A Sea Change in the Music Business

By Jim Moore, Phoenix Studios - www.muzik-zone.com

On June 29, 2008, The (Nashville) Tennessean carried a grouped series of excellent articles that took an in-depth look at "The Changing Face of the Music Industry" by Ryan Underwood and Bill Friskics-Warren. The series is an invaluable guide to aspiring songwriters and performers on the future of the industry. I will quote liberally from this series (with the appropriate credit being given) because it is so important to you as educational information.

The newspaper's website has an informative but simplified Flash presentation that steps you through six basic recording & marketing outlets for musicians:

The Traditional Artist Label Deal Since only 10% of a label's investments in talent ever turn a profit, and sales are plummeting, the industry is moving away from this business model.

PROS: The artist gets a cash advance from the label, as well as promotional & marketing support, and the label assumes the financial risk and makes a long term (?) commitment to your career - but there are no artist development services for emerging acts.

CONS: The artist gives up virtually all control of his/her music (even your name is no longer your own to use on your own website), the advance must be paid back, if things don't work out it is very difficult - if not impossible - to sever ties with the label, and you have to complete with other artists for the label's budget and attention.

The 360 Deal This is what most big labels are now pressuring their artists to sign. In the past, the label has made all the money from the record sales, leaving the artists to make what they can from tours, merchandise sales, etc. - and often still being in debt to the tune of millions to the labels despite million-record sales (as you'll hear on this site from major recording stars). Now the labels want a cut of absolutely everything.

PROS: The artist gets more preferential treatment from the label, a cash advance, marketing & promotion support, development support for new acts and the label assumes the financial risk.

CONS: The artist gives up virtually all control of his/her music (even your name is no longer your own to use on your own website), the advance must be paid back, if things don't work out it is very difficult - if not impossible - to sever ties with the label, and the label gets a piece of every penny you bring in - and they get it before you do; your advance must be paid off before you get anything.

Artist Exclusives With Retailers The Eagles, Garth Brooks, Journey, AC/DC (Wal-Mart) and Paul McCartney (Starbucks) are just a few of the big stars who have gone this route (other outlets include Amazon & Barnes & Noble), and the number is growing.

PROS: The artist gets preferential treatment from the retailers, with your CDs right up there next to the big players in store displays, there is no huige debt to the record label and you still have control over your music.

CONS: The artist is limited to selling records through a single outlet, there is no artist development support for new/emerging artists and there is no path to radio play - so you need to generally (but not always) be a major artist before you can land such a deal.

Licensing Deals to Larger Companies The artists license both their live and recorded music to large entertainment giants such as Disney (Miley Cyrus) and Live Nation (Madonna, Jay-Z) who provide in-house lebal services.

PROS: The artist has no debt to a record label and record sales don't make or break you, as long as bad record or concert sales are not consistent.

CONS: There is no path to "terrestrial" radio (just satellite radio sometimes) and you have to be an "established brand" before they will even consider you.

Customized Partnerships PROS: This gives the artist control, with a higher percentage of the income, no debts to a record label and a more flexible business arrangement.

CONS: The artist assumes more financial risk and his/her career is on more of a record-to-record approach.

Phoenix Studios would fall under the Customized Partnership category. While we have no plans to become a full-fledged "label" or "publisher" we do offer certain specialized marketing & distribution services, while the artist keeps control over his/her own music, even through their own record label. See our SERVICES section for details.

The Artist Does It All The artist is fully responsible, using his/her website and online distribution sites such as Amazon Marketplace, TuneCore or iota to sell their own individual songs and albums. No record companies are involved.

PROS: The artist retains full control over their music, there is no debt to the record label and except for small commissions, the artist gets all the income. Commissions can range from 15-50% so you have to choose your online outlets carefully.

CONS: The artist is completely responsible financially, there is no marketing or promotional support, and you must compete with tens of thousands of other independent artists for the buyer's attention and sales.