Is money the most important thing?

My original question was to try and find out how record companies determine the best type of music to use to make the most money.  Throughout my research I found that they sign all sorts of artists and genres in order to do this so I created another question to keep my research going which is how do record companies make their money so i could learn more about the process of what they do.  I found that they really do take a gamble when signing those artists, but they also rip off the artists and take away all of their artistic freedom.

Through the article "How Record Labels Really Make Their Money" I found that record labels really take a risk on who they sign when signing an actual artist and that they really rip off the artists because of this.  They make the majority of the money when an album or even a song sells because of how much of a risk they are taking by signing a new and upcoming artist.

According to the article “How Record Labels Invest” by the IFPI (International Federation of Phonographic Industry), spend somewhere between $500,000-$2,000,000 in order to sign an artist and give them all the benefits that they get with a signing (these statistics are based on major record labels not independent record labels).  This money is spent on many things like advances, recording costs, video production, tour support, and marketing/promotion. This is an add on to the last article where it goes in depth on how much money is actually being spent on each artist and it’s an alarming amount and I never thought it would be this much.  in my opinion it kind of explains why they rip the artists off so much with all of their rules.

In the article called “Record Contracts Explained by Richard Salmon he explains how the record contracts work and how lenient they are with all of their legal binds when offering a contract to a certain artists.  It explains that because of how much money and how much of a risk the record companies are putting into these artists that they create many rules that the artists have to follow like they can’t go to any other label to record a song or even be featured on another artist’s album without their permission which makes sense, but still seems a little over the top with certain things.

According to the article “Independent or contract: Do musicians still need record labels like Young Money and Sony?” by Alicia Adejobe many artists are starting to become independent with the help of all teenagers favorite thing, social media.  In this article it talks about how many artists are becoming independent so they don’t have to r=follow all of the rules that the record companies impose on them.  They are then using social media to promote their music and tours because they don’t have the record companies to help them.  Because of this though the record companies are becoming more lenient and signing different contracts where they will be more in the promoting and tour aspect of it and back up the artists as opposed to them actually controlling them.

Overall I found that record companies really make their money by ripping off the artists and controlling their artistic careers.  But through the new age of technology with social media and streaming services more famous artists are becoming solo artists or independent artists in order to make the most of their careers.  For the first time in the modern music era artists seem to have the upper hand especially the new artists because they have many services to start their careers and record companies will soon have to change if they want to be a major factor in artists careers and be the big super powers that they used to be in the music business in order to make the most money possible.

Social Media's Doing Something Productive?

With the traditional way of signing artists, failing labels are going out of their comfort zone to make special deals with certain artists to promote their music.  According to the article “Independent or contract: Do musicians still need record labels like Young Money and Sony?” by Alicia Adejobe many artists are starting to become independent with the help of all teenagers favorite thing, social media.

http://www.economicmodeling.com/

Social media and the internet is helping a lot for new and upcoming artists who can release songs to YouTube and promote their music online or on Facebook because they no longer need the traditional record label contract to make it big anymore.  While it doesn’t necessarily hurt to have a label back you, it does hurt when they drop you because they simply aren’t making their preferred amount of money.  I thought this was very interesting when I was reading this article because it is saying that basically with the power of technology anyone can make it big if they are good enough.  They don’t need the label for all of their things that definitely help like promotion and bonuses.  They might need them to back them up after their career has started, but that is a much better story for the artists because they can make a more fair deal.

Certain artists though still don’t have a major record label backing them because they want more money.  While it’s very true that the record labels take a lot of their money I would think that it might help to have some support behind their back, but they feel that they don’t need it.  Macklemore and Ryan Lewis who created their own record label and officially had an indie song reach number one on the billboards for the first time since 1994 in 2013.  They didn’t need the support of a record label to take all of their money in support for some promotion.  They did it all by themselves.

Overall I found that it was very interesting to hear that anyone can make it big just because of the internet.  This makes me wonder if record labels will stop exploiting their artists just because they can and actually give them fair deals.  I think that within a few years record companies will have to change because of the way that things are with social media and other things that an artist can do themselves without the need of a record label.

Next I will summarize all that I have learned.

More money more power

When record labels sign an artist they may spend a lot of money on that artist to get them to sign with them, but once the contract is signed the record companies have total control of everything that the artist can and can’t do musically.  Once that contract is signed the artist loses their freedom and they no longer have control of their music career.

http://www.soundonsound.com/

In the article called “Record Contracts Explained” by Richard Salmon he explains how the record contracts work and how lenient they are with all of their legal binds when offering a contract to a certain artists.  There are many legal binds that the artists have like that they aren’t aloud to record at any other label for any reason without permission from their label.  This can create a lot of problems for artists because they lose a lot of their freedom in their music because they only record and the label can do whatever else they want to it when they are editing it.

Another thing that the record companies can do is that they can tell you what to do with your music.  They tell you what kind of music to make and what type of songs they want, which really limits the artist.  They also tell them who to talk to in the media and what guest appearances on certain shows or radio station they should and will do.  This really limits the artist and what they can do.  They are very separated from anyone their record label wants them to be separated to.  I think this isn’t really fair because the record companies control their life while they are signed to them. This is part of the reason why the record companies actually spend so much money on the artist.  They do that because they know that there is nothing the artist can do without the company helping so they legally bind them with the contract.  

Many of the artists also don’t have control of the music they are making which is also really unfair.  While the artists is still making music whether they are with that record company or not the original label that made the song keeps full rights of the song and it is technically not even the artist’s.  This is really unfair in my opinion because the person who has the talent doesn't even get any rights to the song that they made regardless of what they do.  This again shows why the labels are willing to spend so much money on an artist in order to try and make some money from them.
Next I plan to research why the record companies give the artists no rights.

Truck load of Ca$h

Record companies spend a lot of money on artists as we already know, but why do they spend so much money just to get an up and coming artist and on what things do they spend it on?  Also how much risk do they involve when signing a new artist?

The record companies, according to the article “How Record Labels Invest” by the IFPI (International Federation of Phonographic Industry), spend somewhere between $500,000-$2,000,000 in order to sign an artist and give them all the benefits that they get with a signing (these statistics are based on major record labels not independent record labels).  This money is spent on many things like advances, recording costs, video production, tour support, and marketing/promotion.  

The first part that is a bit of a risk for the record company is the advance because they are giving the artist money in order to encourage them to write songs.  In my opinion this is a big risk because they have no idea what kinds of songs will come with this.  It could be hit after hit after hit or all of them could be bust or anything inbetween.  This can cause a huge problem for record companies because they spend around $50,000cto $350,000 on advances for artists.  This number along with all of the other aspects can rise above these numbers given based on the demand for that artist and other record labels bidding against them for a new artist.

The next part that the record labels spend a lot of money on is the recording costs.  These costs can really skyrocket and give the record labels lose a bunch of money if the artist doesn’t do well.  The record labels spend anywhere from $150,000-$500,000 on one album for an artist.  I don’t believe though that this is a huge expense to an artist because this happens with every artist I’d think with a big record label that they could get the recordings for cheaper than they actually say they are getting them for. I don’t think that these cost would also discourage a label from signing someone either because again ever artist has to be in the recording studio while making an album no matter what so it doesn’t put a big hit on them in my opinion.

The third expense to record companies is the video, which they don’t really have to make for an artist so again in my opinion this is just a statistic that doesn’t really matter.  Only popular songs are made into music videos so if they aren’t popular that cost doesn’t exists, but they say they spend about $50,000 to $300,000 on videos per artist for each album.

The next cost to the record companies which I do believe can actually hurt a record company, but more so goes along with negotiating a contract for the tour costs.  Now a record label doesn’t have to have a tour for a failing artist so they can write that off and not pay for it for the, but I’m sure a lot of artists want them so they might negotiate before signing a contract for a tour which would in turn cost anywhere from $50,000 to $150,000 for each tour which could be a wasted cost if the artist doesn’t do well.

http://www.stateofdigital.com/

The last and final expense for the record companies is the marketing and promotion costs which can be pretty expensive and is the most important to the record company because of how much money is put into it.  Anywhere from $200,000 to $700,000 are spent on each artist to try and make their career a reality and not just a one hit wonder.  Since this is more than a few of the other things combined I feel that it really does make a difference between a failing artist and a supported and well-known artist.  One problem for the record companies about marketing is that digital platform marketing is the best way to market for a big audience, but those costs are rising and the record companies have to keep spending more and more money to make an artist.

Overall record companies spend anywhere from $500,000 to $2,000,000 on an artist which now seems like it could actually hurt a record company if they have a lot of failing artists in their future.  At first I didn’t really think that it could really hurt a record company, but 2 million dollars is not cheap for an artist and can actually hurt them.  I now understand why the record companies take so much control over the money that comes in from selling albums and songs.

Next I plan to research about the type of artists that the record companies usually sign.

Make it or Break it

http://pulseradio.net

 
















 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.

Picking the Right Music

source: https://www.musicclout.com

• Briefly explain why you are interested in studying your topic:  
• I picked this topic because I like listening to music that a lot of people like and I want to know how the record labels know how to pick the right artists in order to make the most money.

• The overall question I plan on answering by the end of the project:
• How do record labels determine which type of music and what type of artists to sign in order to make the most profit?

• Sub questions I will need to answer in order to answer the overall question:
• What types of music are the most popular with different age groups?
• Who are the most popular artists and what type of music do they perform?
• How much money do these record labels make on average from these top artists?
• Are there a lot of upcoming artists being signed by different age groups?

• My plan of research (what specific Library Databases, specific websites, names of authors, people, etc. will I pursue to find the answers to the questions above):
• sonymusic.com
• billboard.com
• ProQuest
• musicmachinery.com

TEST BLOG POST

TEST BLOG POST