Originally posted by ariza910
I use to be one of those that argued that the artist should get more $$$ but after really looking at what the music industry does, it really seems fair the way it is.
A lot of you are very confused about the music industry. I dont necessarily agree with it either but it is a business and it gives artist more opportunities than they would ever have on their own.
There are many elements of the music industry. First theres recording and production of music. Equipment, production rooms, studios, ect. Next there?s manufacturing of CDs and Distribution of CDs to music stores. Finally, the music company will market and promote the artist in everything from TV and Movies to radio, magazine and posters. Music companies will also secure concert venues, clubs, TV appearances, and other live performances.
The Music companies are paying for all of this up front!! The majority of artist would never be able to put together such an operation for themselves on such a large scale.
The record company is not paying this up-front. They are giving the artist a high-risk loan to pay for these costs. If the artist ever (
ever, meaning on any future albums) makes a "profit" on their music, that profit is garnisheed and put towards paying off the artist's "debt" to his record label.
But, yes, many such loans do not get repaid, and the record companies are taking a risk in granting them. However, enough do get repaid that the bigger record companies make a killing on their profits.
Also, note that the record company both provides the funding for this and dictates the prices of such. If the record company owns a studio that the artist is to use, the record company charges a "rent" on that studio to the artist for the time the artist in in there, which "rent" is a large profit-center for the company. If a record company has production staff on salary which the artist uses, that staff is hired by the artist as consultants, whose fees end up being much more than their salaries, and which, again, is a large profit-center for the company financials.
I mean, I'm a software developer. The recording artist's plight is somewhat akin to all software companies paying by commission (1/2% of all software sales in the first five years), which commission is countered by charges of $.50 per printed page, $2 per hour of computer use, $10 per day or partial day of office use and $50 per hour per other employee I consult with while developing said software. But, hey, at least the company will give me a "loan" for my office fees that I only have to pay back if I ever get a check from them.
No other industry would live with this. The recording industry thrives on the dreams of starry-eyed youth and the naivety that they believe they (or at least their Uncle Slomo the accountant) can distinguish the overall worthiness of a contract. The "standard" contract in the industry is a wholesale raping of the artist, but artists sign it because every "expert" they ask will say, "Yup, that's the standard contract all right!". It's not illegal, but it is certainly reprehensible.
Music is an expensive business. We are at a very interesting time in music history. For the first time music companies are spending millions on producing and promoting artist and consumers are eating all of that up and then pirating the music.
Music is a very cheap business. All you need is a talented artist and maybe a musical instrument, and you've got music. What is expensive is the fact that the industry has accrued so very many layers of bureaucracy and marketing that all need to be fed profits. The
industry is expensive, which expense is both self-created and self-sustaining.
So its sort of like the music industry paying millions to entertain us and sell us music and not getting any money in return because we are down loading it for free.
It will be interesting to see what happens in the next few years when music companies are no longer getting the same revenue from CD sales.
The industry's profits are down 7.5% in the past year, according to their own numbers. In that same time period, their overall output is down 20-25%, according to externally verifiable numbers (IMHO, if you exclude the pop crap and just talk about "good" music, their overall output has declined much more than just 20% in the past year, but everyone has different tastes so I'll leave it at that). I don't know about your job situation, but I can be damned sure that if my output was down 20% for no justifiable reason, I might soon expect to lose a bit of pay, and if my
company started releasing 20% fewer features in all our software for a year that in about six months the entire office would be out on the street.
So, no, I'm not shedding any tears for the record industry. They had a great run on this scam, and lived large for a good long time. But all free rides must eventually end.
