Large Record Industry Corporations Finding New Ways to Screw Artists and Themselves!

Posted by: mike on May 16, 2006 @ 9:20 am
Filed under: Music Business News

A tip of the hat to an interesting blog for hipping us to a recently published article which reveals a basic truth about gigantic corporations in the record industry. They are stupid.

For those of you artists who have never signed with a larger company or for those of you who are lovers of music merely watching the industry it will be a little tough knowing what this all means. But not to worry. It means only one thing really: the era of gignatic corporations controlling everything in the record industry is in a free fall and has little or no chance of righting itself. Basically, they think everyone else is dumb and unaware in a world where independent music makers (artists and labels) are actually getting smarter, more capable and more effective in reaching their audiences.

One particularly offensive example cited in the article is the common practice in major label world of charging back artists for the label’s contribution to the packaging of their product. These are called “container charges.” The practice has been accepted by artists because there is a cost to the label for the design of the packaging. It is designated as a reduction in the suggested list price, usually twenty five percent. The suggested list price is the basis point upon which an artist’s royalty is calculated. The offensive part? They are now trying to take “container charges” on digitally downloaded music! Anyone who has dowloaded an mp3 knows they do not come with packaging.

Why does this represent, in my mind, that major corporations in the record industry are in a free fall and unlikely to recover? Because rather than working with artists in a fair and cooperative manner to come up with new ways in which to improve the current situation they attempt to squeeze artists out of what is rightfully theirs. This may have worked in the past but it won’t work now.

It actually makes me a little happy. The more they attempt to control the marketplace, manipulating outdated, legalistic systems in order to take advantage of artists the more they push great artists and true music fans towards indy labels and sites such as this one.

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