A record company is a company involved in the music industry. Like it or not, as any company, their goal is to maximize the sales and the profits in order to distribute dividends to their shareholders.
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A record company had to be an industrial company managed by finance tycoons assisted by supply chain experts and marketing wizards (do not forget the lawyers). When a major signed a new artist, they used to pay an advance, then go to the record studio, after mixing and mastering they manufacture huge quantity of vinyl and CD that they have to store in warehouses worldwide. In order to promote and sale their new records they employed an army of marketers and a second army of sales executives. Piracy was low as you needed a factory to create the counterfeited copy. The crowd bought their products by millions, that was the good old time !
Everything began in the 80’s, when the walkman allowed any teenager to keep an inexpensive copy of the record bought by a friend or the local library. In the 90’s the CD burner allowed to have a copy with the same quality than the original record. Since Napster, using mp3, there is no need to have a physical access to the original media in order to get a copy.
Despite RIAA strong reactions, this industry sales and profits decrease every year. This article from Forbes explained that EMI sales were down by 15% over the past year and the company had £910 million ($1.9 billion) of debt. Of course, the shareholders do not like it. EMI is supposed to be sold to a private equity company. This blog says “[..] That means focusing on the existing catalogue and its distribution, not investing in artist development and marketing [..]”.
No need to have an MBA to know that, when a company stops investing in new products and focuses on maximizing revenues on their existing catalogue, that mean bright financial result for the near future before to disappear.
Your comments and reactions are more than welcome…
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Seen this morning:
http://www.mailonsunday.co.uk/.....ge_id=1773
“Prince is determined to revolutionise the music industry”
A British sunday newspaper paid Prince £500,000 for a free giveaway of his awaited new album .
While his record company canceled its British launch, the artist embraced the concept of switching his business model that would go: CDs are promotional stuff, everyone downloads, listens to the same huge radio/tv networks that will play these titles ad nauseam, etc. [the above article describes well how that happened]. So where do I earn my money? Tours, and that artist usually make concert halls booths close pretty early.
I am more than eager to discover what’s really behind your project.
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Matt / Music Lover