Powerpoint Presentation - Majors & Indies

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Record Companies Transform As Consumers Ask For More

High profile album releases are now often accompanied by hundreds of digital formats and products including the album itself, digital singles, exclusive digital tracks, digital ‘bundles’, artwork, videos and a whole range of music products created for mobile phones. While music products diversify, the business of getting it to the consumer is becoming more holistic, with digital marketing and distribution strategies developed right from the start of a campaign. It is not unusual for a record company to offer an artist’s fan base wireless full song and video downloads to go with personalization tools such as ringtones and wallpapers.

Source: Digital Music Report 2007 by the IFPI http://www.ifpi.org/

MySpace: Do-It-Yourself Media Empire.

A Music X-Press Magazine Feature

Where can music fans hear and see thousands of unsigned or independent artists at the click of a button? What has become a multidimensional networking tool for these artists to reach millions of fans? Why is it so addicting? Myspace.com. Media Mogul Rupert Murdoch (News Corporation, Fox TV) could see beyond the tacky html code that glittered juvenile text alongside photo slide shows of teenage debauchery. He saw a global network of millions of people doing just about whatever then wanted with cyberspace and Myspace translated into a branded name that could rake in serious cash. Ever since Murdoch's News Corporation bought out Myspace, the company kept profit and revenue figures secret, so only Tom (Founder Tom Anderson) and his 300 Myspace soldiers know the millions they swim in daily. In 2006 there were a record 100,000,000 accounts being used on Myspace and the company can brag of up to 230,000 new accounts created a day. It's safe to say that of those Millions, a good percentage of pages are musician created and fan based. Almost everyone's Myspace page has their favorite tune of the month, week or day, playing over and over for friends and family to hear as they post blogs about breakfast or comments about cats. It is probably one of the most randomly phenomenal web portals created, but also one drastically altering the business of music. Anyone who's anyone in music circles has a Myspace page, with a fair share of nobodies to boot. Everything about the site is free and artists can upload songs, videos, promotional tools, start their own fan club and create an unforeseen intimacy. When fans get added to a musician's "Friend List", there is a direct connection made, whether real or illusion. Who knows if most artists actually read and respond to messages and comments posted by fans? For many independent or struggling musicians the responses may very well be real, but if Shakira writes back with Xs and Os the day after you send a message, chances are it's her PR team. Creating a Myspace page has become increasingly dummy proof with supporting websites popping up by the dozens to aid with graphics and code. It's almost a paint-by-numbers web design once you get the hang of it. Artists who take full advantage of the pages can tease fans by premiering tracks from upcoming albums, establish direct links to CDs and merchandise and create a push button publicity machine. Independent artists have been reaching out to their "Friends List" to find out what cities react, planning tours and gigs around who responds. Singer/Songwriter Colbie Caillat recently put a call out to her almost 100,000 strong friends to see who would come to a show if she popped into their town. Where else could an unsigned artist plan and promote a nationwide tour without the marketing expense.
Promoting in the actual cities on tours is another benefit many artists take advantage of on Myspace. A quick e-mail reminder to all the fans in any particular city/state is easily arranged through a search and send feature. In the digital studio, it's also become easier for artists to get a feel for what people want to hear. All it takes is uploading a new song and waiting to see how many plays the songs get, as people post comments; and they will especially if asked. This is the ultimate feedback system for an artist trying to find their audience. Where years ago it might've taken a band in Minnesota decades to discover they had a potential following in Paraguay, it can happen over night on Myspace. Every genre you've never heard of is on Myspace, along with all the favorites. This makes exploring the site's dedicated music section a truly enriching experience. From A'ccapella to Zouk, from Ghettotech to Shoegaze, or K-Pop to Bossa Nova, the world can suddenly become an addictive click-fest of ear candy. Such extensive learning tools can also open doors for networking and collaborative efforts with artists. Myspace expanded this potential by adding a Music Classifieds section, where musicians and professionals post free ads to find that perfect voice, promoter or piano tuner. After the News Corporation acquired the site's operation, a Myspace Record Label was developed with the backing of Universal and Interscope Records. Though it didn't exactly cause the stir probably intended; signing artists like Mickey Avalon, Hollywood Undead, Sherwood and Kate Voegele. Surely a respectable roster, but the true musical innovation of Myspace has been, and hopefully will be it's harvesting of Do-It-Yourself artists. Where a media conglomeration like the News Corporation lived off the method of consume and control, Murdoch had the foresight to see Myspace as the future of collaborate and connect. Check out Music X-Press Magazine at myspace: www.myspace.com/musicxpressmag

Documentary

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What is Indie? (Movie Trailer)

Independent Record Labels

What does independence mean?

Every DIY label is an indie. Independence means running your own record label, preferably with your own publishing.

The point of independence isn’t spurning the music industry—it’s being your own boss and avoiding arbitrary costs and constraints. Big business services can sometimes help you do what you want—it is possible to use them and stay independent. Indie doesn’t have to be a religion—that would defeat the object.

The term “independent” is often used fairly loosely:
sub-labels of the major record companies (not really independent at all); sub-labels of the majors that are specific to a big artist deal (not independent); independent labels with major label shareholders (depends on the relationship); non-major labels that are would-be-majors and behave just like them (you decide); labels for so-called Indie music (whatever that is) maybe independent or not; labels that are independent and different to major labels; the indie genre, the indie philosophy or anything predominantly autonomous.Musical independence has several technical meanings but none of them are definitive. AIM admits record labels with less than 50% major label control. Various independent charts use their own criteria for eligibility.

The advantages of an independent label

If you’re a writer and performer you can also be the publisher and record label, and keep your rights and recordings. You can make direct contact with your audience using the Internet and mail order, supported by live gigs and publicity. This is DIY. Publishing your own work and making your own records is fairly straightforward.

The Internet, home recording and cheap duplication make DIY easy and attractive.

You don’t have to sign a contract—you work for yourself. Nobody will try to turn you into a copy of someone else. You decide the art-work and which tracks go on the CD. You decide the running order, production and arrangement. You decide your own recording and release schedules. You license what you like, where and when you like, to who you like. There’s no label boss to impose copy-protection or DRM. No one else makes decisions about you and your work. You own the web site, publicity, promotion material and your image. You can charge fair prices and avoid reselling old tracks on new compilations. You can give yourself more points than the Stones and still undersell the majors. If you make a profit you get to keep most of it yourself (although it may be smaller).

Big record labels normally deduct expenses from an artist’s royalty, including:packaging, promotion (freebies, discounts, some advertising); different territories (countries), formats (SACD, DVD-A, download), times of year (Christmas); breakages (even if there are none), retail at less than full price, record club sales.Recoupable costs will be deducted too (as specified in the contract) and these can include recording. So 10% always means less than 10%. An artist who has paid back their loan and other costs is described as recouped, but they’re the exception rather than the rule. There’s more about record label costs in The money sponge.
A DIY artist obviously keeps 100% after expenses, and independent record label deals are often 50/50.

How big is the independent sector?
Major label sales fell after 2000 and recovered to record levels in 2004/5 before falling again.40% of UK platinum releases in 2002, and 30% in 2003, were independent. Independent releases outnumber the majors 5 to 1 and although the majors dominate popular media they’re responsible for less than 20% of CD titles. 25% of download sales are thought to be independent although high volume online retailers don’t promote much indie content.There are several thousand record labels in the UK, nearly all of them are independent. Together the independents are bigger than any of the major record companies.Independent retailers carry more indie releases than high street record chains. Many low-volume genres (punk, folk, jazz, blues, etc.) are better represented by indies because the bigger labels specialise in mass media and pop chart releases.Most DIY and some small label releases, and many CDs sold at gigs are not bar-coded or counted in official figures, so the official numbers for releases and sales inevitably under-report indie statistics.

The Essence of a Record Label

In the music industry, a record label is a brand and a trademark associated with the marketing of music recordings and music videos of an artiste or band.

In everyday usage, a record label is also a company that manages such brands and trademarks; coordinates the production, manufacture, distribution, promotion, and enforcement of copyright protection of sound recordings and music videos; conducts A&R; and maintains contracts with recording artists and their managers.

Record labels may be small, localized, and "independent", or they may be part of a large international media group, or somewhere in between. Generally, recorded music needs a record label in order to be widely known, reviewed, heard on media outlets such as radio or television, and in order to be available to buy in stores, although the Internet has changed this to some extent.

The name, "record label", refers to the usually papered and cut center area of a vinyl recording that prominently displays the manufacturer's name, along with other pertinent information. Many 7" vinyl singles were pressed with a relief in lieu of the paper label, particularly in Great Britain.

A record label that is a part of a larger record company that also operates as a record label, might be referred to a sublabel of its parent record label.

ie: Sony BMG Entertainmnet(Parent Record Label)
while J Records, Columbia Records, Epic Records, Jive Records are considered sublabels of Sony BMG Entertainment.

A record company gets on board with an artiste for a specific time period (say 3-5 years) or for a specific number of recordings (let's say a 5 album deal).

Major Labels vs. Independent Labels

Majors Vs. Indies

by: George Howard

What is a record label? There is no such thing as a typical record label. They are all different. There is, of course, a spectrum. One end has the “major” labels like Sony and Universal. On the other end, is the one-person dorm room operation, pressing up CDs for their friend’s band. In between, there exist the majority of labels. Most are smaller than the majors but bigger than the guy in the dorm room. These labels are often collectively referred to as "indies,” short for “independent” labels. Any label that is not distributed by a major distribution company is considered an indie. Within this large category, it is important to distinguish between established, professional indies and those dorm-room labels, which are really hobbies. This is not to say that the latter aren’t important or relevant. They are, and in fact, some of the majors of today were started in settings not much more grandiose than a dorm room. (Some of the most successful labels out there now actually were started in dorm rooms.)

There are four major labels: Universal, EMI, Sony/BMG, and Warner Music Group. Underneath each of these parent companies are many labels that are distributed (that is, have their records put in stores) by the above companies’ proprietary distribution arms. For instance, Capitol records is owned and distributed by EMI (which is a British company). RCA (home of Elvis Presley) is owned and distributed by Sony/BMG, which is a German company. Columbia, which released, among many others, records by Miles Davis and Bob Dylan, is owned and distributed by Japan-based Sony. Even Reprise, which was started by Frank Sinatra, and releases records by great artists such as Neil Young and Green Day, is owned by Warner Music Group. It’s all a bit complicated, and kind of irrelevant.

The majors all compete for the greatest market share. They try to be the one that sells the most records, and trade the title of "holder of greatest market share" back and forth every couple of years. The majors are similar in that they are all multinationals (meaning they run their businesses in countries throughout the world), they all have their own distribution companies, they all have their own publishing companies, and they all have massive back catalogs of titles that they continue to sell into the marketplace. These individual elements combined under one company's roof are very potent and ultimately distinguish the label as a “major.” Any record company that does not fit the above criteria or is not distributed by a label that fits the above the criteria is said to be an "independent" or an "indie." Not very long ago, there were more than four of these companies, but through consolidation, we have arrived where we are today. More than likely, there will be further consolidation. One of the majors will be bought by one of the others, and we will have three majors. Or perhaps some company outside the entertainment business, such as Apple, will buy one of the majors, thereby radically changing the landscape.

Source: www.artistshousemusic.com

The future for record companies

Max Hole at Universal Music Group International looks at myth and reality

June 2007

So have the Arctic Monkeys shown that record labels are redundant?

What people always forget about the Arctic Monkeys is that they’re very good and that’s the main reason they’re successful.

You’ve got millions of groups thinking they can go straight to consumers on the internet but the question is, does anybody care? I could go and busk outside an underground station and people would walk past me because I’m not very striking as a singer! The internet’s similar to that. The Arctic Monkeys however, are very talented and their lyrics connect with people. There was a skilful job done around promoting them on the internet that made it look as if they were doing it all themselves but they weren’t.

Record companies spot talented artists, sign them and then help them realise their potential with expertise in A&R, promotion, marketing, sales and they provide money; record companies have always done this and I think they always will. People who work in labels, large or small, are both enthusiasts and experts.

They can do things that artists on their own can’t. That’s not to say that a band having a presence on the internet doesn’t help to get them noticed. Years ago the only way for a band to get noticed was either to play a gig or send out demo tapes, but now the internet is a very important part of discovering and promoting talent.

What do record companies offer artists?

Artists want encouragement, help, support and money. My son’s in a group and what does he want? He wants someone to love his group, create opportunities for him and give him a cheque so that he can stop having to be a part-time waiter and be able to do his music full-time. That’s what most artists want.

They want to play, to have better equipment, more studio time and/or be able to buy some home recording equipment and, if they play live - they want a van so they can go and play in Nottingham or Manchester. Artists still want the same things they always did and they need someone to supply these things. They want somebody who shares and matches their vision, energy and enthusiasm. Someone who can open a door to the producer/recording engineer/song-writer that they love. All this hasn’t changed; it’s still the same and generally it’s the record company who steps up.

So nothing has changed then?

What has changed is the kind of services we offer artists once they’ve signed. In the past we helped them access photographers, designers, producers, engineers, studios. We still do that, but we also offer a whole array of services that are internet-based which include promotion, marketing, eCRM services and building websites.

To an extent, artists can do this themselves, but it’s often more expensive, difficult and time consuming than if they tap into an organisation that specialises. We offer this different set of services once an artist’s signed, because it’s the nature of the business now and we have had to learn to talk more directly to the consumer than we did in the past. Most of the basics however, haven’t changed. Artists still come in the door and say ‘make me a star’, but now it’s ‘make me a star the way I want you to make me a star’. Of course, the issue is that if you take a big cheque off anybody, the bigger the size of the cheque, then the more concern over the investment.

But artists still need record companies?

Snow Patrol is a good example of a band that made independent albums and then signed to Universal. We provided all the services I’ve been talking about after consultation with their management and the group. This allowed them to go and do what they do best, writing great songs, producing music and playing concerts. So far they have had two very, very successful albums. Universal took Snow Patrol who were struggling in the independent sector and gave them a platform to succeed all around the world including America.

The era of the “do-it-yourself artist” presumes artists are capable and want to deal with the business and promotion/marketing themselves. Many of them are not equipped with the necessary specialist skills to take care of ‘business’. We are experts in providing these services and skills which allows the artist to create and make music.

Is the relationship between artists and record labels changing?

Up to now, record companies have provided most of the financial investment to break an artist but have not shared in the revenue created from concerts, merchandising, sponsorship, song-writing etc. once success is achieved. The record company’s piece of the pie is declining whereas all the other segments are growing so we need to adapt. It’s interesting to look at Japan. The artist management/production company model there used to be viewed by the West as old fashioned but in fact, it is a forward looking 360 degree model.

Why are record companies not doing so well then?

Most of our woes are due to piracy, physical and digital. Having said this, we live in a creative business and some countries creative cycles’ are up and some are down. The UK and Japan are up at the moment but I think the US is going through one of its less creative times. We need ground-breaking new music and stars to drive a healthy industry. The more successful you are as a record company in creating hits, the more artists want to come to you.

Does this mean that labels need to change the way they sell music?

We are, and will continue, to develop different ways of delivering and selling music but at the moment no-one knows what ‘the killer application’ will be. We need to be open minded, flexible and unafraid to experiment. These are exciting times but the most important thing for record companies is to sign and encourage great music by great artists. This will never change.

Max Hole is President, Asia Pacific Region and Executive Vice-President, Marketing and A&R for Universal Music Group International

Source: www.ifpi.org

What Does a Label's Sales Staff Do?

Saul Shapiro, Vice President of Sales for Blue Note/EMI Jazz & Classics, reveals the nuts and bolts of what the sales department of a record label does – the various marketing strategies and deals that can happen, how a record gets into a store, and how the business of selling records is changing.

Source: www.artistshousemusic.com