We asked Rounder Records vice president of A&R Scott Billington how the definition of a record label is changing and what models are emerging and here is what he had to say...
Over the past few years, as the retail market for compact discs of non-mainstream music has declined and in some instances all but disappeared, it’s become frustrating not to be able to reach out to many of the musicians with whom we’d most like to work. For many touring world music bands (as well as musicians in many other genres), the main venues for music/CD sales are either via the web or at gigs. The result is that many CDs are selling only 10-15% of what they would have a few years ago. Tower is gone, and many other retailers are scaling back on CDs. Digital sales have failed far short of making up the difference.
Our business has been to provide services for artists— high-quality production and funding of recordings, graphic design, marketing, radio promotion, advertising, indie or in-house publicity, etc.-- then to recoup our expenses by selling music. It’s tough to see that this is no longer a viable business unless we are working with an artist with a large and firmly established fan base. Then, our marketing and sales capabilities can be very effective.
But where does this leave the developing artist? Most of the major labels are now asking for 360 degree or multiple rights deals, in which the record company takes a portion of tour income, merchandising, song publishing, etc, in addition to CD sales, in exchange for artist development. Still, most of these deals are aimed at having a big success in the pop market.
Is there, then, a place for record companies to continue working with non-mainstream musicians who want the services a record company might offer? Surely some musicians are better off doing the support work themselves, at least if they’re inclined to be involved with the business side of their careers. However, I still like to think there is a way for record companies like Rounder to work with developing and niche artists. I don’t believe, however, that it can be based solely on CD and music sales. Perhaps there is a middle ground between the major label 360 degree deal and the old-fashioned record deal, where the record company invests in the overall career of the artist in exchange for other rights, probably including a percentage of tour income.
I know that many musicians would not see this as a pretty picture, but we all still need some sort of infrastructure to develop new music. Madonna and Nickelback can get big 360 degree deals, but most developing artists can’t. There’s still a need for an organized effort, or maybe a trusted filter, to bring the best music to the fore and to truly get the word out to people. Nobody’s quite figured out the right business plan for the digital era, but we’re trying.
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