Artists still lose out in record deals

It took several years for the recording industry to even acknowledge that changes in technology might very well spell its doom if it did not adapt. Then it took others, such as Apple Computers, to show them how technology can help sell music rather than limit profits. But even now, artists are often still the ones who are being shortchanged.

Digital music players, such as the iPod, are widespread on campus. The iPod itself is selling so fast — at least 4 million units are projected to be sold during this quarter alone. Combined with the Apple’s iTunes music store, it single-handedly put the Apple brand name on the map again. Monday, the stock price of Apple rose to a four-year high, while analysts corrected the stock price projections upward to heights it had not reached in years.

The five big music labels, Sony Music Entertainment, EMI Group, Warner Brothers Music, BMG Entertainment and Universal Music Group had grudgingly agreed to let Apple sell their music in the iTunes music store. Only when sales of tracks reached millions per week did they realize there was money to be made.

This weekend, Universal announced the formation of Universal Music Enterprises Digital, a subsidiary of the Universal label which will “publish” formerly unsigned artists online. The catch: According to an article in The New York Times, the artists still have to come up with funding for their albums themselves; the label will only ensure the marketing side of it. The artists retain the rights to their work, but the label has first dibs on a contract should the artist sell more than 5,000 “albums.”

Since the artist’s works will be sold online, production, stocking and shipping of the physical CDs do not apply to the deal. The artist is therefore fronting money while being locked into a deal. The risk of the label is minimal.

Alternative routes of releasing music have been emerging, thanks to the Internet. All of them — excluding illegal means, of course — seem fairer toward the artists., an online startup that branded itself with the tagline “we are not evil,” splits its profits 50/50 with signed artists and also sells physical CD copies. The company also does not lock artists into an exclusive contract.

Other artists have taken it onto themselves to manage their own musical careers. Brad Sucks, a “one man band without fans,” as the sole musician titled himself, is successfully marketing his music through his own Web site at and allows his music to be downloaded and played free of charge if the consumer so chooses. His logic is that fans who like his music will pay for it eventually, either by contributing a minimal fee through his Web site or by buying a physical copy of a future release. Brad Sucks also allows everyone who gives him credit to use his music in radio shows and “podcasts,” a new emerging Internet phenomenon of individuals starting their own “radio” shows online.

Such word of mouth seems to be working quite well for this particular artist. While it may not be working well for everyone, it shows that the old model of huge record labels owning most music may be on the way out. The labels have to learn to respect artists’ works and freedom before it is too late.