12 Music Industry Scams: Everything You Need to Know

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Note: This piece was originally a guest editorial for DJBooth.

“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side.” ― Hunter S. Thompson

Navigating a complicated, ever-changing industry such as the music business is difficult for everyone. But because a tiny percentage make it look easy, it’s no surprise others will stop at nothing to gain a competitive edge, or think shortcuts are the fastest route to fame. 

While I wish that Thompson was wrong about the music business, I’ve seen my share of scams. There’s no shortage of low-lifes, frauds, self-promoters, liars, cheats, and thieves lurking in the dark corners of the industry. Each has their own con, and all are looking to take advantage of the artists they encounter, whether those marks dream of overnight success or want to game the system.

So let’s catalog the 12 insidious ways music business grifters are coming for your money (and sometimes your rights).

Payola

The granddaddy of all music business scams, payola is bribery, pay-for-play, the music business equivalent of dark money. First, it was song pluggers influencing jazz-era bandleaders; then it was so-called indie promoters acting as record company bagmen. Payola was made illegal after a scandal in the late 1950s when DJs took bribes in return for radio airplay. It reared its ugly head again in the early 2000s and continues today, its cancer now spreading to services charging for placement on streaming service playlists.

The Greedy A&R

A&Rs (short for Artist & Repertoire) scout talent and oversee the creative process on behalf of their employer. A&Rs use both their ears and their network to find that talent, and their role as gatekeepers gives them immense power to break artists. But some A&Rs have developed shady side hustles, charging songwriters, performers, and producers to review their material. These scams come in many forms, including charging for submissions and charging to showcase. Sometimes events are made to look like contests with the winners receiving seemingly valuable meetings or introductions, but it’s the organizers pocketing the entry fees and the ticket sales. A&Rs are already being paid to listen to music: it’s their job. If that’s true, why should an artist have to pay them again?

The Shopper

Just as there are A&Rs on the inside scamming artists with dreams of getting signed, there are consultants on the outside scamming them, too. New to the industry and desperate for connections, some artists are willing to pay up-front to get their music shopped around. But ask the question: what incentive is there for a consultant who already has the dough? Instead of paying in advance to have somebody shop your music, why not negotiate a finder’s fee that is due only when the deal gets done? A scammer will insist on the former, but a reputable pro will agree to the latter. Even better: cultivate your industry relationships and save your cash for an attorney to help you close the deal you got on your own.

The Production Deal

These contracts involve an industry player who signs an artist to a record deal, even though that player might not have a distribution deal or even own a label. It’s easy to convince a neophyte to give their rights away, and complicated recording contracts obscure what’s really happening. Also, because the production company stands between the artist and the record company, there is a risk that their involvement will complicate the relationship or add no value. Worse, such deals often force the artist to give up 50% of the money and can tie them up unnecessarily. JoJo paid this price: her first deal ultimately left her unable to release new music for years.

The Double-Dipper

It’s standard practice for managers to charge a commission of 15% - 20% of gross earnings in exchange for their services. But they don’t get to put their hands in an artist’s pockets twice. If a manager also runs a label, artists should be vigilant about how their advisor gets compensated. This doesn’t mean a manager can’t own a label at all, just that there needs to be a contract that spells out all the terms should they have multiple roles. (This applies to music publishing, too.) 

Furthermore, artists should be alert to any situation in which an advisor attempts to take a copyright interest. Developing artists may not have immediate cash flow, so unscrupulous managers negotiate for a piece of their copyrights. Artists should never give up that ownership easily: copyrights exist long after the owner’s death, and joint authorship means that an artist might be tied to their former manager even after they stop working together.

The Conflict

A conflict of interest can occur when one party has relationships that make it difficult to choose fairly. A typical example is when an attorney represents both sides in a negotiation. Should this happen, the attorney is obligated to disclose and resolve the conflict or lose their license. Other industry players are under no such obligation, so be alert to conflicts and create relationships built on trust.

The Vig

Some recording artists are known to charge producers or songwriters for placements. They demand a piece of the music publishing in exchange for a promise to release the music, even when they didn’t write a note! Hungry for the placement, unsuspecting marks pay up out of fear they won’t get it otherwise. Some may see this as the cost of doing business, but it’s actually a bribe. It happens at all levels in the industry: Robin Thicke admitted he got a bigger piece of Pharrell’s publishing for “Blurred Lines” than he deserved, and Claude Kelly recently complained about the practice on Twitter.

The “Buy-On” Agreement

Another example of pay-for-play: promoters who charge artists to perform, or headliners who charge smaller acts for opening slots. Think that’s fair? Definitely not. If you are performing, you should get paid, so avoid these scams. It may feel like you’re passing on a great opportunity, but they’re rarely as good as they sound.

The Ghosting Consultant

I’ve heard lots of stories about consultants who charge for their services up-front and then disappear into thin air without actually doing any work. They make great promises, and appear to have the credentials and contacts to back them up. But do your due diligence and ask for references before writing a check. It’s also standard in the business to pay 50% on commencement and 50% on delivery, so negotiate to pay in installments, so you always have the leverage to get them to deliver.

The Shady Publicist

When considering whether to hire a publicist, research their ability to generate press and help manage a publicity campaign. The value of a publicist is their access to a list of blogs, writers, and other outlets; their ability to help craft a story that resonates; their willingness to pitch their contacts. No publicist can guarantee anything, so don’t fall for any claims that they do.

The Blog

Another example of payola, beware of blogs all too eager to take your money in return for writing a story of posting your music. What’s the risk they write two sentences or regurgitate your bio? If they have to churn out content like that, it’s because nobody’s reading. Everyone is hungry for press, but why should you have to pay for it?

The Faker

Once an essential ingredient of payola, DJs logged fake spins or played records at off-hours to juke the stats. Today, bots are used to run the same scam. Streams and followers can be faked, but there are two problems with this approach. First, if you get caught faking anything, the service will take down your music and reset your numbers. Second, fake followers don’t buy stuff, so your lie will get exposed when nobody shows up to your performance or purchases your records.

And Finally... Fight Back

Scammers rely on ignorance and sloth, taking advantage of the uneducated and the lazy. Overnight success is a myth. Instead, it comes from the hard work of making great music and building your audience. There are no shortcuts to success, so be wary of anybody trying to sell you a service that says otherwise. 

Want to stay safe and avoid these scams? Protect yourself. Read about the business. Ask for references. Talk to a trusted advisor. Negotiate better terms. In short, take responsibility for your career and make smart decisions about it. And remember: if the claim sounds too good to be true, it probably is.

You’ve been warned.

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