Where Is the Money Coming from? a Look Into the Modern Music Industry Essay

Submitted By mrnlo123
Words: 799
Pages: 4

A current event that I have been looking into recently involves a massive change in the music industry. Musicians and recording artists are now receiving funding for their projects from subcontracted firms and private investors, rather than signing recording contracts and “360 Deals” with a record label. As many know, the music industry has been changing rapidly since the internet made being “discovered” a whole lot easier for emerging artists. However, the days of becoming famous off of a YouTube video are long gone, with only a few exceptions. The huge amount of people trying to become famous on YouTube has over saturated social media, and has made it very difficult to rely on the internet for promotion. The real key to becoming popular as an artist is having financial backing to promote their great music. Up until this year, the vast majority of that funding would come from major record labels. Not only would they put up the financial investment, they would control every aspect of the artist’s career: touring, TV appearances, getting radio airplay, and so on. Major record labels were the only companies that had connections with popular radio stations, large music venues, late night talk shows, ect. If an artist signed a major record deal, they were guaranteed to become a star just because of the amazing promotional avenues the label provided. Artists can’t make those connections themselves, so what bad about signing a record deal? The problem is the massive chunks of song royalties, merchandise sales, and touring payments that the record labels take from their artists. Often, artists who were turned in to superstars by their labels kept about 10% of their total net income. The other 90% of their income went straight into the pockets of the major label executives. However, this is beginning to change. A large amount of private investors are starting to get their feet wet in the music business. Now, talented artists can approach these investors for loans. The artists then take that loan money (often $50,000 to $100,000) and personally hire a firm or company that is subcontracted by a major record label. These companies take their clients’ music and pitch it to radio stations, TV shows, and so on, based on the company’s specialty. Before, only record labels had contact to these specialty companies and firms. However, these companies and firms have realized that they can literally double their profits by opening their doors to individual artists looking to hire them for promotion and placement. There are many success stories with this sort of approach to “making it” as a musician. For example, popular rapper Macklemore took a significant chunk of change that he earned himself and hired a publicity firm to work for him. It happened to be the same firm that promotes Warner Brothers Records’ artists on the radio. This “radio-promotion only” firm put Macklemore’s song “Thrift Shop” on nearly every Top 40 station in the country. That got the song heard by millions of people…