The Singer-Songwriter & The Record Company
(Part 2: Evil Geniuses!)
In the beginning the singer-songwriter (i.e. recording artist) and record company had a simple business relationship:
- The artist makes the great music...
- The record company put the artist's songs on their vinyl
- They sold the vinyl, paying the artist a publishing fee (called a
"royalty") for the artist's song.
- The artist kept ownership of their song as intellectual property.
But as record companies got richer, they offered artists more "help" for more ownership of the song:
- Music Production for better sound quality
- Songwriters to help finish albums
- Promotion of the artist and song, etc.
This mean a smaller royalty check for singers / songwriters. But they'd agreed to the new deal because it was still more money than they had ever seen before, as the record often sold to millions of people.
The only problem was that new generations of recording artists began believing they were in the same business as the record company: selling records to their fans.
The Modern Record Deal is born: "Get rich now...pay it all back later."
Record companies would give artists cash advances (i.e. "signing bonus") one any future records sold, but the company would keep full ownership (i.e. "publishing rights") of any songs created.
Meanwhile, the artist is paid a % of every record sold (like a sales commission), but only after paying back the signing bonus (cash advance) and all record company expense that helped them make the song.
Many times, this meant the artist would get very little profit from their first album and would owe the record company money and several albums. And if the artist was a band that meant even less profit to split.
The music artist basically became a "contract worker" for the record company. Sucks huh?
But fans & future singer / songwriters would see the instant wealth new artists appeared to gain instantly became convinced the only way to a successful music business was to sign with a record company.
This false belief helped record companies grow their business astronomically since there would always be a new artists knocking on their door hoping for instant wealth and fame.
The record company's financial future was secure, until...
As recording technology evolved, records were replaced with 8-track tapes, next cassette tapes, then CDs, and now all music is digital through mp3 files streaming over the web!
The traditional record business (i.e. "selling physical media recordings") became obsolete...there was no longer a need to buy physical recordings.
And along with the free-sharing nature of the internet, this meant the traditional record company was no longer needed...so it started to die.
..But instead of naturally fading away, record companies survived by:
- Claiming ownership of the artists' valuable music through the record
- Had laws passes to make it ILLEGAL to "freely sharing" that music, even though this is traditionally what made a songwriter's music *more* valuable (see: songwriter business summary).
Meanwhile, the singer / songwriter's money began to shrink. Because they agree to get a percentage of every record sold, when physical record sales dropped so did their income.
Record Companies Pulled A Bait & Switch!
Record companies took over the singer / songwriter's "music publishing business". Next, they blamed the fans for doing what fans have done for decades; what they're supposed to do: share good music, by labeling them "pirates" (i.e. evil people who historically killed and stole from others).
So how does knowing this help you build your music business?
It's never been easier to build a successful music business in today's world but to do that you need to:
1) KNOW WHAT BUSINESS YOU'RE IN!
If you're not creating a record company you are NOT in business to sell music to your fans.
You're in the "music publishing" business: renting your songs to businesses that *need* your valuable music to sell THEIR products to your fans.
This means you must make your music more valuable by building your fan base. Do not waste time trying to sell songs to your fans. You must get your music in front of them for free, and then charge companies that want to use your songs.
2) Use the internet to your full advantage.
It's still true that you need as many people to love your music as possible to make it valuable enough that companies will want to rent it from you. This means your mission is to grow your audience.
In the past, you needed a record company to help get your song on the radio. But today, there are dozens of websites you can use to expose your songs to as many people as possible.
Again, do not waste your time trying to sell to your fans. If your fans want to buy a song, GREAT! But that's just an added benefit; don't focus on that.
Again the key to making money as a singer / songwriter is to make your songs valuable by grow your audience and then charge *companies* a fee to use your songs to sell their products to that audience.
3) Pay attention to where you hear popular music other than on the radio.
Think of every commercial you've ever heard or saw that uses a song you liked, or every movie or TV show accompanied by great music; or every club or public venue you witnessed playing your favorite songs.
Each one of these businesses rented the song to help sell their products or services, and paid royalties to the owner of the music. Research how to advertise to these businesses. Find these professional connections for yourself.
THIS is how *real* money is made as a singer / songwriter in the music business, and why record companies began seizing full ownership of songs from talented singers / songwriters like you.
So Let Us Begin.
Learning how to build your fan base is very important to build a successful music business. But this comes later in the process.
If you're still at the beginning stages of trying to learn how to write great songs then join my training group.
Let's first learn how to write great songs like your favorite hits from the radio and train to become a great songwriter in four steps, and then be guided though building your music business:
Download my free 6-step exercise manual to prepare your lyrical content
for structuring. Having your song lyric fully fleshed-out before piecing it
together is important.
- Learn important skills and tips about each song section not taught in music
theory class to learn how to
structure your next song.
- Follow audio & video songwriting lessons to complete your
- Also, as a member get exclusive deals on all professional songwriting tools & courses offered on this website.
In a few weeks you'll have access to everything you need to start writing great songs. You've already taken the first step by searching for this info.
And reading this complete article proves you are passionate about entering the music business. So take the next step. There's no cost to join and no obligation to stay.
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Updated: April 4, 2020
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