Major Labels Are inflating Prices, Then Screwing the Artists

If you remember the ancient era when buying CDs was the only way to get your favorite songs, you remember how overpriced they were. This isn't just opinion -- there was a class action lawsuit that charged the music industry with illegal price fixing and ended with a payout to consumers to the tune of $67.4 million in cash and $75.7 million in free CDs, all of which probably sucked. This is why people started desperately downloading tracks that would take an hour over a 56K dial-up connection.

You would suspect that the situation would have just righted itself as downloadable files began to overtake physical discs as the medium of choice, but surprisingly, things only got worse once that change happened. This time, the various record labels conspired to set an artificial price floor for downloads. Fortunately, these were pre-iTunes problems that only happened with dinosaur music services like Pressplay and MusicNet, which would have both been just as useful not existing at all.




"Please note: Each song will be accompanied by a five-minute commercial. Each play constitutes a new purchase."

But that has forced labels to get creative. For instance, in the wake of the untimely death of pop legend Whitney Houston, fans noticed that less than 30 minutes after news of the singer's death broke, her album prices skyrocketed on iTunes and Amazon. The price for her 2007 album The Ultimate Collection, for example, jumped from $4.74 to $12.62 in mere hours.

But isn't this sort of fuckery all so that greedy rock stars can live the rock star lifestyle? These are people who spend their downtime having snowball fights with bikini models, where the snowballs are made out of cocaine.

Nope -- for the most part, the artist doesn't make shit from record sales. Not only can the label wind up keeping all of the profits on even an album that goes platinum, but the band can actually wind up deeply in debt to the label. For instance, after selling over 2 million records and receiving precisely dick, the band 30 Seconds to Mars still owed EMI over $1 million.




And that was just their sunglasses budget.

How is that even possible? Easy -- the label makes the musician cover the cost of everything from recording the album, to promotion, to shooting the videos. It all counts against their cut of the record sales.

Courtney Love, of all people, walks us through how it works: Young artists find out they're getting a million-dollar advance from the label and think they've won the lottery. Then they find out that recording the album, promoting it, shooting the video, and other costs wipe out the advance, and then some.




And then they're contractually obligated to become a terrible heroin-addicted leech on society.

So, their debut album can go double platinum and they'll still be in the red, having to pay back the label with their cut of the record sales ... which is almost impossible, because the artist's cut is tiny. Lyle Lovett, after selling over 4 million albums during the course of his career, says he has not seen one goddamn cent. So if you want to build a cocaine snowman, don't try to go major -- go independant. There's probably not as many groupies, though.