The Changing Nature of the Music Industry Scene

Since the early days of the music business, big corporations have been dominant. For instance, in the 1940s, only three major corporations controlled the music scene (Pallack, 2006). In 2013, three major labels also dominate the music scene: Universal, Sony and Warner Music (Busch, 2012). These major music labels contribute to 75% of the music produced and recorded every year (McDonald, n.d.). Artists working with such major corporations do not have much freedom when it comes to the choice of lyrics, album cover and producers. However, the rise of indie labels and the increasing popularity of online distribution have permitted independent artists with limited resources to reach a great number of fans. Consumers are now able to listen to their favorite artists online for free.

I looked at ten different CDs I found in my house. I found the first four CDs in my parent’s music collection. I purchased the other six a decade ago. The table in the appendix lists these CDs, the artists, the record label and the parent company they belong to.

According to Cohen (2004), the average cost of a CD is 15.99$. I thus spent 95.94$ on the six CDs I bought. The money is then distributed to various recipients. Based on the numbers provided by Cohen (2004), the money from the six CDs I bought was distributed in the following way:

$1.02 Musicians’ unions
$ 4.8 Packaging/manufacturing
$ 4.92 Publishing royalties
$ 4.8 Retail profit
$ 5.4 Distribution
$ 9.6 Artists’ royalties
$ 10.2 Label profit
$ 14.4 Marketing/promotion
$ 17.46 Label overhead
$ 23.34 Retail overhead

As detailed above, artists only earn around 10% of the price of a CD. The rest is distributed among several recipients, including the marketing and promotion of the album, the distribution, packaging, etc. Major labels thus compensate the business team much more than the artist who actually created the song (Pallack, 2006). In addition, artists who sign with one of the three dominant labels often relinquish their freedom. They usually do not have a say in choosing their producers, album cover, etc. Because of these disadvantages, artists are now increasingly turning to indie labels in order to record and distribute their songs.

There are both advantages and disadvantages associated with indie labels. Unlike major labels, independent labels do not have access to strong distribution networks that would help get their music to a large public. They also lack the financial resources of major labels. In addition, unlike established labels, they do not have access to the main media channels and traditional promotion outlets (McDonald, n.d.; Pallack, 2006 ).
On the other hand, indie labels have many advantages. Bureaucracy and hierarchy are absent in indie labels. The people who record and produce the music work closely with the singer, leading to a more genuine final product. In addition, indie labels often take risks by signing unconventional artists, thus broadening the music industry scene. Such labels also have managed to construct and maintain loyal customer relationships. By signing only a few artists in the same music genre, such labels can appeal to their customers by simply preserving the authenticity and the quality of the music they release (Pallack, 2006).
These advantages seem to attract a greater number of artists every year. According to Pallack (2006), sales of CDs in the music industry went down 8% in 2005 compared to 2004, yet the share of independent labels that year was the largest ever.

Indie labels and the major labels produce music that differs in content and style. Major labels are more traditional in their choices. The six CDs that I own are all part of the major labels Universal and Sony. These major labels often sign artists who tackle universal themes that a large number of people can relate to easily. Examples of such universal themes include the pain of dealing with a break up, the love towards one’s other half, sexy women and rebellion. These are recurrent themes within the major labels. On the other hand, indie labels have been more enthusiastic at signing emerging artists and accepting new creative ideas, positioning themselves as pioneers of the music industry (Adaso, n.d.).

Several themes and values dominate my music collection. Since the six albums I own are all part of the major labels, recurrent and traditional themes dominate. The songs in these six CDs are all about themes such as love, sex, broken relationships, sadness, rebellion and violence. For instance, the songs of rapper Eminem promote violence against women, resentment towards society and love for his daughter. Most of the songs in Shakira, Britney Spears, Jennifer Lopez and Justin Timberlake’s albums are more about relationships, sex and break ups. Like most people, I can identify with these universal themes. Considering Eminem’s difficult childhood, I can understand his feelings towards his parents. Britney Spears, in her song “I am not a girl not yet a woman” talks about the difficulties that a woman in her early twenties faces as she struggles to find herself, immediately appealing to all women in this age bracket. After reading about major labels, I am now more aware of their strategies in choosing artists and themes. It is obvious that major labels stick to such themes because they appeal to the masses.

Apart from the disadvantages of working with major labels, the increasing success of independent labels is aided by technological changes that occurred during the early 2000s. These changes have rendered the process of recording, producing, distributing and promoting one’s songs much easier, faster and cheaper than it previously was (Busch, 2012). As a result, iTunes has now replaced Wal-Mart as the dominant music retailer in the US. It is now the leading music retailer in the world. Using such digital services, customers can now purchase one song for a price as low as 0.8$. In addition, because of the rise of streaming services such as YouTube or Pandora, customers have become used to listening to music online for free (Husney, 2005). Also because of these digital services, artists can now achieve fame and success without needing to be backed by a record label.

Because of these reasons, the future of the music industry seems to be dominated by such digital services. As consumers are increasingly using services such as iTunes and Spotify to download music freely, independent artists and indie labels will have a better opportunity to compete with the main record labels. In addition, traditional marketing and promotion tools will become insignificant, and consumers all around the world will easily access a huge library of varied music.

Conclusion

Universal, Sony and Warner Music have long dominated the music industry scene. However, the rise of indie labels that allow artists complete freedom in recording their songs, combined with the exploding success of digital music retailers have led to a steady decrease in the number of albums produced by major labels. The future of the music industry scene will be dominated by such digital services that permit consumers to listen to a wide variety of music inexpensively. The major labels still control a big part of the music industry, but for how long?

References

Adaso, H. (n.d.). What’s the real cost of that major deal? Retrieved from
http://rap.about.com/od/articles/a/TheCostOfARecordDeal.htm
Busch, R. (2012). Major labels as dinosaurs? Retrieved from
http://www.forbes.com/sites/richardbusch/2012/03/27/major-record-labels-as-dinosaurs/
Husney, O. (2005). Major labels vs. independent labels. Retrieved from http://www.artistshousemusic.org/videos/major+labels+vs+independent+labels
Cohen, W. (2004). Wal-Mart wants $10 CDs. Rolling Stones. Retrieved from http://bigpicture.typepad.com/comments/2004/10/walmart-wants-1.html
McDonald, H. (n.d.). Big four record labels. Retrieved from http://musicians.about.com/od/musicindustrybasics/g/BigFour.htm
McDonald, H. (n.d.). Major record label deals: Pros and cons. Retrieved from http://musicians.about.com/od/beingamusician/a/majorlabelpandc.htm
Pallack, D. (2006). How are independent artists and new technologies dismantling the impact of major record labels? Retrieved from http://hs.riverdale.k12.or.us/~hfinnert/exhib_06/davidp/paper6.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s