I've always been deeply interested in the inner workings of record labels.<p>As I understand it, it seems that a label is somewhat like a VC for artists. But no VC takes 80-90% of the company they invested in. Why do they need to take such a big part? Is pressing CDs such a huge risk and expense? If such; why continue doing it? Barely anyone buys CDs for obvious reasons, shouldn't there at least be an option for artists that don't want to press CDs? Maybe there is but artists just want CDs for some reason?<p>Why can't artists get regular bank-loans to fund their business? Is it just too high risk? It seems that someone as famous as Ok Go should be able to take a bank-loan to fund some studio time, but I suppose they're already under contract.<p>Anyway, if anyone has answers to these questions or links to where I can read more about stuff like this, please do share.
Here's the very best point that is brought up: "And musicians need them to survive so we can use them as banks. Even bands like us who do most of our own promotion still need them to write checks every once in a while."<p>While the major labels had their faults, the DID act as investors for musicians.<p>This was probably their most important function, and it seems as if though the majority of Music 2.0 proponents do not know this.<p>This isn't the only thing they don't know about a functioning music industry.<p>The next time you're listening to a Music 2.0 presentation, stand up and ask the dude if he knows where the closest band rehearsal spaces are, where the closest guitar repair services are, who manages local acts, who does booking, who is currently promoting what genres and at what venues... really, I could go on and on about a lot of details that some messiah of the digital arts is most definitely unaware of.
Yeah, the music industry is experiencing some brain trauma right now. It'll happen to the film and TV industries too in a few more years once bandwidth and memory prices decrease.<p>Because music is so readily available, almost no one expects to pay for it. Itunes is cleaning house right now, but that's because people still want ultimate control over their libraries. I'll bet once people can be guaranteed the same level of access that they enjoy on their Ipods as they do on their phones, then Itunes will meet the same fate. Apple probably knows this which is why they are making plays in the streaming business.<p>What the content providers need to do is accept this fate and start building a new model around distribution and the incredible amount of information (data!) they have available to them. Package the product up in something consumers will always pay for--new devices or other peoples products (advertising).<p>The beauty about this business is that it hits a chord in consumer's lives. They will always want it because this content defines them in some abstract way. If content companies can learn more about their consumer's identities, they can sell that information to product makers. If you doubt all you have to do is look at the new artist product lines-- Sean Jean and Dr. Dre Beats to name two.
Question: Does MTV pay the record labels for showing their videos? I'm not being a smart-ass, I'm really asking and didn't want to rip into this without having some background.\<p>The article says that they <i>used</i> to consider MTV a promotional partner, do they still?
This is also extremely interesting because OK Go was one of the bands that was able to tap into viral video as a way of getting the word out there. Remember the video for Here It Goes Again? 50 million views.<p><a href="http://www.youtube.com/watch?v=pv5zWaTEVkI" rel="nofollow">http://www.youtube.com/watch?v=pv5zWaTEVkI</a>
It's extremely difficult to feel sorry for the record labels. They all deserve their fate. They saw everything coming as far back as the mid 90s, but decided they were more powerful than the market. With all their CD boom money, they could have bought Napster and Big Champagne, which tracks P2P file sharing. They could have bought MySpace and Pandora and just about any major music portal that any person of average intelligence would have thought was a good idea.
FTFA "So the money that used to flow through the music business has slowed to a trickle"<p>I'd like to call that a "mis-speak"<p>"The digital music business internationally saw a sixth year of expansion in 2008, growing by an estimated 25 per cent to US$3.7 billion in trade value. Digital platforms now account for around 20 per cent of recorded music sales." [1]<p>Which makes music sales of US$18 billion for 2008 by contrast the revenue for the top 20 countries in 2005 was $12b [2]<p>"PRS for Music, the organisation representing songwriters, composers and music publishers, today published new research showing that UK music industry revenues totalled £3.63bn in 2008, up 4.7% from 2007’s £3.46bn." [3]<p>Some fucking trickle<p>[1] <a href="http://www.ifpi.org/content/section_resources/dmr2009.html" rel="nofollow">http://www.ifpi.org/content/section_resources/dmr2009.html</a><p>[2] <a href="http://en.wikipedia.org/wiki/Music_industry#Statistics" rel="nofollow">http://en.wikipedia.org/wiki/Music_industry#Statistics</a><p>[3] <a href="http://www.prsformusic.com/aboutus/press/latestpressreleases/Pages/UKMusicIndustryrevenues.aspx" rel="nofollow">http://www.prsformusic.com/aboutus/press/latestpressreleases...</a>