LP "Cutouts"

records being pressed today have no return priviliges. a dealer must take the loss, if he has to take a return from a customer, or buys too many. a distributer or middleman may make exceptions, but the label sales are strictly one way given the small pressing quantities. cut outs were sold to deplete inventory when a title was temporarily or permenantly discontinued. sold at a lower cost, the artist or artists saw no royalties from these sales.

the retailer didn't...the label did.....since todays pressings are one way, there are no cut outs. back when cut outs were part of the business, even a tiny seller from a major label was 20 to 30 thousand units...today 1500 to 2000 units is a successful lp.

patrick..what label do you work for? honestly everything from the majors is one way.

one more thing....cut outs were never sold title specific(which makes it impossible to track royalties) ....cut outs were sold in bulk, mixed in 100 count cartons, etc.....no item numbers except for one which was the mix itself. most, if not all of the artist agreements to this day are written with provisions for overstock and cut outs(even though vinyl royalties won't buy a ham sandwich)....heck, i've been doing this since 1969, and agreements with artists, and agreements for intellectual properties have been my main focus for at least 15 years. if you're taking returns on vinyl in this day and age, thats scarey.

hey patrick...contact me through agon, and you'll find out what a small world this is. thanks

here's the way the majors worked in regard to the infamous cut out....primarily made up of returns, etc, the royalty was paid on the original sale(back when the lp was sold the first time at the regular price) the royalties (performance/publishing mechanicals/etc per unit. when returns accumulated that were not believed to be re-sellable, they were stamped or cut in some manor and sold for a fraction of the normal whlse price. the accounting to the artist and their management would reflect all sales, less returns, and inventory. most artist agreements allow the label (even today) percentages and reserves to cover everything from promos to future returns. clauses for liquidation and recoupment of advances and production costs make getting on the gravy train tuff. today its even tuffer with digital delivery (is anyone making anything on this?). i admire your company patrick, and wish you the best. i still work in the industry on the licensing side, and i have dealt with all the majors over the last decade in some form or another(a&r,production,sales,marketing,management,you name it.. i do know that the major labels relunctantly make vinyl and sell it one way, or license it to outside companies who pay royalties on gross receipts...not to mention guarantees.....the stories i've heard and people i've worked with over the years in every capacity of the business (several folks in the book 'hitmen'), make for some great stories.....as to the history of royalty payments, lets just say leadbelly wasn't the only artist who got screwed. the good news is companies today play tuff, but play by the rules......KEEP BUYING NEW VINYL!!!!!