Music Business Survival Series Pt 5: How Record Labels Work

Promotional photograph of Elvis Presley, taken...

Promotional photograph of Elvis Presley, taken in 1954. (Photo credit: Wikipedia)

 By Julian Harris Gibson

Record labels function like any other corporate machine, their ultimate goal is to make a profit. We cannot put the entire fault on record companies because music is such a subjective field without any real guarantee of success.

A company who sells a product like a car can expect to make a certain profit when the product reaches the market. If the product doesn’t sell on the retail market car companies can then go to the private sector or even government or markets overseas to sell their product at a market value.

However in the music field, the artist is the product and no matter how much money is spent on marketing and promotion, the fans have to respond in order for the record label to reap a profit. Also with the rising threat of online piracy it is an even tougher landscape for the fledgling music empire of today.

The groups of the twenties who made the big band sound tapped into the swinging attitude of the gilded age hipsters who wanted to grab a “doll” and paint the town red. The sizzling sixties were filled with artists like The Beatles, Elvis Presley, Jimmy Hendrix and others who not only protested in spirit but also song. Music can be tied to culture all the way back to the beginnings of civilization and maybe before that.

The jungles of Africa were filled with the sounds of war drums and stick instruments that allowed people across great distances to communicate. Scientists now study the songs of whales to show that these water born mammals may be much more sophisticated than we had ever thought. I bet there is a lawyer right now putting on a scuba suit to try and sign Free Willy to a contract or sue Sea Worldfor copyright infringement for a signature whale sound. But seriously, Copyright, Publishing and Contract knowledge is key to the successful career of any artist.

Cover of sheet music for "The Star-Spangl...

Cover of sheet music for “The Star-Spangled Banner” by Francis Scott Key, transcribed for piano by Ch. Voss, Philadelphia: G. Andre & Co., 1862 (Photo credit: Wikipedia)

Music itself is a tricky business venture because it has always been connected to society’s consciousness at the particular time. At hard times like war, music can inspire a nation. In fact, the Star Spangled Banner was written about the battles fought during the American Revolution. Francis Scott Key was so inspired by the bombs “bursting in air” that he spent all night writing the song and it became an immediate hit on the revolutionary charts. 

  Now at every sporting event we all stand with our hand over our heart and sing along. While this song has been sung by many famous singers, none have sung the national anthem with the emotion and grace as the late Whitney Houston during her Super Bowl Appearance in 1991.  Her performance was so riveting that her record label produced a live version of the performance and it sold over a million records. Whitney’s performance came at a time when America was at war in Iraq and everyone was feeling patriotic. Whitney’s golden voice brought grown men to tears and the nation stood amazed and proud that the best rendition of the Star Spangled Banner ever sung came from a skinny girl from Newark, NJ.