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Re: now music and economics...
>are about to become superfluous because the benefits they can now offer
artists are not worth the costs.
Oh? How many bands have made it big without a label?
Nobody just lately, but that doesn't indicate cause and effect. It works
both ways: 1) either the band sends in some demos and gets and offer as
promising or 2) the band is already a success and had a big audience and
gets an offer. The time may very well come that #2 can make it big through
Internet distribution, rather than through a label.
BTW, didn't I read last year that Internet download had generated its first
radio hit?
Say I like this obscure 1940s song and I hunt around for it and buy the
CD.
So that means a band would then have no reason to make anything but
singles. We get only Pinball Wizard and no Tommy.
Not necessarily. It just means that there are a ton of singles out there
for download. It's true that "Pinball Wizard" is fun as a single, but TOMMY
is about as easy to download these days.
>Plus, I can find a bunch of other rare stuff that nobody is interested in
carrying down at the CD store.
Online stores have taken care of that problem.
Maybe. I suspect there a ton of live material circulating that's not on
official cds at all.
> Buying a used CD doesn't support the artist, because there are no
royalties
You KNEW I'd be ready for this argument, didn't you? Of course it supports
the artist...in that the CD was purchased in the first place.
But file sharing supports an artist the same way. When someone shares the
file, they're supporting the artist by promoting his or her work.
It's like a used car. And at least I'm recycling! Downloaded music is one
purchase per 100k downloads. That means no one makes money.
Not from file sharing, but then how much do artists make from radio play?
There might be a way I can see asking Internet providers to pay a small fee
the same way clubs and radio stations do to pay artist royalties.
>like radio or whatever. I notice that large capacity storage devices
advertise lots of space for your mp3 collection.
But again, MP3s sound like a cheap radio.
Shn is better. As capacity and bandwidth increase, the quality will
increase.
>But they charge those costs back to the artist
WHY does this bother you? The artist doesn't pay it unless they make money!
Those who don't, the vast majority, that money is gone from the labels'
pockets, period! Think of it as a loan to start a business.
What the artists get from the record company is not a free and clear
payment; it's an advance against royalties. As I understand things, the
label subtracts costs before they pay any royalties. If the band doesn't
make enough in sales to cover the costs of making and promoting the album,
then they owe their advance plus the uncovered costs back to the record
label, i.e. the band is in debt to the label. I gather this is fairly
common.
You can consider it a loan--that's a fair analogy--but why do you think it
doesn't have to be paid back? Do you think record labels would make up
contracts this way? It's possible that some bands default on their loans
and the record companies write them off as a loss, but debtors are still
expected to pay back what they owe.
>, and it's stuff that might be contracted separately at lower cost.
Might be, but I tend to doubt it. A system in place is usually cheaper than
someone doing the tasks individually.
But the record labels have no incentive to keep costs down if the artist is
paying. Plus, they might get the urge to engage in some creative
accounting. Percentage deals should always be for a percentage of the
gross, not a percentage of the net. If you make a deal for the second,
there will never be a net. ;)
>year Sony
Entertainment posted sales of $19.2 billion, giving them net earnings of
$1.09 billion.
Yes, you already said what I was going to...Sony isn't JUST a label. They
make equipment, movies, books, etc. etc.
I followed up with the music stats.
>You're right that their profit didn't get near the billion mark, but the
gross was closer to two.
As ANYONE who owns a business would tell you, the gross doesn't mean shit.
It's the net that counts.
>This is one of the big five, and one that's trying
to cut costs, indicating they're in trouble with $174 in PROFIT.
Do you know how that has to be split up?
Profit = the total revenue - the total cost, so it doesn't have to be split
up. There are several possible uses for profit, one of which is paying
stockholders. Is that what you mean?
>Pete puts music out for us by himself, as do other artists, on their own
label. From what these artists say, it's better to be in control of it
yourself.
Of course...as long as you're as famous as Townshend, that's no problem.
Most artists can get together enough cash for a small cd venture. It's just
that no one can expect to start off really big without an audience to
support them--the record labels can't afford to pay for development any
more. If you're a band planning to expand in a big way with venture
capital, then you should know the risks up front.
>I'm saying that signing shouldn't be taken as the criterion of success
these days.
No, but it's a step in that direction. Most of the bands signed lose money
for their label.
I still think this is return on investment the labels are complaining about,
and not actual cash. I just don't think they're in the business of giving
money away. That's a charity.
>But the risks weren't the reason for their profit.
Yeah they were! No product, no profit!
Risk isn't the same thing as product. Britney Spears is product.
>Are you saying that a real rock band wouldn't do these things? It's
selling out, right?
I'm saying that they don't make money on the tour unless they do these
things. Even then, tickets are $100+ for the "cheap" seats.
I suspect that these tour are sold to Clear Channel and work on the same
advance system as the recording advance. Notice The Who didn't go with
Clear Channel again in 2002. I'd look at CC's accounting very carefully,
too.
>But where is it written that record companies are the only corporations
who can do this?
Nowhere, but at least they have a clue about what might and might not make
money. I suppose anyone who wants to can, but I don't see anyone lining up
to do so. Not even established Rock bands like The Who.
Nah. Their idea of what can make money is 'NSync and Miss Britney Spears.
>costs are charged back to the band, even if it leaves them in debt.
Yeah, they might be CHARGED to the band...but if the band doesn't make it,
and breaks up, who's going to pay? That's IF any of them had money after
the fact! No, that money's GONE.
The individual members still owe it, and there are methods of collection.
It can be written off for a tax deduction, but I don't know anything about
the figures on this.
>But they're developing talent so they can keep it in their stable.
Yeah, so they can benefit. Understandable, no?
>Is this a myth? What costs are they eating? Do you think they write off
all the money that bands end up owing them? If so, it's a tax deduction and
they get use of it anyway.
The costs of finding, recording, promoting etc. a new band who doesn't make
it. And just so you know, a tax deduction is not money in your pocket. It's
only less you have to pay.
See above. The band owes these costs. Tax deductions might not be money in
your pocket, but they can be used to an advantage.
>there was much less competition from ACCUMULATED RECORDINGS in the
mid-sixties than there is now.
That's why "music must change." It just hasn't, that's all. We need the new
thing to take over from Rock music.
I thought it was Latin music. Anyhow, something new is something old in a
lot of cases. A lot of kids these days are Louis Armstrong fans. the
market is seriously fragmented, and this is because of the number and
variety of recordings out there.
keets
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