MUC110 LEC1. Overview of Recorded Music Industry

OVERVIEW:
RECORDED MUSIC INDUSTRY
© 2007 musicbizclasses.com

U.S. RECORDING INDUSTRY Overview
• 3000+ Labels;
;
• 30,000 new releases per year

Primary activities:
• Talent acquisition through A&R
(Artist & Repertoire);
• Contractual arrangements with recording artists
and their managers
• Prod ction manufacture, distribution
Production, man fact re distrib tion
• Marketing and Promotion of recorded music
• Enforcement of copyright p
py g protection of sound recordings
g

• In the U.S. the Industry is centered, primarily, in NY, LA,
and NASHVILLE with activity in Atlanta and Miami also
Miami, also.

RECORDED MUSIC INDUSTRY REVENUE

RECORDED Global Sales:
MUSIC $18 Billi
Billion
2008

US Sales:
$5 Billion
Products: 2008
CDS
Vinyl
DVDs
Downloads
D l d
Streams
g
Mobile/Ringtones
Merchandise

RECORDED MUSIC CHANNELS

WHOLESALE:
RECORDED To Distributors
MUSIC

RETAIL:
LICENSING: Direct to Consumers
Film
TV •Bricks and Mortar
Radio •Online
Internet
I t t •Cell Phones
Background
Music


Label Types
• The Majors: major distribution; dominant market share

• Independents: lacking major distribution; can be large or
small, “Major Minors”

• Sub-labels & Imprints: separate companies
or divisions owned or distributed by major labels

• Specialty labels: non-traditional distribution;
focused on non-mainstream genres (i.e. classical, gospel)

Distribution channels & market share define
record label types
yp

The Majors
• Divisions of an Multi-national conglomerates,
which usually have other non-music divisions.

• Majors control approx. 70% of the world music market,
and 80-90% of the United States music market.

• Universal– Universal Music Group is a subsidiary of
French Global Telecom/Entertainment company
(Universal/Vivendi)
• Sony Music Entertainment— American-based
subsidiary of Japanese Electronics Company
• Warner Music Group– Publicly traded, U.S. Based
• EMI Music Group– Privately held, British-based Global
Music Group

Major Music Company Corporate Structure

Corporate
Conglomerate Media-TV,
Telecom

Music Group
Gas, Water,
other
Music non-music
Record Publishing Distribution
activities
Label(s) Company
p y


VIVENDI/UNIVERSAL MUSIC GROUP

Island Def Jam Music Universal Motown
Group Records
Interscope Geffen Decca
A&M Records Deutsche Grammophon
p
Lost Highway Verve
Records GRP
MCA Nashville Impulse! Records
Mercury Nashville
Mercury Records
M R d
Polydor


SONY
Arista Zomba Label Group
Arista Nashville Legacy
Bluebird Sony Latin
BNA Records Label Masterworks
Burgundy Records Provident Label
Columbia Group
Columbia Nashville RCA
Epic RCA Nashville
Jive RCA Victor
J Records Sony Wonder
Verity Group
y


WARNER MUSIC GROUP
Atlantic Reprise Records
Asylum Rhino
Bad Boy
B dB Roadrunner R
R d Records
d
Entertainment Rykodisc
Cordless Sire
Recordings WB Nashville
East West WB records
Elektra Warner Music Intn’l
Lava Word Records
Maverick
M i k
Nonesuch


EMI MUSIC GROUP
Angel Manhattan
Astralwerks Mute
Blue Note Parlophone
Capitol Virgin
Capitol Nashville
EMI Classics
EMI CMG
EMI Records
EMI Televisa Music


ADVANTAGES OF MAJOR LABELS:
Scale
WELL FINANCED: Can afford better…
• Production
• Distribution- major networks
• Marketing
• Talent Acquisition
• And, sometimes, manufacturing

• INDUSTRY PERKS: Can Offer artists…
• Stability
• Prestige
P ti
• Advances
• Top production resources
op p oduct o esou ces


Advantages of Independent Labels:
Vision & Knowledge
g
MORE CREATIVE:
• Can find more raw talent
• Can use creative development, marketing
and financing tactics
• Can build better brand loyalty among fans
y y g

• SPEED:
• N t encumbered b l
Not b d by long corporate approval processes
t l
• Can understand artists and trends faster

• REGIONAL CONNECTIONS:
• Better regional connections for publicity and sales


Record Label: Key Activities

Internal:
• Talent Development
• Artist P d t M k ti
A ti t Product Marketing
• Legal
• Providing service to the artists

External:
• Sales & Distribution
• Marketing and Promotions
• Providing service to distributors and retailers


Record Label: Departments

SPECIAL MARKETS

INDIE RADIO
PROMOTER

PRGRM DIRECTOR
A&R

PRODUCT MKTG-
PRESS ARTIST DEVELPMNT

NOTE: This is a sample organizational chart.
Depending on the size of the Record Label, the
departments may be combined or organized in a
different configuration.


Record Label Business Structure: Key Functions

Leadership/Vision

Talent Marketing & Admin Manufacturing
Aquisition Sales

Product
Pressing
A&R Management
g Business
Affairs Packing
Marketing
Legal Inventory
Promotions
Management
Sales/ Accounting
Distribution Royalty/
Creative
Creati e Affiliate
Services Management

Record Label Business Structure: Department Heads

CEO/President
CEO/P id t
(Chief Executive Officer)

General COO CFO CTO
Counsel
C l

Administration Technology
Legal Finance
Human Information
Affairs Accounting
Resources Mngmnt
Business
Marketing &
g Online
Affairs
Aff i
Sales Security

For Educational Purposes Only

Please do not copy or distribute


MUC110 LEC1. Overview of Recorded Music Industry

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