The New York Times reports (free registration required) that the record labels have managed to find new revenue streams and ways to profitability in the wake of declining CD sales. Certainly, ringtones and digital downloads are helping the bottom line but, this quote struck me as important. "Lately, the major labels have in effect tried to move into the talent management business by demanding that new artists seeking record contracts give their label a cut of concert earnings or T-shirt and merchandise revenue - areas that had once been outside the labels' bailiwick." (emphasis added)
Reducing royalties, fixing CD prices and now demanding that new artists give up a cut of touring revenue? Somewhere, deep within the bowels of hell Beelzebub is surely asking himself, "Why didn't I think of that?!"
[via Hypebot]
1. It's very logical that record companies start to look at this from a new point of view. They see artists as a n investment that needs high ROI and those that make it have to make up for those that don't. There are over a dozen of revenue streams that can be exploited. Nothing new in a digital world. The question is if this is good or bad for the artist and if a higher up side means a larger investment? Will major record companies also become management agencies, merchandising production companies, promotors, etc. etc?
Posted at 6:06PM on Dec 11th 2006 by Martijn