Open Letter To The Record Companies – Why You Should Leave The Merchandising Industry
Open Letter To The Record Companies – Why You Should Leave The Merchandising Industry
1. Merchandising is not the music business, it’s the apparel business. Besides, no matter how much the lop label executives try, they will not be able to swallow their pride enough to embrace a business they would have rather pissed on 10 years ago. And to those conglomerates who owned themselves a Giant, Winterland, or Niceman back in the day - that doesn’t count towards the new paradigm.
2. You have less leverage than you think because you are increasingly becoming unnecessary. Very soon, even a monkey will be able to effectively distribute music online. So why would a band trade an additional 359.5 “degrees” of themselves in exchange for a record deal? Besides, the real merchandise companies have always been happy to cover a bands short term cash needs with less exploitive terms.
3. If I could be a fly on the wall and watch a major label merchandise strategy meeting, my guess is that it resembles a 12 year old dousing an anthill with gasoline and lighting it on fire.
4. Labels: Do you really think that your best case fractional ownership of the merchandise market will come close to equalizing your loss in music revenue?
5. The real merchandise companies will push back and win. They have the tools, the drive, and quite frankly much more experience in many aspects of the industry. Maybe some of you will be lucky and they will hire you to administer their publishing companies.
March 25th, 2009 at 7:52 pm
Funny stuff! I hope these merchandise companies don’t sell out as they have recently for then the merch world will be in a world of hurt.
March 26th, 2009 at 6:01 am
[…] with more and more 360 degree deals. My favorite bit: If I could be a fly on the wall and watch a major label merchandise strategy meeting, my guess is that it resembles a 12 year old dousing an anthill with gasoline and lighting it on […]
March 26th, 2009 at 9:05 am
This is a dumb argument. Record companies are much more important and relevant to any artist than any merchandising company. Merchandising companies don’t pay to record/release an album or to publicize and market the artist (aka “the brand”). If a record company is willing to pay for the merch, pay for the design, store the merch and sell the merch, along with provide funding to actually make people know who the artist is so people then BUY the merch, then they have every right to make some money off of all the work they just did to make the consumer buy that merch. Without their initial investment (risky investment) into the artist, noone would care enough about or know who that artist is to want to even buy the t-shirt. I definitely think some record companies aren’t very smart and try to merchandise artists that maybe don’t require merchandising, but they’re pissing away their own money. All in all, if a record company is willing to do the work to make the artist known and to handle their merchandising, then they deserve payment for their work. If this puts merch companies out of business, then oh well.
March 29th, 2009 at 2:53 pm
@Dumb:
1. Right now, you can get an excellent sounding album recorded by an excellent producer - with a pretty decent reputation - for about $3000. Start to finish, mic’ing to mastering. That’s assuming you don’t already possess all the tools to just… record it yourself.
2. Record companies don’t pay to record or release anything - the band does through their 9 to 12 (if they’re lucky) percentage point share of the list price of the album, somehow still usually around $10. The label fronts the money then pays itself back with those royalties - not counting their own 30 percent share of the gross of each sold unit. Considering that the ONLY real, reliable and consistent method of selling music right now is by digital means, those labels aren’t really spending much of anything - and yet most bands do not ever “recoup.”
3. Willingness to pay for the design, the merch, the means with which to sell that merch, and this magical mystery “funding” spent to “make people know who the artist is so people BUY the merch” has nothing to do with it. Willingness has always been there - for those industrious enough to get off their asses and sell their crap.
4. The number one thing that every label has demanded of every band - we’re not talking about corporate Pop, but bands getting deals… the people who live off merch - is that the band has to tour. Why? Because print media is dead as doornails, and it “costs” $200,000 to “break” a single on the radio. The label - or the corporation that owns that label - buys advertising in exchange for the label slotting the songs on rotation. Every once in a while a band breaks that pattern by just writing a good song that everyone likes, but far more often it’s about favors. Since labels don’t spend that kind of money anymore, the band has to tour no matter what… and somehow the labels get the bands to “break” themselves. If a band doesn’t get tour support, the label is at this point literally spending NOTHING. As a result, the risk that the labels were supposedly putting up for these bands is now irrelevant, because the bands themselves are the ones risking everything.
The payoff, if you were fortunate to be any good, has always been merch. That’s where the bands have always made their money - and how they could afford to come home from these asinine tours that do all the work for the labels without losing their leases, their car, their spouses, etc.
Now that ONE thing bands could hold on to for themselves is gone.
The labels - as this article nails 100% - had NEVER been willing in the past, because it took too much work and they were already making the lion’s share of the money. Once those fat, monocled, cigar smoking bastards saw their buddies losing jobs and filling out Starbucks applications - cause WHAT THE HELL ELSE ARE THEY QUALIFIED TO DO? - they “discovered” the 360 deal, and now bands naive enough to believe that record labels can do JACK SH!T for anyone are literally signing their lives away.
Sorry, why was this argument “dumb”?
March 29th, 2009 at 3:23 pm
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