CBC: The Story of the Recording Industry

[jobeterob]

http://music.cbc.ca/#/blogs/2012/6/Twilight-of-the-Gods-The-story-of-the-recording-industry

This is a 5 part series on the Music Industry and it's history; very interesting.

It talks about how it peaked with Michael Jackson and Whitney Houston in the 1990's and how even then, artists were being charged:

- breakage fees for CDs; and CDs didn't break but 7.5% came off their royalties

- reinvestment and enhancement fees to further develop technology; I think that was even more than 7.5%; I think it was like 15%;

- all the costs for promoting, recording

And this went on all through the 80's and 90's and was part of the cause of Michael Jackson suing Sony.

It also says this part of the history of music is over because two decades of young people have never paid for their music now............and they won't start paying now. So royalties and the power of the record company are finished.

It also says in it's heyday if you sold a million records, the artist made about $70000. That's all.

And at it's peak, only about 10 records made money for the record company in any given year ~ but the money they made was phenomenal ~ like a billion dollars. And when the money flowed, it poured in.

This is worth listening too...........but it is about 5 hours long; it ran for quite a bit of the summer on CBC.

[R. Mark Desjardins]

Thank for this link. The CBC [[Canadian Broadcasting Corporation) is world famous for their superlative reporting and I am going to set aside some time to listen to this series.

[jobeterob]

Thank for this link. The CBC [[Canadian Broadcasting Corporation) is world famous for their superlative reporting and I am going to set aside some time to listen to this series.


The ones that people will be interested in are the last couple of them.........the one's from the 60's forward.

It definitely shows how the artists got ripped and how the business is over.

[robb_k]

5329
CBC Docs are the best! Thanks for the link, Rob.

[jobeterob]

What surprises about this documentary........and it starts with the first recording.............is that the artists got ripped from Day 1; and if the early recording companies took advantage, it didn't stop ever; it continued with artists into the 2000's. And now there is nothing left; I believe there is an implication that copyright is even in question ~ at least the strength of it.

It mentions there was a warning from some executive when they made the first CDs ~ "you are providing a master for every recording you sell".

And then Napster surfaced and the industry never took it seriously and the industry slipped away on them.

[marv2]

Thank for this link. The CBC [[Canadian Broadcasting Corporation) is world famous for their superlative reporting and I am going to set aside some time to listen to this series.

I love the CBC!!!

[marv2]

5329
CBC Docs are the best! Thanks for the link, Rob.

I agree. I watched several of their excellent documentaries on the "Docs" series when I was home over the holidays. I wished I could see them here in New York or on the internet.

[jobeterob]

I think the first 3 of this series are available as podcasts; the most interesting ones are the later ones; I'm sure they will all be up in due course.

I'm sure many of you will really enjoy them.

[chidrummer]

I always loved this breakdown from Left Eye. It was priceless:


http://www.youtube.com/watch?v=E92q9pYnaYo

[jobeterob]

It's no wonder they all end up with very little.

So when Diana Ross walked out on Motown with $250000..............she wasn't lieing or exaggerating. She was smart to pocket the $20 million signing advance with RCA and then you tour.

[jsmith]

I think Left Eye should go back to school & re-learn maths or better still go to business school.
The tax [[40 to 50% on high earnings) doesn't get deducted before the money is split between the girls....
... they get their individual share & her accountant sets up one of the many tax avoidance schemes [[making them a Ltd Co. & offsetting 'numerous expenses' against the earnings) .... when that's done, the the US taxman gets his cut [[probably up to 12 months after the record company paid the girls).
So, unless she 'took her eye off the ball' & employed a crooked agent + accountant, she should have kept most of the money the record company paid her for herself.
BIG PROBLEM WITH MOST SUCCESSFUL ARTISTS .... they never realise that the flow of money will dry up just as quick as it started and that they can't blow a million on cars, houses, clothes, etc. and still have money left in the bank. Many have no cash left when the taxman comes calling, so they end up in real financial trouble.
OF COURSE, none of the above excuses the fact that the record companies ensure they keep the 'lions-share' of all cash that comes in from record sales ..... so the artists are truly ripped-odd by the record execs ... but the artists should still look after their money better [[& perhaps not burn down the house coz they had an argument with their man).

The rich in America always ensure 'the system' is set up to ensure they keep most of their money & pay very little in taxes. If big selling singers can't take advantage of that situation, they only have themselves to blame [[IMHO).

[jobeterob]

I very much agree with JSmith.

Ultimately we are all responsible for our own financial well being. Generally most artists get a few years to make some real money ~ maybe 5 years. If all the money goes on cars and furs and up the nose and travel and the IRS didnt get paid ~ trouble is on the way. This is not the 1950s and 1960s when we were all a much less educated society. There might have been an excuse then; there isn't now.

TLC could have done a lot better than they did. They were simply just another act with little sense of balance, who had trouble coping with fame, who blew through all the money and then asked "where is it?"

But it doesn't change the fact that the record companies ripped the artists big time, from the 1940's forward; and now the whole industry is going tits up. The money has stopped flowing and there is immense jealousy toward those that made and have something.

[jobeterob]

.Pink Floyd, David Guetta Catalogs to Be Sold, EMI CEO's Memo Reveals

4:12 PM PDT 7/27/2012 by Shirley Halperin


As the EMI-Universal merger draws near, Roger Faxon braces the company's global staff for painful divestitures and uncertainty.
Barely three weeks after extending an 11-year contract with EMI, crediting the label group's "commitment" and declaring in a press release, "EMI is home to me," superstar DJ David Guetta may soon find himself evicted.

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Universal Music Submits EMI Deal Concessions to European RegulatorsPink Floyd Pig Flies Over LondonMusic Execs Rising Pay — A $34.6 Million Year for Irving AzoffAccording to a memo sent to staff worldwide by EMI Music CEO Roger Faxon, the company's impending merger with Universal, which is currently in the midst of the regulatory approval process in Europe and ironing out anti-trust concessions that Faxon deems as "shrouded in obscure legal concepts and impenetrable economic theory," among the divestitures will be Guetta's deal, the Pink Floyd catalog along with labels Parlophone [[excluding the Beatles, both as a group and individually), Mute, Chrysalis [[without the Robbie Williams library) and Ensign. Local EMI operations in France, Belgium, Czech Republic, Poland, Portugal Sweden and Norway will also be sold off, while on the Universal side, the company will bid adieu to properties including Sanctuary, UMG Greece and several European jazz labels.

The EMI-UMG deal could close by the end of September, though Faxon puts a more realistic end date in October. Opening the memo with the record industry's understatement of the decade, "We certainly have been on quite a journey over the last couple of years," he closes with another, "This is a lot to digest, I know."

Read Faxon's full memo below:

Sent: Friday, July 27, 2012 11:20 AM
To: All EMI Music Staff Globally
Subject: Message from Roger Faxon

We certainly have been on quite a journey over the last couple of years. It has been 18 months since Citi took control of EMI, 14 months since Citi put EMI up for sale, 9 months since agreements were reached to sell each of EMI Music and EMI Music Publishing, and just one month since the ownership of EMI Music Publishing passed to the Sony consortium. And now we are moving toward the next milestone in that journey - the completion of the sale of EMI Music to UMG. The final step before that can happen is for UMG to work through with the anti-trust authorities any issues raised by the combination of EMI and UMG - and that work is well underway.

To most of us the anti-trust process is opaque, shrouded in obscure legal concepts and impenetrable economic theory. But, its whole purpose is to protect consumers from anti-competitive behaviour, so regulators take the process very seriously. To understand the implications of any merger they need to sort through and grapple with the intricacies of the industry or industries concerned, and the specific characteristics of the affected businesses. They then have to find a way of resolving any issues they find. In our case, UMG and each of the regulators around the world have been doing just that. Since the market is different in each region of the world, the issues and the difficulty of resolving them also tend to be different. So, in a number of jurisdictions, Universal has been able to resolve the issues and has already received clearance. Now the focus is clearly on resolving the issues in the largest and most complex markets - and none is more important than Europe.

As you have read, and as I have relayed to you in recent emails, the European Commission has raised formal objections about the effect of bringing EMI and Universal together. Universal and the EU regulators have been searching for a way through, to find a remedy to the problems the regulators see. As you can imagine, there are often significant differences in view between the regulators and the company applying for approval, as to the effects of the transaction on consumers. But, in the end, the two need to find a way of bridging those differences so that the merger can go forward.

In the last few days, Universal has with the Commission identified a possible set of solutions that it believes should resolve the Commission's concerns. I emphasize the word 'possible' because before a resolution can be finalized the regulator will seek the input of a variety of third parties. The market testing of a proposed set of remedies is intended to aid the regulator in fully understanding the implications of the remedies, before they make a final determination. So there is a chance that the proposed set of remedies will change before they become final.

The EU regulators will soon be putting the remedy package proposed by Universal into that market testing. And as I said in my note of last week, inevitably much of what is in that package will leak to the press, and that has already started to happen. So, rather than force you to scour the press to put the bits and pieces of the story together, I wanted to make sure that you heard it directly from me.

Here is what is being proposed:

• In the UK, an entity composed of the rosters and catalogues of Parlophone [[excluding the Beatles, both as a group and individually), Mute, Chrysalis [[excluding the Robbie Williams catalogue) and Ensign would be sold. Included in that disposal would also be the Pink Floyd catalogue and the recently concluded new deal with David Guetta, along with his catalogue. Note that these disposals only relate to exploitation of this repertoire within the EEA.

• EMI Classics and Virgin Classics would also be divested in the EEA.

• EMI's share of the NOW brand and compilation business in the EEA would also be sold. However Universal would keep its share and participation in the Now compilation venture.

• The proposal also includes the divestment of a number of EMI's operating businesses in Continental Europe. Those local operating companies are EMI France, EMI Belgium, EMI Czech Republic, EMI Poland, EMI Portugal, EMI Sweden and EMI Norway.

• Universal is also proposing to divest some its own businesses, principal among which are Sanctuary, Co-Op, and UMG Greece plus several European jazz labels.

• They would also commit to terminate or not to bid for a number of high-profile European licenses for major Anglo-American and domestic repertoire, namely Disney Records, Hollywood Records, Ministry of Sound, and Restos du Coeur in France.

I can only imagine the questions that are going through your mind as you read this. I am sure they are pretty close to the questions that Ruth and I have been asking in the last couple of days as all of this has come together. And over the coming days and weeks, we will endeavor to answer as many of them as possible. It is important to say that we have time - in fact quite a lot of time - to work through how all of this is going to unfold and how it will affect each of you and the artists we are so privileged to represent.

From this point forward what is going to happen? Well obviously the remedy proposal needs to proceed through market testing. While that testing should not take long, the process to get to a final decision by the EU College of Commissioners will take some weeks. As of now, their vote is not scheduled until the second half of September. Of course the regulatory reviews elsewhere - particularly in places such as the United States and Australia - will also need to be completed. And even then, there are still some practical logistics of the sale that have to be completed as well.

With a wind behind our backs we could close the sale and EMI could pass to UMG as early as the end of September. However I think it is more realistic to plan for a close at the end of October. In any event it is only at the close of the deal that any of the disposals could be put up for sale. Then of course there will be an extended period before that sale process results in a completed transaction. So as I say, we have some considerable time to get this sorted, and to make plans that take into account the needs of our staff and our artists.

This is a lot to digest, I know. While there isn't much more that I can say about the proposal right now, I do want to take the opportunity to talk to you about it, and we will be setting up an all-staff call for Monday. I'll also be briefing senior management so that they will be able to meet with you to discuss any immediate issues that arise.

As soon as I have any more concrete news for you, rest assured that I will contact you all right away. In the meantime, as always, my door and my inbox are open if you would like to get in touch.

Roger

[bankhousedave]

I'm glad I held on to the twenty quid a night and all the slops I could drink. I may be broke now, but at least so is my lawyer.

[jobeterob]

I'm glad I held on to the twenty quid a night and all the slops I could drink. I may be broke now, but at least so is my lawyer.

There are a few people around who made millions of dollars and many who are left with nothing or being chased by the IRS or creditors.

If you listen to the last hour of the show, it suggests the very issue of copyright is even in question and I believes suggests the industry is pretty much kaput.

[chidrummer]

The whole series was just excellent. I learned so much and there's great food for thought. Well done CBC and thanks for sharing the link, jobeterob.

[milven]

Is there a way to download this or listen to portions of it, stop and then go back without having to start from the beginning?

[jobeterob]

I'm not sure Milven.

What I would suggest is that if time is an issue, listen to the last one.

The early ones are really interesting in terms of learning but the last one or two deals with our era.

[chidrummer]

That's easy, milven. You can listen to the entire series one show at a time here:

http://music.cbc.ca/#/play/Norm-Desjardins/playlist/Twilight-of-the-Gods

[milven]

Thank you. I just checked the link and listened to part of the first one and then the phone rang. I can see that I'll be interested in the entire series . I'll listen to them one at a time and do it late at night when no one disturbs me. [[Wish there was a pause button) How long is each episode. I'm guessing an hour each. Again, thanks for this link. I'm gonna enjoy listening to it, although it will probably be with mixed emotions as I know what happened to the industry that gave me so much joy

[jobeterob]

Thanks Chidrummer. I listened to these Sunday mornings at the lake as Breakfast was being made and eaten............but there were always interruptions. And I think they may perhaps have been an hour and a half.

[milven]

I listened to three of them last night. For anyone who is in , or loves , the record industry, it would be sacrilegious to skip the first ones. The story of the guy who ran Okey Label was especially interesting. Back then it was called a race label [[although they also did "hillbilly"). I saw a lot of similarities between him and Motown and how many artists got ripped off. I'm sure they will discuss Morris Levy of Roulette in the next segment. I loved the record industry, but it is no secret that there was dishonesty, cheating and scandal in it.

I must say it was very relaxing to listen to "radio". Just layed down in my recliner, closed my eyes and listened