Music labels thrive, but will online music services?

By Phantasm66 · 6 replies
Sep 23, 2004
  1. "Of the 99¢ that stores such as Napster and iTunes Music Store charge for tracks, the labels get up to 87¢ of it. That leaves 8¢ for the publishers and a paltry 4¢ for the stores themselves. The net result is that the labels are increasing their profits while reducing their overhead (which is good business). Downloads require no physical packaging, shipping, or other manufacturing costs for the labels yet bring in more revenues. Bandwidth, marketing, and other costs are absorbed by the store."

    I was, like many of you probably, under the impression that mp3 downloads, bittorrents and things like that were killing the music industry. Sales have dropped by X amount because Y amount of mp3s were downloaded from Kazaa, etc, etc. I thought the music labels were in serious trouble. Looks like I was wrong.

    Far from being the ruined businesses that they might like us to believe, it appears that their profits are actually growing strongly as a result of the boom in online music, and that some online music services may disappear, whilst music labels continue to make better and better profits. It also appears that only a slim portion of profits made through online sales make their way to the online music services. And I think we can guess how much makes its way to the actual artists, who in a dream world I would like to pay directly for their works.
  2. Nic

    Nic TechSpot Paladin Posts: 1,549

    Once online music sales become the norm, artists will be able to bypass the record labels and sell direct to the public, or online stores. Then we will finally be rid of the music labels, unless they drop their share of the costs dramatically. New artists can promote themselves through the stores.
  3. Phantasm66

    Phantasm66 TS Rookie Topic Starter Posts: 5,734   +8

    Nothing would please me more than to be able to write an electronic cheque straight to Alanis or Massive Attack or lots of other artists that I like.
  4. Godataloss

    Godataloss TS Rookie Posts: 482

    MY dream is a system where EVERY song is available and you pay a few cents each time you listened to a given song. I could definitely see something like this offered through your cable company a-la video on demand- the hardware and billing is already set up.
  5. Phantasm66

    Phantasm66 TS Rookie Topic Starter Posts: 5,734   +8

    If I could meet some of the people who actually perform and produce the songs I love, I would like to just give them cash. And I would probably give them more than I would be expected to pay for a single or album.

    Music has been a part of the human existance for thousands of years. Its right that it gets embroiled in the technology that's become so much a part of our lives, but its wrong that its USED by horrible companies to make the companies themselves rich. That alone makes me want to keep going back to Kazaa.
  6. Godataloss

    Godataloss TS Rookie Posts: 482

    How very true! We've been subject to a massive machine that not only decides how much we pay for what we listen to but also what material is marketable in the first place. Gone are the days of Blue Note and Motown- labels that did it for the love of the music and the muscians. Now we have to wade through the tides of pop-sewage for the occasional gem that manages to stand out amongst all the turds.
  7. Phantasm66

    Phantasm66 TS Rookie Topic Starter Posts: 5,734   +8

    I know, its sickening.
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