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half. In the 1980s, the labels came up with an elegant solution: They began charging the cost of the unsavory promoters back to the artists themselves.

The big record companies could do that because they could do just about anything they wanted and still sign aspiring stars. While the labels defend their practices by pointing to the more than $2 million they may spend to promote a band that flops, the contracts resemble those that decades ago left coal miners in debt to the company store. Promotional fees became just another of what are called recoupable expenses, which get paid back from the artist's advance. For most bands, that advance money is all they ever see, and it can be a big number. But the advance is actually a loan that's forgiven if the record doesn't sell well. If it does sell, the band must repay that advance before it starts collecting any royalties. And the repayment comes out of the band's end of the gross sales—as little as 12 percent, some of which has to go to the producer, the manager, the lawyer, and the accountant. In a hypothetical example of a smash success worked through record producer Moses Avalon, say a four-member band writing its own songs and with a big five-year, four-album contract breaks out of the pack and into the top 5 percent of big-label acts, selling 4 million records. At the end of it all, each member of the star group would net about $140,000 a year. The record company would gross $11 million before overhead.

The promotion system also had the effect of keeping new music off the airwaves unless a big-spending major backed it. With radio sewn up and most tours also paid for by the big companies, independent acts had few ways to reach the masses, or even connect with the niche audiences that might be interested in their music if they knew about it. "With the stranglehold in radio, new artists don't get exposed," said Ted Cohen, EMI's vice president of new media. "That's why everything sucks right now. It costs $1 million to have a hit record by the time you've greased all the wheels you have to grease." It was small wonder that the industry wasn't very interested in new and more democratic ways of distributing music: The current system worked for them, at the expense of new entrants. The essentially conservative nature of the label executives also explained their opposition to such new technologies as digital audiotape, which died, and the compact disc, which turned out to be a tremendous

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