Articles
Is free music the way forward?
© Al Paton 6 June 2008
Muso's need to know this!
We all know CD sales have been declining over the last few years, but digital downloads, while rising, have not made up for the loss. The record companies are clearly in trouble:
- EMI was bought out last year and announced huge job cuts soon after.
- Warner Music Shares have been in freefall for months ($16 million first quarter loss this year)
- Universal Music, the largest label, saw revenues dip slightly last year.
- BMG Sony - Poised for a takeover bid
Time magazine lately published an article highlighting the state of the music industry with a quote from Guy Hands, chairman of EMI. He said:
"The current model is broken. Unless we find a new model, new music is dead."
That sounds a bit dramatic, but be warned: He's trying to butter artists up to the idea that record companies now want a share of what has traditionally not been any of the record label's business - The income from tours and merchandising (T-shirts, caps, posters etc).
If you think it won't happen, think again... Artists like Korn and Madonna have already signed contracts that give over some of these rights.
It's a strange fact that artists signed to a label don't make much money from the CD sales, even if they do reasonably well. The recording costs, managers, producers, video costs and record company eat up most of that.
The artist's money comes from advances from the record label, and from tours and merchandising.
The new model seems to be: Sell the music cheaply or give it away and make money from the tours and t-shirts.
So the tip for you is:
Your merchandising and tour income are hot property! Don't let a record company quietly slip a merchandising or tour income clause into your contract without getting their first born child in return. Hang on to your merchandising and tour income for dear life!
What I want to know is...
How do the artists feel about giving your music away free? Does it make sense, especially for new artists?
What's your opinion?
You can comment on our facebook group here (South Africa only, I think, sorry...)
Thanks for reading.
Al Paton.
