A to Z of Making It, Music, My Stories, Piracy, Stupidity

It’s Never The Record Labels Fault

There are a lot of stories of how the recording industry has been transformed since Napster.

Most of it is around the losses of income. Most of it portrays the recording industry as the music industry. And all of the stories told from the main news sites, blamed the technology. It was never the fault of the record labels.

Then the iTunes store came and the purchase of mp3’s became legal. And people still complained. You, see the profit margins are nowhere near as good as the CD profit margins. And still the fault was with the technology for not paying enough or not charging enough. It was never the fault of the record labels.

Then YouTube appeared as the earliest form of streaming there is. Users uploaded their fan made clips and their music catalogues. And again, the fault was with the technology and not with the record labels.

Then streaming came on the scene in Pandora, Grooveshark, Deezer and Spotify and the conversation shifted to the pennies paid per listen.

Song writers (people who write songs for other artists) started to complain about what streaming services pay them. Artists complained about what streaming services paid them. And the streaming services keep on saying they are paying 70% of their income to the rights holders, which in 99% of cases is the record labels and publishing companies. Vivendi, the owner of Universal Music is now considering going to an IPO based on the brilliant profits their balance sheet is seeing from streaming licensing and royalty payments.  But the whole time, the technology is to blame for not paying enough. It’s never the fault of the record labels.

Did you know that in 2016, $3.9 billion dollars came into the record label bank accounts from streaming services?

If you don’t believe me, check out the stats from the International Federation of The Phonographic Industry. I wonder who is taking the lion share of those monies.

Here is a dirty little secret from streaming services. They are not making any money. They don’t have the mass, so they rely on capital investments to keep on going. Sort of like a legal Ponzi scheme. Take money from new investors to sustain the business and keep old investors happy with the hope to get legal paying customers to the service.

In the meantime, the much-loved CD product of the record label is getting sold on Amazon and a lot of them are counterfeits, so no money is going back to the record label or the artist. And again, Amazon is to blame for selling counterfeit CD’s because it’s never the fault of the record labels. To the record labels and the artists they represent, it’s Amazon’s fault for not policing this.

So everyone is to blame for the record labels failures except themselves.

Does any remember back in 2015, when Sony’s contract with Spotify leaked?

The record label is getting over $45 million in license fees and there is no transparency if any of these monies make it down to artists and songwriters. The bigger artists/songwriters will have clauses in their contracts for a larger slice of the streaming revenue, and some artists/songwriters are still operating under the old CD-era contracts. You don’t hear Metallica or Max Martin complaining about streaming monies.

In the end if you are signed to a label, creating music which is being listened too and are not getting paid, your issue is with your employer, the record label. But it’s never the record labels fault.

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