Archives for the Month of March 2006 on Matthew Racher's Online Journal
Culture and Industry
It is arguable as to whether culture creates industry or industry creates culture. Do record labels dictate the culture we live in today or do people guide the record labels in congruence with the culture that they see is necessary. When I speak of people I do not mean one culture, but many cultures and sub-cultures. Most industries seem to be guided by a direct knowledge of what consumers want and need, yet the music industry fluctuates as tastes evolve to meet cultural desires. For instance, you will not find a mass majority of college aged students listening to Elvis on a regular basis, not to say that many don’t have his albums in the depths of their music collections. There seems to be an invisible force guiding the tastes of music listeners and there is no single entity that is proven to have control over it.
Record labels control what is spread universally, yet the people control what becomes popular in a certain genre of music. If record companies don’t have the control many would claim they have over listeners, then who should have the most power in this industry? This is a debatable question, yet it will always remain an issue as music continues to progress.
Path towards a Digital World
As recent articles make it clear, digitally distributed music will represent about 40 percent of U.S. music sales within five years. Some companies expect downloads to exceed 2 billion in 2009, which is clearly a vastly greater difference from last year’s 140 million downloads. Some predict digitally delivered music as well as mobile music to make up around 37 percent of all music sold. Some have previously predicted that piracy would slow down the growth of music, but it seems as though profits will continue to soar. This is determined because the public enjoys an innovative and user-friendly space for receiving music. It is easier to download a song than it is to go out and buy an album. Apple iTunes and LimeWire are the two most popular digital music services. It is becoming easier and easier to access music over the internet.
Record companies argue that the profits made by internet music services represent their losses in the world of music. It is hard to prove this yet it is easy to see that more of the world is becoming turned on to internet based music because of its easy accessibility. This will only continue to grow and may in turn lead to more profits for artists rather than labels. This increase in internet-based music may eventually force record companies to decrease prices and give into the needs of the artists rather than control the needs of the artist. Only time and profit maximization can tell where the future of music will lead us, and so far, it’s leading us to a digital world.
The Beginning of a New Age in Music
The Artic Monkeys, a band hailing from Great Britain released an album that became the fastest- selling debut album. Some refer to them as the next Oasis. Their album “Whatever People Say I am, That’s What I’m Not” sold about 360,000 copies in the first week of its release. How exactly did this group become so popular? There goal was not to make millions, but to get on stage on put on a show that no one would forget. The spread their music starting in 2004 by handing out free cd’s after shows. The diehard fans who loved their music made their songs available to be downloaded from the internet, and in turn, this wide spread outbreak of music became the reason why they are so well known right now. It is interested to analyze a case in which the artists pursued their own goals through their own efforts and not by means of a record label. Some would say that handing out free music and allowing it to spread freely across the internet is a poor business decision, but it can be argued that the continued success of the Artic Monkeys is due to this strategy. Some would view this as piracy but in this case, it is seen by the Artic Monkeys as the reason why everyone is buying their music right now. This distribution of music over the internet is only one example out of the many, in which artists and fans become connected through more personalized means rather than through corporate means.
Royalty fees in the record industry
http://www.nydailynews.com/entertainment/story/60991p-57008c.html offers an interesting case study on a band that basically received no pay for their great contribution to a record label’s profits. The 15 % royalty fee the band, Grunthead, received turned into an even greater expense in the long run, when they had to pay for other deductions and costs. This case demonstrates the large gap in profits between producers and artists. It is debatable as to how much each participant in the production of an album should receive, but it seems as the though the artist should receive much more than 15% with no strings attached. For each artist to only receive about $40,000 after producing a gross profit of over $6,000,000 is not only unreasonable, it is almost as drastic as stealing ones fortune. The artist produces the music, while the producer puts the artist’s work into production. It is true that a label can be solely responsible for the fame and recognition of an artist, yet that should not serve as a reason to basically steal the artist’s profits. This large gap should and eventually will close as the artist seeks to utilize more independent labels that serve to maximize profits for the artist as well as the producer.
Music and File sharing, a Way to Higher Profits?
Rock star and actress, Courtney Love gave a speech at a New-media conference in Manhattan's SoHo. Her message stunned the many audience members who listened. "Stealing an artist's music without paying for it is absolute piracy," she said. "And I'm talking about major-label recording contracts, not Napster." As many people already know, recording contracts are made for one simple reason: record labels want to maximize profits by limiting the profits of the talented artists they produce. Of course, these artists can do well for themselves, yet it is a question of comparison. Who makes more money, the label or the artist? And, who deserves to make more money? In the case with Courtney Love, she wanted to leave Geffen Records, which is owned by the Universal Music Group, and find a more independent label that appeals to the needs of the artist. In fact, Love visualized the growth of music based file- sharing as a chance for artists to leave the constraints of the music industry and make their own regulated profits. This idea would certainly give artists more freedom in sharing the music they want at the prices they want, yet would it maximize their profits? Record Labels distribute music rapidly and worldwide, and the web does the same thing, yet the web may be limited in the number of capable and willing users who would buy the music. Although computers continually evolve technologically and their numbers within households continually increase, is it certain that this would be the best way for artists to share and control their music in a way that would lead to the greatest profits?