I’ve been doing a lot of thinking lately about why so many artists seem to be suddenly splitting from their record labels. There was a wave of self-released records a few years ago, including NIN and Radiohead, but recently the “I can do this myself!” camp has expanded with the addition of OK Go and Amanda Palmer, among others.
The basic premise of a label is this: you sign an act you think will end up making you money, invest some time and resources into them in exchange for some ownership (profits, rights) of the product, and start on your journey to making the big bucks. You need the talent to make your connections worthwhile, and the talent needs you, your money, and your connections to help them make it big.
I know, it’s a touch more complicated than that in reality. But, when you get right down to the meat of it, it’s about the label making a wise choice on the artist selection side, dedicating the resources (time, money, guidance) into making that investment a success, and enjoying the rewards when it happens.
Tell me again exactly how that process differs from being a venture capitalist?
It doesn’t!
EXCEPT when you consider the fact that the labels somehow forgot about patience (among other things), and started screwing up from the very beginning.
Sign an act that can’t sing their way out of a paper bag? Great, auto tune the records to hell and use every available bit of technology at your disposal to get them to sound nothing short of magnificent.
Not writing songs that reach as many people as you’d like? Hire a songwriter and make sure their music fits the masses.
There ARE labels out there that take the time to really evaluate the acts they sign, and sign them BECAUSE of their talent and their potential. These, lately, have been the indie labels, which are doing quite well if you look at their growth over the past few years.
It seems to be the majors that have this problem – this immediate need to recoup their investment and milk the artist for all they’re worth. Yes, the music business IS about making a profit. It’s a business and for any business to be sustainable, you have to have some cash coming into the door. However, they’re not looking at things from a long term view as well as a short term view, it seems.
All of that technology to make an artist sound amazing when they’re truly not comes at a cost, and that cost = overhead. Keep increasing the # you’re putting into someone and profits for you diminish, lessening both what you make AND what the artist makes. Tough cycle.
Venture capitalists will put money into a business they think could be viable in exchange for partial ownership of the returns. They’ll sit on the board, they’ll guide, they’ll oversee, and they’ll use their connections to help improve the business. They’ll be present and their input will be heard, but what they wont do is demand their investment back from the first few customers their new business signs. They’ll wait it out, see their investment slowly grow (if they chose wisely), and be in it for the medium to long haul.
Just like labels, VC’s come in different flavors. Some request more of one thing, or less of another. For the artist, it’s about picking wisely (just like the startup!). For the label, it’s about putting terms out there that provide ways for both your profits AND your artist (and THEIR profits) to grow over time.
If artists evolve over time, and fan bases grow and change right along with those artists, hey don’t labels take the same approach? Why don’t they act more like guides, instead of dictators? Why don’t they make smarter choices about who to sign from the very beginning?
It seems that labels put profits above all else in both the short AND the long term, preventing (often times, it seems) the chance of long term growth. Plus, some of the signing decisions? They’re just downright silly! Why are you going to sign someone who can’t sing to a label?!
Riddle me that.