Video
by Ben McLane, Esq.
Video is a subject that is synonymous with the music business today. Essentially,
the purpose of a video is to promote a record and to help build an image for an
artist, not to make an artist money. However, videos can make money for an artist
indirectly because a video can increase record sales. This article will discuss
video as it pertains to unsigned and signed artists.
If an artist is unsigned, a video is probably not the best use of resources unless
(1) the artist has a great song along with a great visual or story; (2) the artist
can have the video broadcast to a wide audience; and, (3) the artist can afford to
produce a professional video. Although an artist can get utilize a video to get
bookings, interest a manager, and perhaps get a record deal, the main reason to
make a video should be to promote a record. The best exposure for a video is
of course MTV. However, getting on MTV is next to impossible without being on
a reputable label. It is possible to get on local cable programs with a well
produced video. Additionally, many syndicated video and talk shows might
consider a video by an unsigned artist.
If an artist is signed to a label, a video usually will be produced to help promote
the release. A video has two aspects: sales tool (i.e. MTV) and potential product
(i.e., home video sales). Although a video is mostly a promotional tool, virtually
all record contracts require that the artist grant video rights to the label. For
contract purposes, a video is treated like a record. Therefore, the concept of
recoupment comes into play. Recoupment means that the label will have the right
to recoup the costs of the video, usually from all sources of income that the
artist might make. As with records, the label will usually initially pay the
production costs of the video. There is a strong argument that since videos
serve to promote a record, not to generate sales of the actual video, only
a part of the costs of the video should be recouped from the artist's royalties.
Thus, most labels only require recoupment of 50% of the label's expense
for production costs. That brings us to another important concept called
cross-collateralization. This is when, as stated above, the label attempts
to recoup its expenses from all sources (i.e., record royalties, publishing,
video sales, etc.). If possible, the artist should try to limit the
sources from which the label can subtract.
At first glance, it would seem that a signed artist would want to demand a guarantee
of a as many videos as possible in the record contract. However, the artist must
keep in mind that a label will usually spend an average of $70,000.00 on a video.
Since half of these costs are recoupable from the artist's royalties, a promotional
video might not always be the wisest choice. The key is to try and keep the
budget low. An artist on a label will also be concerned with creative control.
Yet, unless an artist is quite successful, the label generally controls the
content and the concept of the video. Finally, it is not reasonable to expect
to make a profit from a video. There are rare exceptions (Madonna and Michael
Jackson come to mind), but again the reason for making a video is to hype a record.
In conclusion, if an artist is unsigned, in most instances a video is not the most
practical way to spend money because chances are it will not be seen. If an artist
is signed, although the label will probably insist on a video, the artist should
strive to get the budget low so the artist will not owe back as much money to the label.
Copyright 1998, Ben McLane
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