Michael Jackson surprised fans in 2002 when he spoke out publicly against Mottola and
Sony, the music record label to which he was signed.
Jackson accused the recording industry of mistreating Black artists at a news conference
alongside Reverend Al Sharpton.
“Record labels really conspire against their artists.
They steal, deceive, and take advantage of artists in every way they can.”
After that, Jackson displayed a billboard that said, "Sony Music Kills.”
Prince, American singer-songwriter, also expressed his displeasure with the way record labels
treat artists as "indentured servants."
He warned young artists that record contracts are “slavery.”
You've witnessed it right in front of your eyes.
Lady Gaga, Taylor Swift, and your other favorite Music artists are the survivors of their record
labels.
So, what's going on here?
What's behind this ostensibly scandalous situation?
Well…
That seems to be, quite literally, a million-dollar question.
If we put it bluntly, it's the well-organized and well-oiled pyramid structure that appears
to be at the heart of every major record label.
They lure ambitious artists with irresistible promises of fame and money, but they forget
to add that they'll be enriching themselves in the process.
However, before we get there, let's take a step back and start from the beginning.
According to the report, the music business contributes $170 billion to the US economy
each year and employs 2.5 million people across the country in core music activities such
as recording, streaming, and live performance, as well as related industries such as travel,
retail, and marketing.
Music contributes $9.1 billion in foreign sales each year as an export.
Furthermore, for every $1 generated by music-related activities, an extra fifty cents are generated
in related businesses or areas, demonstrating that music routinely outperforms its economic
weight with a revenue multiplier of 1.5.
Now, let’s talk about record labels… Record labels are businesses that sell recorded
music and its corresponding videos.
They work in the music industry in a variety of capacities, including new artist development,
music publishing, and copyright enforcement.
The terms and circumstances of artist contracts are usually favored by record labels.
In the case of newly signed artists, record labels have complete influence over the type
of music they produce, including everything from the sound of the music to the lyrics
of the songs.
Record labels can also set the amount of money their musicians make depending on the contract
arrangement.
While the relationship between artists and their record companies is frequently mutually
beneficial, it is always possible for it to become strained.
Record labels have the power to make or break the artist.
So…
Do record labels really screw the artists?
When an artist is newly signed, their record label has complete control over how their
music is recorded, allowing them to produce a wide range of sounds and effects.
They frequently have control over the album cover graphics as well.
Musicians, on the other hand, are not always allowed to decide what happens in music videos.
And they are paid only 15-20% of the profit made.
Let's have a look at how that would operate in practice.
So, for example, a fresh musician releasing their debut album will most likely earn around
$1 million - and that's just an estimate.
Some will earn significantly less.
So, $850,000 of this profit will go directly to the record label, leaving the singer with
$150,000.
So, for example, someone like Lil Uzi Vert, who made $8 million from a single song, will
only get $2 million back from their advance and spent money.
This appears to be a good deal until you consider the $300,000 album advance, which might leave
the musician $150,000 in debt to the record label before they become renowned.
Surely, once they made it big, they'll be able to recoup their investment quickly, right?
Unfortunately, this is not always the case.
It doesn't happen very often, and it might put the artist in a situation that Prince
has compared to "slavery."
Over the last few years, record companies have taken advantage of the most popular singers
by collecting the majority of their revenues, putting them into unrepayable loans, and pushing
them into contract arrangements that effectively remove them from the company.
This is the reason that most of our favorite artist are broke or burned out.
Everywhere we look, it appears that fresh artists are having stars put in their eyes,
only to have them removed soon after.
All of the major Record labels, are participating in this.
They sign contracts with hundreds, if not thousands, of artists in the hopes of finding
one who will be a huge success.
Another important question that needs to be answered here is…
Do record labels rip off artists?
Well…
When one person comes out on top, you can bet there are a lot of people left behind
who owe a lot of money to the record company.
That's why the record label continues to press their top earners to make up for the loans
and maintain them in good standing.
So, it is not an exaggeration to claim that record labels will dump an artist if there
is even the tiniest indication that they will not be 100 percent successful.
It's a valid argument that they ignore some of their artists while promoting others.
One out of every 42 musicians who submit to record labels is expected to be signed.
Surprisingly, only 2% of those who are fortunate enough to get signed by a major label will
not be dropped by them.
Therefore, many artists think that record labels are destroying the music industry.
Taylor Swift is one of the most well-known people who has raised awareness about the
injustices that musicians face.
Swift refused to give her record label any of her masters when working on her seventh
album.
Many musicians are anticipated to follow Swift's lead in the future in order to reclaim control
of their own work.
As large record labels have been ripping off their signed musicians by taking the majority
of their revenues, handing them loans they can't always return, and putting them in contracts
that effectively remove them from the production room.
This is the reason Jay Z called his plan to start his own record company “a genius thing.”
Now you might be thinking…
If record labels treat artists in such a way, why are most artists still associated with
these labels?
Without a doubt, technology (Apps like Deezer, Spotify, YouTube etc.) has aided in the transformation
of the music sector into a wilder environment.
However, the primary business model – how artists get paid and may support themselves
– has remained largely unchanged since the industry's inception.
At first sight, an aspiring musician would see this as reckless producers, pirated content,
overpriced superstars, a profusion of unsigned musicians, non-profitable internet platforms,
and music label cartels...
A fresh artist understands that a large sum of money is required to make them or their
album successful.
None of the recording equipment, writers, producers, or advertising is cheap.
This is where the music record labels jump in for help.
They understand that most artists won't be able to fund this on their own, but with a
little help, they might be able to produce something worthwhile.
This way a new artist gets trapped in this cycle…
They think that…
Great!
They are just so thoughtful, giving me a nice present and a leg up in the profession.
When you initially start out, you may believe that signing with a large label is the only
way to go.
It takes a lot of experience to realise that this isn't a dream.
It's a dead-end route for a lot of folks.
Oh, and not to mention that the outward appearance of wealth and a lavish lifestyle is fascinating
to those on the outside.
This way the record label can be sure the artist will attract fans, and more fans spells
more money.
So, apparently is a win-win situation for both, a new artist and a music record label.
Isn’t it?
Well…
That isn't the case, yet again.
Because the money is considered a "recoupable payout," it must be reimbursed in full to
the record company.
The record labels know what works and what the public enjoys, and they're going to sell
it aggressively to those demographics in order to maximize profits.
And, now because the artist owes money to the record label, they have a compelling reason
to make a new album.
Naturally, this is done in accordance with the contract they've already signed, but they're
under greater pressure than ever to recoup their losses.
As a result, some artists succeed and are able to repay their debts while also making
a personal profit.
Others, however, do not.
Even if it appears like an artist is living the dream — topping the charts and having
sold-out performances – the music business is challenging behind closed doors.
So, it looks that signing with a major record company is a "damned if you do, damned if
you don't" situation that necessitates a great deal of luck and wisdom in order to succeed.
Therefore, in order to navigate successfully in this economy and avoid being killed by
the Ugly music record labels, musicians must be both technologically and monetarily competent.
Let’s take an example of Russ, an American rapper.
Russ has been on an independent streak since ending his contractual duties to Columbia
Records in 2020 with the release of Shake the Snow Globe, his third album with the label.
He has advised the new artists by saying “if you're a new artist getting label offers,
it's because you're making money, which means you can go to a bank and acquire the money
you need without giving up ownership.”
So, what do you think, is signing to a music record label a viable system for new artists?
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