You can actually smell the fear permeating the hallowed halls and boardrooms of the major record companies today. Their once formidable generals seem confused and without direction. Put simply, they are frozen, stuck if you may, forced to sail a large sinking ship in a much smaller pond. They will never recover.
Unconcerned, the labels welcomed the arrival of the new digital music economy by choosing to ignore it, doing “business as usual”. When they finally did embrace it, it was too late-that train had already left the station.
In their golden days, the major labels were the only game in town. Artist development was expensive, eliminating all but the richly endowed. To play on this playground you had to have big money behind you, and the majors had it. They were the bank.
We were force-fed our music. Collectively, the majors controlled the small pipeline of releases. It is hard today to comprehend that their power was such that unless you were “with” them in some manner, you got four walled and forced out of the game.
Enter the Web and high-speed connections for the masses, and these once invincible giants (Sony, Universal, Warner, BMG, EMI) found themselves wounded and fraught, a mere shadow of what they once were.
In their golden days, the music giants developed and marketed long term “blockbuster artists” selling enormous numbers of full CD’s. Heady sales reports of 25 million units here and 30 million units there were not uncommon. Sadly, in contrast, today the big sellers top out at 3-5 million units and this level of return makes it extremely difficult to “keep the lights on.”
Back then, the major music labels released music that was completely “bundled” and, like it or not, if you wanted to own it, you couldn’t download or stream only the tracks you liked; you were forced to buy it all. The CD’s were expensive, and if you did love a song and you bought the album, more often than not, the track you liked was the only decent song in the set. So young fans felt “ripped off” by the establishment. Technology became their friend, and they chose another path to obtain their music- they stole it.
The artists haven’t fared much better. Their contracts were more like slavery. In fact, they were so onerous that a label could hit one out of ten successes, and that one would pay for the other nine mistakes and return a handsome profit to the label.
Finding the hits really wasn’t that brilliant or scientific. There was so much potential profit that each month the labels would release large clusters of records, throw all of them against the wall, spending as little as possible on each one, and then quickly determine which ones stuck. They would then cut bait and drop all the others and put full resources into breaking the lucky artists that made the cut. Many dreams were shattered.
Great music doesn’t always capture the listener quickly. Many wonderful and talented artists bit the dust in the process during those days, spending years writing their songs and months making their recordings, only to be cast aside after a few weeks of release. This “shotgun” approach doesn’t work for the labels anymore. And with the label’s resources drying up, each release becomes precious and has to be much more viable and relevant.
In a futile attempt to stop the bleeding and stay afloat, labels resorted to the now infamous “360 deal” to augment their failing revenue streams. This imposed shift in procedure brought along with it even more monetary tribulations for the artist.
The artist has only four main revenue streams; record royalties, music publishing, touring and merchandising. Under the new “360” contract scheme, in order to be signed, the artist is forced to forego large percentages of all four to the label.
To add insult to injury, the skeleton staffs of those labels, already cut back to bare bones, have trouble just breaking records much less really performing any kind of service and earning their cut in the other three areas of revenue. In short, the artist is asked to pay for the label’s unfortunate circumstances, getting nothing back in return.
Information on the web is vast and spreads at lightning speed. Artists are no longer isolated. They can read the truth about other’s tribulations. They have become educated and realize that the majors have become weak as they take a lot and offer very little.
It used to be the ultimate aspiration to be signed by a major. But today, that desirability has diminished to the point that the bright “stars in the artist’s eyes” have all but faded.
The web is offering many alternative DIY opportunities to artists. Rather than get “ripped off” even further, many of them now no longer consider majors to be the “path of choice” to achieve their dreams.
The “great wall” is crumbling with the Internet. The Web has no gatekeepers and the playing field has been leveled. Technology, computer recording and MIDI performance has brought along with it the ability to record good sounding music in a closet for a fraction of the cost the labels spend to make a record in a commercial studio. The good news is that now, virtually anyone could upload their musical creations in a matter of minutes. This is also the bad news.
With thousands of tracks, the web has become overrun with music, most of it unfocused and undeveloped. This has created a new problem for the Artist, and in fact, for the industry. After an artist gets their music uploaded, how do they get people to discover it and ever find it?
