Anna Britten has spent many years working within the music industry, for record companies such as Warner Music and Naxos, as well as music publishing and journalism. She is now a freelance music journalist who has written for Time Out, Q Bang and Classic FM Magazine. Location: Anna is based in Bath.
In this chapter:
- What do record companies do?
- Different types of record companies
- Things you need to know
- Different departments within a record company
- Getting in the door
WHAT DO RECORD COMPANIES DO?
Record companies are the organisations that turn musical ideas from tunes inside a musician’s head into the shiny discs playing on your stereo, and the files on your iPod. They make and distribute records: singles and albums on CD (sometimes vinyl but hardly ever cassette nowadays). Releases are also available as a paid-for digital download from the internet. Money is also made from merchandise, ringtones for mobile phones and selling music for use in advertising, films, TV and computer games and other bits and bobs.
Records are one of the strands through which musicians make money, and are – with the possible exception of classical records – arguably the most lucrative. Bands and artists are headhunted by, and sign contracts with, record companies: perhaps for just one album, perhaps for several if they’ve got potential or a good track record. The record company organises recording or remixing of their music (a small proportion of ‘demos’ will be put out, if they are of high enough quality) and turns this into records. They produce any amount from a limited run of 50, to an initial pressing of 50,000 or more if it’s the new Robbie Williams album, and send these to a distributor – sometimes another wing of the record company, sometimes a separate company which may distribute records from several different companies. The distributor then sells them to shops. The record company crosses its fingers and hopes it has a hit on its hands. A myriad of different departments are responsible for seeing this process through. They are addressed later in this chapter.
The legal download market
Record companies also sell music through online distributors such as OD2 (who supply ‘e-retailers’ such as MSN, Wanadoo, MTV and Tiscali) and MusicNet (which supplies AOL and HMV’s online operation) plus iTunes and Napster, which sell directly to individuals. See also page 24.
Record companies do not deal solely with new recordings. Much work is done on ‘exploiting back catalogue’, which means dreaming up new ways to sell old music. This might mean repackaging it with a new sleeve and campaign; creating a compilation of an artist’s greatest hits, or of various artists’ songs, perhaps under a ‘theme’ such as love songs for Valentine’s Day, or that old chestnut, ‘Christmas Hits’.
And don’t forget classical music – someone has to make and sell all those Beethoven’s Fifths, you know.
WHAT IS THE BPI?
Record companies are represented by the trade organisation the British Phonographic Industry (BPI). If you recognise the name that’s probably because it funds the BRIT Awards, lobbies Parliament and supplies information to the media on the British record industry. Their website is an invaluable resource for anyone seeking a job in the music biz, so do check it out (see Useful Addresses).
DIFFERENT TYPES OF RECORD COMPANIES
At time of going to print there are four major record companies. These are known, unimaginatively, as ‘the majors’, and a little knowledge about them can be very impressive when it comes to an interview situation. At present the biggies are:
- Sony BMG (which owns Arista, Columbia, Epic, Jive, RCA and others)
- EMI (which owns Capitol, EMI:Chrysalis, Parlo-phone, Hut, Innocent, Virgin, Source, EMI Classics and others)
- Universal (which owns Mercury, Island, Polydor, Decca, Deutsche Grammophon and others)
- Warner (which owns Atlantic, Elektra, Nonesuch, Blanco Y Negro, Warner Classics, East West, London and others).
Majors often own several small labels, many of which discover and record talent themselves. Fred Durst’s Interscope label, for example, looks on the surface as if it is all his, but it is bankrolled and distributed by Universal.
Majors also tend to own their own distribution companies (i.e. the people who take orders, pack boxes, and send the CDs off to your local record shop), distributing their own wares plus other companies’ (which pay them for this service).
Beneath these come those record companies that go it alone and are not part of a major label. These are privately owned and financed by owners/investors, and are called independents or indie labels. Important ones include the likes of Domino (Franz Ferdinand, Arctic Monkeys and others), XL (The White Stripes, Dizzee Rascal and others), B-Unique (Kaiser Chiefs, The Ordinary Boys and others), Ministry Of Sound, Rough Trade . . . and in the classical corner the mammoth Naxos, widely regarded as the most successful classical music label in the world.
The smaller the independent, the more likely it is that they specialise in a particular field: dance music, indie music, classical, even being as specific as recording only for clarinet. Dozens of outfits are run by one person, often – literally – from their kitchen table, surrounded by boxes of Jiffy bags and chipped coffee mugs. For distribution these companies use independent distributors, which are not owned by a major, and which distribute only independent labels. Many independent labels in the UK are members of AIM (Association of Independent Music). See Useful Addresses.
THINGS YOU NEED TO KNOW
- Making money is a lot harder for record companies now than ever before: copyright theft in the form of internet file-sharing sites, illegal downloads, and the rocketing trend of CD-R ‘burning’ has been like a sharp axe striking at the tree trunk of the industry. And despite constant firefighting from the record companies, as soon as one illegal activity is clamped down upon, another leaps up. For example, when Napster was forced to go ‘legal’, up sprang Kazaa and Grokster. Many wonder if the way forward is to somehow work with these sites, rather than against them.
- Sometime in 2001/2, it finally dawned on record companies that if they couldn’t beat ‘em they had to join ‘em, by turning new technology and the trend for downloading to their advantage. Subsequently, BMG issued the first ever commercial digital download of a single in April 2003 – Annie Lennox’s ‘Pavement Cracks’ – and opened the floodgates for other majors to follow, via various online distributors and e-tailers (see page 21). According to BPI figures, there are now one million tracks available on the various download services in the UK, and in the first half of 2005, 10 million legal downloads were sold – nearly twice the figure for the whole of 2004. Download figures are now included in the official singles chart, and in April 2006 Gnarls Barclay’s ‘Crazy’ made history by getting to number one on download sales alone. Yet at time of writing, digital sales only account for about 2% of business – by 2008 this is estimated to reach 7–9%.
- In 2002 the US association RIAA, the Recording Industry Association of America (the equivalent of the BPI) launched lawsuits against ‘major offenders’ who had illegally file-shared. In 2004, the BPI decided it too would take legal action against the UK’s worst offenders.
- There are also traditional ‘pirate’ CDs to contend with: the kind you buy for a couple of pounds on the beachfront in Tenerife, for example. The global sales of pirate CDs are reckoned to have more than doubled in the years from 2000–2003 to create an illegal industry worth around $4.5 billion.
- All of this seems to be exacerbated by the high price of CDs in the UK compared to elsewhere in the world, which averages between £10 and £16 for a new chart album. Many argue this puts CDs beyond the reach of the casual record shop browser, and yet lowering CD prices cuts record companies’ profits even further. Hmm.
- Money is no longer made from singles. They have traditionally been seen as an ‘advert for the album’ and are nowadays fast becoming, in the words of one industry commentator ‘a loss-making albatross’, be–cause the sales are not enough to justify the production and promotion costs. In their heyday The Beatles would have sold a million copies of a number one single. Nowadays a single might need to sell only 45,000 copies to top the charts. Record companies sometimes resort to dirty tricks like buying large amounts of a single themselves to propel it up the charts, on to Top Of The Pops and hopefully shift some albums on the back of it. When double CD sets like ‘Now That’s What I Call Music’ can cram 40 hit singles on to an album for £9.99, what sensible person is going to spend their pocket money on just one of them, for £3.99? Think about it: when did you last buy a single? Fact: many record companies now make more money from mobile phone ringtones than singles.
- Job cuts across the record industry have been massive in the last few years, with many questioning the future viability of the way music is made and distributed to paying listeners. Could the days of the record company be numbered? It’s not unthinkable.