the spinART story an interesting one. here are a few more details around this:

what i have heard is that, as of sometime around april 2007, jeff price was “no longer associated with spinART” (see earlier blog entry). as recently as november 2007, he “doesn’t know where things are at” with spinART. strange.

the lawyer handling spinART’s affairs (who coincidentally (or not?) happens to be from newton, ma, jeff’s hometown) says that spinART went out of business in april, 2007. in july 2007, under the lawyer’s administration, spinART sold all of its assets to raise funds for creditors. he goes on to say that spinART’s financial records were “quite a mess” and “with the help of spinART’s principals” (which presumably includes jeff price and his partner joel morowitz), he “put together the best list he could of creditors and amounts owed.” shortly afterwards, a distribution was made to creditors, with unsecured creditors receiving pennies on the dollar.

it’s a sad story. no one wants to see anyone go out of business and lose their shirt…their investment…their reputation. but hold on a second - it wasn’t spinART that lost their shirt and investment - it was anyone associated with them - the artists, distributors and publishers. as i blogged earlier, jeff price is off with his new company, tunecore - i can’t say i’ve talked to him, but he seems to be doing just fine. his reputation appears to be intact. for example, the new issue (#61) of the big takeover has a short take on tunecore and refers to jeff as a “forward-thinking entrepreneur”, discusses how tunecore “empowers artists” and quotes jeff stating that “tunecore is an enabler that allows artists to succeed under any terms they want”…blah blah blah.

hey, that’s a great idea to enable artists, it’s just too bad that this philosophy apparently didn’t exist at spinART. here are some terms that i’d want as an artist:

1. have my label fulfill stated contractual terms, which includes,

2. providing royalty statements within 90 days of each 6 month period ended june 30 and december 31 (item 6 in the contract, by the way), and

3. paying the artist the balance due under the royalty statement as of those same time periods (also item 6)

4. label to pay the music publishers for mechanical licenses so the artist doesn’t end up unrecouped with the publisher (item 9)

5. label to pay the artist for synchronization licenses (so when the artist’s music is used on tv and the production company pays the label for that usage, the artist receives its contractual share)

6. label to pay the artist for merchandise sold to the label

7. label to pay the artist for proceeds of merchandise the label collects on the artist’s behalf

8. label to buy computers and phones that work - it would be incredibly bad luck for computers to consistently not receive e-mail and have hard drive crashes and for phones to consistently “not receive” voicemails

9. don’t stall, be evasive or lie

are those outrageous demands? i wouldn’t think so, it just seems like good business to me.

back to the liquidation process for a minute. you’d probably expect that even if your records are “a mess,” if the company’s owners are involved, it wouldn’t be unreasonable to expect them to come up with a relatively complete list of creditors. if you were a record label, where would you start? i think your artist roster is a good place. maybe look at who their publishers are. but somehow, spinART managed to leave some artists and publishers off their creditor list. i could see if you hadn’t heard from an artist in a couple of years…but if you’ve consistently received e-mails, voicemails and legal notices of breach of contract and contract termination, i think you’d probably remember that when coming up with the list of creditors. the mind boggles at just how this happened - i mean, it couldn’t have been intentional, could it?

what makes this more confusing is to this day, companies like itunes, amazon.com and spinART’s distributor continue to sell spinART product. i’m not entirely clear on whether they should be able to do this if spinART is out of business. hypothetically, if spinART was served with a notice of termination for breach of contract, then it is legally obligated to return original artwork and inventory. in the meantime, i don’t know where the proceeds of any sales end up, but you can be sure not in the bank accounts of spinART’s artists.

now if i could just get a hold of more details or e-mails…

word on the street is that spinART records has gone out of business and filed for bankruptcy. i wish i knew when that became official, because it’s a very sad day in this world, one that should be marked on the calendar and never forgotten.

spinART had a reputation for signing up-and-coming bands as well as bands that were tired of, or unable, to play the major label game. not only did spinART claim to provide great support to their artists, but they strived to treat them fairly - not just as business partners, but like they were family. of course some artists may have been more like a brother, while others were like the red-headed stepchild, but family nonetheless. what family is there that doesn’t have favorites?

but if spinART couldn’t succeed in the music industry these days, then i really think no one can. if spinART’s business model couldn’t provide them with enough capital to survive, then no model will work; it really should have been quite lucrative for them.

so on this sad day, i wipe away my tears and wish jeff price (founder of spinART) the best of luck. it looks like he’s landed on his feet and was able to walk away from the spinart debacle unscathed.

at his new endeavor, tunecore, (founded in november 2005), jeff aims to:

revolutionize the way artists are able to get the money generated from the sale of their music by eliminating payment or royalty “periods” and allowing them to take their money when they want it, the moment it becomes available, and

deliver all the money from around the world owed to our artists, including money they might not have otherwise collected due to copyright laws, international tariffs or regulations of other countries, and

enable an artist to make money doing what they love

noble goals, all about making sure the artists are actually compensated for their work. i wonder if tunecore can exploit some tricks of the trade jeff learned from his days at spinART.

something else i noticed in an article from january 2006, jeff explains his thoughts behind tunecore. he commented that “Labels and aggregators pay out your money in “royalty periods”. For example, they will pay you every three months and send your money only after they have taken their 9% - 50% cut.”

hmm…that actually sounds like a good deal compared to some others that i’ve heard of. better to get paid every three months after having 9%-50% taken out, rather than not getting paid at all.

jeff also says that creating tunecore “is also my rant against these companies screwing over artists. It was time to do something about it.”

well bravo jeff, i commend you and i agree. i also hate record companies that screw over artists and i think it’s time to do something about it.

let’s see what happens.