Sony playing a Cheap Trick on musicians?

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Labels will always be around

Labels will always be around. Its simple economics at work.

Assume every artist is working as hard as they can to sell their own record. Now assume a label steps in and offers to use its resources to mass-promote a single artist.

That artist faces a choice: 1) except the offer and make significantly more money than before, or 2) turn down the offer.

The problem is that if even one artist excepts the offer, that particular artist will do really well while the vast majority of other artists will struggle and probably fail. Hence, if an artist is offered a deal, they will except. Simple game theory.

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Now in terms of how much an artist receives per record sold, digitally or otherwise, by the label, I agree the artist receives an unfairly small portion of the pie. However, this too can be explained by economics.

Look at the example above again. If an artist that doesn't except the offer from a label is sure to go out of business, than how much money does the label actually have to offer any individual artist? Answer: only enough money to keep the artist in business. i.e. pennies per song sold.

Of course, in the real world, some artists manage to do significantly better than this. That's because some artists are indeed better than others. There are some artists that will fail no matter how much money a label pours into marketing. And there are some artists who will earn a better return on marketing dollars invested, than other artists, simply because the public likes their music better. The result of this is that labels need to offer these successful artists more in order to win them over.

Additionally, since there is more than one label, labels also compete with each other for the best investments. Hence once again, some artists will be offered a lot more than others.

Nevertheless, overall, labels don't really have to offer much.

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Should labels just be outlawed?

It may seem from my arguments above that labels are just moochers abusing the system. However, the truth is that the music industry sells far more records with labels than they ever would without labels. This means that if we didn't have labels there would be a lot of records you or I would never even know about, and hence not purchase. And that, arguably, is a bad thing.

Posted by: Feldon   Posted on: 04/29/06 You are currently: a Guest | Members login | Terms of Use

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