[...]Truths About The Industry: From An Insider On The Outside | Tech N9ne[...]…

[...]Truths About The Industry: From An Insider On The Outside | Tech N9ne[...]…

Truths About The Industry: From An Insider On The Outside | Tech N9ne…

I always encounter sites and discussions k this where so many “consumers” who have NO CLUE about the industry and what the infrastructure of it is, are always trying to point fingers at the RIAA and other unions inside the business like the performance rights agencies ASCAP, BMI, SESAC. and Sound Exchange, as well as the mechanical rights agency Harry Fox. Just like any industry in this country they have unions that employees join to help protect and defend them from the companies they are employed by. The UAW protects and defends the rights of automobile employees, but I don’t see anyone raising sand about cars and parts being stolen off of lots at the automobile factories, or raising ire at the UAW. The TEAMSTERS protect and defends the rights of truck drivers nation wide, yet I don’t see anyone raising sand about merchandise being hi-jacked off of these trucks as they sit at truck rest stops or other places.

Unfortunately in this industry, not only do artists (employees) need protection from the companies they are employed by, but from the consumers as well. This is one of the most highly visible industries in America, because of the product that these companies offer to the market place, that are some of the most sought after products in any industry. Because of that fact, artists find themselves fighting not only their employers, but their fans as well. This is a cents against dollars industry. It may cost the distributors a few dollars to manufacture a cd, let’s say 7.99 a cd, but then you need to account that to sell it to a retailer, they wholesale it for let’s 9.99, and earn a few dollars off of the cd from the retailer , and the retailer turns around and makes a few dollars off of the consumer by selling it for 11.99. Where does this leave the artist? Fighting for their musical life, if like most artists, they don’t take the time to find out about the business before signing any contracts that may not be in their best interest, all for the pursuit of infamy over money.

Simple cut and dry, how would you like to be at your job, and then have someone who doesn’t work there. show up on a Friday, and then take half of your earnings from you, with no reason, no explanation, yet the company that you are employed by still earns the same revenue, but takes a miniscule loss because of theft at places where their merchandise or products are being offered for free?

This is current state where artists now find themselves while employed at the 4 major distributors SONY/BMG, WMG (Warner Music Group), UMG (Universal Music Group), and EMI.

They have to fight against being cast into a non-recoupable status, where millions of dollars are spent on developing, producing, promoting and marketing the artist, only to be levied against the artist, and before one single record royalty can be earned by the artist, the company must “recoup” what has been spent to put the artist’s music products out to market. The majority of artists today in this business find themselves in this non-recoupable status, because album after album release the company never does recoup what was spent from the original album, and the balance is passed onto the next album.

They also have to fight against what was formerly their largest earnings, which is performance rights (music publishing). They are payed a royalty fee of 9.1 cents each time their music is performed on radio, tv, in a commercial, for a movie trailer, in a video on (MTV, BET, VH1, etc), if it’s being streamed on radio or played on traditional radio, or if it’s composed into sheet music (per copy). But this is only for those for artists that compose and write their music, and they still must insure that this negotiated and placed into their contracts. Unfortunately most don’t and the distributors and labels retain those rights, and even if they do keep those rights and give up some of them, it is much harder to earn publishing these days because of all of the generic digital mediums that launch monthly it seems, and the fall of traditional radio (where the most publishing has always been earned). Michael Jackson today owns most of the music publishing of some of the biggest artists in the business, and I’m not just talking about the Beatles either. Check it out for yourself.

They must also fight against piracy, which in a sense is truly destroying their earning power. if they are already losing money from record sales, and music publishing, imagine them now having to fight against consumers pirating their music for free. So you think you are sticking it to the mean old nasty RIAA when you do, but essentially you are directly hurting these artists, who are already struggling to make it in their chosen field. Yes it is fact that the MAPS agreement from the then 6 major distributors had a direct affect on the change of the business model, and they were found guilty of price gouging, but piracy across the globe has placed a significant dent in the industry. This MAPs agreement caused the rise of the thousands of file sharing sites now that launch daily. The 6 majors had an opportunity to lead the charge into the digital age, but totally refused to because of their insane greed. Now that they are playing catch up to the rest of us, they want to shut it all down, so they can reap from their “birth child”.

Artists are not making off of mechanical rights what they were making in the 80′s either. Mechanical royalties are earned at the end of manufacturing. So if a distributor manufactures a million copies, the artist is automatically due earnings of 1,000,000 x 9.1 cents per copy at the end of manufacturing, and this is not held against them for advances and is non-recoupable. Unfortunately most artists do not know this among many other things, because they don’t take the time to find out about the industry they are in. It was pretty normal for a good album whatever genre it was to be pushed to a million sales in the 80′s, now it’s considered good to sell a half a million. This has tremendously cut into the mechanical royalty earning of thousands of artists.

They fight against “ticket touting”, where artists today, literally earn their most money from concert bookings and revenue. These ticket touters are now offering tickets at sites like E-bay, etc. that look like they are authentic but are fakes of the original tickets. So if the artists has worked out a deal where they share in the revenue of the “gate”, to suffice for their ” booking fee” to perform, they are losing along with the promoter, because people are showing up and expecting to gain access to these venues, but have no authentic ticket. These tickets are not traced back to the promoter’s chosen ticket merchant, and therefore they lose out on that ticket sale, shared by the artist.

These artists also fights against the thousands of online music “distributors”, that usually charge a fee to upload and sell their products, and they accept just about anything from anyone. In fact Tommy Mottola just recent spoke at a conference about these same online companies that have raked in millions of revenue, while thousands of these artists will never break even. Where does this leave artists who have good music? They have to fight through millions of “real bad” albums that never would have been picked up by any of the majors any way. This has caused the quality of music to go down, and now the majors are willing to also sign anything to survive and compete with these online distributors.

So to wrap it up, consumers today need to know the business model of the industry before they complain and think they are just hurting the RIAA, they hurt the artist the most, and in turn ultimately hurt themselves in getting good quality music.