6 Music Business Lessons We Can Learn From ‘Straight Outta Compton’
Besides being one of the most greatly anticipated films of 2015, Straight Outta Compton also has several valuable lessons to teach us about complex and still relevant issues within the music industry, offering advice about contracts, musical rights, and even constitutional rights.
Guest Post by Mita Carriman on OkayPlayer
If by now you’ve seen Straight Outta Compton, the acclaimed movie on the rise of NWA, then you already know that the praise its been receiving is well deserved. Granted, there’s been controversy about the directorial decisions by Team Compton to eliminate certain aspects of NWA’s history and their personal relationships outside of the group. But If you haven’t seen it yet, I recommend you set those (legitimate) concerns aside, and clear your calendar to make time to go see it – particularly if you are a musician.
Why? Not only because it’s one of the most entertaining and engaging capsules of hip hop history I’ve seen in years. Not only because it will make you want to immediately curate all sorts of West coast-rap inspired Spotify playlists soon as you leave the theater (I know I did). But also because the storyline is full of invaluable lessons in how to survive and thrive in the music business.
As a music lawyer now in my 6th year of practice and proud old school hip-hop head, Straight Outta Compton was essentially a giant nerd-gasm for me and made me feel like it should be a part of any music law or music business curriculum. Below are six essential music biz lessons I pulled from the movie that every musician should know, regardless of genre…
1. [+ Most Important!]: Don’t Sign A Contract Until Your Lawyer Looks It Over.
This is the biggest lesson that any musician should leave Straight Outta Compton with if they don’t know this already. Ice Cube’s character in the movie knew what was up, and refused to sign any paperwork as an artist without having a chance for his lawyer to look it over first. If you’re a musician, you should do the same.
It never ceases to amaze me how often I hear musicians shrug off the need to hire a lawyer to review a contract. In today’s music business, there are tons of small independent record labels and music publishers offering label, publishing or licensing contracts without any advances given. Because little to no money is being advanced, many indie musicians seem to interpret this as meaning that they don’t need to hire a lawyer to look over the contract or that the legal expense isn’t worth it. They couldn’t be more wrong.
Just because a cash advance isn’t being offered as a part of a music contract, doesn’t mean that serious obligations aren’t otherwise involved. You would be surprised how much one sentence in a contract could literally alter a musician’s entire career forever- and not for the better.
Is the contract locking you into any sort of exclusivity that prevents you from signing other music deals? Will the label or publisher have rights to your other music works? Will they have rights to your stage name? Will they be taking an unreasonable extent of your copyrights or ancillary rights in touring or merch? Will they be commissioning music videos or PR and deeming those costs as an advance? Will you have the right to audit your royalties? Did they even mention when you will be getting your royalties? If you’re dealing with a foreign label and you’re based in the US, can you only bring a lawsuit abroad? Does the contract say that the label can appoint your manager and take a 70% cut of all your income as your manager and your label?
I can’t stress or say this enough – have a lawyer, specifically an experienced music lawyer (not your cousin who is a paralegal, your friend still in law school who interned once with a label, or your personal injury lawyer) look it over first.
If there’s only one music biz lesson to take from Straight Outta Compton, the importance of having a lawyer review your contracts before you sign is most crucial. The cost to hire one to get you out of the contract after you sign will be way more expensive and in many instances impossible to break you out of with litigation lasting for years.
2. Expensive Clothes, Champagne & Lobster Meals From Your Label Might Be On Your Dime.
While there are plenty of deals in the music business that had their start over casual discussions during drinks or meals, if you’re a musician signed to a record deal and being given fancy new clothes or lavish meals from your label, the expenses involved for them might actually be on your dime, considered an “advance” to you that will be taken out of your royalties. I’m not implying that a label would necessarily be wrong to do so, I’m just highlighting the importance that musicians should be aware of how it can affect your earnings.
The Straight Outta Compton scene where Ice cube’s character grows suspicious after seeing Eazy E and manager Jerry Heller eating lobster and champagne for brunch gave a glimpse of how that can happen.
Many royalty clauses for record deals tend to have catch-all phrases that enable record labels to deduct just about anything the label spends on musicians as an advance. I’ve had plenty of musician clients shocked to learn that deductions from their royalties were being taken from meals and other entertainment with their label as “meeting” costs when they assumed they were being treated on the label’s tab. The same goes for travel and lodging accommodations which might be provided from a record label.
Again, not saying a label that does this is necessarily “wrong” or “evil” for doing so, but as the old metaphor goes, just remember that there is rarely such a thing as a free lunch. If your label is giving you first class air, 5 star accommodations and regular meals with lots of zeros at the end of the tab, you may want to speak with your lawyer and label to ensure coach travel, airbnb or other budget friendly lodging options, and less baller-fied meals if you’re the one ultimately absorbing the costs.
3. Have A Band Agreement–Esp. One That Considers A Band Member Leaving.
Most of the band agreements I’ve drafted or reviewed for my band clients are similar to a general business partnership agreement, but with additional intricacies related to issues of copyright, trademark and other music industry concerns between the band members.
The main storyline in Straight Outta Compton detailed how NWA came together as a band, then dismantled with Ice Cube and Dr. Dre leaving the band to launch solo careers and their own labels.
If you’re in a band now, you should absolutely have a written band agreement in place, drafted by a music attorney for transparency amongst you and your bandmates.
For starters, the band agreement should make clear who is a band member and who is not. Many bands sometimes have musicians who only join the band as a “sideman” for occasional recording sessions, paid as a work for hire, or temporarily on tour or for live performances. Not surprisingly, this can create blurred lines regarding who exactly is an official band member. With the rise of music “collectives” over the past few years, it can get even more confusing as to who is in a particular band, who’s not, or even more basic – if there even is a band to begin with.
Among other things, your band agreement should also absolutely address what happens if a band member leaves, or if a band member can get terminated. If so, can the remaining members get a replacement? Can the remaining members continue to use the band name/band trademark? Can the departing band member get any royalties on future music creations? These are a handful of the concerns that came up in the movie, and which your written band agreement should address.
4. Songwriter & Producers: Make Sure You Get Your Songwriting Credits.
Some of my colleagues may or may not agree with me on this, but in today’s music business I personally and strongly believe that songwriting/publishing is the most crucial and lucrative source of income for musicians, as record sales have steadily declined over the years.
For example, everyone’s favorite Whitney Houston track “I Will Always Love You” was written by Dolly Parton. Whitney only recorded a cover song of it. Every time the Whitney recording is played on the radio, a recording is sold or stream, or put in a synch deal, it’s Dolly who earns money from it as a songwriter, not Whitney’s estate. There’s more immediate glitz and glamour involved with being a recording artist, but there’s more longevity and earning potential if your songwriter. Business-wise, musicians should probably strive to be both.
In Straight Outta Compton, Ice Cube’s character grows increasingly agitated and concerned about his lack of earnings in NWA. In one particular scene he was given the run-around about why he hadn’t been getting paid properly for his work with the group and he basically claimed that he was tired of the excuses because he knew he wrote many of the songs and was entitled to good earnings.
Songwriting is important. Make sure you get proper songwriting or production credit when due as a musician, and if you haven’t already, be sure to register with Ascap, BMI, or Sesac to collect your songwriter performance royalties, and SoundExchange to collect your digital songwriter performance royalties. As I like to say, songwriting for musicians is the gift that keeps on giving.
5. Know Your First Amendment Rights As An Artist.
One of the most exciting parts of Straight Outta Compton detailed NWA’s release of the track “F*ck Tha Police,” and the controversy it sparked across America as a radical public commentary on police brutality. In the movie, NWA was met with fans who supported their bravery for the outspoken song release, but the song was also met with a warning letter from the FBI about the track. NWA instantly became national crusaders for First Amendment rights as a result and gained unprecedented support when the group decided to publicly share the FBI letter.
According to online news accounts of the real-life controversy, after the FBI sent their letter to NWA, the FBI had to publicly clarify that they did not have an intention to suppress NWA’s freedom of expression. NWA’s “F*k Tha Police” track today lives on and is still available for commercial sale and stream. In fact, when I left the theater after seeing the movie, I overheard a few people in the audience say they there were immediately downloading the track after learning more about its history.
Freedom of expression is an amazing liberty afforded by the US, and NWA clearly won the freedom of speech battle with the release of “F*k Tha Police”–however, it is important for musicians to note that the first Amendment does have limitations against it.
6. Your Biggest Earning Potential As A Musician Might Not Be Your Music.
One of my favorite parts of Straight Outta Compton was the opening scenes depicting Eazy E, Dr Dre, and Ice Cube during their youth and before NWA came together as a band. Rather symbolically, Dr. Dre is seen laying on a floor wearing headphones and getting happily lost in music from Roy Ayers. Ice Cube is seen focused on creative writing in his notebook while on his school bus.
After both of their music careers launched, Dr. Dre and Ice Cube went on in real life to make astronomical earnings for their work outside of the recording/songwriting music business. Dr Dre went on to become one of the most acclaimed entrepreneurs in the world with the launch of the ubiquitous Beats by Dre headphones. As shown in the film after Ice Cube left NWA, he committed himself to writing the screenplay for the movie Friday–which sparked several sequels and a thriving film career for Cube.
Forbes.com reported that Dr. Dre earned a whopping $620 million from the sale of Beats by Dre. It’s been reported online that Ice Cube has starred in over a dozen films that have each earned over $100 million dollars. And as for the Straight Outta Comptonmovie itself, Dr. Dre, Ice Cube, and Eazy E’s wife were the film producers and it was reported to have earned $60 million in its opening weekend alone.
My point in mentioning this is to highlight that “music “ alone may only be the start to a musician’s entire entertainment career. Dr. Dre and Ice Cube weathered personal and professional storms throughout their career that few could survive, but they made it out on top and have an incredible legacy they made as business men.
It’s wise for musicians to be true to their art, but also to be true to their business. There shouldn’t be any shame or dishonor for musicians who are proactive on the commoditization of their art and ancillary businesses. It might look cool for musicians to pretend that they don’t care about money, but musicians who don’t may find themselves straight outta dollars they’re leaving behind on the table.
And now some fun disclaimer stuff! (not at all, but you know we gotta do this)
The views presented are the views of Mita Carriman Esq., an Entertainment Attorney based in NY whose past client list includes Styles Upon Styles Records, Dither Down Records, Bastard Jazz Records, Dubspot, Les Nubians, Frightnrs, Mi Casa Holiday, and Weekend Money. This article is general information only and does not replace or constitute legal advice of any kind nor does it create an attorney-client relationship. You are advised to seek the help of a licensed attorney to help you with your unique and specific situation Lastly, you can follow Mita on Twitter @MitaCarriman or learn about her law firm at CarrimanLawGroup.com. Her email address email@example.com.