," Mr. Camelio said. "I got to thinking: what's the one thing
you can't download, the one thing that the artist can hold on to? The
answer: the creative process. That's the product I'm offering: the
creative process."

To a surprising degree, these special features are also turning out to
be the most lucrative part of the package. As of last week, Ms.
Schneider's online customers were spending an average of $53, nearly
three times the price of the CD.

It may be that few people beyond her fans will even learn about her
new record. Ms. Schneider mentions her Web site at her concerts, and
she's hired a publicist for press and radio promotion. Then again, she
noted, "jazz is so siphoned off from the rest of the culture, I'm not
sure people who aren't fans of mine find their way to my music
anyhow."

Ms. Schneider recorded her first big-band album, "Evanescence," in
1993. It was swooningly romantic music, stacked with lush harmonies
yet propelled by a muscular swing. She produced it at her own expense
for $35,000; sold it to Enja for $10,000; and never recouped her
initial investment.

Still, Enja made enough money off it that, two years later, the label
paid the full cost of producing her second album, "Coming About." It
also sold well, but not well enough to earn her any money. In 2000,
she split the cost of her third album, "Allegresse," but again earned
no return on her share.

"I can't really complain about Enja," she said. "They put my name on
the map. But there are so many pieces of the pie to slice up for the
record company, the distributor, the record stores that there's
nothing left for the person who did all the work: me."

"My point is not that the record companies are bad," she added. "They
have to make a living. They're risking their money. They absorb the
losses from artists who don't sell. But I needed to find a business
model where, at minimum, I made my money back."

Ms. Schneider's situation was hardly unique. Most instrumental jazz
albums sell just a few thousand copies. One that sells 10,000 is doing
well. To sell 50,000 is almost unheard of. Record labels typically
offer musicians a royalty of 10 percent to 12 percent of the retail
price for each album sold. But musicians are not paid any royalty
until after the label makes back the production costs. Those costs
include studio rental (in New York, about $200 an hour), equipment
rental ($1,000 or more) and the engineer's fee (up to $100 an hour).
Many labels also insist on making back the costs of packaging and
pressing the CD's ($4,000 to $20,000, depending on the quality of the
printing and graphics).

If the album includes original compositions, as Ms. Schneider's do,
some labels also demand the music's publishing royalties. (Ms.
Schneider gave Enja a 50 percent share, though she has since acquired
not only the full rights but also the master tapes and is selling the
older albums on her Web site, too.) Under the traditional system,
then, it's no surprise that artists rarely see any royalties.

Musicians with ArtistShare pay upfront for an album's production
costs. They also pay Mr. Camelio a fee to create and maintain the Web
site (about $5,000) as well as 15 percent of the gross proceeds. Other
than that, they receive all revenue.

"Who knows," Ms. Schneider said. "I may even get to the point of
making a living entirely off my recordings."

Fred Kaplan is a columnist for Slate and jazz critic for The Absolute
Sound.
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