January 29, 2013

Avoiding Music Industry Scams

The music industry, filled with dreamers who are trying to "make it," is unfortunately great breeding ground for fraud. Scams fairly easy to come by, especially if you are a musician. It's sadly easier to fool someone when they're trying to break into a complex industry and are desperate to do whatever it takes to succeed. Unfortunately, this kind of passion and dedication can mean setting yourself up for a bad situation, but you don't have to be a victim if you know what to look for.
An example of a pay to play scheme circa the early 2000's



Don't Pay to Play
These are some of the worst and most common hoaxes because they seem so benign but they can easily cost you a lot of money without getting you anywhere. They tend to disguise themselves in the form of some sort of legitimate opportunity from a legitimate business whether it be getting your song played on the radio, getting you a record deal, or letting you play a showcase in front of a big time A&R rep. The common thread though is that they will all ask you for money to get access. With the exception of membership-based organizations like ASCAP or The Recording Academy, press, marketing, or radio promotion agencies, or a qualified professional industry consultant (determining that requires research though), there are very very few legitimate music businesses that will charge you in order to get access to a career opportunity (and honestly the aforementioned companies aren't charging you for access, they're charging for their services- but I didn't want to confuse anyone into thinking they are not legitimate businesses because they cost money). Many of these scams offer you what sounds like the chance of a lifetime, and some will even go through a process of choosing only a handful of participants to make it seem more promising, but that is not how the music industry operates. In fact, most contracts will offer you an advance (money in advance of any sales), not the other way around. Many people in the music industry make money by getting a percent of the artist's earnings based on their work together. If that is not the case it should be a serious red flag.

I experienced one of these infamous cons first hand when I was younger. A "music talent search" program came to my area and asked for musicians to bring a demo in order to be considered for the chance to be connected with major label A&R representatives. It sounds great and decent enough right? The program had a panel of "industry experts" who would listen to your demo and score it to determine who would be chosen for the opportunity. At the end of the day, everyone who was chosen was seated in a room and given various forms and contracts. It still may sound a bit like American Idol, but these forms required you pay a crazy $650 per solo act or $850 per group to move on. It also included some legal language stating that the money was nonrefundable for any reason and was intended to cover "participation fees" (those are pretty steep fees for them to rent a room) and the money needed to be paid within 7 days of the recruiting event. Talk about shady! If these people really believe in you and can really get you in front of an A&R rep, they'd probably be happy with a finder's fee or a percent of your advance, not charging you up front to even have a chance.

Trust Your Instincts 
If something doesn't feel right for whatever reason, you're probably right. Don't risk it even if it seems like an amazing opportunity. If it seems to good to be true, it mostly likely is.

Ask Questions
Asking questions tends to be a good way to get someone who is trying to swindle you to start to feel nervous. If you ask too many questions they'll be more inclined to leave you alone because they'll realize you're not going to fall for it. Ask if you can speak to former participants. Ask them to name some of their former success stories. Ask about what the next steps of the program are and those thereafter. Ask them what exactly your money goes towards and exactly what you will get in return. Ask for names of key employees, look them up online, and ask if you can speak with them. Better yet, tell them you want to have any legal language reviewed by an attorney.

Google It
The Internet is an amazing tool for sharing information, including those about scams. Now, when someone has been cheated, they are likely to take to the Internet to warn other people about it. Find as much information as you can; search the name of the program along with the word "scam." If you can find out names of employees, past clients, and any success stories and look them up too to determine if they've had any real experience in the music industry.

Get Educated
The more you know about how the music industry works, who does what, and how they get paid, the harder it will be for someone to trick you.

Any other advice for avoiding scams in the music industry?