Until the 1990s, the standard distribution deal remained the primary vehicle for artists to get their music heard. Record labels brokered the recording, promotion and distribution costs, with royalties only being paid once those debts were recouped. However, the digital revolution has left artists little better off, says former Talking Heads frontman David Byrne. Writing for "Wired" magazine, Byrne pointed to Apple's 30 percent cut from its iTunes downloading operation as great for consumers, but less so for artists.
Complaints about traditional deals had little outlet until the end of the 1990s, when Internet downloading services like Napster emerged to fill a basic consumer need. Weary of shelling out $18 per CD for one or two songs that appealed to them, consumers readily embraced the idea of downloading them online, according to entertainment writer Steve Knopper. So far, consumer acceptance of the new format has trumped labels' attempts to sue it out of existence.
Struggling to prop up a fragmented revenue stream, record labels are embracing increasingly unusual arrangements. In 2008, music marketers Jon Cohen and Rob Stone began courting major companies to pay for advertising on a network of music blogs--whose overseers wield considerable influence but have been difficult to reach by traditional means, "Fortune" magazine reported. Whether artists can make an adequate living under this model remains to be seen, however.
Allowing unlimited access to free music remains a contentious subject, as "BusinessWeek" reported in recapping a March 2008 debate at the South by Southwest Music conference. Ted Mico, head of digital strategy for Interscope/Geffen/A&M Records, questioned the idea that cannot be sold at all, while Peter Rojas--whose RECRD LBL blog is a key participant in the ad-driven model--argued passionately for the opposite viewpoint. Still, with so many unknown bands vying for attention, how many can ride an online wave to fame remains uncertain.
To recoup their investments, major labels are increasingly relying on "360" deals. Marketers, managers and producers join in handling every aspect of an artist's career. The artist gets a large amount upfront, with their partners taking an equity stake, in hopes of leveraging a marketing machine's resources. To Byrne, however, such arrangements spell disaster for creativity: "As a general rule, as the cash comes in, creative control goes out. The equity partner simply has too much at stake."
From entertainment writer Knopper's standpoint, music industry resistance to downloading is merely the latest in a string of technological miscues. As Knopper noted in his book, "Appetite For Self-Destruction," labels resisted the compact disc, until they saw it could make money. With recorded music increasingly accessible for free, the '80s and '90s boom time is long dead, Knopper told "Electronic Musician." The tradeoff, he asserts, is that artists may also have to live on a reduced scale.