IDM Mailing Archive

quoted 4 lines Date: Fri, 17 Jan 2003 19:03:24 -0000

> Date: Fri, 17 Jan 2003 19:03:24 -0000 > To: <idm@hyperreal.org> > From: "skism" <cazeone@ramdis.com> > Subject: RE: [idm] 2003: The Year the Music Industry Dies - Wired

Magazine, 2/2003

quoted 6 lines Message-ID: <KMEBJKLODEGGIFHIGMMEOELHEAAA.cazeone@ramdis.com>

> Message-ID: <KMEBJKLODEGGIFHIGMMEOELHEAAA.cazeone@ramdis.com> > > Didn't I read somewhere that the Industries loss in sales was actually due > to > a drop in production, which they tried to cover up in order to have some > ammunition for the war against p2p?

Could a drop in production be due to a drop in sales do you think? A label makes a profit on each one so they'll press as many as they think they can sell.

quoted 7 lines But in the end I can't see the Industry disappearing anytime soon... Their

> But in the end I can't see the Industry disappearing anytime soon... Their > revenues are still huge so the worst I can see happening is a little belt > tightening or maybe the odd merger and acquisition here and there. > > What's great about capitalism is that it gives an opportunity for small > more efficient companies to adapt to new circumstances where the larger > companies are too bloated and inefficient to change in time to deal with

Second paragraph contradicts the first. The corporates can afford to weather the storm and develop new technologies (e.g. digital subscription channels). As you say there will likely be some acquisitions and mergers. By definition that means that many small companies will disappear. This is exactly what is so bad and undemocratic about capitalism and why no sane government will practise it in a pure form ever. But anyway... The labels that are really being hurt are small labels like Rephlex and Planet Mu. You have to take into consideration record label economics. They are like the film industry in some ways. A big corporate label spends a lot on developing and promoting a new act but something like over 90% of these acts make a loss. This adds up to a huge total loss that has to get recouped by the profits from the minority of acts that do break through. This is why the successful artists seem to get a tiny return (though I think a typical well-negotiated deal with 12% of retail can work out to about 40% profit which is not so bad). This has led to the urban myth that the labels are always ripping off the artist. This view often gets promoted by the artists themselves who believe that their success is down to their divine talent and that they would have made it with or without the label (of course the unsuccessful artists often blame the label). They may be right but the only artists I can think of that have been big and then gone it alone are TAFKAP and George Michael. It's a bit like a lead actor thinking they can direct a film. Artists also get massive interest-free loans in the form of advances which never have to be paid back if they don't make it. Now I'm not really defending the big labels cos there is a lot of sharp practise that goes on and they leverage their positions in every way to get a better deal - it's to be expected in the situation. The small labels on the other hand can't afford to take a huge loss and generally press in just-over-break-even quantities to make a small profit and try to slowly grow. But once you start to sell much below 1000 of a release, a label becomes unsustainable. This used to be a typical target for a small label a couple of years back but has now dropped radically. It's the reason there are now so many 7"s around - the business has literally got smaller. This has also been compounded with the distributors. Most of the ones dealing with smaller labels have gone tits up and the bigger ones that are left don't have much incentive to spend their time on releases that will only sell 2-300. It is now almost impossible for a new label to get distribution. Something has definitely affected sales very badly - and I think it's downloading. I reckon it's not so much a case of downloading a particular record that you might otherwise buy - but more about saturation. When you haven't even listened to half the stuff you snagged then you're not so likely to be running down to the record shop to fill your shelves. --------------------------------------------------------------------- To unsubscribe, e-mail: idm-unsubscribe@hyperreal.org For additional commands, e-mail: idm-help@hyperreal.org