The Problem with Record Companies

Post by **Dave Mudgett** » 7 May 2009 9:03 am

... according to Phil Alvin of The Blasters - http://www.youtube.com/watch?v=Sd994qtXMJQ

Interesting perspective and extremely entertaining, IMO.

Hook Moore · Post by **Hook Moore** » 7 May 2009 5:53 pm

Now thats news you can use..Very entertaining..
Hook

Alvin Blaine · Post by **Alvin Blaine** » 7 May 2009 11:29 pm

That interview is about 16 years old, and now look what's happened to music.

Apple went and made the Ipod, IPhone, and Itouch, all sort of the new hand-held furniture to play music on. As of last year Itunes (Apple) has become the largest music distributor in the the world.

If you guys search around more of those Art Fein Poker Party clips on YouTube, you'll find some clips of a very young version of myself on there, some 22-23 years ago.

Mark Edwards · Post by **Mark Edwards** » 8 May 2009 3:36 am

Quoting Johnny Carson on the Tonight Show "I did not know that Ed"

Tony Prior · Post by **Tony Prior** » 8 May 2009 6:07 am

kinda ironic, we all brag at the highest volume and call mom immediately when we sign a deal with a record company. Then the next day we sue them !

Record companies are actually a business and sometimes I think we forget that. Not every artist actually sells records and of course some sell more than others. There is a contract, there are lawyers and there are pens. There is an obligation on the part of the artist to actually be artistic with the intent to sell records, that's why they are signed with a record company, one who is actually in the business to get the recordings out to the distributors and to the stores.

Are record companies vampires that suck the blood out of you ? sure I guess some are , maybe most. But what is the obligation of the artist ? easy answer, make music that sells.

t

David Doggett · Post by **David Doggett** » 8 May 2009 7:42 am

Very interesting history of how Victor and Okeh started as furniture companies and just wanted to get records out to the public cheap to promote sales of their phonographs. Musicians were just raw material to be had almost free with low one-time payments to put content on records as cheaply as possible. They thought only wealthy whites would pony up for home phonographs and were shocked when poor people bought them to hear country music and blues. BMI got royalty laws passed for record sales and airplay, and also tapped into the 90% of musicians who don't record but play live covers. Then the internet trashed the record industry, and here we are.

I love the Blasters.

Cameron Tilbury · Post by **Cameron Tilbury** » 8 May 2009 8:21 am

I'd have to disagree (with respect) with the statement that the internet ruined the record industry.

The "visionaries" at the record companies underestimated the power and potential of the internet and didn't see the change coming or adapt to the market quick enough.
How did they react? By launching lawsuits against anyone and everyone caught downloading.
Now, there's no way I'm on the side of illegal downloading at all. But I am against big record companies not looking after their talent (in the first instance) and their own interests (in the second instance) and by forseeing the change in the market.

It wasn't as if downloading snuck up on these companies. The illegal file-sharing websites were (at the time) only filling a natural void left in the marketplace.

Artists have a right to be angry with record companies.

Tony Prior · Post by **Tony Prior** » 8 May 2009 10:57 am

Artists do indeed have a right to be angry at record companies, but consumers also have a right to be angry at artists who provide a new CD with 14 tracks, one good song and 13 tracks of pure trash, or in some cases 14 tracks of trash !

Say hello to the angry consumer.

Years back when we bought an album, an LP, it was good, we had to decide which songs we liked best out of all of them. Everyone was happy.

Today, $15 for a CD with no value , there is enough anger going around for all of us, so

along came the download.

Now the consumer is happy and the artists and the record companies are not.

I didn't invent streaming audio but I sure like it !

Works for me ! I haven't bought a crappy CD in years and I have bought a few that I listened to first on line to be certain they were worth the money.

t

Post by **Dave Mudgett** » 8 May 2009 11:07 am

Even though I largely agree with Phil's overall view, I take the "furniture company" description as a statement that these early companies were largely in the business of making record players, which were basically a type of functional furniture in homes of the first half of the 20th century. For example, I don't think Okeh or Victor were in the "general furniture" biz long before the advent of recorded music. I think at least Okeh - which started as the Otto Heineman Phonograph Supply Company - was specifically formed to make and market record players, and I think that's largely true for Victor and others.

Of course, being a piece of furniture, record players figured prominently in the furniture biz of that period - see this discussion from the Grand Rapids Furniture Register from 1917: http://books.google.com/books?id=YG8oAA ... #PPA343,M1

But what is the obligation of the artist? easy answer, make music that sells.

I disagree. The obligation of an artist is to make art. An artist like a musician doesn't control what sells - that is much more in the province of the prospective buyers and marketeers. A musician should simply be concerned with making the best music they know how to make. IMO, ignoring this essential point is how we have arrived at this inverted pyramid type of system where the vast majority of power is concentrated at the top and an awful lot of working musicians have little to say about the music they're making. I honestly doubt that most musicians want to put out CDs with drek on all but one tune - that sounds like a marketeer's trick to me.

To me, the point of all this is that record companies and the music biz in general aren't really about music. Classical orchestras are about music. There are plenty of musicians in other styles who are all about music. But there is a huge disconnect between that and the mainstream music biz. IMHO, of course.

Musicians were just raw material to be had almost free with low one-time payments to put content on records as cheaply as possible.

It doesn't seem to me that the basic business model for recording musicians has changed all that much. Yes, some studio musicians get paid very well now, but I don't think most do, and I also think one-time payments are still largely the business model for most musicians, as we've discussed ad infinitum, ad nauseum over the years here. I'm happy to be enlightened if that is really different for most recording musicians, but it's not my perception.

BMI got royalty laws passed for record sales and airplay, and also tapped into the 90% of musicians who don't record but play live covers.

ASCAP, formed in 1914, was decades ahead of BMI, which was formed in 1939. Again in my opinion, this approach to copyright and performance rights is yet another example of a music biz inverted pyramid oligopoly where the power is all at the top. To me, the internet is the last, best hope for music as we know it, and also the best chance I've seen to right the inverted pyramid. But I imagine that the present power structure will try to prevent this.

My opinions, as always. Of course, I'm a big Blasters fan also.

Tony Prior · Post by **Tony Prior** » 8 May 2009 2:17 pm

It's kinda like the Chicken and the Egg theory. Record company hears artist and likes what they hear, then the artist signs a deal with the record company to make 3 or 4 albums , then makes albums that don't sell, then the record company breaks the deal and the artist sues for breaking the deal , of which the artist was supposed to make good music that people like and will buy, as that's why they were signed by the record company in the first place.

I believe there is liability all the way around.

If an artist has lost his way, why should a record company continue to take the hit ? No different than a record company going blood thirsty, the artist should have a way out.

just my take , I'm not signed by anyone and I still can't find my way !

Ron ! · Post by **Ron !** » 8 May 2009 4:10 pm

just my take , I'm not signed by anyone and I still can't find my way !

Do like we do.Start your own label and publishing company.
Here is a little secret for you Tony.....you probably won't believe it but it is true.
Make a good sounding song and buy the first 100.000 yourself.
10 to 1 that you will get signed on by a major company and your record will hit the high rise.
The reason why I have not done that yet is very simple...not enough $$

It sounds unbelievable but it is true.

Ron

P.s

Tony I have a label for sale if you are interested.

Leslie Ehrlich · Post by **Leslie Ehrlich** » 8 May 2009 9:41 pm

Tony Prior wrote:Record company hears artist and likes what they hear, then the artist signs a deal with the record company to make 3 or 4 albums , then makes albums that don't sell...

What if the artist's music is not selling because styles have changed (e.g. rock is out and disco is in)? That is how the business usually works. When a new style comes along, artists have to be prepared to hop on the bandwagon if they want to maintain their popularity.

Tony Prior wrote:Record companies are actually a business and sometimes I think we forget that. Not every artist actually sells records and of course some sell more than others. There is a contract, there are lawyers and there are pens. There is an obligation on the part of the artist to actually be artistic with the intent to sell records, that's why they are signed with a record company, one who is actually in the business to get the recordings out to the distributors and to the stores.

In other words, fame has its price.

Tony Prior · Post by **Tony Prior** » 9 May 2009 1:00 am

Yes , fame has it's price, usually a personal price.

Ron, yes,, I am well aware, I do have a self titled registered publishing company, it cost $10 to register the name at the County Hall of Records. And yes I am well aware about buying the first 100K pieces yourself, didn't we all wonder how a CD is released on Tuesday and it already sold 500,000 units ? That's why CD's come out # 2 or 3, heck even #1 the day they are released, they had the most sales that week.

The missing element is distribution, that's where the $$$ is made.

By the way, I always enjoy Karen's tunes. They are as good if not better than many others out there.

t

chas smith · Post by **chas smith** » 9 May 2009 3:33 pm

I was doing some sub-contract-after-hours welding at CNN in Hollywood. The CNN executive, who didn't know that I have an interest in music, and the man I was working for were talking shop. The exec told a story of how one of his friends, at a major label, was bragging about having signed a very promising band and gotten them to sign a contract where they wouldn't make a dime, for at last 3 years.

chris ivey · Post by **chris ivey** » 10 May 2009 10:44 am

to these recording companies and high dollar studios who had a strangle hold on music for so many years, i say hooray for the internet and quality home recording gear which has put some power and control back in the hands of the artist!

Ron ! · Post by **Ron !** » 10 May 2009 5:09 pm

Tony,

Karen thanks you for the compliment she just said.

You know...when you buy the first 100.000 yourself(on paper) the major company's will step in and contact you to take you off of the market because you will be jeopardizing their assets.
In other words....they will do what ever it takes to get you out of the picture.
Now....most people don't have the money to do this and that is why you will hardly find any "Indy" artists.

But believe you me....if you would have the "cojones" to pull of a stunt like this you would riding sky high.A major cash flow would be coming your way.

Ron

P.S

Shoot me your e-mail address over the forum e-mail please Tony....

John Macy · Post by **John Macy** » 11 May 2009 9:37 am

I'm curious on how you would show the record companies where those 100,000 units went, and the paper trail they would want to see on how they were distributed and sold...

RIAA gold and platinum records are certified on units shipped, which is often why you see gold record parties for records that are only soundscanning 3-400,000 units sold. There have been times that labels over ship units to make a certification, but everyone knows that, and no one is going to buy out a company based on units shipped with no sales...

John Macy · Post by **John Macy** » 12 May 2009 11:03 am

Still curious...

Ron ! · Post by **Ron !** » 12 May 2009 12:57 pm

John,

those 100.000 Cd's don't have to be printed.Just sold.Anyone can buy them.....even the artist him/her self.
Whether you buy them on paper or in the store does not take away the value of them.
When big record corporations see something like this happen they buy either the contract from the artist or buy the whole stock of Cd's or in this case the rights.

Now here is where it get's funny.....you don't have to sell these rights....you can lease them out but usually people sell the rights because it has more value.

no one is going to buy out a company based on units shipped with no sales...

No-one has to because Radio stations play the songs with the most sales.Simple as 1+1.
Once you are hitting the chart like that(even if your song stinks)you are a threat to the big boys and they will buy you out.
Take a look at Toby Keith.....he ran from the big boys and started his own Label, Publishing Company etc.....The Big boys thought he would not make it because he did not have anything.Little did they know that Toby did what I just explained.

Ron

P.S
My explanation seems simple but in the long run it takes a lot of effort and money to pull off a stunt like this.

Donny Hinson · Post by **Donny Hinson** » 12 May 2009 4:57 pm

Artists do indeed have a right to be angry at record companies, but consumers also have a right to be angry at artists who provide a new CD with 14 tracks, one good song and 13 tracks of pure trash, or in some cases 14 tracks of trash !

Artists and writers (most of 'em, anyway) simply don't have the talent to turn out hit after hit. You get one or two home runs, and then you whiff a few, pop up to center, and ground out to the 3rd baseman. Just like baseball, it's a hit-or miss business. What's sad is that the artists and writers are so needy, they'll sign and do just about anything for a little fame and fortune, and then blame the "suits" when things don't work out.

Just remember, no one can take advantage of you without your consent.

John Macy · Post by **John Macy** » 13 May 2009 4:43 am

So let me get this straight...

I produce a record on an artist, it doesn't even have to be good, or even pressed...

I get a trade name and create a record and publishing company.

I go empty my retirement account (like I have one) and buy 100,000 units from myself that actually only exist on paper.

I run these sales figures up the flag pole and suddenly radio will start playing my song, even if it stinks, and the labels will trip over each other to either buy out my artist's contract or my label because I am now a threat to them...

That it?

chas smith · Post by **chas smith** » 13 May 2009 3:23 pm

and suddenly radio will start playing my song

You better empty your other retirement account to cover the "slotting fees".

Ron ! · Post by **Ron !** » 13 May 2009 3:41 pm

John......welcome to the record industry.

Chas is right though because you have to pay the radio stations as well.They are advertising here in Pittsburgh that they can plug your song for 1288 dollars.
They do not mention how many times they will play it though.

Ron

Chris LeDrew · Post by **Chris LeDrew** » 13 May 2009 5:12 pm

Ron ! wrote:John......welcome to the record industry.

I assume you do not know John's background and experience in the music industry. John, I hope you don't mind if I do this:

http://www.johnmacy.com/

Just read the bio. I think John knows the record industry just a little bit by now.

John Macy · Post by **John Macy** » 13 May 2009 7:57 pm

Thanks, Chris, and thanks for reminding me I forget how crappy that website is...(by the way, I am sorry I missed you in Dallas--I was looking forward to meeting you, but a big session came up and I could not go, which was fortunate because my wife had a heart attack that weekend, and I was sure glad I was home...)

Ron, I have been around the block in the music industry, including 4 years as head of a division of a large indy label and overseeing administration of a publishing company of 25 writers....soooo, that theory you propose seems so unworkable. I forwarded this thread to one of my close friends who has been managing major label acts since '81 and his reply was "thanks--I needed a laugh this morning...can I join him on whatever planet he lives on...".

Nothing personal, I just want to understand information that is put up here as fact--can you give me some examples of people doing this, especially in the business climate of the last few years, and how buying 100K copies yourself is going to "threaten the big boys"? Still curious...