At the moment, being a record company is not so much desired as was the case 2 decades ago. Profits are declining for record companies and artists are getting more dissatisfied with their services as well. The digital age is with us now and this has presented a challenge to record companies as well. They have the option of adopting the digital creativeness or closing shop as is the case with many record stores around the world.
How record companies operated
Traditionally, record companies simply scouted for talent and bankrolled artists in their label until they started making money. They would then keep most of the artist’s earnings after this as a result of them having all ownership rights of their artists’ works. This sort of model worked well three decades ago where artists relied on everything from the record company; from recording their songs to physically distributing them in the market. However, this is not the case presently. Fewer people are buying CDs nowadays and the young generation can be able to access music from the internet easily.
As a result most of the models adopted by many record companies decades ago are quickly becoming obsolete and their survival in the music industry is pegged on them being able to adopt to changing technology and practices. Artists demands have also changed a lot over the decades, what they needed 2 decades ago is not what is being demanded nowadays.
Manufacturing of CDs is dwindling and many major record companies are outsourcing the manufacturing bit. It is just a matter of time before CDs become obsolete as well thereby allowing the scaling of virtual music stores all over the internet. Unsigned artists and bands are not relying heavily on them getting signed by a record label. With the change in dynamics in the music industry, unsigned artists are at an advantage of getting all of the revenues due to them for the sale of their products. They also get to retain all royalty of their music and hence get to earn more during their lifetime. This is a major scare to record companies.
Record companies are also getting more scares facing the fact that it is easier to record high quality music nowadays without the use of an expensive studio. The evolution of technology has provided artists with cheaper products that can allow them to record music easily and conveniently without requiring the help of record companies.
Technology has also made it easier for artists to market their products by themselves. Any artist can put up their music on YouTube and rely on blogs to push its recognition among many people. It is all about how they can make more people reach their product, which is conveniently taken care of by the use of the internet.
Record companies have been existence for a very long time and have contributed to immense success of artists over the years. However, the industry is quickly changing with the advent of technology. It therefore goes on to say that record companies need to change with the tides of technology or risk being swept away.