They used to do this when times were bad, but never when times were good. Hell, the three major label groups all keep trumpeting their results, how great they are, then again Bill Ackman has a big position in Universal, which proves the point, it’s all about the stock price baby, the underlying business is irrelevant.
Don’t confuse this with the tech layoffs of the past year. Unlike the record labels, the tech companies had been on a hiring spree, they were all about growth, the future was so bright they had to wear shades, the layoffs were all about right-sizing, not undercutting the essence of the business.
Let’s be clear, almost all these layoffs concern people in the new music sphere. It’s like Universal and Warner are abdicating their power in this world, throwing their hands up in the air and saying we can’t figure it out, we’re catalog companies with new music businesses that focus on moonshots, the rest of the landscape be damned.
Yes, indies keep gaining market share. You’d think the majors would wade in and figure out how to get more of this action, but instead they’ve punted.
You don’t see Live Nation laying off people in light of great profitability. Proving how healthy the live sphere is. And Live Nation is promoting shows from clubs to stadiums, they’re not ceding market share to anyone, they’re going where there is demand, which appears to be insatiable, well, at least growing… It’s a worldwide market, think of the possibilities! And Live Nation is.
But at Universal and Warner… They think everyone’s still playing the old game. You sign some nitwit, massage them with producers and remixers and then hype it in the press, get them on TV and do your best to get on terrestrial radio. And believe me, terrestrial radio still has power, but it’s shrinking. The majors are clinging to the avenues of most exposure instead of retooling to promote from the bottom up, which requires hard work, investment and time. But they just want to cruise along trying to create the next JLo, some other empty vessel that they can convince preteens and brain dead adults they should care about, as if hit music is all there is, as if it’s that which touches souls most, which lasts, when that is patently untrue.
Never have the majors played in fewer genres and released fewer records. In other words, they’ve pulled back, and now they’re pulling back further!
And, new signings primarily come from those who’ve built it themselves online, via social media/TikTok. The main criterion is how many followers you’ve got. So if you’re a great marketer, this is your time. But if you’re a great musician who is not so good at online marketing, you’re SOL.
The labels want the acts to do the work. So why do they expect the acts to make a deal with them? In truth, many who do end up with contracts unheard of previously, with a greater royalty rate and the return of masters, the act has most of the leverage, this is topsy-turvy.
Then again, the acts can make more going independent. They can get nearly 70% of income from the DSPs, and if they sign with a major good luck getting 50%, or anywhere close.
Back in the heyday of the recorded music business, the seventies and eighties, labels were always creating new imprints, adding staff, believing you needed more people to grow. CBS had Portrait… I could list more, never mind independent upstarts, like Interscope, but today it’s doom and gloom in the halls of the labels, it’s consolidation instead of growth, meanwhile the overall numbers are good. Isn’t this when you try to take market share from your competitors, isn’t this when you add staff?
One staff can only sign and promote a limited number of records. People count. This is not work that can be done by AI.
But man, Wall Street eats this stuff up. As if the recorded music business was simple, as if Bill Ackman, a money man to the core, can comprehend it. As if there’s no expertise involved.
The labels should be nurturing new executive talent. But no, they don’t want to pay for it. The fat cats make money and the rest of the staff are underpaid worker bees who need to be on call 24/7. Where are the stock options for the rank and file, all the perks that tech and other companies now provide. Nonexistent. How do you expect to get the best and the brightest? You don’t!
Used to be a privilege to work at a record label, but that went out the door with Tower Records. Music isn’t the only cool sphere. Go try and recruit an assistant director of anything at an elite college, they’ll laugh at you.
This is all good for independent artists. And good for the business at large. Because it presages opportunity. The labels do have their catalogs, then again, so did Paramount, and look what has happened to that company, it had to sell its valued real estate just to make a debt payment. The landscape changes, and the lumbering giant labels do not. Once again, leaving opportunity.
More genres will flourish. More acts will bubble up and grow. The labels’ hold on marketing and distribution has been broken by the internet, today anybody can play. And you don’t have to worry if your music fits narrow terrestrial radio formats. You’re one on one with your audience, that’s the magic. The major labels still don’t know who their customers are, still don’t have a one on one relationship with the people who actually pay their salaries. They’ll wine and dine radio programmers, DSP programmers, but the great unwashed? They’ve got nothing to do with them.
Once again, you don’t pull back when times are good, you do your best to grow! Monte can’t promote every record. And as good as Janick is…
But Kyncl and Grainge know better. As they promote the drivel that puts up momentary numbers and then recedes into the woodwork.
The music business grew by delivering album acts that oftentimes didn’t even have hit records. And these acts still exist, and they’re on the road. But they’re not flashy enough for the majors, not an easy enough sell, so they’re ignored.
Ukraine has a hard time fighting with one hand behind its back. To stand up and win it needs American money. To achieve great goals you need people, time and money. And believe me, breaking records is war.
But now major labels want to fight with one hand tied behind their back. The stock might go up for now, but what about the long term?
Screw the long term.
