FACT: Record companies fuck over artists on royalty payments. They often have to audit the books and many artist never see a dime more than their advance no matter how many albums they sell. Why do you not see a ton of artists speaking out against piracy? Because they don't care. They know they aren't going to get paid much if anything for album royalties to begin with so people downloading the record doesn't effect a lot of them.
FACT: These same artist make most of their money off of publishing royalties, radio performance royalties, touring and merchandise sales. It is not uncommon for an act to do $15 per person in merch sales at a concert. So if they sell 1,000 tickets the merch sales just put another 15K in their pockets (less expenses of course)
FACT: I have said before and will say again bands like Radiohead and NIN are terrible examples of the free download working brilliantly. Why? Simple. Record companies have spent years, thousands of hours and millions of dollars marketing these bands. These bands have toured for years while enjoying the support of major labels that can get them on the radio, on MTV and in the best venues in the world. Job Bob's Garage band doesn't get that and even if Joe Bob's garage band is supremely talented it takes a lot of effort to get noticed so until they do they will continue to play for 20 people in a bar. Radiohead has millions of fans that they have built up over many years and while the bands talent and brilliant records are ultimately what keeps the fans coming back, many of those fans first discovered them through MTV or on the radio or in a magazine or some other media device that most likely was paid for by a major record label.
Think of it like this. If you were a bestselling author that had many major big selling books many of which were made into very successful movies then you decided to put up a book for free online the media would jump all over it and you would get a ton of downloads. Why? Because everyone knows you. How? Because when you started out the publishing house put a lot of time and money behind marketing you.
If JK Rowling puts a book online there might be so many downloads it could crash the server. If unknown writer #2 puts his new book online tomorrow, nobody would notice.
Radiohead is not the norm. NIN is not the norm.
Yes, the record companies are unfair, but it is a trade off. The successful bands make a lot of money touring and the record industry keeps most of the money for album sales which allows them to sign and market new bands or continue to market existing bands.
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