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Greed is Achilles’ heel of music industry

by Chris Pocock

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Artwork courtesy of Staff Artist Rob Piper

Artwork courtesy of Staff Artist Rob Piper

Look no further than the recording industry to see Charles Darwin’s theory of “survival of the fittest” in full swing. Record companies duke it out for control of charts and radio stations, while artists push to remain relevant in a time of abysmal record sales and dwindling ticket distribution.

Profit is the name of the game; recording industries churn through artists and bands, milling the music industry for financial gain.
But why should you care? According to a study performed by Nielsen SoundScan, record sales have declined to pre-1991 levels. The music industry has been failing for quite a while and the effect is all but invisible — labels such as EMI and Warner Media Group have been cutting thousands of jobs and losing value. Since then, they have resorted to taking creative control away from artists and instituting increasingly ravenous and profit-funneling contracts. The death toll for musical diversity is ringing.

Turn on the radio and you’ll know exactly what I’m talking about: Auto-Tune, a millionaire rapper complaining about the harsh life on the streets, a prepubescent 16-year-old boy singing about his unconquerable love for a girl — they’re all acts perpetuated by a sinking industry.

I can’t blame the recording industry completely. Illegal music pirating has ravaged the business, causing labels to respond desperately from sinking too far into the red. But institutionalizing increasingly voracious contracts with musicians is a pathetic method to recover dwindling profits. Major music labels are already notorious for dishing out diabolical contracts to their artists; most bands only see 12 percent of profits generated from CD sales — even less after they pay marketing fees, CD printing costs and other expenses to the label. Save for the few success stories, most artists are lucky to receive a few thousand dollars worth of profit.

And it only gets worse. New types of contracts, such as the “360 deal,” essentially treat bands as brands, exchanging more money upfront for a larger slice of the returns from merchandise, performances and other money-generating sources.

Of course, much of the money given to the band goes immediately toward paying back record companies for the fees associated with creating and distributing the CD in the first place. But while CDs are only generally successful during a brief period of time, revenue from performances continues to collect through the lifespan of the band. Even the lifespan of the band is controlled by record companies, which often commit artists to as many as eight record contracts before the artist is able to sign to another label. I wonder how much grinning and rubbing of hands took place after that strategy was devised.

The manipulation of artists by music industry fat cats is only the beginning. Payola, the record companies’ practice of paying off radio stations to play their singles, is also heavily practiced in the industry. To anyone who’s ever heard the same damn song played repeatedly throughout the course of an hour, now you know whom to blame.

Comically, as the government seeks to ban the practice, music labels continuously find new and innovative ways to bribe DJs to play their respective songs. When outright bribes were banned, labels siphoned funds to DJs through a third party. When that was banned, music labels began awarding DJs vacations and gifts — purely out of the goodness of their hearts, I’m sure.

This forged sense of hype and persistent abuse of musicians carried out by record labels has inspired artists to evolve and challenge the age-old system, with varying degrees of success. Radiohead had perhaps one of the most interesting approaches, offering consumers the ability to download its album “In Rainbows” for the price they thought it was worth — be it zero dollars or as much as $212 (the equivalent of £99 at the time of release).

The ballsy move paid off. Though reportedly 62 percent of downloaders chose to pay nothing, the other 38 percent contributed an average of $6 for their copies — accumulating the band far more money than if it had gone through a major label. As an added bonus, Radiohead fans knew the money was going straight to the band, and not through a record label whoring its band out for money.

That 38 percent gives hope to an industry currently burning to the ground. Fans have the obligation to support artists, or risk losing them to a monstrous, money-driven machine, draining bands of their profits. Otherwise, this abuse will continue like a broken record.

… will continue like a broken record.
… will continue like a …

—Chris Pocock is a journalism junior.

—The views expressed in this column do not necessarily reflect the opinion of The Daily Aztec.

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2 Comments

2 Responses to “Greed is Achilles’ heel of music industry”

  1. godvin on January 31st, 2011 2:24 pm

    you hit it right on the head, and with all of that, they (the industry) are still shuffling around over paid executives who do absolutely nothing. the music business and the new digital music industry is fine. the problem are the so called gatekeepers that don’t want change unless they control it. but they are learning, the fans are the ultimate gatekeepers.

    [Reply]

  2. Luvenia Wiltrout on December 4th, 2011 10:33 pm

    Replaced in the rotation with Charlie Furbush, who I really don’t imagine will do any better.

    [Reply]

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