Major Labels

Allman Brothers & Cheap Trick Vs. Sony BMG Comments & Commentary

The Allman Brothers and Cheap Trick have filed a class action suit against Sony for allegedly under paying artists for digital downloads (story here).  Is this another nail in the coffin of the major labels?  Our readers and the industry speak out:

Cds_color_4"Major labels aren’t going to die. They may end up paying more royalties on digital downloads, but they’re certainly not going to die." – Glen from Coolfer

"The big labels will die… Sonybmg_28 1. They don’t have the technology to compete
2. people don’t like them
3. They pick wrong enemies (Microsoft, Apple)
4. Their upper management is incredibly thick.
5. more importantly, they don’t have the next generation artist. They are too busy doing ‘Prince’ rehash or American idol. Lucrative at the moment yes, but nobody else care.            6. and … I won’t even mention hilarious business tactic similar to shooting themselves in the foot for short term profit." – squashed

It’s about time someone woke up and yelled about this. How many acts are stilLegal_2l stuck taking reduced royalties on the experimental CD format, and higher deductions because of the CD’s more expensive manufacturing process?  I wonder what the return rate is on ringtones? – Boston Music Attorney Rob Falk

Money_1"Record companies have screwed artists from the dawn of the recorded music era. That IS NOT going to stop…But the digital era gives ACCURATE sales numbers. So, what do they do? Pay bupkes. Essentially nothing, for those yiddish-challenged…

The Allman Brothers and Cheap Trick are not going to get any more significant money. But now the average person is gonna know on a 99 cent download the artist doesn’t even make a nickel. And that just gives them more incentive to steal. Hell, the artists are not getting paid ANYWAY!"  – Bob Lefsetz in the Lefsetz Letter

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Bruce Houghton on 04/29/2006 in Major Labels | Permalink | Comments (4)
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  1. Anecdote from the net. (my buying pattern is somewhat similar, altho’ I buy a lot less CD these days compare to 3-4 years ago.)
    http://www.knowledgeproblem.com/archives/001564.html
    Other than the obvious aesthetic connections (those jangly Brit-pop-ish sensibilities) among these recordings, I am deeply intrigued by the variety of their labels, by which I mean the entity that holds the legal copyright on the content:
    * Arctic Monkeys: Domino Recording Company
    * Editors: Kitchenware Records, “under license to Fader Label”
    * Clap Your Hands Say Yeah: self-published
    * Of Montreal: Polyvinyl Record Company
    * Tapes ‘n Tapes: Ibid Records
    * I Love You But I’ve Chosen Darkness: Secretly Canadian Records
    * Spoon: Merge Records
    * Mute Math: self-published; in fact, I understand that Mute Math generally sells its CDs out of the back of the pickup truck of one of the band members at its shows
    So what’s so interesting about this, beyond the usual long tail, artists can directly distribute to their fans, etc. aspects that we’ve been discussing for a couple of years? Look at the variety of labels among the 8: 2 are self-released, but the other 6 are on labels (although according to WRCT 88.3 FM Pittsburgh, Tapes ‘n Tapes is the only artist on the Ibid label). Ibid is, at least at this point, a one-artist label, and the others are of varying sizes and vintages. Look at Merge, for example, which was founded in Chapel Hill in 1989 and whose artists include Teenage Fanclub, Dinosaur Jr., the Buzzcocks, and other pretty-established indie bands as well as other bands with which I am unfamiliar. Secretly Canadian has a smaller and less-well-known roster. Polyvinyl has also been around a while (and is a local label here in Chicago), since 1995, and also has some well-known bands.

  2. Lefsetz’s mistake is in thinking the average person (a) will know anything about digital royalties and (b) will alter purchasing habits in the event (a) is known.
    I don’t think the typical American is very good at allowing morals to dictate purchases. Even in cases that have much more public awareness — paper products’ and fossil fuels’ impact on the environment — there has been only a slight, decades-long shift in consumer behavior. If there is to be a similar shift in music, well, it’s going to take another decade or two.
    When it comes to music, very, very, very few people shop according to morals. (And those are super indie DIY people who are completely defined by these types of things.) And I don’t believe they take songs on P2P as an act of civil disobedience. They do it because the music is free and percieved (and actual) threat of penalties is incredibly low.
    All those people who hated Sony BMG’s rootkit blunders? They’re going to buy hundreds of thousands of copies of new albums by Pearl Jam and Tool tomorrow. Not even Pearl Jam could keep itself from hookin up with Sony BMG. And what is that? Because they know next to nobody is going to actually boycott the company and the band’s release.
    Wal-Mart is the most hated and most successful retailer in the country — if not the world. According to Lefsetz Logic the company should have been out of business years ago. That’s why I don’t care much for Lefsetz Logic. It has no historical basis. Everybody has known for decades that artists have been treated unfairly by record labels. This has been a recurring story throughout the years. But consumers don’t care. They’ll keep buying music. In the future they’ll buy CDs, downloads, ringtones and they’ll subscribe to online or over-the-air music services. And very few of them are going to get involved with the legal mumbo jumbo behind the songs. They just want the songs.

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