I was listening to NPR where they said the record company made about $8m off Kate Perry's record sales, whereas they were responsible for most of the marketing expense (promoting to radio stations, etc). There was another show about how much it costs record companies to try to get a summer hit, and they didn't have much to show after [1]
There's now a trend for record companies to reposition themselves as marketing agencies (which is what they actually do) where they take a cut of the total revenue (including song writing and concert sales) called 360 contracts. [2]
It'd be interesting if the entire process of songmaking were like a creative commons non-commercial project. You start with a song writer, different people doing mixes, and then when it reaches a stage where it can be monetized all people involved get paid. The question is "how to hell do you monetize this?" iTunes? High Fidelity mp3 ? Live performances? Humble bundle $1 compilations?
There's now a trend for record companies to reposition themselves as marketing agencies (which is what they actually do) where they take a cut of the total revenue (including song writing and concert sales) called 360 contracts. [2]
It'd be interesting if the entire process of songmaking were like a creative commons non-commercial project. You start with a song writer, different people doing mixes, and then when it reaches a stage where it can be monetized all people involved get paid. The question is "how to hell do you monetize this?" iTunes? High Fidelity mp3 ? Live performances? Humble bundle $1 compilations?
[1]Songs of Summer http://www.npr.org/blogs/money/2011/07/11/137705590/the-frid...
[2] Kate Perry's Perfect Score http://www.npr.org/blogs/money/2012/01/20/145466007/katy-per...