The sad part about this whole situation is the fact that the labels have always been the banks, either to a full extent or a partial extent.
The fact is that if you made a record that cost $100,000 to record and another $200,000 to promote, if you only sold 10 copies of it the label didn't come after you demanding their money back. That was the calculated risk that they took, based on a gut feeling that the artist had something special and would in fact succeed. Sometimes those gambles paid off, but far less often they didn't. The careful assessment of the gambles kept them afloat.
Either way, labels were able to fund this "gambling" by funding artitsts that DID sell a lot of copies, and the profits from those sales were then channelled into funding more "gambles". Back in the 70s/80s the average major label failure-to-success ratio was about 30 to 1. That meant that with each significantly profitable artist, they were able to fund 29 other (to that point) non-profitable ones and "gamble" that they might hit the jackpot the next time round. It often paid off, but far more often it didn't. Again, the win-loss factor had to be carefully monitored in order to stay afloat and continue this risk-taking.
Either way, the label never asked for any of its money back, even if it sunk millions into the artist.
Banks will not be remotely as kind. Not only will they want every penny back *including interest* but they will also filter out the applicants to make sure that there is absolutely NO doubt that the project they are funding, be it a recording or a tour etc. WILL succeed. If a recording fails dismally, or the singer gets electrocuted and dies on stage mid-tour, the bank will still demand their money back. The labels would be prepared to "gamble" on something like this though, and be prepared to eat those losses.
The old "banking" system really doesn't look half bad when you consider what this situation will almost certainly soon become. Labels had (and still have) something that banks or traditional money lenders don't have - belief in the artist, passion for the art, and the desire to perpetuate the process.
âAnytime that craftsmanship begins to slide out of the picture, so does the fun, because being good at something â being a craftsman â thatâs the fun of life. Thatâs the vinegar."
"People with edges break bones when they fall. Round ones can roll anywhere."
"Audere est Facere"
The fact is that if you made a record that cost $100,000 to record and another $200,000 to promote, if you only sold 10 copies of it the label didn't come after you demanding their money back. That was the calculated risk that they took, based on a gut feeling that the artist had something special and would in fact succeed. Sometimes those gambles paid off, but far less often they didn't. The careful assessment of the gambles kept them afloat.
Either way, labels were able to fund this "gambling" by funding artitsts that DID sell a lot of copies, and the profits from those sales were then channelled into funding more "gambles". Back in the 70s/80s the average major label failure-to-success ratio was about 30 to 1. That meant that with each significantly profitable artist, they were able to fund 29 other (to that point) non-profitable ones and "gamble" that they might hit the jackpot the next time round. It often paid off, but far more often it didn't. Again, the win-loss factor had to be carefully monitored in order to stay afloat and continue this risk-taking.
Either way, the label never asked for any of its money back, even if it sunk millions into the artist.
Banks will not be remotely as kind. Not only will they want every penny back *including interest* but they will also filter out the applicants to make sure that there is absolutely NO doubt that the project they are funding, be it a recording or a tour etc. WILL succeed. If a recording fails dismally, or the singer gets electrocuted and dies on stage mid-tour, the bank will still demand their money back. The labels would be prepared to "gamble" on something like this though, and be prepared to eat those losses.
The old "banking" system really doesn't look half bad when you consider what this situation will almost certainly soon become. Labels had (and still have) something that banks or traditional money lenders don't have - belief in the artist, passion for the art, and the desire to perpetuate the process.
âAnytime that craftsmanship begins to slide out of the picture, so does the fun, because being good at something â being a craftsman â thatâs the fun of life. Thatâs the vinegar."
"People with edges break bones when they fall. Round ones can roll anywhere."
"Audere est Facere"