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History lessons for musicians

Let´s face it. 

800px-Gunung_Palung_JungleIt is a jungle out there. Never before in the history of the mankind have there been so many musicians competing for such a little piece of the pie. In a day and age where physical record sales are on a steady decline many musicians believe there isn’t much they can do. In a time where the mere thought of spending money on music is thought of as absurd to many, making a living as a musician seems more unlikely than ever. That´s why we decided to publish our book “History lessons for musicians” as blog posts so those of you who didn’t subscribe to our newsletter or bought the book could get it for free. Here we go…

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“Those who cannot remember the past are condemned to repeat it”
Georg Santayana

For a lot of musicians it feels like the battle for fair record sales compensation is lost and making a living from “living your dream” seems out of question. What I will show you in this book is evidence that what is happening now is just a transitional phase. A phase in which those who make the right decisions now will come out as winners later. I will show how historic patterns can help us to predict the future of things to come and how you can use this knowledge to your advantage in planning your career. You will learn why the only way to survive in this new hyper competitive world is by learning to stand out of the crowd of millions of new musicians that come out (and disappear) every year and how by shortening the traditional music industry “food-chain” musicians instead of the industry can come out as winners. I will show how to make 10-15 times more than before by selling your music directly and we will also cover the strategic basics every musician should be aware of. What this book doesn´t cover is a step by step tactical framework or a collection of tips. In this sense it´s a motivational mindset book, not a how-to. After reading this book you will know the success secret behind some of the top artists’ careers and become one of the initiated few that realize the true power of seeing the big picture instead of getting bogged down in details. Are you ready to learn from history?

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Chapter I – History Lessons

Back in the days before the gramophone or the radio was invented the only way to listen to music was live performance – on concerts, in operas or from travelling musicians. When the first record players came onto the market they were a luxury good and through the decades became a mass commodity. What once was scarce now became readily available, as vinyl records, on tape or a CD bought through your local record store.

The Label System

800px-His_Master's_VoiceThe only way to get your favorite album or track was by buying it from a record store that carried it in the first place. The store you bought your record from in turn bought it from a distributor who bought it from the record label. The record label gave the musician an exclusive contract, sometimes an advance and a small part of the total amount of money they´ve made in profit from the record sales. So far so good and that is how things worked for roughly hundred years. A lot of money has been made in the meanwhile and a lot of money has been lost lately but to get a better understanding of what exactly happened we need to understand how and why things worked well in the past first.  The system worked because the label had control of four elements.

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First Element: The Artist

450px-MusicianIt’s the artist who signed a contract for the promise of a career. To be honest most artists were practically slaves and the labels where their slave masters. This is still the fact with those major label artists that didn´t negotiate advantageous contracts for themselves. (My wild guess would be about 99.99%) If you ever wondered why so many multi-platinum artists ended up broke and in debt the Answer is that they had terrible contracts which made them pay for most of production, promotion plus every other imaginable cost while having the label take the majority of the revenue with much less costs deducted.

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Famous artist bankruptcies:
MC Hammer, Marvin Gaye, Meat Loaf, Tom Petty, TLC, Cyndi Lauper, Isaac Hayes, Toni Braxton, Billy Joel, George Clinton, Jerry Jee Lewis, Mick Fleetwood

A lot of VERY successful artists here – with good business sense some could have still been multi-millionaires instead of making others rich.
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456px-AliciaOnThePressSecond Element: Manufacturing – Producing vinyl, tapes or CDs cost effectively used to be very expensive because you had to spend thousands of dollars in the beginning to produce the physical record in a minimum quantity. The label in that respect was or is similar to a bank. It lends money and makes you fill out a contract that guarantees them that their get money in the long run. There was still a risk associated but back then a lot records broke even and the hits then really killed it.

The manufacturing part is pretty much obsolete now that we have the internet.

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The Third Element: Distribution – Since the record companies controlled the distribution they controlled who got into the store and who didn’t.

A cashier and a customer interact at a cash register at the Wal-Mart store in Harrisonburg, Virginia. Photo by Ben Schumin on March 29, 2004.An independent label let alone a single musician had no chance of getting the kind of national or international reach a major label had. Again, here because of structural realities high capital investments were needed. You needed the label as an investor and connector.

This part has changed massively now since the internet allows limitless distribution.
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By Ronald Saunders from Warrington, UK [CC-BY-SA-2.0 (], via Wikimedia CommonsThe Fourth Element: Promotion – Traditional Record labels made money from selling records, bought advertising and in turn sold more. At least that is how it used to work.

Advertising created awareness which translates into sales. Since people couldn’t buy music anywhere else and there was only a handful of big record labels with really big advertising budgets and proper distribution they could control the market easily. There were healthy profit margins but most importantly there was a massive quantity of records being sold. It used to be considered a major failure by many labels when the artist didn´t sell 100.000 records or 500.000 records – now these seem “acceptable” numbers to many.
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Matter of fact many indie artists and labels would be happy to sell a fraction of that.

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