Off The Record
Prospect
By Robert Sandall July 25, 2007
There is a story doing the rounds in the US that says a lot about the state of the music business. It concerns a young rock band who decided to stop selling their CDs at concerts. Selling CDs has, for many years, been a good way for an act to reclaim the margin that would otherwise have been snaffled by a retailer. But it made no sense to this band once they discovered that by selling CDs for $10 they were cannibalising sales of their $20 T-shirts.There are two points to note here. First, that a simple garment with a logo stamped across it, probably manufactured for pennies in a third-world sweatshop, now costs twice as much as an album of digitally pristine, highly wrought music recorded in a state of the art western studio. Second, most bands, however successful, now make their money from live work and the merchandising opportunities that go with it, rather than from recordings.
The record companies know this, which is why when EMI re-signed Robbie Williams in 2002, the £80m deal guaranteed the label a share in the profits generated by Williams's tours. Such spinoffs are often now make or break issues in contractual negotiations.
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