Record Labels Target the Consumer for Slavery

All Recording Labels are slowing failing under the weight of their own failures, excess and bad business practices. While they keep pushing and banking on quick fixes and get rich quick schemes. All the while waving the banner of artists getting rights and the artists getting paid for their work.

While I’m all for artists getting paid fairly for their work, the record labels are not interested in the artists rights or even seeing the artists get paid. The labels want to maintain the status quo which is to place the recording artists under their contacted servitude for as long as possible. Slavery has not ended in the free, enlightened and developed world it’s just gone legal with the use of contracts and creative accounting methods. Under the covers of the record labels what you’ll find in a bunch of legal and accounting idiots devising more and more insidious methods to defraud artists out of even more of their hard earned money, while stripping them of more and more of their rights to earn a living without paying their contract overlords even greater sums of the money they do make.

Artists have lived a long time in the knowledge that being signed to a record label means that they give the rights to their recorded works to the record label, sells of that recording would never earn them enough money to buy a fast food lunch at the greasiest spoon in hick-town nor would the record label ever let them earn any real value from the recording even if it was wildly popular and sold like ¢.01 Starbucks Frappuccinos. As the artists gained the marketing the music labels put behind the recordings which helped them sell tickets to live shows and merchandise like t-shirts.

Today the landscape is changing record labels no longer have the market power that they once had and physical music sales are sliding into the abyss. The old record stores are closing their doors faster then Barber shops at a bald guy convention. While the recording labels will swear that this is because of out of control piracy from internet file sharing. The truth is it’s not, the physical media retailers are closing up shop because the music (and now the Movie) industry is sucking all the money out of their pockets. Has the retailers will tell you the manufacturing costs have declined the wholesale prices have skyrocketed, and the number of releases by new artists and established artists are also decreased. Artists that do get signed and the music that they are releasing no longer appeal to the retailers customer base. The labels cookie cutter approach to A&R is not entirely new in the music music industry but, it’s become so pervasive with the major labels that one music artist sounds just like all the others and no one is buying the CDs any more. If a label stumbles on an Artists that appears to be selling and is hot then in short order their is a dozen other artist releases that sound just like it stamped out by the A&R departments of all the other labels.

The labels new contracts are written to charge artists for using the songs that they have record and the label has released in live performances the live performances fees are based on the number of tickets sold and basically will be taking 50% to 60% off the top of what the artist earns at a live show. The new contracts also include charges for using images, logos, song titles, album names etc. on merchandise sold by the artists (this is a bit odd as most artists or someone other then recording labels, own the copyrights on song titles, album names, the artists’ logos, the artist’s name and the images that are used on the artwork.

Why does the recording labels continue down the path of self destruction? While, it really goes down to see the forest for the trees. The music business was founded by the broadcast radio industry to produce content for the stations to broadcast over the air so that the broadcast companies could sell radios and later advertising. Once the phonograph started to become popular the broadcast companies used their recording companies to drive the sells of phonographs. The media market was born and slowly the recording industry was born. Competition and consolidation and a the thought of being bigger then the movie industry thrived in the corporate executives and shareholders minds. The Music industry as always had delusions of being the biggest media industry in the world. They made the choice to try and control every detail of their business. In the 60 and 70 major hits by Elvis, the Beatles, later the Rolling Stones and others causes some record company executives to claim that the recording Artists were getting rich off of their hard work and the record labels weren’t making enough of the pie. By the end of the 70’s the recording labels contracts and accounting practices were so skewed in favor of the labels that artists could barely afford to feed themselves from their royalty payments. This prompted the 70’s and 80’s mega tours and huge venue stadium tours were artists with hit recordings would get together and share the expenses and profits form these massive huge venue tours. By the 80’s the mega tours and huge venue tours were out of favor with most concert promoters due to the increasing regulations and declining revenues. While some single bands could and still can attract hugh audiences the huge outdoor stadium sized concerts became outdated by the early 80’s. The music labels are under the faults impression that artists make hugh sums of money form live performances when in fact most artists only make a modest living from concert revenues. Once the artists start also giving a large cut to the record labels it will force artist to go completely independent.

Is the end of the big music labels near? Well unfortunately the answer is no. The end of the music labels will be a very slow and very painful death for an industry that should have never been allowed to continue in the first place after all slavery was outlaw in the modern world a long time ago. The recording labels are still in the slave trade and until the governments of the world wake up and see the music labels for what they really are. The labels have been enslaving artists for years all the while making huge profits on the works of the artists. The labels justify this by saying that the artists become famous and wealthy on the labels promotion and advertising dollars. The reality is the labels have been turning the artists into slaves and profiting from their works for years. Now the labels are faced with declining sales and slumping performance in their signed artists. The small labels are making the most noise in the music industry today by signing new and different artists and they are the only ones that seem to be focusing on new models like abandoning the major cookie cutter approach and failing to adopt new business models. If the governments what to protect artists rights and their intellectual property they need to investigate. Why is this my opinion? The music labels over the years as found that slavery of the artists have been profitable but, now that the profits are on the wain because of slowing CD sales they see that they’ll need to make the artists even more indentured to them by taking as much from the artists other sources on income as possible but, even that revenue stream is not going to put them back in the big money. So, as slavery has worked to keep the artists in check they see the only sure way to keep the cash flowing is to make the consumer a slave by only offer music as a subscription/rentals. The goal of the subscription model is to tie the consumer to a reoccurring charge that ensures the labels have a stable revenue stream.

The music labels having a steady revenue stream is this a bad or negative thing. Yes, in my experience and my opinion if any company or organization is allowed to control and maintain a guaranteed revenue stream it leads to abuse and no financial accountability. With no choice but to enter into a subscription service controlled and benefitting the music labels. This of course would allow the bigger labels to squeeze the small labels and would prevent indie musicians from ever competing with the label musicians for music sales. In the end of course if device manufactures fall for the music labels plan to make part of cost of the digital music device cover the cost of a subscription service, without informing the customer upfront then the customer backlash will lead to government action. In a way the music labels are wanting the device makers to enter into an illegal forced subscription agreement. Were customers have no choice but to pay the device maker for an unwanted subscription service or the Microsoft model, where Dell and other PC makers still have to pay Microsoft a license fee even if the PC is shipped without a Microsoft OS. So, that’s worked out for Microsoft with more legal actions then they can shake a stick at and more on the way. Dell and the other Windows PC makers are also undergoing some close painful investigations over the forced bundling licensing deals with Microsoft. The Music labels are far more vulnerable to legal actions in this type of licensing deals then PC makers and Microsoft.

In the end artists will abandon the labels (starting with the majors and moving to the minor ones). Digital distribution no longer requires a record label and labels no longer have an iron grip on the distribution channel. Indie musicians are now compete on almost an even footing with label artists. The big difference is of the .99¢ to .89¢ per track charged by the online distributor charges the indie artist makes about .60¢ to .40¢ per track in hard cash while the label artist is lucky if they earn .05¢ to .01¢ per track sales credit, and that’s before the label gets creative with the accounting. Of course, that is, and, then only if, the artist’s contract with the label covers digitally distributed track sells, otherwise, the artist makes a whooping .00¢ credit per track sold.

True there are benefits to being signed to a recording label like you don’t have to worry about feelings of paranoia about being ripped off because hey, let’s face facts and artists signed to labels are being ripped off by the labels.