These institutions were mostly small, independently created babbling companies run by entrepreneurs who would discover talent, create records and promote the performer’s live shows. Since these proprietorships were small in size, if an artist or group produced an album that did not sell well, the labeling companies would be forced to keep promoting their artist because other clients were harder to find due to competition among labels. – Steve Chapel and Rebel Grafton, Rock ‘n’ Roll Is Here to Pay: The History and Politics of the Music Industry (Chicago: Nelson-Hall, 1978), 46.
Over the past half-century, some of these labels were either combined or purchased by other corporations, in turn putting only a few major corporate giants in control of music promotion. The corporations would loan money in order to pay for these entrepreneurial institutions, but they later found themselves in debt from all of the labels they had purchased. This then caused the corporations to fire the talent agents and entrepreneurs that brought these companies to tuition to begin with.
Eventually the only people controlling, discovering and promoting talent were the large incorporated record labels. These record corporations nominated almost every aspect of music production. In order for an artist to become successful, they would need to sign a contract with one of these companies. These are commonly known as ‘record deals,’ and without the promotion value of one of these corporations a group would have very little chance of achieving widespread popularity for themselves.
Thus, the record corporations became the arbiters of taste for the music scene. In fact, they even had direct control over what songs are played on public radio stations, so the only music that was being exposed to the masses was from signed artists. Mark J. Percival, “Music Radio and the Record Industry: Songs, Sounds, and Power. ” Popular Music and Society 34. 4 (201 1): 460. If a company did not like the way an artist sounded, they were not re-signed. If they did like their sound, a record contract would be negotiated.
A new performer has relatively little bargaining leverage over the companies; hence the first contract that is signed is monetarily unfavorable for the performer. The most common form of contract would include an music industry report By Jar Simms capital or risk capital. Sums of money as large as $100 million have been given to ammos artists to write and sell a set number of albums, These albums are then produced, promoted, and sold to the public. The danger for the artist lies in how many albums they sell.
The investment capital given to them by the company is based off of a projected number of sales. If the actual amount of sales is lower than this amount, then the artists owe the record company a portion of the investment capital. This puts the artist in debt, and in order to pay it off, the artist will be forced to sign yet another record contract and try to sell even more albums the second time around. After Maria Careers album Glitter failed to meet its enormous projected sales amount, MI Music canceled her contract and she found herself owing close to $72 million to the record company. “MI Drops Maria Carrey,” BBC News, wry. BBC. Com, 23 Jan. 2002 (accessed 25 Par. 2012). Thanks to her previous success she was able to overcome the loss and continue her singing career, but should something like this happen to a newly signed artist, their music career could effectively be over. Oftentimes the company drops an artist, and because of the contract agreements the artist cannot make music for anyone else. The entire system is therefore based off of the revenue earned by the record companies.
The performer’s main goal becomes keeping the record companies happy because they will only make money once they pass the projected album sales figure. This is a fundamentally flawed system because the artist represents an equal if not more important aspect of the music industry, and the traditional system exploits them. In order for this system to change in the musician’s favor, a drastic reconstruction of the industry must take place. Theirs is still a deeply troubled business. Since 2000, when online file-sharing took off, global recorded-music sales have fallen from $26. Billion a year to $15. 9 billion, according to the IF, a trade group. Apple has helped to smash profitable albums into less profitable singles. High-street music shops are closing. Digital outlets such as tunes are not growing nearly fast enough to offset the decline in CD sales. Indeed, in many countries they are stuck in a niche. In Japan, 73% of spending on recorded music in 2010 was on CDC, DVD’s and vinyl. Fewer than one- fifth of Britons bought digital music last year. Streaming services such as Spottily, which make money from advertising and subscriptions, are not yet helping much.
They brought in Just 3% of total recorded-music revenues last year, according to the BPI, which represents British record labels. The new products unveiled by the Great Turtleneck One this week should push the digital market out of its niche. Apple’s cloud is not Just a storage locker for music. It will search devices for tracks purchased from the tunes store, and automatically give customers the rights to download the music to any Apple device. That puts Apple’s service ahead of recent offerings by Amazon and Google, which require users to upload music to the cloud.
By making digital music purchases more accessible, it should raise their perceived value, leading to more sales. Which will scan computers for all music tracks and offer cloud-based access to them for $24. 99 a year. Apple will take a cut of sales and give the rest to the record companies. Whereas the cloud is simply better than the competition, this is a breakthrough. In effect, it will allow music companies to levy an annual fee for the use of their music, whether ripped from CDC or downloaded illegally. -http:// www. Economist. Com/node/18805473