Research Into Existing Music Labels

Completed By Amie

Looking at music labels was essential within our research as it informs us of the business aspects of why artists make music videos. It looks out how a music video can provide branding and identity as well as how the industry are making their money back. We also look as how the music industry is doing currently with persist reports regarding loss of profits. 

What Music Labels Are Out There?

A record label is arguably the main reasons why artists such as Katy Perry, Britney Spears and Justin Timberlake are so successful and perhaps without them they would not have had the same achievement as the institutional imput to the branding of the artists is aimed to drive sales. The record label provides artists with effective guidance marketing them to their correct niche audience but provides them with funds to make their musical career but also equally can destroy their career.

Who dominates the market?

The Relationship between Artists and The Record Label

How Do Record Labels Make Their Money?

Why are CD's so expensive to make considering manufacturing is low? This is because of all the background work which goes into making it but also creating enough excess that the label can make a profit!

Artist royalties and Songwriter royalties which are usage based payments to a licensor to generate an on going asset which can either be done at a fixed price or by percentage of gross. A royalty interest is the right to collect a stream of future royalty payment which is often used within music industries describing a percentage of ownership.

Costs of recording the album - Recording studio fees, studio musicians, sound engineers, producers, etc. which can totally range depending on technology and expertise. This process of generating money is rapidly changing with easy internet distribution during the digital age.

Marketing and promotion costs - Video clips, public relations, tour support, marketing campaigns, promotion to get the songs played on the radio, etc can be very costly which often results to artists having to pull media stunts for example Rihanna getting the tube to her concert in order to promote it as it received a lot of press attention.

Design costs - CD insert, promotional materials (posters, store displays, music videos) which is vital to all promote the video alongside marketing as it provides a media platform for the lyrics to be presented and developed. 

Concert tours also generate the profit via ticket sales depending on how many are sold, if they are big arena tours and how much crew and set equates to. 

Why Are Music Videos Important To The Label? 

Music labels spend so much time and money on music videos as it provides a platform for branding of the artist, enhances the music and promotes the song all in aim to drive sales. For example Madonna created some of the most expensive music videos of all time and her notorious movement and costumes within the music video sparked interest within the audience creating publicity. This led to a jump in sales of her records which led to their success therefore making more money for the label. (most expensive music videos ever made table is on the left). 

Music videos aim to be edgy and shock for example 

Miley Cyrus's new music video 'Wrecking Ball' is a move away from her disney character Hannah Montana as we see her naked and her sexualised behaviour led to her video being one of the most watched on youtube and her song moving up within the charts hitting number one on the US billboard hot spot list, number one in Canadian hot 100 and number one in UK official single charts along with much success throughout the rest of Europe.

                                                                                                   

"The Internet Opened A Music Business"

Doug Morris, Chief Executive Officer, Sony Music Entertainment

Doug Morris discuses managing creativity and change within the music video as part of an online guest speaker group series. He covers many vital points including how record labels are changing with current technology in aim to continue to make music sales. 

The Future of Music Labels 

Record labels are suffering as the largest capitals failing to make enough profit.  Distribution is slowing down as selling recorded music and investing profits into the development of new talent slowly decreasing. Global music sales have been contracting for over a decade falling from $27.8 billion in 2000 to $16.5 billion in 2012 conveying that their is less funding for new artists especially when it is such a risk investment as some labels report the fail rate has improved to eight out of ten but traditionally nine out of ten artists do not generate a positive return on investment.

Labels are imply that they are now just an investment bank that become involved within product development, distribution and marketing services for their client which is hitting a 80% chance of a capital lost many labels are becoming more reluctant to sign up and coming artists. 

Completed By Ruby