In our 8 Percent podcast interview with artist Amanda Palmer, she referred to her decision to join a record label as “signing a deal with the devil”.
While the industry has certainly been perceived as greedy, often ludicrously so – Warner Bros. refusal to let Prince record under his name, and George Michael’s lawsuit against Sony Music that stated they had deliberately sabotaged promotion for some of his albums in an act of spite are two of many examples – it wasn’t until the crossing of the digital frontier that the true extent of the situation was revealed to those not in the business.
Today, we are all spectators to a circus of label representatives, so used to having all the power, grasping to retain dominion over the music scene. The extreme, sometimes ethically horrendous, depths they are plummeting to in order to survive are fuelling outrage, and it is abundantly clear that the industry needs to change.
But will it? In the eyes of many artists, record labels are still a necessary evil if they are pursuing a stable, let alone successful career. If that’s truly the case, musicians have no choice to sell their soul in return for a shot at meeting their potential.
Surely, there’s a better way.
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“The price of CDs skyrocketed while the quality of music has plummeted. And as long as middlemen create means by which the consumer consumes, this will never change. The problem’s not a complex one; the solution is simple: let the baker make the bread” – Prince.
Over the last 130 years, the role of the record label has changed remarkably little. At the dawn of the 1900s, Edison Speaking Phonograph Company, Victor Talking Machine Company, and the Columbia Phonograph Company were in fierce competition to get their devices into the majority of households all across the world. To bolster appeal, the companies began to court artists to record music specifically for them.
Within a quarter-century, the industry have shifted such that it was not the technology, but the music itself that was the primary commodity. What was left of these original companies transitioned into what would become the big six record labels – EMI, CBS (now Sony), BMG, PolyGram, WMG, and MCA (now UMG) – and set about establishing relationships with musicians and nurturing talent as an investment. This system gave emerging and established artists alike unprecedented support, and in return, the labels were making tens of billions of dollars annually.
Over the decades that followed, the companies worked to expand their profits, but doing so came at the expense of the artists. Draconian contracts and creative control became the norm, but the worst came when the Copyright Act of 1976 was passed into law with a ‘technical amendment’ put in place without consultation with artists that defined recorded music as ‘work for hire’.
In an instant, musicians had been demoted to little more than hired help, rather than respected as the artists responsible for the content that made the business of music production and distribution a reality.
Courtney Love addressed this critical moment in an article for Salon in 2000. “Today I want to talk about piracy and music. What is piracy? Piracy is the act of stealing an artist’s work without any intention of paying for it. I’m not talking about Napster-type software. I’m talking about major label recording contracts…Stealing our copyright reversions in the dead of night while no one was looking, and with no hearings held, is piracy.”
The industry bodies had all the power, and they knew it. If an artist had any hope of having a career in music without having to rely on late shifts stocking shelves at the grocery store to pay for their next record (or even that week’s rent), there was no other option than to sign their work away in perpetuity.
When the internet age reared its head, the record industry – like most industries that had faced little competition throughout their history – all but ignored it. For most, their only move was to purchase domain names for their company and the bands signed to them in order to maintain their ironclad grasp (bands including Aerosmith, Goo Goo Dolls, and The Offspring fought and won back the rights to their domains, but smaller bands were rarely, if ever, lucky) but until several years had passed, the image below was about all fans could expect when visiting what they thought was a site belonging to their favourite artist:
By the time the industry was ready to enter the digital domain, they were left playing catchup with legal and illegal content suppliers alike. Napster launched in 1999. Rhapsody and iTunes in 2001. The innovators had beaten labels to the next step in the evolution of music distribution.
“The record age was just a blip. It was a bit like if you had a source of whale blubber in the 1840s and it could be used as fuel. Before gas came along, if you traded in whale blubber, you were the richest man on Earth. Then gas came along and you’d be stuck with your whale blubber. Sorry mate – history’s moving along. Recorded music equals whale blubber,” Brian Eno told The Guardian in 2010.
Labels continued to go to great lengths to retain their supremacy: one Minnesotan woman was sued for $1.9 million in 2007 for downloading 24 songs of illegal filesharing service Kazaa. Meanwhile, artists were being signed to ‘360 deals’ which gave record companies a share of all the performer’s income streams, or multi-album contracts from the outset. The latter has been a norm in the industry since its inception, but the recent lawsuit between the artist Kesha and her producer, Dr. Luke, has highlighted how morally bankrupt the system has become when a payday is at stake.
It’s led to artists like Amanda Palmer, Childish Gambino, and Azealia Banks leaving their labels, but the dislocation has not been as jarring as might be expected. In fact, performers like Ed Sheeran who have found mainstream success independently, and others like Nine Inch Nails (who infamously left UMG after inciting fans to steal his songs online rather than pay the exorbitant prices charged by the company), have signed/re-signed to record labels in spite of all the cons.
The move isn’t just being made by superstar artists with major negotiating power either. Melbourne band The Vaudeville Smash financed their first album and international tours through crowdfunding campaigns and clever release strategies (their song Zinedine Zidane went viral after hitting Youtube a week before the 2014 FIFA World Cup), before signing with Japanese label P-Vine Records.
“We signed to Japanese Record Label P-Vine records in 2015 on the back of 2 successful trips to Japan in 2013 and 2014. At the time we felt we needed Japanese representation due to the language barrier and the distance between our countries. We were also hoping to use their contacts to help collaborate with other artists, secure high profile gigs, market our product and potentially receive advances for future projects. Another reason we signed with them was to distribute our music in Japan, something that maybe couldn’t be done independently. Or at least we didn’t know how to go about doing it,” says bassist and co-manager Luca Lucchesi.
If working with a label is simply a matter of convenience, a case of “better the devil you know”, then an alternative must exist which provides entrepreneurial opportunities for artists without distracting them from their craft.
One of the companies hoping to define the new future of music is FMIN Creative, an initiative working to overhaul the music industry through technology, entrepreneurship, and innovation.
By instilling entrepreneurial principles and experience with cutting edge technology like Virtual Reality, Brain Computing Interfaces, and Cryptocurrency, they hope to find ways to restore power to the artist.
FMIN Creative’s mission is a respectable one, but the task ahead of them is monumental as they challenge a system that refuses to change for the times.
For the time being, labels aren’t going anywhere, if only because their competition is still in its relative infancy. As artists start taking on more of an entrepreneurial role in the development of their business, and new models arise to fill the gaps the powerhouses ignore, that may very quickly change.