If you read the article and read between the lines ths ain’t all that. First of all not everything is going e-lable. So artists that have a track record for selling CDs will still be on CD. Now here is the catch. A new artist signs up with Warner and gets an e-lable deal. Sounds all groovey and fab, but the real advantage is to the recod company. First of all the company is going to advance money to the artist. The artist goes to the studio and does music for e-label. Now all that great advance money is not free…it is simply money that the label advances and then takes back out of the artists royalies through sales of the product. Since the record company doesn’t spend one dime doing artwork, pressing CDs, promoting or distributing CDs then the record company is really getting the deal here. If an artist is lucky enough to have some online media sales then the record company will first get their advance money back. If by chance the record company does any promotion work then they will also get that money back first before the artist sees a plug nickle. Allowing the artist to own their master recordings is no deal because the second those songs are released online the odds of them having much value on a future CD release is about zilch. However, you can bet that even though the artst owns the masters the recording company is going to have first option of pressing CDs if there is a fluke. So what does it mean? Real simple people. The record company invests peanuts in e-label artist development. The production cost of 3 songs on e-lable versus a full CD is peanuts. The advances will be less, but the record company gets theirs first before the artist sees squat. THis doesn’t even take into account any side deals by the record company, whether the record company is going to own the online retail outlet and pay royalties on wholesale, how much the record compnay is allowed to give away for free, etc., etc. If there is a fluke and the artist becomes some kind of pop idol over the internet then the record company swings a real CD deal with the artist with much less risk and expense. My money says the artist still starves, but gets to send letters home to mom that they are a recording artist for Warner. Since record company costs are in the bargain basesment on e-label then more artists can be signed…why not…it costs little to sign em up and if someone stands out you have them wrapped into a contract. The laugh is that unless the record company seriously promotes it’s artists on e-label the artists may have just as good of a chance on CD Baby or Garageband.com doing it themselves. I’d like to hear more about how this e-label thing is going to work, I won’t be betting this is going to be a better path for the artist. If this e-label thing wasn’t going to be a real deal for the record company do you think they would be doing it?
[edited by rla on 24.08.2005 07:02]