Two Basic Functions
Label
1. Acquire Masters
2. Market those Masters
Oligopoly
A market condition in which there only are a few firms competing in the market. A few could be anywhere from 2-20
Three Levels of Oligopoly
1. dominant firm oligopoly
firm owns 50-90% of market
2. Tight oligopoly
concentration of 4 firms hold more than 60% of the market
3. Effective competition
more than four but less than “many” firms hold 60% of the market
Four Significant Factors
1. # of firms
2. The seller concentration
3. The product differentiation
4. Barriers to entry
Recording Industry – Tight Oligopoly
… Yep
Birth of Rock and Roll
1955. Ended the Tight oligopoly
1955-1956 – 44% increase in sales volume
1958- Independents Skyrocket
1960s: Albums > Singles
1962- Billboard: 42 labels
The Merger of Polygram and Universal
1998
Top 4 controlled 75%
Universal, Warner, BMG, Sony
2004- the big 4
1. Warner Music Group : Canada
2. Universal Music Group: France
3. Sony-BMG Music Entertainment: Japan – Germany
4. EMI Group: UK
Universal Music Group
World’s largest. 1998 when UMG (old MCA) merged w/ polygram. In 2001, it merged with french Vivendi to create Vivendi music.
Universal Music Group sales
MCA, Geffen, Interscope, Mercury, Polydor, London, Vertigo, Verve, Wing, A+M, Island/ Def Jam
Motown, Decca
Warner Brothers Records
Music division of Warner Brothers Film to control music interests in its film in the 20s
AOL – Time Warner Inc.
After 2000, Warner Bros records became AOL time warner.
Warner Music Group sold
AOL-Time warner sold to Edgarm Bonfam of and a canadian group of investors
Warner Music Group holdings
labels and Warner/Chappel publishing and WEA inc. Branch distribution
Warner Music Group labels
Warner Brothers, Electra/asylum, Atlantic, Atco, Reprise, Rhino, Maverick, Tommy Boy, Grant
Digital Audio Disc Corporation
Sony, Japanese elec. Company, developed software to compliment its hardware. Went with CBS to create the Digital Audio Disc Corp.
Sony acquires CBS
Sony built its music interests by acquiring CBS for 2 billion in 1988
Sony Music labels
Columbia, Epic, Sony Nashville
BMG acquires Arista and RCA
Got Arista from Clive Davis in 1979
In 1986, BMG purchased RCA victor from GE
BMG labels
Ariola, RCA, LaFace/Arista, Zoo entertainment, Private, Windham Hill, Jive/Silvertone
EMI
Began with UK mergers in 1930.
EMI was mainly euro until 1956 when it acquired Capitol Records
EMI labels
Capitol, EMI, Chysalis, Sparrow, Virgin, Blue Note, Angel
Corporate structure
The upper level structure of the big 4 is basically the same. Each corporate owner owns several different business in addition to its recording companies
Vertical Integration
Seek to own all aspects of production, from signing of song, to sale of recording.
Label president
Label president is usually someone with A experience, but not necessarily.

Label president oversees ALL operations, but depending on involvement with A, the other divisions may have additional independence.

Business Affairs
Legal Department:: Negotiationg Artist and producer agreements, Other licensing arrangements, Sampling and Film::
Accounting
The counting of sales, returns, free goods, promotional albums, and the payments of royalties.
International Division
This unit works out international distribution deals and coordinate marketing plans around the world. May be responsible for A in foreign territories. Some smaller labels hire other labels outside the US or a major US label to handle international marketing and distribution
Marketing
Get records to consumer

Promoting consumer awareness through media

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Sales
Getting orders from Rack jobbers, retail chains, and one stops

May be specialists whose job it is to visit stores and help to set up displays

Promotion
::Radio and Video play
:: See that the “Right” people hear the music :: Take artists to visit local Radio and TV stations or record stores
Advertising
:: Create media plans to go along with album or single :: Many labels make advertising :: Make national media buys or dispense co-op ad. money to retailers and distributors who come up w/ additional ad. plans for label.
Publicity/ Artists Relations
Consists of nonpaid exposure other than radio or music video :: In charge of getting album reviews in National and local media //////// Coordinate the work of other departments to be sure there is a unified marketing plan for every album. :: Work with personal manager to maintain image
A and R
Finding + Recording Artists :: Look for songs for non writers :: because it’s in charge of the finished copy, it also has administrative duties with the master.
A and R administration
get mechanical licenses and clearances for sampling:: make sure that all people who played get proper credits :: help producers screen material for an artist:: coordinate delivery of the recording, artwork, and liner notes for delivery to plant:: make sure musicians, artists, and producers get paid.
Producer
In charge of the rec. process :: Find talent and record it :: Record after others found it :: screen talent being pitched to label :: may be paid / independent
The “indies” Independent Label
not owned by conglomerate or subsidiaries :: may be distributed by majors and still be an indie