Current and Contemporary
Models of Music
Production Distribution Consumption
Music in the Good Old days •
Music in the beginning could not be bought or sold.
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The birth of technology changed it all and music could be recycled.
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Music will always be based on the social fabric.
What record companies do? •
Fund recording sessions
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Manufacture product
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Distribute product
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Market Product
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Loan & advance money for expenses (tours, video, hair & makeup)
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Advise and guide artists on thier careers and recordings
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Handle the accounting
Making Music Today
The system has evolved to market the product/container - vinyl, tape or disc. •
Recording Costs have declined to almost zero.
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Manufacturing and Promotion are approaching zero.
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Touring is not just promotion.
Several Models with different levels of Artist control
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360/Equity Deal
• 360 deals are contracts that allow a record label to receive a percentage of the earnings from ALL of a band’s activities instead of just record sales. This means that they have great control over the artist. • The artist is completely covered by the managers, promoters, producers and marketing people. • Labels will commit to promoting artist and allow bigger opportunities for them. • Artist will mostly be used to sell products so label makes more money out of them. • A lot of the times labels will sell artist to a big company for a large sum of money (e.g. Live Nation offered $150,000,000 to Jay-z for 10 year venture).
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360/Equity Deal
Here are some examples of how the label will sell their artist as a product in order to make more money.
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Standard Distribution Deal
Most important principles of Standard Distribution Deal: • Record company handles manufacturing, distribution, press & promotion, therefore they have most control with the decisions. • Label owns copyright to recording forever. • Artist gets royalty percentage once they pay off all above so with this deal artists tend to find themselves in debt to record company. • Expenses needed to pay are very high which therefore means artist needs to sell many albums (hardly done), sell many concert tickets, merchandising and licensing. • Basically artists will earn profit once everything has been paid off, a very high sum. E.g. paying off a typical $250,000 sum would mean selling 250,000 albums. Paying off in sales of albums alone is near to impossible.
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License Deal
• The license deal is quite similar to the standard deal. • The right to exploit that property is granted to a label for a limited period of time. • The decisions to allow the rights to be licensed is up to the artist. • Positive - Allows for a little more creative freedom. Negative - Record label may invest less. • With the right label, the license deal can be a great way to go.
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Profit Sharing-Deal
• Indie label (Independent label): The artist supplies talent and the indie provides its resources more like a joint venture. They split any profit 50/50 after deducting all expenses. • Major labels For new artist its harder to get a large sum of profit as compared to an established artist. • Final point The typical profit ratio might be in the region of 2:1 or 3:1 in favour of the recording company.
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Manufacturing and Distribution Deal
This particular model gives a lot more control to the artist in terms of their rights to the music they create. The artist does all the work before manufacture and distribution, such as the master and album artwork. Artists Steps: •
Create the song, record master and create artwork.
Find a Distributer – There are many online distribution companies that allow any amateur artist to sell their songs. One such company, called “CDbaby”, distributes your work across the major online retail stores. Such as Itunes, Amazon, Rhapsody etc. $39 for Album $9.95 for Single.
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Distributer and Music store get a cut of the profits – Usually around 60% of retail price.
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Manufacturing and Distribution Deal
Advantages of this Model: •
Artist keeps all Licensing rights to song
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Music is instantly spread worldwide
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Digital distribution is much quicker and cheaper compared to printing and shipping CD’s.
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Manufacturing and Distribution Deal
Disadvantages to Model: •
Online stores get large cut of the profits
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Manufacturing and Distribution Deal
Disadvantages to Model:
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Nowadays, it is too easy to get onto Itunes. It is no longer exclusive as it is inundated with amateur artists therefor it is hard to stick out from the rest.
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These distributers do little or nothing to promote you.
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No real way of tracking your online sales. Only brief summary.
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Self-Distribution Deal
MySpace Costum. Myspace using HTML / CSS Connect Myspace with Twitter Example; http://www.myspace.com/bmth
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Self-Distribution Deal
Lastfm The Scrobbler automatically fills your library and updates it with what you’ve been listening to on your computer or iPod. Connect your Last.fm profile up to Twitter and more! Learn how to tell all your friends when you love a track; add your recent tracks to your blog and tweet your weekly top tracks
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Self-Distribution Deal
Youtube A lot of bands use youtube to promote themselves. Here is an example of that:
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Self-Distribution Deal
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Self-Distribution Deal
Another thing that I found is that some bands use youtube to promote themselves posting some kind of home videos when they are on studio recording another CD, here is another example of that; Also I found that some bands post the making of their music videos and I think that is quite important to share the ideas that they had for making it and the people who actually like that will be able to access that content worldwide for free. And the band will be able to post it on Youtube for free as well.
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Self-Distribution Deal
Amazing way of self promotion using new technologies and a lot of creativity !
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Self-Distribution Deal
A lot of bands are also using twitter to promote themselves. And seems to be a really good way to spread the word. Connecting twitter to myspace profile seems to be an option that a lot of bands acquire to promote what they are doing.