Also hints that record companies should get a cut of concerts, merchandising, sponsorship, song-writing, etc to make up for declining revenue in other areas.
Max Hole, President, Asia Pacific Region and Executive Vice-President, Marketing and A&R for Universal Music Group International recently gave his insight as to what he sees for the future of record companies.
He provides some rather interesting observations in that he firmly feels that the artist and record label relationship is essentially unchanged despite the fact that the music distribution model has.
But, what’s curious though is the real message at the heart of what he says, in that he’s sort of hinting that record labels are now, or will be, little more than marketing and promotional outfits. He doesn’t say it outright but, he says things like they can “…help (artists) realize their potential with expertise in A&R, promotion, marketing, sales, and they provide money,” and that many artists don’t want to hassle with the “…business and promotion/marketing themselves.”
He feels that artists just want to play music and write songs, and that a partnership with a record label lets them do that by supporting them financially while they do so. Yet, does this really justify an artist receiving only $1.99 USD of a $16.98 CD price? Is the financial and marketing support worth almost 90% of each CD they finally sell?
The real kicker is that he seems to think 90% isn’t enough in light of the decline in physical CD sales, that record companies must be able to tap into the artists REAL sources of revenue like concerts, merchandising, sponsorship, song-writing etc..
He writes:
Up to now, record companies have provided most of the financial investment to break an artist but have not shared in the revenue created from concerts, merchandising, sponsorship, song-writing etc. once success is achieved. The record company’s piece of the pie is declining whereas all the other segments are growing so we need to adapt.
I like how he mentions the word “adapt,” which he follows up later by noting that they need to be “…open minded, flexible and unafraid to experiment.” Do any of these characteristics strike you as being observable traits of the music industry? Probably not, though EMI has stepped up to the plate somewhat by offering DRM-free tracks on iTunes new “iTunes Plus” DRM-free music store.
In any event, it amazes me still at the hubris record execs have in trying to say with a straight face that artists need them, especially when it boils down to mortgaging their future with cuts of CD sales, and perhaps even concerts, merchandising, and other revenue sources in exchange for slick ads and a few dollars in their pocket so they don’t have to have day jobs.
For some artists it may just be the thing they need or are looking for but, at the risk of having the record labels hands in their pockets for years to come, I’d hope they’d reconsider.
I think record labels need artists a whole lot more than artists need them.
digg_url = ‘http://digg.com/music/Universal_exec_says_music_artists_need_us’;
Looking for more stuff to watch or download?
Is 2007 the year the CD died?
3 Quick Ways to Watch Movies for FREE!
3 quick ways to watch TV shows for FREE
BitTorrent torrent sites & search engines
Azureus – A Beginner’s Guide to BitTorrent Downloading
Watch The Simpsons, The Office, Jackass, South Park, Lost, X-Men, and More, On-Demand For Free
well i am intrested i,m an artist i play comecial musics this is my number +234769547384 +234769547394 thanks will talk more when u call me
I don’t need them. I have a nice website with all my music available for a free download.
I’m not very popular. The last time I counted I had over 50000 downloads and I was getting about 1000 downloads a month.
If just 10% of those people who listened to my music kept it on their hard drive that’s 5000 copies of my songs out there. Not bad for a budget of less than $20 a month.
Max Hole (perfect name) says …
“You’ve got millions of groups thinking they can go straight to consumers on the internet but the question is does anybody care? I could go and busk outside an underground station and people would walk past me because I’m not very striking as a singer! The internet’s similar to that. The Arctic Monkeys however are very talented and their lyrics connect with people.”
So the record label’s job is to take UNtalented artists and sell them to us anyway they can – including eliminating any competition.
“What has changed is the kind of services we offer artists once they’ve signed. In the past we helped them access photographers designers producers engineers studios. We still do that but we also offer a whole array of services that are internet-based which include promotion marketing eCRM services and building websites.”
How do you market on the internet if you don’t allow downloading? Are they still daydreaming people will buy a whole album to hear one song?
“To an extent artists can do this themselves.”
Uh yea and it’s a whole lot cheaper too. Plus they retain the rights to their work. If they drop an independent label they can still walk down to their local pub and play music for rent – unlike others who have to mortage their homes just to buy the rights back to their own music after the label dumps them. A trick I heard recently is that a big label will buy the rights and archive it to eliminate the competition. “Not commercially viable right now” because they want to focus on some other ‘star’. That’s also why big labels have been so painfully slow to rerelease their back catalog of out of print stuff.
So how stupid can congress be to give these crooks the authority of law?
“the US is going through one of its less creative times.”
Gosh. I wonder why – especially pretending independent musicians don’t exist.
The RIAA still claims they represent 90% of all music sold in the U.S. Hmmm … that means emusic and itunes are only selling 10% of what’s sold?
This will prove to artists that the music industry is dumb as a bag of rocks and they will begin looking for other methods of hosting their material.
I think the record companies are getting more and more greedy by the minute! Now that they see their profits shrinking due to their OWN STUPIDITY…such as suing their own customers for example….now they want a slice of the pie that the artists use to make a living for themselves.
I hope the artists tell them to go jump in a lake!
Max Hole = “A Hole”
that * needs a better barber…. his bald spot is as crooked as his ideals
lol i was just going to comment on Max A. Hole’s name too boomer.
Max Hole… Really? That’s a great name like the other exec with the last name of Slipper that I always get a chuckle out of.
Good article Sole I often think they have it backwards about who needs who from where I see it as a listener.
* the record companies!