A guide for daredevils: how the music industry works. Modern problems of the activities of concert organizations Brands in music

Are you here: For the service sector

The modern music industry is a rather strange phenomenon that does not stand still and is constantly evolving. Those who have worked in the musical “kitchen” for many years know that sometimes it can be very difficult to predict what awaits us in the future musically. However, the profit system is always the same, and anyone who is serious about turning their music into hard cash would do well to have at least a basic understanding of how the music business works.

Therefore, we decided to write a small guide for daredevils who want and intend to promote their music and make good money from it. This is just enough information to give you a basic understanding of what the music business lives and breathes, and to get you thinking about how you could become a part of it.

Record companies

The “traditional” path to success in the music industry is to have your record heard by a well-known label who will then sign you to a contract to promote your work. It’s even better if you’ve already recorded several compositions that can be included in your mini-album, or in a full-length album, or several albums online.

Essentially, the label acts as an investor who invests their money in you and your project. This money goes toward studio rent, mixing and mastering, and your advance, which is paid up front so you can live until you start receiving your share of the sales, known in the industry as royalties.

The label also handles all the paperwork needed to release a track/album, which includes a breakdown of how royalties are divided: what percentage of each coin earned goes to you personally, the collaborators, and what percentage goes to the label to cover its initial investment and receive further profits that the label could invest in your promotion again.

Musical kickbacks

The Copyright Protection Society (MCPS) pays royalties for each copy of your track. This means that the more records you sell, the more you get. In addition, if your song ends up on CDs, or DVDs, or is used in any other way, then you also receive a certain amount for this.
For example: there are 20 compositions in the collection, and one of them is yours. This means that the Copyright Society will pay you 5% of all sales.

The long-awaited release of your music

Releasing your music means using your track in any form, and any revenue generated by the release of your music can come from many and varied sources. In reality, money comes in from every time a song is played on TV, radio or used as a film soundtrack, money comes in even when the track is played in Topshop dressing rooms. The list goes on and on.

Theoretically, it turns out that you get money for any use of your track. This system works thanks to collection agencies such as PRS in the UK or ASCAP (American Society of Composers, Writers and Publishers) in the US. These organizations track all the ways your music is used, then collect and distribute the money accordingly.

TV, movies and more

The main distribution channels and sources of profit in the music industry are TV, film and video games, and specifically, the distribution of the soundtrack of your music through these channels. The advantages of a phonogram are obvious: they will pay you just to use your composition; as a result, you receive new income from the fact that your song is used in film projects or TV shows, for example, as a soundtrack. Using your music in this way allows you to increase the recognition of you and your work, since it will be heard by a potentially huge audience that was not previously familiar with your music.

It's not easy to get tracks into TV and film projects, but there are specialized production companies that will act on your behalf to push your music in one direction or another. So, you can continue to do your own thing while agencies like these promote your tracks to people involved in film and television.

The need to compile a catalog of music that will be in the music library of music companies (more recently referred to as Music Production Companies) is quite understandable. After all, it is such a catalog that is potentially the most profitable of all the things you will do. As a rule, such a company will take a percentage for promoting your music. But you don't have to pay them upfront to represent you. Payment is made upon receipt. What's even better is that they don't get paid until your music hits the market, which means they'll work as hard as they can to get the word out about you.

Think about Rembrandt's "I'll Be There For You" - the Friends soundtrack - and how many people around the world know him...

Other sources of profit

What if you wrote and produced absolutely nothing? Don't worry, you can still make money from music. PPL streaming is not some typical distribution channel for songwriters. This is an additional source of royalties paid by broadcasters to artists for the use of their music. All those involved in the creation of the song (bassists, backing vocalists, etc.) also receive a small amount for their work.

Distribution

The distributor is responsible for getting your music from the warehouse to the store. To do this, if you create physical content, you need to enter into a distribution agreement.
As we know, 'physical' music lags in popularity compared to digital music, which is good news if you're starting your own label, since distribution doesn't have to be as effortful or expensive. Digital distribution means that your records will be available for sale digitally in all the places where your fans want it. For example, Amazon, Beatport, iTunes. In other words, digital distribution saves you from unnecessary fuss in every sense.

And finally

All of the above is quite difficult to accept, but if you want to connect your life with music, then you must understand the basic mechanisms of such a huge musical machine, and you must be ready, if you really want to make a name for yourself and leave a mark on the musical field, take on this is the case and go to the end, no matter what.
And we wish you good luck!

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Stages of the creative industry

New technologies have often led to radical transformations in various spheres of human activity. The advent of Gutenberg's first printing press, and later devices for sound and video recording, significantly reduced the cost of copying and made it possible to distribute creative works without the direct participation of their authors. In the early stages of the development of these technologies, inventors were able to successfully distribute (not for free, however) copies of multimedia content without paying royalties to their authors. For example, at the end of the 19th century, the mechanical piano (pianola) and punched tapes on which notes were recorded became actively widespread, which made it possible to massively copy and distribute musical compositions.

In such conditions, composers and score publishers risked being left without income. To resolve the growing conflict, an agreement beneficial for both parties was reached. Copyright began to extend to copies of works, and musicians, together with score publishers, received the right to receive income from distributed copies, and record companies minimized the possibility of score publishers monopolizing the market and received guaranteed access to musical compositions for a fee. This model of copyright protection is still in effect both in the music industry and in other sectors of the creative industry. There is a concept according to which such a model allows reducing transaction costs, but it remains insensitive to changes in economic conditions.

The digital rebirth of the music industry

The widespread adoption of digital technologies over the past few decades has significantly transformed our society. Co-Director of the Berkman Center for Internet and Society at Harvard University Yochai Benkler (Yochai Benkler) in his book “The Wealth of Networks” notes that digital technologies have made it possible to form a networked information economy that combines both market and non-market elements. Such an economy operates on the basis of a universally distributed technological infrastructure (computer equipment is owned and controlled by individuals). The “raw materials” are public goods (information, knowledge, culture), the “marginal social value” of which is actually zero. However, human creativity and the computing capabilities of technology are limited resources. And social systems of production and exchange (peer-to-peer) make it possible to use these resources more efficiently.

Digital technology has transformed the music industry. Now, to record and distribute a music album, for example, it is enough to have not very expensive recording equipment, a computer and Internet access. As a result, musicians no longer need to turn to well-known recording studios, which control most of the distribution channels for music content. Reducing costs and risks when creating digital content makes it possible to break down previous barriers to entry into the music market, which contributes to the formation of a highly competitive environment and the emergence of new creative works. But at the same time, music products are actually “leaking” out of the hands of their producers into a digital environment in which they are increasingly less able to control its distribution, and industry revenues have declined. Does this affect the motivation of creative individuals to create new cultural values?

The government strengthens support for copyright

To survive in the music industry, record corporations are forced to adapt to the new conditions of the digital age. But instead of supporting a competitive environment in the industry, the US government is pursuing an active domestic and foreign policy aimed at maintaining the existing “status quo.” The most significant example of the strengthening role of the state in regulating intellectual property at the domestic level is the adoption by the White House in 2010 of the General Strategic Plan for the Protection of Intellectual Property, which is aimed more at combating counterfeiting than at reforming legislation in the field of intellectual property protection, including .h. and copyright.

In his article, Tulane University Law Professor Glynn Lunney notes that such a US departure from neoclassical approaches to international trade may be premature. Proponents of tightening copyright regulations argue that such actions will contribute to economic growth, job creation and income growth in the creative industries. But copyright advocates often overlook how tightening copyright regulation will affect other sectors of the economy.

As an analytical model for considering this interaction, Mr. Lunney suggests using Frederic Bastiat's broken window paradox, according to which if a boy breaks a glass in a baker's shop, the latter will have to order a new one, which will create a demand for the glassblower's products and glazier's services. But if the glass had remained intact, the baker would have been able to buy new boots with this money. As a result, the economy grew, but no new value was produced for the baker. Similarly, in the creative industry, even if the expansion of the copyright regime creates new incentives for economic growth, this will not always lead to the creation of new values for society. This can lead, for example, to the “pumping” of resources from other sectors of the economy.

Making music without copyright

During the first decade of the 2000s, after the appearance of the first music file-sharing service Napster, industry revenues fell by more than half (see Figure 2).

Figure 2. Volume of music sales (in 2011 prices)

How it's done: producing in creative industries Team of authors

Music Industry in the Digital Age

At the beginning of the 21st century, the industry has changed dramatically. The music business has been restructured more than once as Internet technology has developed. The main problems remain piracy and the weak desire of Internet users to pay for legal content. Thus, only in the period from 2004 to 2010, revenues of the global recording industry fell by almost 31%. In 2013, for the first time, a slight increase in sales of music recordings was recorded compared to the previous year in the amount of 0.3%.5 Mainly due to official sales in the iTunesStore online store. But already in 2014, sales of individual tracks in the iTunesStore fell by 11% compared to the previous year: from $1.26 billion to $1.1 billion, and sales of physical media decreased by 9%.6 In Russia, the figures are still worse than the global ones. From 2008 to 2010, sales of legal physical media fell from $400 million to $185 million, more than halving in three years, and the piracy rate stood at 63%. For comparison, in the United States the piracy rate is only 19%.7

The very attitude towards music and the ways of listening to it are also changing. Online stores like iTunesStore, which were popular 3-5 years ago, are being squeezed out of the market by streaming services like Spotify and BeatsMusic. According to analysts, by 2019, almost 70% of all online music industry revenues will come from streaming services, and online store revenues will fall by 39%. At the same time, 23% of all users of streaming services, who previously bought at least one album per month, now do not buy them at all.8 Of the 210 million users of online broadcasting services, only 22% of users still have paid accounts. As music analyst Mark Mulligan notes, “What makes the transition to a new distribution model difficult is that we still need to find the value that subscribers to free-to-air streaming services are willing to pay for.”9

Moreover, music today needs different ways to attract modern audiences. In ways that would best meet the needs and habits of this same audience, accustomed to streaming services, gadgets, background and streaming perception of musical material.

Among the most important transformations that have occurred in the music industry are:

– unprecedented musical abundance. There is too much music today. The Internet has increased the supply many times over. As a result, the listener experienced an oversaturation effect. And when the listener begins to feel oversaturated, the value of the music drops. As a result, it is very difficult to attract such a jaded and tired listener. Moreover, when there is a lot of other entertainment on the Internet besides music10;

– reducing the duration of contact with one work. If an Internet user doesn’t like something, he immediately closes the file and switches to more exciting content11;

– transition from downloading and storing files to streaming listening;

– Internet audience attention deficit disorder;

– clip perception and the collapse of large musical forms. Shifting from an album mindset to a singles mindset;

– desacralization of music. Nowadays, almost everything for every taste is available on the Internet. The user does not need to make much effort to get the desired entry. Music comes too easily. And when music is obtained without much difficulty, it does not evoke a feeling of value and uniqueness;

– consumption in multitasking mode, which led to the practice of background listening. Today a person can afford to listen to music, read an article and surf YouTube at the same time. That is, a person goes to the Internet not for music, but for something else (for example, a movie or a game). Music is not an end in itself for the user. She plays in the background12;

– frequent changes in trends and the need to constantly update content caused by the FOMO effect. FOMO is “the fear of missing out on something new, being left out, the obsessive desire to be in the know.”13 The FOMO phenomenon especially applies to fans who are accustomed to following the lives of their idols. You can follow social networks around the clock. But if the artist does not update the content and share something truly (from the fans’ point of view) important with fans, then interest quickly disappears14;

– synthesis with other forms of art, primarily with cinema and theater;

– multimedia nature of musical material, that is, when promoting music, the accompanying video, photo and text content begins to play a significant role;

– the need to compete for the attention of the audience not only with the professional music community, but also with “amateurs”, who, relatively cheap technologies and software, allow them to try their hand at creativity and share the results of this creativity with a wide audience.

Considering all the challenges that the digital revolution poses to the industry, experts from the British The Music Business School believe that today a successful promotional campaign for a musician should rest on several pillars, including:

– emphasis on the uniqueness of the artist;

– loyal fan communities that should be present on several major social networks at once;

– distribution of the album through the maximum possible number of resources and platforms (online stores, streaming services, mobile applications, etc.), that is, the so-called multi-platform business model;

– presence on all the most famous video hosting sites;

– involvement of fan communities in the generation and distribution of content;

– building the promotion of your music around some interesting story (or idea) that would provide its potential listeners with narrative involvement;

– offering non-standard projects that expand the possibilities of music and allow you to “consume” it not only at concerts or through regular Internet listening, but also through some hybrid formats15.

Thus, the primary task for a musician is to attract the attention of as many listeners as possible and maintain this attention for as long as possible. The music industry is gradually coming to the conclusion that attracting an online audience with music alone is difficult. “We need to look for new forms in which musicians can now present their music. It is now clear to every musician - both luminary and beginner - that simply recording a song is not enough now, because it has every chance of not being heard,” says the leader of the Mumiy Troll group, Ilya Lagutenko16.

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Biblicalisms and musical culture This topic in our book is perhaps the most difficult for a number of reasons. Firstly, I am not an expert in the field of musical culture; secondly, music is the most abstract form of art; therefore a piece of music is very complex if

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1.1. Music journalism and modernity Journalism is often called the “fourth estate”. Along with the three main branches of government independent from each other - legislative, executive and judicial - modern journalism is called upon for its part

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1.2. Applied musicology. music journalism and music criticism in the system of applied musicology The concept of “musicology”, as well as the designation of specialists in this field by the word “musicologist” (or, in the Western version, “musicologist”), is usually associated with

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Music criticism and music science Many scientific fields are engaged in the study of the phenomenon of music: in addition to musicology itself, it attracts the attention of art historians of various directions, aesthetics, philosophy, history, psychology, cultural studies, semiotics, and

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Music criticism and society The musical life of society, which also includes music-critical thought and practice, is a subject of interest for musical sociology. It is no coincidence that sociological science most often turns its attention to artistic criticism,

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1.4. Professional music journalism At the forefront of modern music journalistic practice is the most important problem - the problem of professionalism. What is it made of? Several important components can be identified that allow us to distinguish

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Composer's music criticism This unique phenomenon requires separate consideration. Even in Pushkin we find the argument that “the state of criticism itself shows the degree of education of all literature.” It’s not just a respectful attitude

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5.4. Musical production as an object of review Musical production is a synthetic genre. In it, music is combined according to the laws of artistic synthesis with other artistic “streams” (plot development, stage action, acting, visual

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3. Musical version by A. S. Dargomyzhsky The musical solution of A. S. Dargomyzhsky in his romance based on Pushkin’s text “October 19, 1827” (composed in Paris in 1845) is extraordinary and worthy of special attention from researchers, including Pushkinists

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2.2 Valentina Shvaiko. Multimedia and transmedia opportunities for promoting music in the digital era Valentina Shvaiko – postgraduate student of the Department of Technology and Sales Management of the Russian Economic University. G. V. Plekhanova, graduate of the master’s program “Media Production in Creative Arts”

Lecture - Sergei Tyncu

It’s amazing, but many people still don’t know how the music industry works today. Therefore, I will try to explain everything in a nutshell. And, by the way, if you don’t understand what industry is, then abroad this is understood as business. That is, we are talking about how the music business, or music industry, works. Get it into your head once and for all, industry is business.

Like any other, the music industry produces and sells a product. And this product is a concert. Previously, the product was records, but nowadays this is no longer relevant. Now the product is just a concert. Why a concert? Because musicians make money from concerts and listeners pay money for concerts.

Accordingly, the main goal of the industry is to understand the audience demand (in a given territory) for concerts of a particular format, style and price tag. The industry itself doesn’t care what music and what musicians it sells. Just to sell it better. It's like being in a bar. An adequate bar owner does not care what kind of beer he sells, and he bottles the one for which there is more demand and for which he can earn more - buy cheaper and sell more expensive.

For an artist to get into the music industry, stay there and be successful... all you need is one thing - to be in demand. It's like with any product in any market. If there is a demand for your gig, then you will be in the industry. If there is no demand, then you won’t be there. The industry is interested in artists who bring in money that people will come to see.

This law works both for large stadiums in America and for small taverns in the Samara region. The music industry is the same everywhere.

Please note that you don’t have to be good, but you just have to be in demand. But here people often think that if a product (a musician) is good, then it must be in demand. And these are different things. And the concept of “good” is very subjective. But the concept of “in demand” can be felt with your hands and measured in the number of viewers and the money they bring.

The industry consists of three main participants - the concert venue, the artist, and the viewer. And the main thing is the viewer. Because this whole thing exists with the viewer’s money. He pays for everything. Concert venues and artists live on his money. He calls the tune in every sense and pays for the banquet.

The industry doesn’t care how an artist achieves popularity and relevance (this is a personal matter and expense for the artist and his manager). Good music, scandals, good PR, fashion, etc. The industry doesn’t care what product it sells. Her task is to sell what is in demand. If people don't come to your club (or bar), then you're going broke. Therefore, the industry has the task of understanding what the people need - this is perhaps the most important thing in the industry.

Just imagine for a second that you have your own rock club. You spent money to buy it, you spend money to maintain it, you pay staff, and you have a bunch of other expenses. And imagine you need to choose one of the artists for a concert in your club. And pay him a fee. Who would you want to see in your club if you need to earn money and not incur losses?

Making an artist in demand and popular is the task of the artist himself (and his management). The industry doesn't care who to sell. She simply focuses on the current tastes of the viewing audience. Of course, these tastes somehow constantly change. Since the tastes of the audience are heterogeneous, the industry works with artists of different genres and styles.

In accordance with the popularity (demand) of the artist, the industry offers the viewer concerts at venues with a larger or smaller capacity, plus sets different ticket prices. But the industry is always driven by demand. You could say this is a soulless machine, stupidly reflecting the current state of the market and demand. Roughly speaking, the industry is thousands of concert venues, whose number, size and format are determined solely by the market, that is, the demand for certain artists and genres in certain territories.

Remember, at different times in different territories there is also a demand for different things!

It makes no sense for either the artist or the viewer to be dissatisfied with the industry. It simply shows the state of the market, reacting to it rather than shaping it. If something is not available in the industry, or is poorly represented, it is only because at the moment in a given territory there is such a demand for this product (zero or small).

If an artist doesn’t make it into the industry (or makes it, but not on the scale that he would like), then it’s not the industry’s fault. She only reacts to the tastes of the crowd. And she doesn’t care about the specific names of the artists.

That's how it all works in a nutshell.

Accordingly, the concept of popular music varies. If you make music based on your taste, then don’t be surprised that the music industry doesn’t need it. Your taste does not necessarily coincide with the taste of the audience who pays. And if it does, then it’s not a fact that the quality of your musical product can withstand competition with other artists. Always remember the competition. Nowadays there are many more musicians in the world than the audience needs. Therefore, not everyone gets into the music industry.

If the demand for music in a village is one accordionist for a New Year's party, then ten accordionists will not fit into the industry of this village.

There are musician managers in the world. They are intermediaries between artists and audiences, artists and the industry. Some people (like everywhere else) can do without intermediaries, but others can’t. Like any intermediaries, managers strive to make money. Therefore, it is important for them to see and understand whether a particular artist can become popular or “not a horse’s fodder.” This vision and understanding distinguishes a good manager from a bad one. This is his income. The industry, again, doesn’t care how an artist tries to become popular - at the expense of managers or without. The word “manager” in this text can mean not only one person, but also an entire promotion office.

Many artists place great hopes on managers who, in their opinion, will solve all their problems. But it's not that simple. If the manager is good and understands the market, then he will only work with an artist who, in his opinion, has potential. And the artist must somehow be able to charm the manager, make him believe in himself. And it turns out that the manager is not a magician who sells a bad product, and the artist first of all needs to provide a product with the appropriate properties (which can be sold).

If the manager is bad, then he can easily take on an artist with unclear prospects. And here it may be that a bad manager will not help in any way, or it may be that an artist who is good from the point of view of market prospects will be successful even with a bad manager. But in any case, if an artist decides to promote himself with the help of a manager, then he needs to make the manager believe in this artist.

And we must remember that a manager is not free. If a manager (office) invests money (or time/effort) in promotion, then it means they see potential in the product (artist) and plan to recoup the costs and earn more. And if none of the smart managers want to do business with you, it means they don’t see market potential in you. They, like everyone else, can make mistakes - try to prove it to them and the market.

Understand that if your potential is obvious, then a sea of people will immediately form around you who want to make money from you. But if it’s not obvious, then you have to eke out a miserable life. It's like with women. If you are a super chick, then there is a sea of men around you. And if you’re not very good, then the demand for you in the men’s market is much less. Everything is very simple in this world.

The music industry is subject to the same laws as the general market. Imagine a grocery store. There are 10 packets of milk from different brands. So let’s say you decide to make milk. Good milk. You come to the store and say - I have good milk, take it to the shelf. And they answer you, the milk may be good, but no one knows it and will not buy it - people’s demand has already developed for certain brands. Why do we need to buy some potential illiquid goods for our shelves? Then you start advertising your product - you shoot videos for the box, hang advertisements on billboards around the city, hand out free packages to the public at the metro, hire a star for promotion. All! Demand appeared - they took you to the store. First in one, then in another, then all over the country! You're in business, dude!

Of course, in reality the situation with demand and stores may turn out to be more complicated. They can say that they don’t care what they sell - people in the area will buy any milk for this price and therefore they are not going to change anything in the assortment. Then it will be necessary to motivate the store - offer them purchasing prices lower than competitors or stupidly push a bribe. In the case of concert venues, which don’t care who plays in their so-called tavern, everything is solved using the same methods - reducing requests for fees to the artist and, again, the good old bribe. This is the market.

A simple, clear diagram. But one detail is important here. You must produce milk of a quality that people like. And at the prices at which people want to buy it. That is, the package should not cost 200 bucks. And it doesn't have to be dog's milk. At least in Russia. You yourself may like dog (or rat) milk, but if you go to the market, try to crawl into the milk industry, that is, into business, then you need to take into account the demand for products in a certain territory.

That is, if we talk about the dairy industry, then everything is the same here - the product (artist), the store (concert venue), the buyer (spectator). And there are advertising departments and agencies (labels, intermediary managers) that promote products for money.

Of course, many musicians all over the planet don’t want to think about the market, product, buyers and other unromantic things. And many successful artists managed to live in their own exceptionally sublime world, doing nothing but creativity (but at the same time paying managers who are immersed in routine and everyday life).

But if you have not reached such a level of enlightenment, then you need to either deal with the market and your popularity yourself, or try to charm some manager (office) who will believe in you. And of course there are such managers. Because there are successful artists in any country, and someone is involved in the affairs of these artists. But if they don’t believe in you, then, my friend, all the problems are only in you. In no one else. It's hard to admit - to look in the mirror and say to yourself, “I guess I'm not what people need.”

Of course, you can hire a manager (like any advertising company) stupidly for your own money (and not for a share from concerts)... but this is like paid sex. They give it to the right guys for free. And if they don’t give you freebies out of love, then you clearly have some problems with being in demand.

Very often, unclaimed artists blame the industry, intermediary managers, and viewers for their lack of demand. It is so stupid. The industry and managers respond to viewer requests and demand. And viewers are free people who decide for themselves where to spend their money. If they don't want you, that's their right. They don't owe you anything. They didn't force you to study music.

And the most reliable way to join the industry, and all professional musicians and managers of all times know this... is very simple. You have to stupidly compose hits. That's all! Songs that people like. Write hits, dude, and you will definitely have everything! Pay attention - all the performers who failed to fit into the industry - they do not have a single hit.

But let's say you can't or don't want to write hits? But you can play other people’s roles - this is also in demand (in pubs and at corporate events), and with this they also get into the industry - just perhaps not at the level that someone would like. And if you don’t play hits at all, then there are no guarantees of getting into the industry. Maybe you’ll be able to get a job in the industry, maybe not.

OK it's all over Now. I hope now you understand why some artists have a lot of concerts and money, while for others the cat cried.

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I baked these wonderful potato pies in the oven and they turned out incredibly tasty and tender. I made them from beautiful...

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A guide for daredevils: how the music industry works. Modern problems of the activities of concert organizations Brands in music

Record companies

Musical kickbacks

The long-awaited release of your music

TV, movies and more

Other sources of profit

Distribution

And finally

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