It's funny how the RIAA (
Recording Industry Association of America) have slowly 'taken over'. I remember when they were a small viglante-like group taking on (and beating) Napster, and now they have more power than the artists themselves.
Speaking as someone with a lot of direct education on this subject, I'd just like to point out that, if you think the artist ever had the power in the music industry, you are very much 110% mistaken.
In college we re-enacted a meeting for a record contract. It's not at all like the movies; the musician usually isn't even there. It's lawyers, usually working for a musician's management on behalf of the musician, lying through their teeth trying to haggle the record company to higher advances.
This is the way record companies work:
1.) You get a contract. You're going to make an album under a given record label.
2.) They give you something called an advance; basically, they give you a ton of money up front to make the album and it is yours or your peoples' responsibility to translate that money into a sellable album product. Obviously bigger, well-known artists get bigger budgets.
3.) At this juncture is where the facets of the record deal come in. An example I'll give is a meeting my teacher at college was actually a part of, involving Black Eyed Peas. Apparently the record company wanted to push Fergie: the conditions of their advance was that Fergie's vocals be the focus of the album and she be sort of "the posterchild" for Black Eyed Peas the way that Gwen Stefani is way bigger than No Doubt. Fergie is marketable; the others, not so much. The band's people didn't want to do this, and they weren't given the deal full force; the record company didn't push them much at all. The compromise was that they would do a lot of club track remixes and push that direction instead.
4.) The Advance money is yours to do with as you please as long as the album gets made and record company's basic requests of the contract are met (which are different and vary widely for every artist--they might tell you where to record it, they might ask you for a specific number of tracks, or they might ask you to--as shown above--push the marketable piece of ass, but there are literally hundreds of possible requests they can make). You can actually do whatever you want with this money, but it must eventually be paid back to the Record Label via your work's profits. Take note of this: when you see a song on the radio or MTV or whatever, and the band drops off the face of the earth...it's almost always because they've lost the financial backing of the Record Label after bad turnaround on their primary advances.
Most people seem to think that musicians get a paycheck from the Record Label (and thus, 'aren't hurting anyone' by downloading). This actually isn't true, because of the Advances.
Say you are given $25,000 bucks by Elektra Records to make your album. They want space for two singles (meaning two radio-friendly songs), they want your big underground hit on there too, and want you to record at a specific studio (to protect their asses, costwise, usually your first deal is made specific to a reputable studio under the label's wing). That $25,000 dollars they give you is to make the album, it's not a payoff. And you have to return that money to the Record Label at some point.
Okay, so you're albums' made, it's out selling in the stores. Not getting enough of a push. Record Label advances you a little more money to make a video, bringing the total to $30,000 (btw, these numbers are absurdly lower than the real ones, for the sake of argument...they are usually in the hundreds of thousands). Now your record is pushed, your video is out, and the money is rolling in, right?!
WRONG.
The advance money is the first thing to be paid for. When your record gets bought, ALL OF THAT MONEY goes directly to the label first, to repay your expenses. The musician isn't even a part of the equation until
AFTER the advance is repayed in full. If you are lucky and your album EXCEEDS that amount, then the record company begins to take the cut agreed upon in the contracts and such, and you get (usually for a first deal) 10% (lesser acts) to 15% (big acts or 'easy money') minus expenses.
The money doesn't even go to the musician; it goes to the label, and a small percentage of that goes to the musician--and only AFTER the Advance has been repaid. If it keeps selling and the Label makes back their advance, and sales continue to roll and your album makes some profits, that money gets filtered through the label too. 80-85% of the money is the label's; the rest is usually yours. But then you have to cover certain expenses, like as if you worked in an office and had to pay for your own computer.
"Oh, my band has no expenses." Yes, you will, if you have a label. You will have to also use some of the advance money to tour or promote yourself; as mentioned, they may contract you for a video (though that's unlikely right off the bat, unless you already have a hit song). They will force you to have management--it's a basic facet of a record label's contract. They can't be wasting their time with dreamy uneducated musicians; they need to have a go-between who knows the score. Because of this fact you will often get a manager appointed by the label and the manager seldom has your best interests in mind, only the album's profit margin. Management takes 15% of YOUR 10% of the total profits, usually; this is why managers often have several clients at a time.
The label could also make you get a producer for your album, another extraneous expense. Then there is equipment, booking, road crews, promotions, distribution, etc. All of these things come out of the artist's cut--which is already disgustingly small. But the industry is built this way so as to keep the Record Labels rich enough to keep funding new albums with millions of throw-away dollars.
So I just wanted to give you all this info about how the music industry works because a lot of people think they aren't hurting the artist, but really they are. Only the HUGE artists are completely financially secure despite the downloading. Sales may not seem to waver much, but that is a huge difference to the artist--who is in fact the very last person to get any of the money whatsoever, and a pathetically low percentage at that. Hell, most artists don't even get paid at all until about 6 months after their album hits the store shelves. And even then, your percentage gets diced up to pay for all those 'extraneous expenses' such as studio time, single edits for the radio, management, touring, etc.
You the artist do not see a god damned DIME until everyone else and their mother has obtained their cut, period.
The record industry really sucks, as far as being thankful to the artists who make it work. Downloading doesn't help this at all, either.
Imagine how much harder it must be to pass the 'break even' point in returning the advance when you're a new artist and all you have is a single...that everyone's downloading and not buying your album...and because of that your record label deems you as too much of a high risk investment and decides to terminate your contract (which they can do anytime while you have no say in the matter and couldn't quit if you wanted to--which was the case with Megadeth on Capitol Records recently. It's a standard record contract clause). Bottom line is, the people already rich from the music industry aren't going to suddenly get poor...but the ones starting out are being completely paralyzed, and that is making the industry go stagnant--and THAT is where money is lost, not by the artists who've already made millions, but by the labels who can't successfully push new talent. It is slowly becoming more cost-efficient to just ignore new acts and wait for them to independently gain some lucky radio hit, and then snatch them up and milk the single rights for all it's worth. Either way the person you hurt the most are actually those newly signed garage bands, the ones who could've been the next whoever, as long as they have the right support. Downloading their song will break them, easily. A good example of this would be...hmm...any current rock single on the radio, actually. Like the Killers, for example. You will NEVER see a second Killers album, and if you did, it's only because they were given a three-disc deal and hadn't blown all of their advance completely out the window yet.
For the above reasons, many young new artists that get record contracts flounder and fail outright; even some experienced artists feel the clutch. A good example is the Offspring, who tried to release one of their albums entirely online, on par with the band's feeling that downloading music should be acceptable. Well the album made absolutely no money and flopped, and the record label cut back their Offspring efforts considerably. Their main opposite, Green Day, is all over the radio; Offspring's new album single barely gets played. You know why you always hear "Gotta Get Away" and other **** off of their early albums instead of new ****? It's because those songs were hot for the label they are no longer on, and the label helps to keep them in rotation for the royalties--a great way to make the bucks at the Offspring's offense, since they are no longer on the payroll of that particular record label. Why waste your money and make them do new albums when all you have to do is give them a pathetically small royalty check every six months for a handful of raido playbacks? They are now on an independent label I believe; thus no financial backing, thus no chance in hell against the mighty battering ram of their death that is Green Day's new album.
BOTTOM LINE!!
Whew. Long but lots of good stuff in there. I suggest you all give it a read if you want to really understand the music industry. I just gave you two years of collegiate learning in one forum post, heh. Bottom line: downloading music hurts the people we need most--new musicians, new acts. It also hurts the record label's abilities and interest to fund multiple new artists.
As someone in a band, I'll say this much. I spent $900 to make an album myself for my old band (I used my computer and such). We made $2000 bucks at our CD release party thanks to a pretty awesome promotion we had involving two models from Playboy's "Girlfriends Magazine" (For ten bucks you got the disc and their autographed book). I saw $40 bucks of that. You can do the math.
