Feedback on FTC/Labels Settlement
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I have come across a few facts that undermine the RIAA's position on
pricing. Here is a good thing for you to read:
It explains how little the music companies actually pay out to support new
If blanks CDs are less than $1 retail, you KNOW the companies are paying
less than a $1 for them. So the plastic really is negligible.
Just thought the link above would help.
I found your article interesting and informative, particularly in its clear
explanation of the MAP issue and its ramifications. I do feel, however, that
you let the record companies off the hook a bit towards the end of the article.
First, the RIAA is a highly biased music industry advocate/mouthpiece that
exists solely to protect the interests of the major labels. The RIAA simply
cannot be trusted to offer a objective explanation--or even a largely truthful
one--for the excessively high prices of compact discs. Second, as a former
employee of one of the five major labels, I can tell you first hand that the
record companies do very little to rein in excessive expenditures in both the
recording and promotion processes. Simply put: consumers are made to pay for
the industry's inability to control expenditures. Third, for the RIAA to point
to the efforts and time spent by artists is a little disingenuous. The RIAA is
far from being an advocate on behalf of recording artists. Of course, Hillary
Rosen and her hypocritical crew are happy to raise the flag of the artist when
it suits their purpose, but remember, this is the same organization that is
lobbying on behalf of awarding the copyright ownership of master recordings to
the labels in perpetuity. The RIAA wants music artists to be labeled 'work for
hire' so the labels can walk away with all intellectual property. What a joke.
The labels spend too much money on recording (did you know that one day of
studio time at a major-label studio in NY costs around $2500-3000? This is just
one day. And this price doesn't include engineer fees, producer fees, studio
musician fees, and any rental equipment that might be used), too much money on
videos (a $100,000 video is considered a cheap video), too much money on radio
promotion ($50,000 per week to keep the song on radio). And guess who's expected
to make up for this profligacy? That's right, it's us, the consumers. If only
they knew what I know...
Basically, I am the source for the info (which may
not be helpful to you). But I'll try to break down the costs for you. Mind you,
these are major label prices we're talking here. You can record an album, make
a video, and effectively promote a record for far less than the numbers I
mentioned. But these are the prices I dealt with as a production manager for an
independent music production company funded by Sony Music International.
Studio costs: Most major recording studios here in NYC work on a 'lock-out'
system. You rent the studio, which includes the control room and any equipment
in it (recording console, some outboard recording gear, etc.) and the live room,
where the music is performed, for a 14-hr day, and no other artists are able to
access the studio while you have locked it out. The recording device itself,
i.e., the device onto which the music is recorded, is extra, as are the other
costs I outlined in my original letter. Studios including The Hit Factory, Sony
Music Studios, Right Track Recording, and Quad all routinely charge $2500 to
$3000 per 'lock out' day. Now, it is possible to make deals, but these studios
have huge overhead, and they won't go much further down than, say, $2200 per
day. Even the mid-line studios, which are perfectly acceptable for most
recording artists but lack some of the niceties and luxuries of the top-level
studios, are no cheaper than, say $1700 per lock out day. How do I know? I've
set up recordings and negotiated prices at almost all of these places. And
remember, while a punk band can crank out a full album in a week or two, most
major label acts take that long to record two or three songs. The more
successful you are, the more likely you are to take your time in the studio.
One act I worked with (great guy, don't get me wrong) would routinely take 2
weeks to record one song, plus a day or two to mix it. Big bucks.
Of course, there are a million ways to make a video, from hand-held 8mm cameras
to Super Beta to Film. For a major label artist, the costs are almost always
high, and more and more directors prefer to shoot on film for a more
professional look. Directorial fees can be $100,000 all by themselves,
particularly when you're talking about the directors who make the vast majority
of the videos seen on MTV today. Again, I'm not quoting a source. I know
because I've had to help produce a few of them, and it gets real expensive real
quick. Renting post-production facilities to edit the videos is almost
expensive as renting recording studio time, so you get the picture.
promotion. Here's where it gets a little tricky. Labels don't pay radio
stations to get airplay. At least not directly. They pay 'radio promoters,'
perhaps the most corrupt and powerful group of folks in the biz. They routinely
get paid 6 figures to use their influence on radio program directors. This
influence can take the shape of cash gifts, free vacations, etc. But, as the
labels themselves do not actually 'pay' anyone off, it's very hard to prove
guilt. Payola never went away, it just migrated to a buffer class of former
record executives--thugs, if you will--who will get the job done for you. If
you'd like to read a seminal account of these folks, read the book Hit Men by
Fredric Dannen. It describes the influence of these promoters (along with
providing a great history of the development of the modern record biz).
this has been helpful and not too vague!
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