Using The “R” Word in Milwaukee

“R” for recording that is. The Milwaukee Symphony Orchestra has become one of a handful of orchestras across the country to kick a new digital recording distribution initiative into high gear. How did they manage to do what no other orchestras have done so far…

Adaptistration People 120If you believe everything you read in the press from a number of orchestra managers about recording it would appear that the union has thrown up a unassailable brick wall on the issue. Fro example, The 9/16/05 issue of the L.A. Times reports a very amicable contract settlement between the musicians and the board of the L.A. Philharmonic. The article reports that L.A. Philharmonic president, Deborah Borda, claims their negotiations “were smooth, in contrast to the turmoil that has characterized recent labor relations at other North American orchestras.” The article includes similar comments from Hal Espinosa, president of the Professional Musicians Local 47, “These negotiations were very amicable. We were able to talk very easily across the table. I believe both sides were as happy as you can be.”

Nevertheless, the article reports that the only Ms. Borda found a problem in the negotiation process. The article quotes Ms. Borda as saying “We unfortunately are not allowed to deal with recording in our contract…that’s governed by a national agreement. We have no say over it. Even if our musicians wanted to work with us on that, they’re not allowed to.”

However, while that comment was being circulated to readers of the L.A. times, a committee of musicians and managers at the Milwaukee Symphony orchestra managed to work out this new recording deal. So unless there’s more to the story in L.A. it doesn’t appear that the rules are as prohibitive as some proclaim.

In fact, one of the first major changes which relaxed recording rules came about more than five years ago with the creation of the AFM Internet Agreement. It placed many of the decisions surrounding electronic media compensation, etc. directly in the hands of musicians. In order to help better understand the agreement I asked Robert Levine, principal violist with the Milwaukee Symphony and a member of the AFM committee which created those new rules. Robert described the new agreement as follows,

“The AFM Internet Agreement, which we negotiated in 1998/99, left the issue of compensation, in many situations, up to what we called Local Internet Oversight Committees, composed of equal numbers of management and musicians. Basically the LIOC had complete control of the deal except for some things such as mandatory copy protection, no use of product to replace musicians, and the like. The one major caveat was that ownership of the product couldn’t be transferred to third parties such as record companies. But, if the institution retained ownership, in most situations the LIOC could choose to waive upfront payments and go solely with revenue sharing, which is what we did.

This was not as radical as it seemed to many at the time. The AFM had been moving informally in the direction of more local control over media rates with its tacit (and then explicit) acceptance of the concept of the electronic media guarantee. The concept of revenue sharing was not completely new either; it was in both the Audiovisual Agreement and the Radio-to-Noncommercial promulgated agreement.”

I asked Robert why it took so long for anyone to take advantage of the new Internet Agreement and he said,

“What was really new about the Internet Agreement was the degree of cooperation required within institutions. Basically, if management and musicians didn’t agree on every aspect of the project, it didn’t happen. In our case, that included control over repertoire, review of the contract with the distributor, how and when musicians were paid, and just about everything else. The only aspect we ceded control to management on was compensation of soloists and conductors, but that was our choice to do so.”

All initial signs coming out of Milwaukee appear to indicate that both sides have come to a reasonable understanding on the issue, a far cry from either side blaming some other party for preventing changes the current rules.

“Needless to say, that degree of cooperation proved something of a challenge to both management and musicians, although in different ways,” said Robert. “But we worked through all the issues, and it was a very healthy and positive exercise to do so. In many other institutions, however, that degree of cooperation was simply not possible.”

In Milwaukee, their six member Local Internet Oversight Committee consisted of administrators John Hancock, Renee Logee, and Linda Unkefer representing management and musicians Robert Levine, Roger Ruggeri, and Samantha George representing the players.

The agreement that committee created provides for payment to musicians, conductors, soloists, and publishers on a revenue-sharing basis rather than traditional advance payments. Granted, it’s a sincere asset to have someone who actually participated in creating the AFM Internet Agreement as a member of the Local Internet Oversight Committee but it also shows that agreements like this are certainly possible.

One of the final components in this agreement was finding a company to distribute the MSO’s new digital e-label. The organization selected to distribute the MSO’s recordings was the Independent Online Distribution Alliance. According to a statement released in a press release from IODA founder and CEO, Kevin Arnold, he’s very excited to be associated with the project,

“We are thrilled to welcome the Milwaukee Symphony Orchestra and MSO Classics to the roster of IODA-distributed labels. IODA’s industry-leading technology solution for licensing, metadata management, and royalty administration is a great fit for ground-breaking organizations like MSO that are charting new territory for classical music in the digital world.”

Hopefully, IODA will be able to help the MSO find other online distributors who provide a better interface for classical music than the current exclusive carrier, iTunes does (an issue discussed at length in an article I published on 9/10/05).

For now, it appears that all parties involved with his new deal in Milwaukee took one look at the unassailable wall everyone keeps talking about and agreed that they were just too high to jump over. Instead, they simply walked through the door installed in 1999.

In the end, both players and managers in the MSO see the potential rewards from using the rules agreed upon for electronically distributed music:

“The Milwaukee Symphony Orchestra has always been a pioneer – in the world of new music, through innovative programming and by being the first American orchestra to visit Cuba,” said Andreas Delfs, MSO Music Director. “Now a new age for classical music distribution has begun, and we are pioneers once again.”

“The other important aspect is that the project has the blessing of the musicians and the union; everyone seems pretty excited about it,” said MSO concertmaster, Frank Almond. “Realistically I don’t think anyone expects to make millions and millions of dollars from this, but the revenue-sharing idea seems to address lots of previously cumbersome issues in a positive and equitable way. The MSO musicians quickly realized this was a great opportunity from many perspectives, and were pretty enthusiastic about its chances from the start.”

“This is an important milestone both for the Milwaukee Symphony Orchestra and the American orchestra industry,” said Robert Levine, MSO principal violist. “For the first time, an American orchestra is making available its archives on iTunes and other commercial download sites, finally realizing the promise of the groundbreaking AF of M (American Federation of Musicians) Internet Agreement of 2000.”

“I am extremely proud of the MSO family members who worked behind the scenes to make this groundbreaking local internet distribution agreement possible,” said Mark Hanson, MSO president and executive director. “This innovation is the result of significant cooperation between musicians and management, a long-standing institutional commitment to recording and radio broadcasting, and ambition to advance the organization. The MSO is excited to be the first American orchestra to distribute previously-unreleased live recordings to a world-wide audience that will soon come to appreciate the artistry of the Milwaukee Symphony Orchestra.”

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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6 thoughts on “Using The “R” Word in Milwaukee”

  1. Revenue sharing? Uh-huh… Do you know how many copies need to be sold before there is any “revenue” to be shared? Do you know what the average, or even really successful classical release sells? The chances of the musicians seeing any of that is about the same as Arnold Scwarzenegger winning an Oscar.

    It sounds great on paper, but this is just another way that musicians are getting squeezed. Why we would want that escapes me. The fact that Milwaukee was so quick to adopt it is highly suspect as well – if it had been a healthy organization, it would warrant a closer look.

  2. The cynical comments of Mr. Wilt above are typical of those who would have musicians mired down in a “no record, no hear” quagmire.

    His assertion that it takes an organization that is challenged financially to take a ground breaking step is
    certainly backwards thinking. I applaud the Milwaukee organization for being pioneers.

    Let’s see how it sorts out. After all, no real record company is paying any American musicians to record either.

    Wayne

  3. “Revenue sharing? Uh-huh… Do you know how many copies need to be sold before there is any “revenue” to be shared? Do you know what the average, or even really successful classical release sells? The chances of the musicians seeing any of that is about the same as Arnold Scwarzenegger winning an Oscar.”

    The Milwaukee deal is structured so that musicians share in revenue from the first dollar. Of the gross sales price, iTunes takes a cut, the distributor takes a cut, and the musicians’ share is calculated on the gross revenue the MSO receives from the distributor, before any deductions for production expenses, soloist costs, mechanical rights, or anything else. It may not end up being a lot of money, but it’s for material for which we have already been paid and was formerly sitting in the archives doing nothing for anyone.

    “It sounds great on paper, but this is just another way that musicians are getting squeezed. Why we would want that escapes me. The fact that Milwaukee was so quick to adopt it is highly suspect as well – if it had been a healthy organization, it would warrant a closer look.”

    In fact we modeled the deal on some other media contracts, some from “healthy” organizations. Your attitude sounds a lot like “only big orchestras should do media work.” That kind of snobbery really does deserve to be left in the archives.

  4. This is coming from a Classical Music Marketer.

    Arts Organizations need to realize that to make money they have to be creative on how they do so. This includes retaining the people they currently have in addition to adding new ones. Unfortunately, most company’s patrons or subscriber base are an older set, so they have to get younger and sometimes middle aged “newbies” interested. The time for being elite means being obsolete.

    The recent deal by Milwaukee and Apple is huge. If it gives younger and newer audiences a look at something much more diverse than Brittany Spears, they will realize the genre’s greatness. Without sounding trivial, I call it the Boone’s Farm theory. When I was younger, I liked sweet, less complex wines (POP Music). As I got older and educated myself, I began to like deeper, more complex foods and wines (Bordeaux, French Foods). What the Itunes deal will hopefully do is allow people to sample things more complex and in-turn build new audiences keeping the art-form alive.

  5. Yes – we’ll see.

    I hope I’m wrong – seriously.

    Regarding Milwaukee’s agreement, you say that revenue starts from the first dollar, before any production costs are paid. How is this possible? Is someone underwriting the costs? Hard to believe money would trickle down to the artists before that had happened.

    Should there have been changes to the old restrictions and costs on recording. Probably. It is obviously getting prohibitively expensive for orchestras to try to put out new material, particularly when the record companies have decades worth of old stock (of the same material) that has already been paid for many times over. I’m not sure what we ended up with, though, will ultimately be good for the musicians. Will we get greater exposure? Absolutely. Is it worth the added stress on the performer? Don’t trivialize the effect that the microphone or television camera has on somebody already facing a “big night”. Perhaps the fact that we may be seeing much more of this type of thing will make it easier, but probably not much.

    I got the sense that the new language was put together in a rather hasty manner, with limited input from the people who would be affected by it, which is never a good thing. Maybe the authors DO know what’s best for me, maybe they don’t.

    Again, we’ll see…

    Jim

  6. I have been trying to remember the meeting we had regarding this issue. I believe the strongest point was that the new agreement could reduce musician compensation by almost a factor of ten. It would also have required that the orchestra come in on its traditional “free day” (Monday) to play a patch session for what was not covered in the course of the concerts – this was also done at a very modest rate of compensation.

    I think many of the musicians recognize the difficulty in producing new recordings due to the labor costs and the disincentive for recording labels to invest considerable resources in producing “redundant” product. However, the feeling is that Philly and the AFM (national) had given the farm away with little input from other orchestras that would be impacted by this decision.

    Perhaps Milwaukee’s situation is different in that many of the costs involved for the iTunes project have been addressed via their EMG. Most of the “big” orchestras no longer have an EMG component in their compensation packages – I believe LA was one of the last, and we rolled it into our basic weekly salary with our recent contract. Not having seen Milwaukee’s agreement, it would be difficult to speculate on the details. If they are using archival material exclusively, then sure, I guess it would be OK. However, I would be interested to know who decides which material is artistically suitable for release. Surely not every concert they have ever performed is “commercial-grade” without any splicing or editing. How far back will into the archives will they go? Outside of the quality of the performance, is the quality of the recording suitable for public consumption? I know our archival recording are less than ideal for playback – when they were made, they were not done so with the assumption that they would be commercially released, so the same care that would be given to microphone quality and placement is not evident. Also, does the management have an accurate accounting of all musicians, including extras, that played on those recording and would therefore be eligible for additional remuneration? At what point, if any, do we stop looking at past performances and start putting the future ones on the table? I know that Mr. Levine is no fool, so these (and the many more) question I have have probably been considered and addressed.

    Perhaps I was premature in lashing out at Milwaukee’s agreement, as it triggered a bit of a knee-jerk reaction when I read the words “profit sharing”. I sincerely hope that it helps to put them on firmer ground. However, if it is successful, then other orchestras will surely jump on the bandwagon, which may provide a true glut of product on the market. And the record companies think they have a tough time now…

    I do want to emphasize that my comment regarding Milwaukee’s financial situation playing a part in this in no way reflects my attitude of the artistic level of that orchestra. I know they are very good, and have musicians that could sit in any orchestra. Having worked in other orchestras that have been through difficult financial problems (Houston and Denver), I adopted my “cynicism” the hard way – I earned it. I know what it is like to be part of an organization in seemingly perpetual crisis mode, and after having gone through their recent cutbacks, Milwaukee may have been vulnerable to a less-than-ideal situation. Presumptuous? Could be, but like a dog that has been hit a few times, I tend to flinch when I see something like this coming around.

    Jim

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