In a new interview with “Digital Killed The Radio Star” podcast, MEGADETH bassist David Ellefson shares his opinion on lack of money in the music business.
He said:
“To be honest with you, the best way to stay in the music business now is to get into real estate.”
“Because there’s not a lot of money in this anymore. And that’s the reality. And I saw that coming years ago.
“Dave [Mustaine, MEGADETH leader] and I were so lucky to get in under the wire with MEGADETH where there was still a bright future ahead of you. Getting signed to a major label; our days [on] Combat Records — not so glorious, but there was a bright light up ahead. We actually outlived our seven-album Capitol deal. And by the time that was done, we transitioned over to Rod Smallwood, IRON MAIDEN‘s manager, he put together the Sanctuary Music Group, and we transitioned over to that.
And that was — essentially it was a very large independent label, so in one way, Dave and I, we kind of felt like we were — while there was a lot of money in it — I remember feeling like we were kind of going back into the independent world, which was a little daunting. And then Dave did three records for Roadrunner… And [we’re] now back on Universal Records with MEGADETH.”
On bands touring a lot to make even, Ellefson said:
“Heavy metal and punk rock, it’s always built from the ground up.”
“And if you’re lucky enough, like we were with MEGADETH, to get MTV success and have some of the shiny celebrity moments, but those often will go away. We’re still left standing, because we’ve built a real fanbase. And with MEGADETH being back on Universal, which is where we are now… The reason Universal signed MEGADETH was because we pretty much brought the full cache to the table already.
I can imagine many record labels today that have built bands like MÖTLEY CRÜEand MEGADETH and GUNS N’ ROSES, I bet they’re kicking themselves that they didn’t somehow write some sort of a ‘360 deal’ back in the day,” referring to legal language that lets music companies take cuts of different artist revenue streams, including merch, touring, fan clubs, sponsorships, endorsements, etc. “‘Cause imagine if [labels like] Geffen, Capitol, Warner Brothers, imagine if they also owned part of the MEGADETH brand; imagine if they owned some of our merchandising; imagine if they owned some of our touring. I often think about that with Capitol Records — they signed us to a seven-album deal. They didn’t have any merchandising; they had no attachment to our brand. So they basically, for seven albums, built our name, and then when it was all done, we walked out the door. Now, of course, they still have ‘Rust In Peace’ and ‘Peace Sells’ and they’ve got a huge catalog that makes all this money.
“So we were very lucky that we were in the period of the music business where we didn’t have to give away the rights to many of those assets,”
“Because most bands today, when you sign a deal, you are essentially having to give up some of your merchandising, possibly some of your touring. And quite honestly, as now a label guy [owner of EMP Label Group], I get it. I mean, who in their right mind would put a bunch of money out to build some artist’s career, because there’s such risk in it these days and not a lot of payoff.”
Fans have responded to his statement and they are very much disappointed.
Below are some of the responses:
“All of these inspiring gems for future musicians to be discouraged by…thanks Dave 2. F*ckin bass players”
“I can’t tell if he’s being sarcastic or if he’s that annoying guy at family functions who won’t shut up about flipping houses.”
“Sorry, Junior, but Dave says you’re not an original Realtor.”
“So.. the best way to stay in the music business is to not be in the music business. Okay..”
5 comments
I’m not in a band, nor am I a musician, but he is speaking the truth. To get music in front of people, bands need some help, which is where the labels come in. They have the marketing juggernaut, if they know what they are doing and not trying to screw over anybody, to put a band on the map. Sometimes you have to give something up to get something else. That’s just life. The only thing I would do if I was in a band, is to make sure that everybody in the band understands the basics of the music business and pays attention to what they are signing; in terms of contracts. Read the whole thing, read the fine print, get a lawyer if you have to. It’s easy to take advantage of someone when they are intentionally stupid. Which is why people interested in a career as a musician understand the business end of things, not just the music/creative set of things.
Nobody wants to end up like Badfinger.
You are correct. Artists today can essentially cut the labels out of the process right until they are already big. It’s a glorious time to be a musician from a creative standpoint.
But if you want to tour…..that’s where the labels really come in. That is a huge logistical effort, employing a lot of people and making arrangements months in advance that HAVE to come thru when the date rolls around. You need a company that can take a huge loss in refunds if there is a catastrophe. Also someone with lots of lawyers and a big bank account to cover liability settlements.
Record labels really used to do EVERYTHING for the artists, leaving them to get wasted, bang groupies, etc. And they still managed to cross international borders, have all their gear (most of it rented locally) in place on show day, have hotels for bands to wreck, rented cars, local PD support, hiring truck drivers to haul ridiculous stage props, kickbacks to local politicians, parking, and much more. That is much bigger than most aspiring artists realize.
The 360 contract sucks. But labels had to evolve their model once physical sales went away. That was another huge logistical effort if you think about that process, but it was where labels made most of their money. They saw where artists are making money nowadays and simply shifted to taking a bite of that. It’s up to the artist to decide whether it’s too big a bite for them.
That’s what Misha Mansoor has been saying, too. Somehow music executives are still rich but artists can’t make a damn penny without diversifying into something else. That’s why Misha has GGD and Horizon Devices.
Dave knows the industry…he literally wrote a book on it. He is just speaking the absolute truth. Explaining basically how the ‘360 contract’ that labels force artists to sign is what took the money out of the artists’ hands. The record industry has changed as has how you distribute music. Bands need to evolve and quit crying that it’s not the 80’s anymore. His book is outdated now after the rise of the internet, but how the industry works is something that Ellefson is an expert on.
There is good and bad now. Bands no longer need someone with record, tape, or CD presses to arrange manufacturing and global shipping. We have digital music that can be sent around the world basically for free in seconds. No more Mtv but you can now just playlist a band and hear them on a dozen different platforms. Everyone has twitter and other ways to communicate with fans. You can have the power of a full on studio without leaving your house. No longer having to come up with ten grand for a week of studio time to lay down a record.
Technology has made it easy for anyone to make music and get it out there. Look at Bieber and his kind where all it took was the lightning strike of going viral on YouTube….instant millionaire. You don’t need a band, there is software for that. You don’t even have to be good– how many millionaire artists today rely on auto-tune or time/pitch correction? So it’s easier than ever to make music and get it out to lots of people, essentially removing the record labels until you already hit it big. Merch? Heck every YouTuber with 50 subs puts out merch now.
From a business standpoint, the labels made smart moves. They relied on physical sales and when that died and artists’ money came from somewhere else, they moved to take that revenue instead. The industry adapted, so too must artists. Or go it alone, which is entirely possible nowadays.
Dave is speaking the truth. I have seen many other artists say the same thing. BUT from my point of view, if you are getting into that industry to make a ton of money, you are probably in it for the wrong reasons. But yeah the years of bands making money hand over fist are gone.
With the teachnology now, anyone can strike it lucky without a label. So many people have been discovered from the likes of youtube. It’s just another transition in the industry that the labels are so far behind.