… but not for the reason you think! So what is the REAL source of the financial pain record companies are feeling? Here’s word from an insider (kind of!)
It seems pretty obvious to anyone involved in p2p that it is being made a scapegoat for the failings of an industry out of control. There is a perception that the majors use tools like ‘datamining’ and ‘market profiling’ (thats adware to you) and then offering a few thousand tracks online brings them closer to our universe, they are modernizing and preparing the way by stomping out the opposition.
But in fact the music industry is being shaken up not by technology, but by simple economics. Only in the last 50 years have recording companies risen to power over the publisher breaking down the old order with their radical new ways and 7″ singles for a brand new 50’s / 60’s economy, well that economy is history and that is why these companies soon will be too.
Here’s what is killing them:
A boy band gets signed/created by a management company on the basis of marketing data, a few million ($/€) spent on grooming and promo, recording, pushing etc,etc.But this invested cash is HARDLY EVER recouped, massive album sales are the only way for a rec’ co’ to make back the cash. I have worked for a few labels that have lost money on every artist, but their top 2 or 3 stars make enough profit to sustain the whole mess.
What is crushing the industry (hooray) is the consumer who will buy anything with the ’stars’ head on … eg. sponsorship of cars, soft drinks and sports teams (etc) is where the money is Any management company worth its salt can make a killing off this sort of stuff.
and the record company normally has no share of these profits
Just think, with the free publicity for their ‘pop celebrity’ off the record company & the celeb opening supermarkets for 5 years .. that’s several million in the bank for Mr Management and his deluded limelight hogging puppets. With no talent needed either, off the peg cover versions seem to suit the everyone just fine for this purpose.In the industry no-one thinks of these ’stars’ as musicians, they are a ‘lifestyle mascot’ best friend, dream boyfriend, fantasy self. The money is not in the silver disks but in a radical extension of what was ‘merchandising’ and now is ‘corporate sponsorship’
Imagine how the poor old record companies( ;-D ) feel about this? they put 3 million in, some other guy gets 10 million out!
Ok you are saying … surely the companies can create the acts themselves and cut out the middleman.
Well, they tried that but when the’star’ IS the merchandise … it only takes some big time management/promo company to approach them and the record company is left holding lots of worthless cover-versions.Remember they are RECORDING companies … all they own is the ‘exclusive right to exploit’ specific recordings made by the artist during the contract period (usually re-negotiated every year these days)
Meanwhile on the other side of town, Quintin O’sexy is opening up another Supermaket.
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the views expressed here are mine and do not reflect those of my company or any of my clients.
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