How The Industry Changed

The state of the recording industry today has changed drastically from what it has been. The days of creating a song, getting it played on the radio, sold within stores, touring and making a ton of cash has basically dried up.

Here are a few of the main components that have created change of the traditional recording industry.

1. Recording

In the beginning of our industry, you or your band had to know how to play an instrument and at least, the fundamentals of music theory to get a song made. Originally you had to play and sing the entire song over and over until you got a great “take” then that take was cut into a record. Multi track recorders changed the industry so that individual tracks were created and musicians played their section prior to the singer coming into the studio. The advent of computers and sampling changed EVERYTHING. Now musicians were no longer necessary to make a song, if you needed a guitar track you sampled the guitar sound you liked played by someone else, and just inserted it into the place where you wanted it to go. The new era of producer driven music was initiated and this era fashioned a poor example of creativity. Producers became mixers of other people’s ideas, sounds and samples. Hits are made by people that have no idea how to read music, music theory or even business etiquette.


2. Radio Promotion

The first commercial Black recording played over the airwaves was done by a Black man – Dave Clark. The story as told to me, by Mr. Clark himself, was that he was a band leader in Memphis and his band was to play on the radio. Time came for the broadcast and the band was not ready to play, he didn’t want to ruin his chance to get on the air so he took a hand wound, bell shaped recorded cylinder player, placed the radio microphone into the bell and played a recorded cylinder while his band got their act together. From this humble beginnings came the advent of Black music on radio.

In the late 1930’s radio started playing recorded music and entertainers were not happy. Bing Crosby and Paul Whiteman stamped “Not Licensed for Radio Airplay” on their records and hired lawyers to try to sue the radio stations that bought them and played them. They believed that if people listened to their music over the radio they would stop buying records and even stop coming to their shows. In 1940 the Federal court ruled that once a record was sold, the buyer had the right to use it in any manner he liked, including broadcasting it on the radio. This ruling basically created the way radio stations would function from then on. Once the record companies realized that radio airplay only increased sales, they then started giving free copies of music to the radio stations creating the word “PROMO’S” and charging the artist for these free copies.

As record companies started developing and radio stations became more affluent a new business was made, Payola - The paying of cash or gifts in exchange for airplay. "Payola" is a contraction of the words "pay" and "Victrola" (LP record player), and entered the English language via the record business. The first court case involving payola was in 1960. On May 9, Alan Freed was indicted for accepting $2,500 which he claimed was a token of gratitude and did not affect airplay. He paid a small fine and was released. Before Alan Freed's indictment, payola was not illegal, however, but commercial bribery was. After the trial, the anti-payola statute was passed under which payola became a misdemeanor, penalty by up to $10,000 in fines and one year in prison.

It took a major performing rights organization to bring Payola back to the news. By the mid- fifties the independent record companies had broken the majors stranglehold on airplay and BMI licensed songs dominated the charts. ASCAP believed BMI licensed songs were hits only because of payola. So ASCAP urged House Oversight Subcommittee Chairman Oren Harris to look into the recording industry's practice of payola. ASCAP believed these records were played so often by greedy deejays causing them to become imprinted on unsuspecting teenagers. ASCAP had always looked at rock and roll as a passing fad, with these hearings they were trying to ensure that rock and roll would die. The committee decided to look into deejays who took gifts from record companies in return for playing their records on their shows. Fearing the worse, the record companies began stepping forward and announcing that they had given money to specific deejays. Soon twenty five deejays and program directors were caught in the scandal. Among the more popular ones were Joe Niagara (WIBG, Philadelphia), Tom Clay (WJBK, Detroit), Murray "The K" Kaufman (WINS, New York) and Stan Richards (WILD, Boston) the probe quickly focused in on the two top deejays in the country, Dick Clark and Alan Freed.

Dick Clark, with more to lose, quickly gave up all his musical interests when ordered to do so by ABC-TV. When Clark appeared to testify he brought Bernard Goldsmith a statistician. Goldsmith told the committee that Clark had a 27% interest in records played in the past 28 months and those records had a 23% popularity rating

Now fast forward to today and the current radio market. Record labels created a system of “promotion” to ensure that the records they made were played instead of someone else’s. Illegal and self serving this airplay creation is still alive and well. Radio, in turn, created the formats (Top 40, Urban, Rock, Album Oriented Rock, Hip Hop, etc.). This system worked fine until the advent of the Internet and the creation of Napster and MySpace. The old modes of exhibition, MTV and radio, became too rigid, and have been replaced with pull models, within which no one hears what they don't want to hear.

3. Video Promotion

Music Video was introduced in the United States by the movie industry with the advent of “talkies” the musical feature film itself; the set piece production numbers in films from ‘The Jazz Singer’ (Crosland 1927) through the lavish MGM musicals of the 1940s and on to the beginnings of the rock n’ roll movie such as Little Richard’s appearance in ‘The Girl Can’t Help It’ (Tashlin 1956) can all be seen to have influenced the style of the music video.

MTV, which began broadcasting on the Warner satellite feed in 1981 in the USA, growth was rapid. American artists soon realized the potential of the medium. In the early years, however, assumptions about the demographics of the audience led to dominance by white acts and a preponderance of male rock. Despite the success of the huge budgeted productions of Michael Jackson ‘Thriller’ (Landis 1983), Bad (Scorsese 1987), it was almost the end of the decade before any other black artists’ work broke through. The reluctance to play black videos merely ensured that rap videos were only able to acquire very small budgets and tended to be distributed through alternative means, not finding a mass audience. Gangsta rap was seen as enormously threatening to the white audience and it was only through using crossover in the shape of Run DMC and Aerosmith’s ‘Walk this Way’ (1986) and later the absurdity of the work of MC Hammer and Coolio that rap could become acceptable and eligible for bigger budget videos.

Hype Williams led the way for black artists and black directors through his extravagant productions for the likes of TLC, R. Kelly and Missy Elliott, by the late 90s commanding budgets of $2 million. These higher budget videos in turn generated record sales and led to Hip Hop effectively replacing rock as the dominant music form.

4. Digital Promotion

WARNER MUSIC INTERNATIONAL and digital services provider PREMIUM TV agreed to develop online television sites that will let consumers watch music videos for free, as the music industry seeks to counter a decline in cd sales

WMG created a video unit to promote new albums and artists on television, the Internet and mobile devices. The world's fourth-largest record company set up the division, called DEN OF THIEVES, in LOS ANGELES. DEN OF THIEVES will help drive the company's digital sales of music.

Now a company called DEN OF THIEVES makes me really worry about how these new record people will take care of the artists that they promote. After three (3) years with Warner this company has become an independent television production unit, with no visible sign of Internet promotion but some video game involvement.

The Bass Brothers' FBT Productions and Joel Martin's Em2M filed a lawsuit against Aftermath Records, Interscope Records and others over the split of digital royalties due for Eminem's recordings. The suit claims that the labels should be paying half of the net receipts from downloads and master ringtones rather than the lesser artist royalty rate based on sales. The complaint alleges that an audit of defendants by FBT and Eminem revealed that FBT and Em2M were underpaid by more than $650,000 from 2002-2005 since they did not receive 50% of the net receipts from the sale of downloads and master ringtones, among other reasons. Ultimately this suit was ruled that music royalties don’t change just because a song has been sold online

Older recording contracts typically provide that artists will receive a royalty for the sale of records based on the unit's retail or wholesale price -- often 10%-14% of the retail price or double that percentage of the wholesale price. When the recording is licensed, the label and artist often share equally the net receipts from licenses.

Today licensing has become the new source of recorded music income.