Change in the Music Industry
The music industry is a high paced one that is constantly evolving and spitting out new artists and bands, as well as a range of new music for each genre. With the technological evolution, information and entertainment were digitalized, including music and people quickly turned to the digital side leaving the music industry to falter and fend for itself. Smaller or independent labels are diminishing or being sold to larger and more powerful ones, and the three major labels today are Universal, Sony and Warner Music. The music industry still manages to make profit, regardless if there are any sales, which may seem odd especially if the majority of people download music for free. Most people don’t even look at what record company or label they’re contributing or denying profits to when downloading or buying music, and for this paper I looked at my personal music collection and took a sample of ten albums I own as both physical CDs and as pirated album downloads. (Refer to appendix)
After identifying the record labels and parent companies, six out of ten albums belong to Universal, and two of these six are co-owned by Sony and Warner Music. There are only two albums that are from an independent label. This shows that it’s difficult staying away from major labels because they own so many smaller labels under their umbrella. According to Rolling Stone magazine the retail price for a CD is $15.99 and breaks down as follows (Cohen, 2004): $0.17: Musicians’ unions, $0.80: Packaging/manufacturing, $0.82: Publishing royalties, $0.80: Retail profit, $0.90: Distribution, $1.60: Artists’ royalties, $1.70: Label profit, $2.40: Marketing/promotion, $2.91: Label overhead, and $3.89: Retail overhead.
Taking all four albums under Universal solely, their cost would amount to $63.96 and all the profit is obtained by Universal. The two albums that are co-owned by Universal can’t be calculated as the percentage distribution of the profit between the two companies isn’t stated, nor can they be assumed to be split in half exactly. These albums are also downloaded, so there is a net balance as one sales of the CD is obtained while another isn’t. The loss or gain of profits by the independent company can’t be calculated as well as the retail price of a CD isn’t stated, nor is the distribution.
Artists hardly make any money from sales and make 9-12% of the sold records (Busch, 2012), so they rely on promotions, music videos, and concert ticket sales. In the case of a record discount or bargain sale, the artist won’t receive royalty payments and therefore the percentage rate decreases (Busch, 2012). With the demand of concerts and memorabilia, artists don’t have to worry about making profit because it’s easy money for them.
With the masses shifting towards digitalization and the Internet, it was only a matter of time before the major companies caught up and joined the digitalized side. The leading distributor in the United States used to be Wal-Mart, however today it is iTunes, so we can assume that many artists lost profit when the change occurred (Knopper, 2011; Busch, 2012). Several online platforms provide people with free music, such as Youtube and Spotify (Knopper, 2011), and it wasn’t long before record labels found a way to make profit. It seems that regardless of all the sales, the record label still manages to come out on top, and a good example is that Apple’s share is larger than the songwriter and artist’s share combined when they make a deal with iTunes. With this general idea in mind, artists tend to constantly promote themselves to increase their audience which will increase their sales.
Another factor that contributes to sales is the theme of the album. The sample albums’ themes range between love, optimism, recklessness, opposition, independence, defiance and a sense of self. Some albums are empowering and are aimed for independent audiences who prefer brilliant lyrics that discuss an issue rather than a repetitive pop song. These themes are personally appealing and the majority of my music collection steers towards that direction, with the exception of some poorly written yet catchy pop anthems. In fact, the independent label Hopeless Records supports many other artists that aren’t signed to them but have similar music themes and aid or support them by selling their merchandise and concert tickets.
The benefit of having major labels is that one is aware of where their money goes towards and how much they contribute to the music industry, but a major disadvantage is not being constantly guaranteed great music quality. Anyone can see that the quality of pop music has deteriorated as compared to pop music from the 1980s or 1990s, and it pushed some people away from the genre and led them to explore different genres. Personally this is what my music library shows as it contains pop music from different decades with hardly any recent pop songs, but the majority of the music library is music from different genres mostly concentrated on alternative, rock, punk and pop punk. When comparing the music quality between independent labels and major companies, there isn’t much of a difference in terms of audio, but if one were to compare the quality of lyrics or semantics of the song, it varies. Most artists in my library are signed under a major label, yet their lyrics and its semantics are as worthy as those artists under an independent label. For those who don’t find much of a difference between music produced by the two different labels, it doesn’t make a difference whether they purchase a physical CD for $15.99 or if they save that money and download the album for free, because they know that the industry has other ways of making money.
Appendix
| Artist | Album Name | Label | Parent Company |
| You Me At Six | Cavalier Youth | BMG and Virgin Records | Sony and Universal |
| Olly Murs | Never Been Better | Epic | Sony |
| Maroon 5 | V | Interscope | Universal |
| Mariana’s Trench | Ever After | Interscope | Universal |
| Blink-182 | Enema of The State | MCA | Universal |
| Simple Plan | Get Your Heart On! | Lava and Atlantic | Universal and Warner Music |
| All Time Low | Nothing Personal | Hopeless Records | (independent) |
| Lawson | Chapman Square | Polydor and Global Talent | Universal |
| We Are The In Crowd | Weird Kids | Hopeless Records | (independent) |
| Sleeping With Sirens | Feel | Rise Records | Warner Music |
diyanahawari 