Remake, Remodel: The Evolution Of The Record Label

More documents

Recommendations

Info

This pre-draft version is strictly for review purposes only and is not for general dissemination or sharing. Rob Salter commented that the experience with the Nadine Coyle album gave him better sympathy for the challenge labels face and the fact that ‘there is real skill in what they do’. In the case of less established artists, this is probably a good thing for the retailer – if the success of the Nadine Coyle exclusive through Tesco is anything to go by. An almost total lack of media profile meant that prime racking in the nation’s biggest retailer counted for very little and the album peaked outside of the Top 40. Many have pointed to direct-to-retailer exclusives as a great way of seeing very clearly where labels actually add value and how the lack of a label’s involvement in these projects was sometimes all too clear. One major label senior executive, in discussing these types of deals, commented, ‘They might have made a bit more money in some cases, but they have always got smaller. In every single case, the brand has diminished without the currency of what a label can contribute.’ ‘Anyone who has been in the industry long enough knows it’s about having a talented, co-ordinated, focused and enthusiastic team to make something happen; manager, label, publisher, agents and publicists.’ Gary McClarnan - Founder, Sparklestreet ‘A label is a connector – the glue that hold everything together-we work with marketing and promotional experts internally and externally and pull it all together’ Chris Ancliff - General Counsel – International, Warner Music Group The advent of digital then has resulted in additional complexities, but the benefit to labels is that the costs of bringing something to market can be cheaper, based on better market knowledge and the speed of getting to market can be faster. In theory, this can mean that an act can be launched more realistically and cautiously, cutting out the hugely expensive launches which, by the time they get to market, result in what one label MD described as ‘those awful head in hands moments’ where the budgets have been blown before an act can even get off the ground. As Shabs Jobanputra says, ‘The marketing process is more efficient. That’s where it has changed.’ Contents 22
This pre-draft version is strictly for review purposes only and is not for general dissemination or sharing. CHAPTER 4 | INVESTMENT Looking at the record label as investor: as the stakes are raised, is investment under strain? What other funding sources have sprung up? Can these truly take the place of the label? Traditionally, the primary investors in new artists and their music have been record companies. BPI figures claim a proportion of overall income of 21.7% per cent was reinvested in music across the industry in 2009 16 . This isn’t necessarily all going into NEW artists, but a large part of it is. In recent years, as the role of the record company has been under the spotlight, its role as primary investor has also been in question. Undoubtedly the sector’s ability to invest at such a high level has been under threat in line with the sales, but have other parties moved into this space on any scale? Spreading the investment risk The investment of a label into an artist or catalogue is underpinned by risk and reward. Traditional label investment has been made in return for rights to exploit the copyrighted recordings of an artist for a period, or in perpetuity. As the perceived risk in these investments has grown with the market downturn since 2000, labels have looked for other means of return to balance the increased risk. This has come in the form of participation in further income streams that flow from the success of an artist. Increasingly, record companies now have a stake in more aspects of an artist’s career (often known as 360-degree deals), partnerships or joint ventures. In tandem with the requirement from labels to have a share in these other income streams, artists are looking for a more holistic contribution to their career from their record label. These differing concerns of artist and label are, however, not necessarily conflicting and are contributing to a new direction of development for labels. This means they are starting to provide more services to artists than they ever did in return for a share of a greater part of an artist’s success. Record company investment in almost all instances is written off if an artist is unsuccessful, so inevitably with a reported success rate for major labels of anything between 10 and 20 per cent, the company needs to fund these losses from the profits of the successes. This ‘portfolio management’ of investment by labels can mean that successful acts feel they are subsidising the failed investments, and so many have considered whether the investment role of a label can be performed by other agencies. New entrants: putting money where their mouths are? Companies such as Ingenious, Power Amp, SellaBand and Icebreaker have entered the market in recent years, offering a variety of different models of investment in music. 16 BPI Statistical Handbook 2010 23
Page 1 and 2: Remake, Remodel: The Evolution Of T
Page 3 and 4: This pre-draft version is strictly
Page 21: This pre-draft version is strictly
Page 55: This pre-draft version is strictly

Remake, Remodel: The Evolution Of The Record Label

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?