Record Label Overcompensation
The advent of the internet boom brought about some fascinating opportunities. Conversely, it also brought multiple challenges to the music industry and the unexpected nature of the internet is is one of the contributing factors as to why record sales are going down have been plummeting since the new millennium. More and more people are choosing to stream music instead of buying it mechanically, and that’s why Youtube and Spotify are growing exponentially while physical record sales are becoming phased out by convenience factors.
Furthermore, despite the governmental crackdown on pirating, it still remains a huge issue to music industry incentives. The ability to execute free file sharing without any real consequences causes a huge riff where people are obtaining music for virtually no cost. These attributes cause record labels to take desperate measures to compensate for the faltering music industry and obtain revenue from several other outputs. Likewise, aspiring musicians also rely on record sales to make a living, so not having enough sales can be very hard for them financially.
Record labels are contributing to the problem
360 deals are contracts that help the record label acquire a percentage of the earnings from all activities of that band or musician, that transcends the confines of traditional contractual agreements. Record labels can get huge cuts of money from musicians that hold concerts, sell merchandise, synchronization deals that they receive an endorsement and so on. Many record labels chose this option when they sign newcomers to the industry rewarding them with some sort of social currency to reward through fan exposure and potential opportunities.
Since new artists are often in a position of less leverage with record executives, they have to succumb to these rules and contemporary standards. This results in a lot of empty promises and potential resentment in regards to the artist’s perception of the contractual agreement and possible exploitation of creative value. Likewise, some artists feel as though the record labels do not deserve the amount of money they are asking for and did not put in the same commitment they did to succeed. Large sums of financial assets are lost to labels and there is a sense of control over innovative content as well. The music industry’s language is money and they prop up new artists with enormous capital – In a sense, they are a necessary evil in getting your foot in the door through exposure and success. Self-publishing is in the same right very effective ,but comes at a cost of differentiating your music through the oversaturated market with limited finances. Check out the next article to look into how to self promote.
Artists can fight back against 360 deals through self-publishing – Here is how to do it.