Intro To Music Industry

Unit G322

Part A: Textual Analysis and Representation

Part B: Audiences & Institutions

The Music Industry

Institution Audience

Production Distribution

MarketingExchange/Exhibition

Consumption Reception

We’ll start with the audience (you).

• How do you consume music?

• What is your attitude towards the music industry?

• Watch the following clip – recap your textual analysis and representation skills by analysing what clichés of the music ‘industry’ are presented?

The Industry

• In simplest possible terms, what is the job of the music industry?

A record company gets the music from the artist to the

audience.

Record Labels – an overview

• Major labels- these will often be linked to a distributor.

• Major distributed Independents – a small, often specialist label that uses its links to a major label for distribution.

• True Independent – an independent label that doesn’t use a major distributor but provides this service for itself.

The first step

• The record company must find a record.– A record is defined as an audiovisual entity,

not as the format on which it appears. Therefore a ‘record’ can be:

• A CD• A music video• An internet download

FACT: Records used to be made individually with the artist performing again and again for each ‘copy’.

Finding an artist

• Imagine you are a record company executive. Around the room are various profiles of artists on offer. Which would you chose and why? Think about the band’s marketability and, from a music industry perspective, their profitability!

The Deal

• Now you have chosen a band to work with, you must make a deal with them.

• We will discuss three major parts of record deals. We’ll keep it simplistic for now. You will then formulate a deal based on them.

• The areas are– Royalties– Advances– Reserve against returns

Royalties

• Royalties are the share of record sales that the artist gets paid.

• They are a percentage of the WHOLESALE price of the record (the price at which the record is sold to the record shops.)

• Each percent is known, in the industry, as a ‘point’.

Royalties

• An artist with a ten point deal will get ten percent of the wholesale price of each record sold to shops.

• So, if 10,000 records are sold at a wholesale price of £10 each, the artist makes…

£10 x 10% = £1

£1 x 10,000 sales = £10,000

The advance

• Record companies will stump the cash for recording the album, alongside a lump sum paid to the artist for signing with them.

• This sum is always contracted to be recouped (re-taken) against the royalties that the artist earns.

• So if an artist has a £20,000 advanced on a ten point deal they need to sell 20,000 records before they start making any money.

• Recording costs are also recouped against royalties. There are many bands that do not make much money!

The Reserve

• Record shops can return unsold records to the label for a refund – often 100% (this is more complicated in practice though).

• When a label takes on a new band, or pays for a new album, there is always a risk that it won’t sell and many of the records will be returned.

• The label must therefore ensure that they don’t lose out big time.

The Reserve

• Until the label knows that a record is selling, they will keep a percentage of the royalties payable to a band (in addition to the recouping the advance.)

• The percentage of royalties kept as a reserve is based on the likelihood of the record selling.

• When the record has been proven to sell, the reserve is returned to the band. This is known as ‘liquidating the reserve’.

The Deal

• Your deal must explicitly set out the numbers and percentages for these three areas.

• Remember, if your artists don’t write their own material, you will have a separate contract with the songwriters that you use. Your label may have some writers on the payroll though. But this will definitely affect the way you pay your new signing.