Make it or Break it

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 Through the article "How Record Labels Really Make Their Money" found on the website (a website all about music business and money), I found that the record labels are taking a huge risk when signing a new artist and making an album for them.

When record labels try to sign an artist they know what type of music they want to produce, but in all actuality it is a huge risk to sign an artist.  “According to the Recording Industry Association of America (RIAA), approximately 90% of the records that are released by major recording labels fail to make a profit. This means that record companies really are taking a risk when they look to back an artist and part of the reason why companies like Soundcloud have done so well” (Philips).  I feel that this statement is true but I’m not so sure that it really has that big of a risk when actually signing artists.  In this article I found that on average the record label makes about 45% of the profits for each artists and they don’t just work with the music and producing.  They also work with the merchandise, tours, and all other aspects of their long or short career.  They get most of the money when it comes to anything for an artist.  

I do believe though that the record labels don’t make as much money in certain things as they used to like selling records and CD's, but they make more money with singles and streaming services.  Streaming services and singles don’t necessarily make up all the money that they used to, but they still make a profit either way.  IT is a risk however when signing an artist I believe because you don’t know if they are going to be a one hit wonder, a very popular artist or a bust.  On one artist they may lose money if they fail to kick it off and they pay for all of the production costs.  They can lose money that way, but the big record labels have so many people signed that the failed artist doesn’t really seem to make a huge impact. 

Even though it definitely doesn’t help to sign a failed artist, I do believe that record labels make way too much money compared to the artists because in most cases they are making 4 times as much on every single thing that sells related to the artists.  The record labels may be putting a lot of money and time into producing and packaging everything for the artist’s career, they have so much money that it doesn’t really make that big of an impact.  Even though this article and author believe that the record labels are putting a lot of risk and money into an artist in order to make a profit, I don’t believe that they really get hurt when that artist fails.

I plan to research more about the money that goes into producing an artist for the album and how much money they make from each sale of anything related to the artist.