A few folks have been asking me to comment on EMI's new deal with Korn.

In a nutshell, the band is trading 25% of their across-the-board revenue for a $15 million upfront advance. It's a risky move on both sides, since most critics (and some fans) don't expect Korn to sell as many albums or tickets as they once did. If that happens, EMI's shelling out an investment that won't bring much return. On the other hand, if Korn succeed at expanding their audience, they could be seriously selling themselves short.

This type of deal is not new or unusual. This just happens to be the highest-profile deal of its kind in the United States, so it's getting some mainstream attention.

And it's bad for working musicians, for a few reasons.

First, it's so highly speculative. Can major labels really sustain this kind of strategy? We've already seen the effect of huge advances on the rosters of major labels -- this approach really ties them down to focusing on a very small handful of artists. Meanwhile, Sanctuary Records tried to merge label, touring, and management duties in a similar fashion. For a while, it looked like they were on to something, in a Google-esque, "don't be evil" kind of way. But they took too many risks, and now, they're on the ropes.

More importantly, this new kind of deal celebrates the "lottery winner" ethic that we have to fight every day. It perpetuates the myth that everything will be just fine, if only you can get signed to a major label.

In reality, remember that the $15 million is just a cash advance against future earnings.

It's a payday loan.

If they earn more than $60 million during the term of the agreement, they're losing money.

Yet, this kind of deal will set an example for artists that will say "yes" more readily to signing deals that require them to hand over a chunk of their appearance fees. Remember that 99% of artists lose money on album sales -- why would you want to take a second hit in the pocketbook?

Then, there's the "carrot and stick" issue. How many musicians have created their life's best work after seeing seven zeroes at the end of their bank account? (This would be a good research project -- comment on this!)

When you're relying directly on your audience to keep food on your table, you're motivated to do your very best. When you're lulled into a false sense of security by a major label expense account, you're in danger of writing entire albums about hotels and limos.

Technorati Tags: EMI, Korn, music+business, money