Rockonomics 101

They’re the first Austin band to sell a million records since 1988. Does that mean the slackers of Fastball are going to get rich? Not necessarily.

In January 1998 Tony Scalzo was still working the graveyard shift at The Bagel Manufactory in Austin. Although he was in his thirties and slaving in front of a hot oven for little more than minimum wage, he rarely complained. He’d often talk of how the solitude gave him a chance to think and to listen to long stretches of public radio. If he was truly disappointed that fifteen years as a professional musician hadn’t led to much more than a great recipe for cinnamon-raisin bagels, he wasn’t letting on. Then again, not even Scalzo could have imagined that within four months he and his bandmates in Fastball would be chatting on Jay Leno’s couch or offering guitar lessons to Conan O’Brien. But that’s just what happened. By March “The Way”—Scalzo’s single about a missing elderly couple from Salado—was already one of the year’s most unavoidable hits, a staple of pop radio, MTV, and VH1.

Fastball’s fast ascent had all the makings of a fairy tale: down-on-their-luck heroes, hard work, and a happy ending. In fact, if the band’s rags-to-riches story line echoes Cinderella’s, it’s wholly appropriate, since both were hatched on the same studio lot in Burbank, California. Disney-owned Hollywood Records discovered them in 1995, stuck with them after the commercial failure of their debut album, Make Your Mama Proud, and helped make “The Way” a radio smash. After only six months, the full-length album on which the song appeared, All the Pain Money Can Buy, sold its millionth copy—no small feat, since less than one percent of the albums released in 1998 went platinum that same year. Even more impressive, Fastball’s platinum certification was the first by a Hollywood artist in the label’s eight-year history and the first by an Austin act since 1988 (not counting the late Stevie Ray Vaughan).

The upshot of such success is that Fastball is a global business enterprise, one that has generated millions of dollars in revenue for Disney. The band itself stands to earn millions too, only not as fast as you might think. One of rock and roll’s most enduring myths is that once you hit it big, you’re immediately showered with the kind of cash pocketed by showbiz icons and pro sports heroes. That may be true for longtime superstars like Garth Brooks or Madonna or the Rolling Stones, but far more often rock stardom and financial stability are two distinct concepts—a lesson the members of Fastball have been forced to learn as they go along.

Although the music industry accommodates dozens of business models, there are three main methods for a band to make money. Scores of books and seminars attempt to explain the intricate details of each one, but the basic concepts aren’t nearly as complicated as the business managers, attorneys, and accountants would lead you to believe:

Record Deals By design, major league recording contracts place the record label’s financial interests ahead of the band’s. Labels have in place a staff and system capable of producing, distributing, and promoting records, and all but the biggest of stars typically forfeit more than 85 percent of an album’s suggested retail price for those services. Before a band sees any of the remaining money, though, it has to pay off its debts to the label. Those debts, known as recoupable expenses, are amassed when the label spends money for what most of us would assume is the cost of doing business, typically things like the recording of albums, artwork and packaging, tour support, and video production. If enough albums sell and the debt is fully repaid, the band begins to collect its take. If the album sells poorly and the debt isn’t repaid, it carries over to the next album—assuming there is one.

Touring Whenever a band plays a show, it is paid a fee and/or a percentage of the tickets sold by a club owner or promoter—but the financial consequences of touring are more complicated than that. You see, there are two ways for a band to tour: with the financial support of its label or without it. Almost every band asks its label for tour support while it is still in its starving-artist phase, the upside being that someone else picks up the tab for expenses like travel, lodging, food, and roadies. And it’s quite a tab: Road work with a bus and small crew can easily cost $15,000 a week. The downside is that tour support increases a band’s debt to its label. That’s why successful bands begin to tour self-sufficiently once they can afford to—so they can keep whatever they make. If a band is at the point of touring self-sufficiently, it is likely to be making at least enough to cover its expenses on the road. If it’s an established act like the Rolling Stones, it could be bringing in as much as $1 million a night—though, of course, its expenses are going to be much higher than $15,000 a week.

Publishing Basic United States copyright law protects songwriters by giving them the exclusive rights to grant or deny the reproduction, distribution, or performance of their work. Although many artists do not write their own songs, most modern rock bands do, and Fastball is no exception. For a band that generates its own material, music publishing is potentially the most profitable aspect of the business, because any money generated by the songwriters’ copyrights is out of the reach of its label, debt notwithstanding.

The majority of a band’s publishing income comes from its “mechanical” and “performance” rights. As the name suggests, mechanical rights cover the reproduction of a song on a record. In the standard contract between a band and a label, the label is required by law to pay the composer a fixed rate per song simply for the right to use the composition on commercially sold recordings. The mechanical licensing rate for the U.S. and Canada is 7.1 cents per song, which translates into 71 cents for every copy of an album sold (7.1 cents multiplied

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