Music Industry Research

Making Money
"The turmoil in the recorded music industry changed the twentieth-century balance between artists, record companies, promoters, retail music-stores and the consumer. As of 2010, big-box stores such as Wal-Mart and Best Buy sell more records than music-only stores, which have ceased to function as a player in the industry. Recording artists now rely on live performance and merchandise for the majority of their income, which in turn has made them more dependent on music promoters like Live Nation (which dominates tour promotion and owns a large number of music venues.) In order to benefit from all of an artist's income streams, record companies increasingly rely on the "360 deal", a new business-relationship pioneered by Robbie Williams and EMI in 2007. At the other extreme, record companies can offer a simple manufacturing and distribution deal, which gives a higher percentage to the artist, but does not cover the expense of marketing and promotion. Many newer artists no longer see a record deal as an integral part of their business plan at all. Inexpensive recording hardware and software made it possible to record reasonable quality music in a bedroom and distribute it over the internet to a worldwide audience. This, in turn, caused problems for recording studios, record producers and audio engineers: the Los Angeles Times reports that as many as half of the recording facilities in that city have failed. Changes in the music industry have given consumers access to a wider variety of music than ever before, at a price that gradually approaches zero. However, consumer spending on music-related software and hardware increased dramatically over the last decade, providing a valuable new income-stream for technology companies such as Apple Inc."


(http://en.wikipedia.org/wiki/Music_industry)


Most of the money made by up and coming artist will be from live PAs and performances. Because of this the video will be posted online as there is little way of making any money back from producing the video. The release of the new single is in a bid to increase the hype surrounding F Star Raw, so that he can achieve more record sales. This single a CD will be released alongside a string of performances at major venues throughout the UK


Distribution
Music distribution is the essentially, the process music reaches the shops. Distributors usually make deals with the artists' record label but sometimes directly through the artist if they are independent. The distributors make money by taking a percentage of the revenue from each CD sold.


The distributors normally expect the 'finished article' from the label/ artist but sometimes they sign a M&D deal which is an agreement where the distributor manufactures and distributes the CDs/ albums. They retain all of the revenue until their initial investment has been paid off, then they will take a cut from the revenue after this point.


F Star Raw is an independent artist as has signed a distribution deal with a private distribution company. They have agreed a deal with HMV who will take 10,000 units 6000 of which will be spread between the London based stores and the remaining 4000 throughout the rest of their stores in the UK.




Royalties
Essentially royalties are an exclusive copyright to the score/lyrics of a song. Owning the royalties gives you 5 exclusive rights:
(a) to make copies of the songs through print or recordings
(b) to distribute them to the public for profit
(c) to the "public performance right"; live or through a recording
(d) to create a derivative work to include elements of the original music; and
(e) to "display" it (not very relevant in context).


These exclusivities have led to the evolution of distinct commercial terminology used in the music industry.
They take four forms:
(1) royalties from "print rights"
(2) mechanical royalties from the recording of composed music on CDs and tape
(3) performance royalties from the performance of the compositions/songs on stage or television through artists and bands, and
(4) synch (for synchronization) royalties from using or adapting the musical score in the movies, television advertisements, etc. and
With the advent of the internet, an additional set of royalties has come into play: the digital rights from simulcasting, webcasting, streaming, downloading, and online "on-demand service".


[www.wikipedia.org]