Intro To Music Industry


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Introduction to studying the music industry for G322

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Intro To Music Industry

  1. 1. Unit G322 Part A: Textual Analysis and Representation Part B: Audiences & Institutions
  2. 2. The Music Industry Institution Audience Production Distribution Marketing Exchange/ Exhibition Consumption Reception
  3. 3. We’ll start with the audience (you). <ul><li>How do you consume music? </li></ul><ul><li>What is your attitude towards the music industry? </li></ul><ul><li>Watch the following clip – recap your textual analysis and representation skills by analysing what clichés of the music ‘industry’ are presented? </li></ul>
  4. 4. The Industry <ul><li>In simplest possible terms, what is the job of the music industry? </li></ul>A record company gets the music from the artist to the audience.
  5. 5. Record Labels – an overview <ul><li>Major labels- these will often be linked to a distributor. </li></ul><ul><li>Major distributed Independents – a small, often specialist label that uses its links to a major label for distribution. </li></ul><ul><li>True Independent – an independent label that doesn’t use a major distributor but provides this service for itself. </li></ul>
  6. 6. The first step <ul><li>The record company must find a record. </li></ul><ul><ul><li>A record is defined as an audiovisual entity, not as the format on which it appears. Therefore a ‘record’ can be: </li></ul></ul><ul><ul><ul><li>A CD </li></ul></ul></ul><ul><ul><ul><li>A music video </li></ul></ul></ul><ul><ul><ul><li>An internet download </li></ul></ul></ul>FACT: Records used to be made individually with the artist performing again and again for each ‘copy’.
  7. 7. Finding an artist <ul><li>Imagine you are a record company executive. Around the room are various profiles of artists on offer. Which would you chose and why? Think about the band’s marketability and, from a music industry perspective, their profitability! </li></ul>
  8. 8. The Deal <ul><li>Now you have chosen a band to work with, you must make a deal with them. </li></ul><ul><li>We will discuss three major parts of record deals. We’ll keep it simplistic for now. You will then formulate a deal based on them. </li></ul><ul><li>The areas are </li></ul><ul><ul><li>Royalties </li></ul></ul><ul><ul><li>Advances </li></ul></ul><ul><ul><li>Reserve against returns </li></ul></ul>
  9. 9. Royalties <ul><li>Royalties are the share of record sales that the artist gets paid. </li></ul><ul><li>They are a percentage of the WHOLESALE price of the record (the price at which the record is sold to the record shops.) </li></ul><ul><li>Each percent is known, in the industry, as a ‘point’. </li></ul>
  10. 10. Royalties <ul><li>An artist with a ten point deal will get ten percent of the wholesale price of each record sold to shops. </li></ul><ul><li>So, if 10,000 records are sold at a wholesale price of £10 each, the artist makes… </li></ul>£10 x 10% = £1 £1 x 10,000 sales = £10,000
  11. 11. The advance <ul><li>Record companies will stump the cash for recording the album, alongside a lump sum paid to the artist for signing with them. </li></ul><ul><li>This sum is always contracted to be recouped (re-taken) against the royalties that the artist earns. </li></ul><ul><li>So if an artist has a £20,000 advanced on a ten point deal they need to sell 20,000 records before they start making any money. </li></ul><ul><li>Recording costs are also recouped against royalties. There are many bands that do not make much money! </li></ul>
  12. 12. The Reserve <ul><li>Record shops can return unsold records to the label for a refund – often 100% (this is more complicated in practice though). </li></ul><ul><li>When a label takes on a new band, or pays for a new album, there is always a risk that it won’t sell and many of the records will be returned. </li></ul><ul><li>The label must therefore ensure that they don’t lose out big time. </li></ul>
  13. 13. The Reserve <ul><li>Until the label knows that a record is selling, they will keep a percentage of the royalties payable to a band (in addition to the recouping the advance.) </li></ul><ul><li>The percentage of royalties kept as a reserve is based on the likelihood of the record selling. </li></ul><ul><li>When the record has been proven to sell, the reserve is returned to the band. This is known as ‘liquidating the reserve’. </li></ul>
  14. 14. The Deal <ul><li>Your deal must explicitly set out the numbers and percentages for these three areas. </li></ul><ul><li>Remember, if your artists don’t write their own material, you will have a separate contract with the songwriters that you use. Your label may have some writers on the payroll though. But this will definitely affect the way you pay your new signing. </li></ul>