Want to know why the big four record companies are suing kids left and right?? It’s not because they are worried about a their profits being stolen, it’s because they don’t have any business plan in place once they become obsolete.? Jeff Price was the co-founder of spinARTS records and now the record company is completely digital.
Over the ensuing years, spinART had its peaks and valleys. By 2004, there were a lot more valleys than peaks. The label still did what it did very well, identifying bands that it believed people would like and making them famous. But there was one big change, in the “old days” the more famous an artist got, the more money the bands and spinART made by selling the music. Almost suddenly, this correlation seemed to be breaking. Necessity being the mother of invention, it got me thinking, what could I do to remain in the music industry under a model that would not rely on selling music (the exploitation model). And thus the idea for a new model was born, turn distribution into a service for a simple up front, one time flat fee.
For the past century, artists could record, manufacture, market, and, to some degree, promote their own music, but no matter if they were The Beatles, Elvis or Led Zepplin, they could not distribute it and get in placed on the shelves of the stores across the country; the required costs and infrastructure of the physical world were just too massive — a 500,00 square foot warehouse staffed with 30 people, trucks and inventory systems, insurance, a field staff of 30 people walking to music stores leveraging, begging, pleading and paying to get the CD, album, 8-track, wax spool, etc., on the precious shelves of the retail stores — and checking up afterwards. Distribution was out of the hands of any one person, no matter how dedicated or wealthy. Without the music available to buy, there was no way for it to sell.
Record labels made artists famous and made money off that fame by selling the music — without the music available to buy, there was no way for it to sell. The record labels exclusively had the relationships with the distributors (and in the case of the “four major record labels” the same company owns both). Therefore, with only one means to the desired end, the goal for many artists was to get “signed” to a label.
Record labels were in a very unique position of power due to their exclusive access to distribution, they were not only the singular gatekeepers to a career for an artist by “signing” them to an exclusive contract, but they were also the subjective “deciders” as to what music was pushed out and promoted to the media outlets. With a “signing,” the labels acquired exclusive rights to and from the artist. In return, the label advanced money while providing the relationships, expertise and infrastructure to record, manufacture, market, promote, distribute and sell the music. Of all the artists and music creators in the world, far less than 1% got chosen by the labels due to the risks and economics of the “brick and mortar” world. Of all the music created around the globe, even less has had the opportunity to be discovered and heard by the masses.
And then the world changed thanks to the Internet and digital media…….
Fairly fascinating insights from a man who has experienced both aspects of the musical evolution from the expoitive distribution model to the digital age.