The Economics of Everyday Things: “My Sharona”

Hey there, it’s Stephen Dubner. You’re about to hear the third episode of our newest podcast, The Economics of Everyday Things. It is hosted by Zachary Crockett and you can get all the episodes on any podcast app. Here’s Zachary:

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I recently talked to a woman whose name I have heard hundreds of times — at the grocery store, karaoke bars, in my car. But before the world knew her name, she was just a typical teenager in the late 1970s, living it up in Los Angeles.

Sharona ALPERIN: It was a pretty carefree life in those days. We would just, you know, go to someone’s house and rock out — The Cars, The Pretenders, Blondie.

Zachary CROCKETT: Oh yeah!

ALPERIN: All those songs that you would just air guitar in your bedroom. I was a 16-, 17-year-old person. I was working in a clothing store, and this guy said, “Hey, I’m playing at S.I.R. studios. Do you want to come check me out?” And so I went, I brought some friends. They were honestly really good! And then he asked to take me to lunch, and he told me, “I’m absolutely madly in love with you. We’re gonna be together one day.” And I was like, “What — are you kidding me? You’re many, many years older than me. And I’m just not available.” He ended up really pursuing me. I didn’t go with him for that first year while he was kind of being my groupie. That’s when he is writing these songs. Every club — the Starwood, the Troubadour, the Whiskey, three shows a night — sold out! Cut to: I’m driving back to my work, and I’m just like, “Did I just hear a song with my name in it, on the radio? Like, what just happened?”

From the Freakonomics Radio Network, this is The Economics of Everyday Things. I’m Zachary Crockett. Today: “My Sharona.” It’s the story of how one hit single can pay off for decades.

On August 25th, 1979, “My Sharona” seized the Number One spot on the Billboard Hot 100. It stayed there for a full six weeks, becoming the biggest hit of the year. In an era of disco dominance, “My Sharona” stood out. The song was written by singer/guitarist Doug Fieger, who died in 2010 — and this guy:

Berton AVERRE: My name is Berton Averre. I was the lead guitarist and co-writer in a group, The Knack. 

The Knack was a rock quartet that formed in L.A. in 1978.

AVERRE: When our band first started, I was living in my parents’ house in the Valley. We weren’t making any money at that point. 

But the band soon gained a cult following for their high-energy shows at clubs in West Hollywood. And it wasn’t long before Fieger planted the seed for a song that would change their lives.

AVERRE: “My Sharona” was one of the first songs that Doug and I wrote together when we started playing the Troubadour. Doug was always saying, “We should have a song that’s like the end of the set, that makes them want us to play an encore.” I was a huge fan of Elvis Costello’s. And the drum breakdown in “Pump it Up” was, like, so … just feral and exciting. I picked up a guitar and I started playing the riff that we know as the “My Sharona” riff. BUH-bah BUh-bah BUH BAH BUH BAH BUH BAH-buh BUH-bah BUh-bah BUH BAH BAH-bah BAH BAH! And I thought, “This is pretty good. I like this.” So, we went back to Doug’s apartment. And Sharona was this young woman and Doug took a shine to her. He just, just off the top of his head, came up with the kind of stuttering, the “m — m — my Sharona.” He was channeling Roger Daltry in “My Generation.” And we cranked it out, you know, I’d say maybe an hour. Best hour ever.

In economic terms, that one hour of songwriting was one of the two most productive hours of Berton Averre’s life — we’ll hear about the other in a minute. The band at this point was only earning a few hundred dollars per gig. But, they were building buzz.

AVERRE: It was 100 percent word of mouth. We were kind of a local sensation in that sense. We had a string of really big names getting up and jamming with us, because we played really well for a band. 

We’re talking Stephen Stills, Eddie Money, Tom Petty … And then:

AVERRE: Springsteen got up and jammed with us. And the record companies that were there — the next morning, our manager is fielding calls from all of them, talking potential record deals.

They signed with Capitol Records for an advance of around $100,000 — which was pretty sizable at the time. But a record advance isn’t pure profit. There are strings attached.

AVERRE: The label gives you advance money so that you could record the album. And then your first sales — all the money goes back to them until you’ve paid back the advance, right? So, in an era where people were spending, like, $400,000 to make their albums, we spent — and this isn’t an exaggeration — seventeen and a half thousand dollars.

That thrifty approach led to the other most productive hour of Berton Averre’s life.

AVERRE: Most of what we did in the studio were one takes. One takes, and then we re-record the singing.

CROCKETT: You hear a lot of big name bands, you know, spending hours and hours and hours in the studio just carefully crafting one song. That was not the case here.

AVERRE: No!

So, after recording “My Sharona” and the 11 other songs that went on their 1979 debut album, Get the Knack, the band was left with more than $82,000 from the advance.

The tradeoff with an advance is that once you take the record company’s money, the recordings become their property, not yours.

Michael CLOSTER: I mean, mid- to late-70s, the traditional deal would be that the record company would own the master, and they would provide a percentage of the sales to the artist. They would call them “points.”

That’s Michael Closter, head of the music publisher Reach Music. He represents both Averre and the estate of Doug Fieger.

CLOSTER: You know, if you had 10 points, 12 points, 14 points, the record company would be making the majority — 90 percent, 85 percent.

AVERRE: Our band got, because we were in demand, 13 points — which was, for a new band, it was unheard of.

That’s 13 percent of every physical copy sold. And the album Get the Knack sold two million copies in the first year alone. At first, The Knack didn’t get to collect their artist royalties — those went straight to Capitol to pay back that $100,000 advance. Once that debt was paid, though, the band started receiving checks. And that was very nice for all four members of the Knack — Berton Averre and Doug Fieger, along with bassist Prescott Niles and drummer Bruce Gary. Meanwhile, “My Sharona” was all over the radio. And that meant performance royalties.

CLOSTER: That’s a huge revenue stream, especially back in the day. If you had a big radio hit, you would generate significant performance income.

Performance royalties get paid when a recording is played in public — say, over the radio, at a roller rink, or in a store. But that money didn’t go to the Knack. It went to Doug Fieger and Berton Averre, the two band members who had written the song, back in Fieger’s apartment. They owned the copyright to “My Sharona” as a composition — the tune, the lyrics, the rhythm, the chords.

CLOSTER: Being the songwriter is really key to your financial success and your longevity. It kicks off numerous amounts of other royalty streams that really have nothing to do with the record company, and that the record company would not be recouping against.

As the songwriters, Averre and Fieger also got an extra share of the record sales accorded to copyright holders — that’s called “mechanical royalties.”

AVERRE: I remember the first check I got from the mechanicals, and it was about $90,000.

Remember, performance royalties and mechanical royalties are attached to the song as a composition, not the recording. This was Fieger and Averre getting paid for that first golden hour, writing the song in Fieger’s apartment. Not the second golden hour — when they were cranking out the record in the studio with Prescott Niles and Bruce Gary. All of this was just the beginning. Later that year, a college student in San Luis Obispo, California, had the idea to record a parody of “My Sharona.”

He sent it in to the disc jockey Dr. Demento, who played novelty songs on his nationally syndicated radio show. That is how the world first met “Weird Al” Yankovic. “My Bologna”was released as a single, and on Yankovic’s first album. And because “My Bologna” was adapted from Averre and Fieger’s song, they collected royalties whenever the parody version was played or sold.

That wasn’t always the case when other musicians made use of “My Sharona.” In 1987, Run-DMC used a sample from the Knack’s own recording of the song. At that point, the law around using samples was a bit unclear. Run-DMC never got permission from the Knack to use their recording, so the rock band didn’t get paid when “It’s Tricky” made the charts. Nineteen years later, the Knack filed suit for copyright infringement, and the parties came to an undisclosed settlement.

Now, samples usually are not a big money-maker. For “My Sharona,” the serious bucks were yet to come. That’s after this break.

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By the early ’90s, the revenue streams from “My Sharona” had seriously decreased for Berton Averre.

AVERRE: I mean, Doug and I were getting by — we weren’t like on the street or anything, but we weren’t making significant money.

The Knack had put out follow-up albums in 1980 and 1981, and these sold a few hundred thousand copies apiece. Decent, but nowhere near the success of Get the Knack. Shortly after that, the members started to squabble, and the band split up. They later reunited for a fourth album, which was a critical and commercial flop. It seemed that The Knack had run its course. And yet — as Michael Closter points out:

CLOSTER: You know, anything that hit number one from a certain time period will be used and rediscovered.

For “My Sharona” that happened in 1994.

VICKIE: Evian is NAIVE spelled backwards! Oh — can turn this up, please? Please? You won’t be sorry. Thank you!

CLOSTER: Reality Bites — that was a really big use of “My Sharona.”

Reality Bites was a comedy directed by Ben Stiller, about the romantic and creative struggles of twenty-something Gen-Xers. It grossed more than $20 million. And some of that went back to Averre and Fieger in the form of something called synchronization royalties.

CLOSTER: Synchronization income, which is the licensing of music in a film or TV show or an advertisement or a video game — that’s a huge revenue stream for the songwriter. There’s no barriers except for the free market to tell you what you can charge for your song.

AVERRE: We made a good chunk off of the sync rights. It was probably about $60,000.

Reality Bites put the original recording of “My Sharona” back on Billboard’s Hot 100 chart again, 15 years after its release.

AVERRE: What happens is that the people who were into it originally are at a different stage of life — they re-experience the song. And then what also happens is new fans!

New fans, new sales, and even more synchronization deals.

CROCKETT: Do you have a rough estimate on how many films and commercials and advertisements “My Sharona” has been used in over the years?

AVERRE: It could be 50. 

CLOSTER: We’re constantly, throughout the year, licensing the song in all different types of situations, and all over the world. So, you never know when you’re going to get a great email in your inbox, how they want to use your song in a very large, substantial way, which equals a very large, substantial payday.

The 21st century has introduced one more income source from “My Sharona”: streaming royalties — paid by platforms like Spotify and Apple Music when users play the song. The record label negotiates a rate for the recording, and then gives the band a cut. And the publisher collects a mechanical royalty and a performance royalty, both of which go to the songwriters. Those rates are a lot lower than what a band makes on physical record sales.

CLOSTER: When you look at your statements and you actually see the per-song, micro-penny rate, you’re like, “Oh, my Lord!” On an individual line basis, it’s very minuscule, but we’re talking about such volume that it really adds up.

Before he died from cancer in 2010, Doug Fieger called “My Sharona” “the golden albatross.” Berton Averre, for his part, is still composing new tunes, mostly in musical theater. But if he’d never lifted a finger beyond that hit song, he’d still be getting paid.

CROCKETT: I know you don’t want to say the exact amount of the checks, but are we talking, like, mortgage payment money? Car payment money? 

AVERRE: Well, let me put it this way: it’s easily over $100,000 a year, and less than, I’d say, $300,000. I still make a very good living off of that one song. I do not have the wolf at the door — probably never will.

So, a man who co-wrote one hit song 43 years ago still makes six figures off of it to this day. None of that money is flowing to Sharona Alperin. Today, she’s a real-estate agent in Los Angeles. She has some ambivalent feelings about the hit record that was written about her — a record, I should say, that presents a 17-year-old girl as the object of an older man’s lust.

ALPERIN: I mean, come on — “My”? Let’s think about it. Is there a more obsessive or possessive word in the English language? “My”? It’s like, “Dude, no — I’m not yours.” It was time for me to be MY Sharona.

CROCKETT: And where should people go if they want to find your business online?

ALPERIN: Oh, thank you for asking. They can go to MySharona.com.

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For The Economics of Everyday Things, I’m Zachary Crockett.

This episode was produced by Sarah Lilley, and mixed by Jeremy Johnston, with help from Greg Rippin, Jasmin Klinger, and Emma Tyrell. Our executive team is Neal Carruth, Gabriel Roth, and Stephen Dubner.

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Hey there, Stephen Dubner again. Hope you enjoyed this episode as much as I did, which was: a lot! By the way, on a recent episode of Freakonomics Radio we looked at the phenomenon of the one-hit wonder from a different angle — that episode is called “What’s Wrong With Being a One-Hit Wonder.” Meanwhile, if you are loving this new show, The Economics of Everyday Things, go to your podcast app and follow or subscribe right now. We’ll be back soon with a new episode of Freakonomics Radio. Until then, take care of yourself and, if you can, someone else too.

CROCKETT: If we wanted to play “My Sharona” on this podcast, how much would that set us back?

CLOSTER: Um, we would enter into a free market negotiation and I would try to extract as much as I can from you. No, no — you know, we’re all good!