Causes Of The Decline Of Record Labelss

2138 Words 9 Pages
Technology began to advance rapidly and the record labels could not keep up starting from the 60s to the 2000s with the development of tapes, where people recorded radio, and later the invention of the CD. The labels were scared because they were losing control of the public with burnt CDs and mixed tapes made essentially free. During these years there were five major labels: Sony, EMI, Universal, BMG, and Polygram. As the years proceeded into the 2000s, labels bought out other labels because they were losing so much revenue. Now, 2014, there only stands three major labels whereas the others have been absorbed. To combat some of the loss during the CD era labels put a tax on burnable CDs; however with the further development of technology …show more content…
One of the major sources of the deterioration of record labels was due to the development of new technology. Curien and Moreau (2009) explain that piracy is the culprit in the decline of CD sales from 2000 all the way to 2007. The invention of the CD burner and MP3 file sharing has led labels to find alternative sources to improve their diminishing investments. The traditional contract model relied heavily on record sales; however in the era of new technology, record labels needed to find new ways to stay afloat and what better way than to look into their money making stars; consequently the 360 deal was born. The 360 deal was an apprehensive attempt in response to record labels greed. Within the 360 deal model record labels gather a higher percentage of an artist income; yet they themselves do nothing extra for the artist (Bouton, 2009). Okorocha states, “Naturally the labels turned to their artists for this needed source of revenue. As the drop in album sales deepened, the artists ' ancillary ventures, such as publishing, touring, and merchandising, proved more valuable to the fiscally distressed labels than the decaying record selling business” (p. 9). In this case, the record labels are essentially taking away artists’ income. Do people ever wonder why artist do a lot of campaigning or advertisement? This is why. The record labels take most of what they make from it. In order for an artist to live they have to do a …show more content…
It is a hard market for independent labels because the major labels consist of 70% of the music market. This system is similar to a monopoly, but in recording industry terms it is an oligopoly. Oligopolies allow for record labels to gain access to artists’ other revenue streams such as publishing, marketing, distribution, etc. (Brereton, 2009). Even though the access the major labels have to an artist income is overbearing, it is still easier to gain commercial success through the help of such a business monster. Vasquez states in the article, The 360 Deals, The

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