Further thoughts on why Major Labels Suck………….

Now it’s 2011. As I mentioned in my Christmas post I intend to add tons of new posts in the first 4 months of 2011.  As of now I don’t have any structure or plan covering these upcoming posts so I will encourage everyone to post their suggested topics as comments. I will certainly be adding more info on recording, playing live and band politics. Beyond that I will just write what comes to mind.

This morning I had a conversation with a musician friend about the demise of the music business.  It’s interesting to note that some people are still arguing that the music business still exists. This is complete lie. The days of the huge labels controlling a massive industry are over. The labels that remain are pale shadows of their former selves. How did this come to be? It’s simple. They did it to themselves. 

In the late 1980’s and early 90’s the music business underwent a format change. Vinyl records became obsolete and the CD became the new format.  For the major labels (names like Columbia, Warners, RCA, BMG, Arista etc) this brought in a deluge of unearned money.  It’s important to understand why this money wasn’t earned.

rebel yell All you labels suck!

When CD’s were first introduced they were viewed as some kind of miracle. The supposed quality was in a new class.  This new technology was promoted as extremely expensive to produce and manufacturer. This, of course, was a lie. Yes, the earliest releases cost huge amounts of money to create. Yes, the new production plants were expensive to build. Yes, the digital format had higher apparent clarity and as a result the recordings needed to be carefully produced in order to exploit this clarity but the whole story was cleverly hidden from the musicians and more importantly the public. The real story was that the manufacturing process was like most manufacturing processes and as the amount of units created rose the costs per unit plummeted.  Soon after the introduction of CD’s the cost to produce each CD dropped from $6-8 to $1.25 per unit,  On the other hand the labels had used the introduction of the new format to raise retail prices from about $7 per vinyl record to $14 for a CD.  Their production costs had risen slightly and they had doubled the price.  And then, like a rain of gold from the gods, every hit record from the 60’s, 70’s and 80’s became hits again.

What most people don’t realize is that the vast majority of music is bought by people 16-24 years old. This is a key factor in understanding the mechanics of the music business.  It defines the way records are marketed. It drives the cycles of music movements and it means that a tyranny haunts the record labels. If they don’t get you to be a fan of some of their artists in that 8 year period then you are lost to them forever. Yes, there are some odd characters, like me, and, perhaps like you, that listen to new bands for decades of their lives but most people are not like this, they fall in love with certain bands as a teenager and they listen to them ’til the day they die.  This makes the music business obsessed with youth culture and youth trends. They create them. They track them. And they exploit them.

The format change to CD’s didn’t change this pattern of human behavior but it did add an interesting wrinkle to it. Suddenly everyone that had loved music when they were young decided to completely rebuy their favorite artists of yesterday. This translated into a deluge of cash to all the major labels.

Rather than seeing it for what it was, an aberration, a strange one time gift, they decided that this was the new normal pattern and expanded their staffs – fueled by the river of money rolling in the door.  The mania reached a fevered pitch and the word that money could be made in this remarkable way spread. Sony, the Japanese electronics giant, bought Columbia and Epic records in an effort to acquire their catalog. The thought being that they could introduce yet another format change ( the mini disc) and sell billions of dollars worth of gear to those crazy americans. They falsely believed that they could once again resell the complete catalog to the whole american public. All the while that this was going on the web was growing in scope in the background. It didn’t occur to any of them, as they counted their millions that the massive price increase that they had duped everyone into paying wasn’t in direct opposition to the MARKET. That’s the MARKET as an entity. The type of entity that levels playing fields with brutal indifference.

It is interesting to note that my experience working inside record labels as a manager had taught me that on the whole the executives of the large labels were lousy businessman. The upper echelons of the major labels are stocked with people who couldn’t run a Carvel ice cream store with any authority. On more than one occasion I sat through a lecture by an executive about how the music business was different. The normal rules and market forces didn’t apply.

All of this carping and self-delusion was a smokescreen to cover a little considered fact.  It’s a dirty little secret. The Music Biz is an illegal cartel. To state that more clearly in case my terminology is kinda vague, the biz is a group of huge corporations that meet secretly to fix prices and control all supply to the stores. The same companies own the production and large portions of the distribution networks.  They own it all and they never compete in the one area that counts, price. That’s why a visit to any large music retail chain will find the average music buyer looking at a sea of releases, all at the same price. Imagine that, what an interesting coincidence. How do they get away with it? Do you really have to ask? The answer is bribes. Big ones paid to politicians and regulators.

So now this particular blog has moved up to recent history. Starting in the very late 90’s the music business started to hemorrhage money. It couldn’t have happened to a more deserving bunch.  Let me take a moment to point out, so as to be crystal clear, that I am not talking about musicians. Musicians have little to do with the music business. The music business if made up of people who know little about music and in my experience have little interest in music and more to the point none of the are musicians.

As file trading came on stream the fact that music CDs had never fallen to a market driven price sent the feeding frenzy of kids downloading into overdrive.  Any what did the major labels do? Did they let the price of CDs fall since they were a dated technology? No they sued their potential customer base and got together to decide that they should RAISE the price of CDs. What utter idiots.

Now they are attempting, yet again, to use a potential price controlled monopoly system to get everyone to pay ridiculous prices for music – Apple’s I tunes. Yes it’s an amazingly convenient brilliant new technology that demands you pay the same damn price that doesn’t work in the stores. It makes this demand even though there are no costs of delivery, no physical format to manufacture and minimal artwork to produce.  I expect that some of you will argue with me on this point. Go ahead I will argue back. Please keep in mind that the rise of filetrading devalued my life’s work by a factor of ten. Nonetheless I believe it can’t be fought and needs to be utilized cooperatively.

What does this mean to you, the dudette playing in a band? It means that the labels are of no value to you. They are whales beached in the sun. Their continued attempt to dominate the market will only serve to drive music from the center of youth culture. It will only serve to make every band have to make it by playing live and promoting themselves. It means that the labels will now move aggressively into merchandise (t shirts and stuff) and live fees as part of their contracts. It means that you should avoid labels like you avoid herpes. Oh wait a minute that’s a bad analogy for musicians…fill in your own…..Is there a way out for the majors? Yes, but I am not about to tell them how to do it.  Right now there is a kid in his bedroom that has the same thought and he will end up buying their catalogs. Good for him……………..

Copyright Brad Morrison/Billiken Media 2011

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4 thoughts on “Further thoughts on why Major Labels Suck………….

  1. Thanks for the post about labels Brad. It is somewhat gratifying to hear someone that has been inside the belly of the beast saying the same thing I have said since the late 90s, that the major labels have merely reaped what they have sown.

    Thanks for your writings, they are appreciated. I look forward to reading more of your thoughts, despite the fact that my band broke up and I am back to step 1, putting a quality act together. If you have any tips on findings quality musicians who avoid the pitfalls of excess and understand that to make it, as you say “have to make it by playing live and promoting themselves.”

    One small point I would like to ad about how iTunes is different. Independent musicians can now get their music into the retail outlet (iTunes) for a small fee. My previous band has our EP on iTunes. Now the reality is that if the store doesn’t promote it, you will not see sales, it just sits out there, so in a sense, it is like having your CD buried back in the racks somewhere.

    So, that does lead to a question for you, how do you target the 16-25 age range you speak of? Clearly to make money off of your music, you need to promote it to this age range. In the world of You Tube, Facebook, and iTunes, are there things you should be doing (besides the obvious), and of course, playing and promoting.

    Thanks for your insight.

    • Hi Tim,
      Thanks for the kind thoughts. The comments you make about I tunes are valid. I realize that indy artists can be bought through the apple system. In fact I am about to rerelease a number of albums that I own through that system. I guess I missed the mark with my comments. I was pointing out that the system SETS THE STANDARD PRICE. This is extremely important. If Pink Floyd wants to spend three years in the studio, spending a mllion bucks to produce an album they then could charge 1.99 per song if they chose. Why can’t they charge .25 per song? Why can’t your band charge $.10? That’s the point I was making.

      As for finding great musicians to play with, I will put it on the list for future blogs. Your question about promoting to 16-24 yr olds is a real mystery. It’s tough. Often the choice is to join a musical movement or trend and make your mark there. I will have further comments in the future on promotions and finding ringers for your band.
      I’ll sign off with a simple tip – steal the musicians you need. Most bands are going nowhere and the members know it. Lots of great bands have been built by stealing the best players in a scene and talking them into the same room on the same day……………….

  2. Brad, you are a treasure trove of very good information for new bands, and old alike! I started a metal band three years ago, and we have been following the steps you have blogged about, and guess what? They work! Our first gig was at the biggest club in our area, that has major label acts coming through all the time, I guess that we had generated enough buzz that the booking agent got ahold of us and asked us to play. We have been back five times since, and put on a SHOW everytime!

    My question I have is this. What are your thoughts on playing free benefit shows? For example, we have done a couple of shows for free for Leaps of Love (they help out families of kids with cancer), and another one that was going for a local Women’s domestic abuse shelter. The abuse shelter gig actually did try to give us money, but we were told in the beginning that it was a fundraiser, so we just donated it back to the cause. Also, if people are looking for a band to hire, for small, local events, and ask what you, as a band charge, is there a set amount or formula to decide on how much to charge? Thanks, and keep up the good work on here!!!!!!

    • Hi Tim,
      Thanks for the compliments. It sounds like you are on the right track. OK let’s deal with your question. It’s a good one. When I managed bands this exact issue came up again and again.
      For about ten years I managed a band called Miracle Legion. You have never heard of them but in their time (1983-1993) they were hugely influential in the underground scene in both America and Europe. If you have ever heard the Counting Crows then you have heard an exact rip off of Miracle Legion. The Counting Crows lead singer followed Miracle Legion around for many tours and basically ripped them to come up with his hits. Oh well, that’s the way rock works…. Back to the question. Miracle Legion was asked to play benefits weekly. We always said no. The more successful the band became the more requests we received. My reply was to be polite and point out that the band were pros and as a result we got paid to make music. This worked very well for that particular band.

      The problem with a band just starting out is that many decent gigs end up being benefits. If you play them then you get more exposure. Early on this presents no problems. The problems come when the band starts to grow. Once you develop a good draw then you often end up trading a substantial pay day for a gig playing a benefit. Now the kind hearted will point out that this is the point – you play the benefit to help out the charity and letting them take the band’s pay day is what it is all about. OK stop. Think. Are you fuckin Sir Elton John?!! No you are not. You are not actually successful enough to throw away 500 or a 1000 bucks. But Sir Fuckin’ Elton John plays these big benefits right? Wrong. He does occassionally support the naked mole rat or the starving babies of beverly hills but this is usually a part of a clever promotional campaign to plug an album. He also uses the donations to lower his taxable income. He also gets paid for the gigs…What????!!!! What the fuck!!! Yep that’s right he gets paid. Not his full fee but they cover his costs, send a private jet, pay for his boy toy hookers, pay for People Magazine to fly out and do a photo spread of his new Kenyan adopted baby….etc. Sounds just like your situation huh? Not one bit.

      Look at it this way. You play some benefits. It helps with your contacts and gets you some exposure. Then your band grows a bit. You start to get some buzz. Now every benefit in the whole state is hitting you up for a free gig. You rapidly become free gig whores. If you try to say no you look like an asshole. If you look around your market I bet you can name a band or two that are stuck in the free gig merry go round. You see them on every benefit and you don’t see them playing the juicy paying club gigs. The promoters know exactly what they are worth. Nothing. Remember the promoters are looking for your band to draw your fan base to their shows and they need those fans to pay at the door. That’s the game.

      Here’s some basic rules:
      1. If you play a benefit then use the gig to its maximum potential. The benefits promoters should be getting you press and TV if possible, news stories and sky writing if you can pull it off.
      2. Think hard about how the “cause” behind the benefit looks to your fans. Your in a thrash metal band and you’re playing a benefit for the cub scouts?!!! Are you wimps?! Be very careful before you associate your band’s name with some kooky social movement or disease. On the other hand playing a benefit for a school for wayward girls where you get arrested for activities with wayward girls may be just the thing to move up to the next level.
      3. If they ask you to play for free and you agree then you damn well better ask for lots of things in return. Promotions, catering backstage, crew to help move your gear, radio ads with the bands name in them, etc. ALWAYS MAKE SURE THAT THE SOUND SYSTEM AND STAGING IS PRO!!!! Playing a poorly organized, badly promoted, cheaply staged benefit to save some fire department means you will play to an empty room one quarter full of people that wouldn’t come to a paying gig if their life depended on it. If the sound system sucks then you are guaranteed to look and sound like shit as well. Is that helping you become a rock star?
      4. Ask around. Some charities are notorious for using bands and doing nothing for them. Be careful. Don’t end up with a band bio that says “We were doing great until we played the “just say no to drugs street fair and then our audience decided we weren’t cool and the promoters stopped taking our calls.”
      5. Always insist to know the complete bill before you give a final commitment. Do you really want to appear after the parrots that juggle and before the polka duo?

      In general my advice is to be extremely polite and to say no. I had the evil habit of offering the phone numbers of other bands that I was trying to move ahead of. They would jump at the chance and I would book one of my bands at the local club. In essence I would take the paying gigs and let the other bands do the favor for free…………..

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