Back in the day, the record label would finance artist’s project up front in the form of an advance. The advance usually amounted to a loan which the artist had to repay. The record label would finance the recording, distribution and promotion of the artist project and then recoup the money after the project started selling. Although it seems fair on the surface, the record label would charge the artist for much more than what the record label provided. The record label would not only bill the artist for the things mentioned above, but they would deduct artist royalties for damaged goods, record club discounts and a wealth of other expenses. In addition the record label would take these deductions from the artists gross earnings.
Although the record label would allow an artist to audit the record company’s books, many artists didn’t conduct any audits. Artists were generally afraid of angering the record labels by asking the record labels to show the expenses and deductions in writing. This justifiable fear kept artists in their place under the record labels control.
Today with digital technology, the power is shifting into the hands of the artist
There’s a new trend in the music business that has record labels sweating in the boardroom. This new trend is called Do It Yourself (D.I.Y.). With Digital Technology anyone can start a record label and have a personal studio on their computer. There are a number of free or (very inexpensive) studio recording software applications that allow an artist to record and distribute their own material without the help or control of any other record label.
An artist can easily promote and sell their CDs and MP3’s online at thousands of internet sites. In addition there are many new web hosting services that allow an artist to have a website dedicated to promoting their and selling their music to the growing online community.
There are hundreds of artists making a living selling their music online. Think about it, if you sold 20,000 CDs online at $10, you’d earn $200,000. If you sold 20,000 for a record label you’d be in debt and you’d face the risk of being dropped from the record label.
By recording, distributing, promoting and selling your music yourself, you control your destiny. Today an artist can control their expenses, track their deductions and not live in fear of any record company.
Today the power is in the hand of the artist.