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ISSUE
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MAJOR LABELS
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UFO
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| Who gets signed?
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Given the power and influence major labels have, it can be a bit disconcerting to learn why some artists get signed. At major labels, a handful of key A&R people make the decisions that affect what millions of people will hear. Often they are mandated to sign new artists that closely resemble artists that are currently selling big numbers. There is always a rash of "clone" signings that define the major label status quo. Why nurture unique talent when you can copy someone else's success?
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Artists who are committed, motivated and have a sizable existing or rapidly expanding fanbase (as reflected in press, radio, sales, tour history) will be signed to UFO.
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| Making an album/creative control
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A major label will pay for all recording expenses and often insist on using the producers, studios, songwriters, etc of their choosing. Every penny a major label spends on recording is recoupable and must be paid back out of the artist's royalties. More often than not, given the level of investment on the part of the major, artists are not allowed the level of artistic freedom they are promised.
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Artists have 100% creative freedom to maintain their artistic integrity. With new technology, albums are being made for a small fraction of a major label budget. Artists fund their own recordings and provide UFO with all the art (a 100% finished album with finished artwork).
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| Marketing/Promotion
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If an artist wins the "Trendy Artist of the Moment" major label lottery the label may well spend a $1 million or more to launch them to superstardom. Unfortunately, when the "hit" single doesn't take off at radio within the first month or two, the label will quickly lose interest and cut off the campaign on the album. Plus, just about all independent marketing and promotion expenses are recoupable from the artist's royalties.
Artists usually either get a huge campaign (practically guaranteeing that if it doesn't work the artist will be dropped and thereafter considered to be "damaged goods") or a cookie-cutter, toe-in-the-water campaign. If things don't happen fast, the plug gets pulled and the artist either finds itself dropped or hung up in a protracted negotiation to get out of the recording contract.
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UFO works with artists to develop a customized marketing plan to build on past success. Cost-effective marketing and promotion techniques will ensure that no money is wasted and that everyone makes money. UFO's marketing commitment is correlated to past sales and current reaction in the marketplace to help build each artist's career organically.
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| Distribution
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Major labels own their worldwide distribution companies and try to ship every album to every store on the planet, insensitive to actual demand. Stores that are "jammed" in this manner carry stock where there is no demand, and simply return it. This often leads to high return rates and a very negative perception of the artist at retail.
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UFO distributes each artist's album to places where they are active and have generated a reaction in the past. The albums will also be available for sale online and as downloads from the UFO website and all the digital music services. The reality is that there is no point in having a record available in markets where there is zero demand. As reaction in the marketplace grows, UFO will increase distribution support accordingly.
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| Royalties
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Due to all the costs being charged against an artist's account, they will be lucky to ever make a penny from the record label. Before an artist ever gets a royalty check, all recoupable costs must be paid back out of their share of sales, usually around 12%.
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UFO splits net profits 50/50. That is, UFO only deducts actual manufacturing, marketing, and promotion costs from the total monies generated, and splits the remainder 50/50. There are no onerous or arcane clauses for breakage, new technologies, or other hidden deductions. (Note: costs are deducted straight off the top, NOT solely out of the artist's share.)
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| The next album
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Good luck. Rarely is an artist fortunate enough (because it doesn't always have to do with talent) to get another album funded. Major labels usually look for at least 500,000 units in sales to justify the expense of further production, marketing, and promotion.
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With UFO, an artist can deliver the next album anytime, or never. It's their choice. Artists can also give UFO special tracks to sell from the website in-between releases to keep fans up-to-date with the freshest music possible.
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| Ownership of masters
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Except for rare circumstances, the major label owns the rights to the master recordings. In fact, by virtue of the recording agreement, an album is simply a "work for hire." Artists may be able to petition to get ownership back after 35 years (this is a copyright law battle to be fought in the next few years as major labels contend they own master rights in perpetuity).
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The artist made it, artist owns it - 100%!
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| Contract term
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Major labels sign artists to deals that typically guarantee that they will release 1 album with the option to release up to 6 more at their discretion. An option is never at the discretion of the artist! At the rate of about 18 months per album cycle, the same deal can last 9 years or more!
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UFO agreements are for three years. During this time, the artists can release whatever they want (1 album, 3 albums, singles, EPs). At the end of the term they are free to go, but we think they'll stay.
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| Transparency
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A major label bi-annually sends an accounting statement. The statements are vague and lack detail or explanation, often requiring an audit to puzzle through.
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Quarterly accounting statements show detailed sales reports and all expenses relating to an artist's account. This information is provided to help empower and further each artist's career.
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