Every industry has rules and the recording industry has a lot of them. And there was a saying once that if you followed enough of the rules, you would get a recording contact, millions of dollars and the red carpet. Perhaps one in a 1,000,000 pull this off. Actually you have a higher probability of being hit by a comet than making a lot of money in music.
So, the record labels wanted to maintain the sales model but they got dragged kicking and screaming to downloads. Credit Apple for pushing it and credit Warner Music for being the first major to sign. Suddenly their revenues went up. But they still complained. They screamed to their friends in politics for laws to be passed. Then streaming came out and they got dragged kicking and screaming to streaming. They even got a percentage of the company and surprise, surprise, the revenues went up again.
Times are changing. Nothing will look the same in relation to labels and streaming companies in the next ten years.
Spotify is connecting tours to the Super Fans to sell tickets. The data tells Spotify who the super fans are, they share that information with the artists and they all come after us. Meanwhile, the labels owned and controlled the recording industry for a hundred years and they had no idea who the super fans were for their artists.
Seriously, the good times are just starting. There is a lot of people to reach with music and Spotify is connecting people to artists and along the way, they are paying artists every month providing an organisation (who might hold the copyrights for the artist) doesn’t get in the way and take the monies first.
For a fan, how good is it. Instead of playing the same album, over and over again, because we had so little product, we can now play the whole history of music. The only thing stopping us is time and distractions. On some days, I’m even confused to what I should listen to, as there is so much to select from.
As for the labels, they are not going away. Morphing more into marketing companies, who could help with your world domination ideals, but do you need them.
Remember that one of the biggest hurdles for any artist pre-internet was getting your music into a record store. It’s a much different today as every artist can get their music on streaming services for a small yearly fee and they can get paid direct from the streaming services and on a monthly regular basis. This is much different to the record label machine who used to do their accounting twice a year and be very creative with it at the same time.
And for over a century the record label has built up a history of owning songs it shouldn’t be owning. It’s ridiculous. An artist signs a deal, pays off all the costs associated with the album and somehow, the label still owns the copyright. The battle is happening. Check out the article over at Billboard.
Todd Rundgren wants his masters back.
“Why would a label be insisting on keeping a property that has stopped selling, that they don’t have any plans to re-promote except when the artist dies?”
According to Nielsen Music, almost 70% of the monies received by the labels is because of older catalogue items. So giving back the artist their copyrights as dictated by law is bad business for the labels. As the article states, around 20 artists have reclaimed their rights from the thousands who are entitled to.
And the labels pull out all the tricks, like telling the artist they will pay them a higher royalty rate (which is useless if the label does nothing to re-promote the tunes) or paying the artist a large advance to hold on to profitable masters.
And as soon as Spotify goes public expect the majors to check out their ownership of the service.
All of their employees are focussed on the now, not for the long haul. And that is the label business.