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A Music Industry Case Study
spmkk writes "The NY Daily News has an uplifting look at the fate of a (hypothetical) 4-piece band "making it big" in today's RIAA-driven music industry. The condensed version: A band that sells 500,000 records for $8,490,000 gross ends up (after a few iterations of the new math) with $161,909 in their pocket. Split four ways, that's a whopping $40,477.25 each for a record that probably took close to a year to produce. And this is for a record that goes gold (as per the article, only 128 of some 30,000 records released in 2002 were so privileged). And I bet you wanted to be a rock star when you were a kid..."
Really, who's to blame here? Is the lack of income by the individual the result of the large share the recording label takes?
No one said the music business was easy either, and we all know the success stories are certainly the far and away cases.
Don't buy CD's from a record store. Don't pirate music - it only increases the popularity of the people you shouldn't be buying CD's from.
Go see live music. If you live in a city larger than 50,000 people, there should be a few bars that get live music. Go see them. If you like them, buy their music. No record company required. No inernet piracy required. Just good music.
If they wanna post stuff for free on the internet, more power to 'em. I'll download that. But I don't expect them to.
Get the hell out of the way.
And don't forget the artists. Attend local shows, support Independent acts. Buy merchandise, hell, mail a check, but find other ways to support your favorite musicians without giving a tithe to the RIAA. It can happen.
It costs quite a bit to make an album, and even more to market it. Most garage bands don't have that kind of cash laying around. So they need someone to finance it.
It's like going to a loan shark and getting a deal with 80% interest.
A band can either take the shitty deal, or go back to playing in their garage where no one will ever hear of them.
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Rockstars are just underground punk-rockers that became popular. It seems to me that there are people who prefer bands that are underground (read: "not popular"). The moment those bands become popular (even though if their music didn't change and/or become more mainstream), the fans reject them because they have "sold out to the mainstream" or some other crap like that. I guess it's more l337 to like some unknown bands even if their music is no different from the more mainstream bands
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Usually when you're small, you want any record deal you can take. Usually you get a 7-album contract or something ridiculous, and you get the same money for each album. The money sounds good if you've never had a record deal before, but if your first albums do really well, tough luck renegotiating.
And then of course if you decide to back out of the contract, the company owns the copyright to your music, making it more difficult to find a new label (because you can't put out any of your old music). Besides leaving your label at that point means other labels probably won't want to touch you because _they_ won't make as much money from you, since you'll know what you're really worth. Bummer huh?
The Right Reverend K. Reid Wightman,
Their position is weak because there are so many bands out there that want to be signed. I have a feeling that any band that tries to negotiate a better contract is just kicked to the curb and the next band is signed instead. It doesn't really matter to the record company who they sign, as long as they look good in a tight shirt on a billboard and don't play any music that might be banned in any of Clear Channel's areas.
There are of course some obscure bands signed now and then if they're willing to accept a contract bad enough (because it's the Record company that's taking the risk you see). I suspect that even those hundreds of records the company "loses money" on are actually profitable (or at least break even) with their fancy accounting practices, but why bother signing a bunch of good sounding bands (and taking up valuble shelf space), when you can sign a few good looking bands and mass market the heck out of them for a few years, which makes megabucks (although less than it used to) for a lot less effort?
I read the internet for the articles.
I think these figures are pretty conservative as to the amount of money that bands can make from online sales. I would much rather do business in this way than to do it the RIAA's way. And yes, this does nothing to touch the piracy issue, but we all know that whole Linux distros are freely available for download on the Internet; and this hasn't ruined Linux, has it?
Always look on the briight side of life! (whistle, whistle)
My guess would be most bands sign the first deal they can get from a record company. They've been waiting for their big break, then it comes and the label rep assures them it's the "standard" deal and visions of rock stardom dance in their head. These bands don't feel they're in a position to negotiate, they're still "undiscovered" and to have clout you're going to have to have made a name for yourself already..
Artists are always being taken advantage of and there are some great examples in the most recent issue of Rolling Stone. "Why do hungry young artists keep signing these one-sided deals? Because they're too young and too green to have any idea how deep they can slide into debt. Because they don't consider the long-term complications of signing their lives away to a lard-assed corporation that will be perfectly happy to write them off as a bad debt at tax time. And because the label has no incentive to do anything on the cheap, sine the artist pays for everything. The dice are loaded. The deck is stacked. And the house never, ever loses." Good article in general, worth picking up.
The point isn't that they only make 40k, the point it that thy are make 8 million and only seeing 40k. That other money is being eaten up by an industry that exists so it can continue to exist. You know how you can get an e-commerce package for $25/mo? Yeah, thats what the music industry could be, a monthly service for any band to upload and be published. Then, local record stores with bulk burners could download and burn, or burn on demand for customers.
Customer: "Do you have the latest radiohead?"
Clerk at a PC: "That'll be ready in 10 minutes, $5.00 please."
This recording industry is spending millions and millions manually doing the job of a good database. To make a long story short (too late) the problem is the record company being overpaid for a service it doesn't provide.
Some one forgot along the way that it's really about the music. Musicians don't make music so that they can become famous.. they make music because they love to make music. Sure we strive to "make it" but even though most don't make it.. it's still rewarding. True music is an art.. prefab music is a business. I have been writing songs since I learned guitar when I was 12. 8 years later I have a band... I could care less if we "make it". I just love to get together with my band and play music and give that music out to people who want to hear it. Remember, there are a lot of rock stars and wanna be rock stars out there.. but a lot of them aren't musicians.
"The moment those bands become popular (even though if their music didn't change and/or become more mainstream), the fans reject them because they have "sold out to the mainstream" or some other crap like that."
Totally untrue. Most of the time these bands produce one record that fits their old style then fall to the hype from the record companies. The record companies will say, "hey, change this and you'll sell a couple hundred thousand more albums", or "Let's sound more like band X so that we can reach a wider audience."
When a band changes just to sell more records, forgetting the fans that got them to the point they are at is, when the band sells out. Sometimes the bands just change as the members get older. But any fan can tell the difference when a band starts "selling out".
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Bands do not make big money touring.
Bands do not make big money touring.
Sure, they make a living sometimes, but most of the time they don't.
Band's tour for two reasons: They love to play music, and they want to promote the sales of their albums.
Tickets cost $200 sometimes because people are willing to pay it. If you can sellout a show at $20/ticket, then why not charge $30 (etc. etc.) and it grows from their. The money just gets spent making the show bigger, brighter, and louder.
The costs for putting on a concert are staggering. Just the local labor alone can be as much as $10,000 (or more) for an event. It costs $2/mile/truck to send the show down the road. Each truck. Each bus.
Why do you think some bands accept corporate sponsorship for their tours? Many (well-known) bands would lose money trying to tour if they didn't have the sponsorship money.
Merchandising? By the time the venue gets their 20%; the sales company gets their cut; the designers, manufacturers, etc. get their cut, there isn't much left for the band.
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What's wrong with the music companies taking the cost of touring, recording, distribution and advertising from the revenue earned by an act? How else are they supposed to pay for it? It's a business, not a donation to the arts
The problem is that the companies take their profits first before costs are taken out. If the system were truly fair, record companies would take their profits with the artist at the end of the day when all costs have been calculated. Yes, it is a business and the record companies deserve the right to make a profit on investment, but would you want your investment company taking their profits before costs were calculated? The folks that manage my portfolio take 1.5% of the portfolio value at the end of each quarter, not at the beginning of the quarter, therefore their income is dependant upon the performance and my costs to them are based upon mutual growth. Not bleeding the portfolio dry.
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I don't know that I have ever seen a 'rock star' driving a really nice car. You know who I see with lots of money? Rap artists. Anyone care to venture a guess why there are rap artists that make a shit load of money?
They have their own labels! Death row, murder inc, I could go on and on. These guys were smarter then whitey from the get-go. They produced their own music, and sold it themselves. New artists get picked up by these labels and make ridiculous amounts of money because these labels know how easy it is to market these albums. All you need to do is have a video filled with hot chicks and some Bling, have music that doesnt suck(Doesn't have to be good, Ja Rule sucks heavy fucking ass and is really rich), and the white MTV watching yuppie kids will go out and buy that album in droves.
There is no shortage of smaller record labels that will sign interesting groups. If not, create your own label! Swollen Members did it with Battle Ax records, and the beastie boys eventually came out with Grand Royal as a record company. Hello Nasty sold a shitload of albums, and wasn't promoted by RIAA tools.
If more people followed this business scheme (Basically invented by Puff Daddy and Russel Simmons) when they went for a recording contract, they'd be rich. (See Bow Wow, but it helps that Snoop Dogg was in his corner.)
I don't feel sorry for Idiot Band A when they sign with Mega Asshole Company B, without taking into account whats going on. That's just stupid business practice.
How about a business model that doesn't include money for recordings anymore?
Begs the question. I don't really want to see any but a few bands live. I don't want them to reshingle my roof. I don't want them to wash my car. What I want are recordings of their music. There's a lot of money in sales of recordings; surely more of it could find its way to artists.
I think you're totally off. It's about the music, sure. But at the same time, it's a music industry or a music business, neither are music philanthropy.
I'm a student at Berklee College of Music, and a very serious musician. You do music because you enjoy it, but at the same time- by the time i'm outta here, I'll have over 60 Grand in college loans and i'll be damned if I just 'love music' and not try to pay that off, get a house, get a car, etc.
I really enjoy music, and so does everyone at Berklee. Who doesn't wanna be a rock star though? No, it's not all about money. But you can't live in a cardboard box and play in the subway forever, well some people do, but not me.
And have you considered that if you are a real musician out there doing it you better be making some money to pay the bills, even if you don't get any of the money for yourself.
Studio time is over $100/hour at anywhere decent. Guitars are $2000+ for ones of good quality. A drumset is gonna run at least 2000 also. Think about microphones, preamps, speakers, etc. Ok, that's just the items. But at the same time there's people that need payed. Your manager, booking agent, business manager, accountant, cover artist, web designer, producer, engineer, roadies, lighting designers, etc... They all need to live too, and if you are just playing at people's houseparties, you can't make the money to pay them, let alone you. And don't tell me that professional musicians do it all by themselves. Just open up any cd and look at all the credits. They need to get paid. Go to a concert, it makes money, but it costs money to start up. You need a lighting and sound system, tour busses, etc.
Yes, I love the music. But as a real professional, it's insulting to not try to get paid for your talent. Most programmers program because they enjoy it, but at the same time, program what the boss says, not whatever they are doodling away on randomly.
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