Why The Recording Industry Is A Bad Investment

Real Musicians Have Day Jobs

Not something that the recording industry wants you to hear, but talk to musicians. Most of them do have day jobs. In fact they regard people like Celine Dion as fakers. And of course there’s all of the jokes.

Q. How do you get the guitarist off your front porch?

A. Pay for the Pizza.

Q. How do you streamline a musician’s car?

A. Take the Pizza delivery sign off the roof.

Q. What do you call a guitarist who just split up with his girlfriend?

A. Homeless.

There’s a ton more. All of them point to one thing. Musicians aren’t in it for the money, because they could make far better money doing honest work.

So if musicians are paid so badly, why is the Canadian Recording Industry Association screaming so loudly about how Bill C-32 will help musicians? Simple. If they screamed about how much it would help the recording industry, no one would care. That Bill C-32 won’t help musicians doesn’t bother the CRIA member companies. Lying doesn’t bother them either. All that matters is that they make money.

Here’s the funny bit. Bill C-32 won’t help the industry either.

Now that everyone has finished having heart failure, I’ll explain. The details are really very simple, and rather widely known by people in the industry. They just don’t talk about them to the general public, because if the public knew that they were being lied to, they’d revolt.

OK, let’s talk about a generic recording company. What is it’s business? Simple, it manufactures and delivers plastic discs to stores. At one time it did do most of recording, but recording equipment has fallen in price, to the point where my portable recording studio cost me less than $10,000.00 Canadian, and it does a pretty good job. So economically it’s no longer worth the time and effort involved for our generic recording company to do any recording. Instead they act as a manufacturing and distribution system.

The problem is that manufacturing has also dropped in price. Discmakers has some fantastic deals on duplication equipment. I’ve been considering buying a machine from them, they even have Blu-Ray duplication systems. And if you need high volume production, instead of doing it yourself, you can contract with them to do it, their pricing is very reasonable.

But do you really need to manufacture discs any more?

I have an ITunes account. I haven’t uploaded anything using it yet. But I can, any time I want. I know a lot of artists who are using ITunes. Thanks to ITunes, I have a complete collection of Tom Smith’s newest music. No worries about loosing the compact discs either. For that matter if my computer dies, Apple has the music backed up for me. Who really needs Compact Discs? Tom Smith is a perfect illustration of the first joke. Tom used to have a day job. He worked in a bank. The internet, and digital distribution gave Tom the opportunity to go full time. Want a special song for your wedding? Tom will write, and record it for you. If you can afford it, he’ll even show up in person to perform it.

Or how about Dawnya? Dawnya Thill is a new artist, she has just released her first compact disc. It may be her last compact disc, like many other artists she may go fully electronic. Or more likely she’ll decide to do limited runs with added value, say hand signed copies of the lyrics? Right now she’s hoping to make enough sales to be able to set up a website. I missed her performance at Ohio Valley Filk Fest because my daughter was in the hospital, but several people I’ve talked to said she was pretty good.

The Recording Industry is in the same position that the horse drawn carriage manufacturers, in the early 20th century. With less need for their services, their sales are going down. They’ve attempted, and to a certain extent sold the government on the idea of introducing more restrictive copyright laws, but the laws that they are getting, aren’t what they need.

What they really need is a law that states that the only distribution system that can legally be used is theirs. Anything less won’t allow them to survive.

The same applies to The Canadian Motion Picture Distributors Association. Video distribution is about ten years behind music distribution in moving to digital downloads, but it is moving. In Canada ITunes carries a lot of BBC stuff that we’d never see on broadcast TV, including classics like Fawlty Towers.

So whatever you do, don’t buy stock in any of those companies. Short term, you might make some money, but long term, you’ll loose.


Wayne Borean

November 1, 2010


3 thoughts on “Why The Recording Industry Is A Bad Investment

    1. I was talking long term investments based on changing technological and sociological indicators, not current returns. Based on the rates of return for self publishing through ITunes/Amazon/EMusic and other direct services as compared to the rate of return for an artist working through a label, it’s not economically feasible for an artist to work through a label anymore. The labels of course are doing their best to hide the numbers from the artists. They want to retain the business for as long as possible. In fact Steve Kane, the President of Warner Music was initially furious when I pointed this out, and then came back with the “but we provide other services of value’ but wouldn’t identify those services to me.

      Steve has run the numbers. He knows the situation. Any company President which doesn’t would be incompetent, and he didn’t get to where he is by being incompetent. He’s fighting a rear guard holding action, while trying to redefine the company’s business. I wish him luck, because the current business cannot financially survive.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s