Record Labels Adapting
How are record labels adapting to the web and mobile platforms when it comes to music videos? The music industry has survived because it has learned to adapt. The industry's ability to switch in recent decades from an emphasis on sheet music to records and then to CD's proves that the major labels can adapt. However, the recent radical shift from CD to online formats has been very challenging to deal with. The big music companies are being forced the adapt quickly.
The VEVO joint venture between YouTube and the major labels indicates that the companies are accepting the fact that the whole music industry is turning toward access of music rather than ownership of music. The focus is changing from CD's to music videos online, from albums that may contain a few hits and several marginal tunes to singles that stand by themselves. That change has spawned a much broader musician base since virtually anyone with a little bit of technological savvy can record a song and possibly generate a following for a recording in an instant. This means that the once-powerful record labels are no longer nearly as powerful. One response by the record companies has been to drop artists whose profitability to the label is marginal. Sales of 80K-100K appears to be the current cut-off point. A driving force in this is that musicians are beginning to retain the ownership rights for their copyrights and master recordings, which makes decades of earning potential for them and their heirs a real possibility. Today's today musicians are also sharing in all the profits from both the music sales and their tours. Both of these trends have major effects on the music labels' profit margins and are requiring companies to rethink strategies for signing and retaining artists.
Another change has been that the major labels have admitted that things need to change and to offer some services to musicians who have not formally signed to that label. Some examples have been in the areas of touring and merchandise support. Some artists have been allowed to produce their own music and the contract with a music label to manage sections of their business without having full control over that area and without bearing all the risks involved. These unusual and creative actions indicate that the major firms are now listening carefully to what artists want and are much more willing to be flexible as they deal with artists.
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