Record Labels Statistics

When a song gains widespread popularity, there is typically little inquiry regarding why the song successfully hit the mainstream charts. The general public normally assumes that the song possesses general qualities that somehow merit noticeable recognition. Some listeners might point out that the song became a hit because of its good rhythm, while others will claim that it was due to its melody. In reality, however, this might not necessarily be the case. For every song that becomes a mainstream hit, chances are that there are a countless number of similar songs that go completely unrecognized. This raises a question, who is controlling the music market?

The truth of the matter is that, for the past decades, major record labels have blatantly
managed the music industry in a manner that has suited their own advantage. By employing discreet, illegal tactics – corporate labels have been able to manipulate mainstream radio stations, artists, and even enthusiastic music devotees. After all, record labels are businesses aiming to foster their own growth; therefore, at the end of the day, it always comes down to stock options and the maximization of profit, not the music itself. It is for this reason that corporate crime in the music industry might be more prevalent than the general public could possibly imagine. The Recording Industry Association of America, which represents the largest five music companies in the United States, has come under significant scrutiny for using criminal tactics that aim to reduce the benefits of artists; this has caused multiple contemporary musicians to turn their back on major record labels by working independently.

Corporate crime within the music industry is quite old, dating back to the time when record labels commenced to emerge within the music business itself.
During the nineteen hundreds, licensed commercial public radio stations commenced to develop. By the nineteen twenties, music was being broadcasted through various radio stations nationwide, opening new opportunities for musicians to promote their work and gain recognition (1). It didn’t take long before record labels came to the realization that it was possible to take advantage of the radio in order to raise their sales. If the songs of the artists they represented reached a large-scale audience, the growth of the artist’s career would become secure, thus ensuring stable profit for the labels. During the mid-nineteen fifties, record labels commenced bribing disk jockeys by paying cash and handing out gifts in exchange for airplay. This form of illegal commercial bribery came to be known as the payola scandal, which generated a large amount of agitation within the music industry. During the crackdown of the practice, numerous disk jockeys such as Dick Clark, Alan Freed, and Arnie Ginsburg were prosecuted for accepting bribes from various record companies. At the time, however, many of the record companies offering payolas were simply independent labels that were aiming to flourish within the industry, not corporate conglomerates
(2).

Although it has been made fairly clear that payola is illegal under the law of the United States, the practice continues to be used in different forms throughout the present. By finding means to evade the law, new methods of payola have evolved with the sole aim of obfuscating the fact that illegal bribes are being given to radio stations. For example, rather than paying disk jockeys directly, which is prohibited by the anti-payola regulations, many major record labels have commenced paying music promoters large sums of money. The promoters, who serve as a third-party, then pay the radio stations to play a particular artist. This is known as the third-party loophole (3). Another example of an alternative form of payola involves the actions of global record label, Sony BMG Music Entertainment. Sony BMG was discovered to have organized faux promotional competitions in which all the prizes were given to the disk jockeys; this was simply a sneaky tactic used by Sony BMG in order to bribe the disk jockeys in a mildly concealed manner. This form of bribery is obviously not as flagrant as the methods that have been used in the past. In the year of two thousand and five, the New York Times reported that Eliot Spitzer, former State Attorney General of New York, prosecuted various mainstream record labels for using loopholes in the law in order to violate the anti-payola regulations. Sony BMG was forced to pay ten million dollars in fines, Warner Music was forced to pay five million dollars, and Universal Music was forced to pay twelve million dollars. According to the report, most of the money was used to fund music appreciation programs (4). Up to the present, this has been one of the major examples of white-collar crime within the music industry, which directly shows the manner in which record labels aim to manipulate radio stations in order to increase their profits.

In theory, a music label’s job is to furnish the artists with the necessary tools to prosper; however, this is not always the case. In fact, perhaps one of the most controversial and disturbing forms of corporate crime in the music industry involves record labels attempting to blatantly exploit the artists they are meant to assist in the first place. Under the copyright code of the United States, artists are guaranteed that, after thirty-five years of working with a record label, they will have the exclusive ability to receive copyrights over their own work. This means artists can legally sell, reproduce, or distribute any work they ever created while working with a particular record label. In nineteen ninety-nine, however, the law unexpectedly changed. Congressional attorney, Mitch Glazier, robbed artists from their ability to reclaim copyrights over their own work by secretly modifying the copyright code. Glazier added the term “sound recordings” to the work-for-hire list that musicians are expected to follow, giving record labels total control over the artists’ work. Three months later, the Recording Industry Association of America hired Glazier as the Senior Vice President of Government Relations (5). Expectedly, this infuriated the artist community and generated tension between record labels and musicians. As an attempt to defend musicians’ rights, the Recording Artists ' Coalition was formed. The law was eventually repealed with success after years of lobbying.

Disputes between musicians and record labels are not necessarily confined within the borders of the United States. In fact, the Canadian Recording Industry Association – which also represents major labels such as Sony BMG, EMI, Universal, and Capital in Canada -- has a history that notoriously involves multiple legal actions. According to legal records, the Toronto-based association has applied to the Federal Court of Canada on multiple occasions in order to instigate various lawsuits against consumers accused of illegal online file-sharing, torrent website operators, and even small record store owners selling bootleg CDs (6). The irony, however, lies in the fact that while the CRIA takes a stand against piracy and accuses consumers of disrespecting the copyright laws, it simultaneously faces liability over infringement. In two thousand eight, numerous artists turned to the courts in order to file a lawsuit against the four major labels that are represented by the Canadian Recording Industry Association. The labels were creating, pressing, and distributing compilation CDs and live recordings of various artists without the necessary copyright licenses. Furthermore, the artists featured in these compilations never received any payment from the illegal distribution of their work. According to Copyright lawyer, Michael Geist, over three hundred thousand songs have been illegally used in the numerous compilation albums. In the present moment, countless artists await for their payment, varying from small artists to well-known musicians such as Bruce Springsteen. The potential liability is believed to be around sixty billion dollars (7).

Considering that musicians have to form organizations in order to protect themselves from record labels, it is not a secret that what is supposed to be a mutual, symbiotic relationship between the two groups often happens to be the opposite. It is not uncommon to hear about record companies being sued for attempting to bilk artists out of their earnings. Cases such as Prince versus Geffen Records or Tom Petty versus MCA Records tend to gain large public attention. However, smaller artists, who are perhaps the most vulnerable, rarely receive any coverage outside from the independent music community. Mainstream media outlets have the tendency to ignore the exploitation of unknown artists. This is inherently disturbing, taking into account that smaller artist are perhaps the most vulnerable to corporate exploitation.

Obviously, something is causing individuals in corporate record labels to engage in activities that harm the musicians they represent. Like sociologist John Braithwaite points out, this type of illegal behavior can be linked to the corporate climate that exists in this society, which perpetuates a type of environment where financial profit is considered more important than human dignity. Nevertheless, although the corporate environment might encourage people to perform white-collar crime, the major problem stems from the fact that this form of crime is often unregulated, allowing avaricious record label operators to willfully perform illegal activities without fearing prosecution. Therefore, white-collar crime prevails because there is a lack of restraining forces that aim to prevent it in the first place. This type of rationale is enforced by the social control theory, which points out that all human beings are inherently criminal when exposed to the proper environmental conditions, stressing the importance of establishing modes of crime prevention in order to develop a healthy society.

Various sociologists such as Maggie H.
Martin, Travis Hirschi, and David Matza have studied the social control theory; they all propose that very little difference exists between delinquents and non-delinquents. Thus, they attribute the prevalence of criminal activity to the failure of primary social groups or institutions to provide reinforcement for non-delinquent roles. In essence, this theoretical framework suggests that criminal activity must be prevented by strong regulation, such as punishment. If some type of castigation is applied to illegal behavior on every occasion that it occurs, it is probable that a person will be less likely to engage in criminal activity. It is clear that if corporate conglomerates in the music industry feared prosecution every time they attempted to rob musicians from their work, not simply the bigger artists, the rates of corporate exploitation within the industry would decrease. Furthermore, sociologist Travis Hirschi expands the theory by pointing out that strong social bonds can also prevent criminal activity. Hirschi points out that crime occurs when two groups of individuals do not have a belief in a common value. Considering that musicians and corporate record labels appear to have very different priorities, it is not difficult to understand why corporate crime prevails in the industry. This also explains why it is not very common to hear about legal disputes between musicians and independent record labels, considering that smaller
labels, like musicians, tend to be strictly committed to the music itself and thus share common values.

The offenders who are found culpable of performing illegal activities within the music industry are normally charged fairly large sums of money. In many cases, the careers of individuals who are found guilty might be jeopardized. Very rarely, however, do any of the people representing the music conglomerates have to face any time in jail or prison for their crimes. Therefore, other than establishing laws to prevent illegal activities within the music industry, it is necessary to develop preventive methods to make sure that such violations do not occur. Perhaps the most effective method to assure that the illegal operations within the music industry decrease is to decentralize the music itself. For decades, record labels possessed the ability to dominate the music industry by using exploitive tactics because artists were highly dependant on labels. This, however, is no longer the case today.

Through methods of self-publishing, artists have discovered alternative ways to distribute their music. With the improvement of technology, musicians no longer need to pay inherently large sums of money to record or promote their music. Social networking websites have made the distribution of digital audio incredibly accessible, allowing musicians to promote their work to the entire world within less than five minutes. Furthermore, the act of recording music is something that has become fairly inexpensive itself. Artist Damien Rice, for example, was offered thousands of dollars to record his debut album in AIR Studios, a highly prestigious music studio located in London. Rice, however, preferred to record his album inside his own bedroom by using his laptop computer (8). The album, which was titled “O,” turned out to be highly successful. In a sense, this suggests that the role of record labels is slightly fading and losing significance. In fact, some of the most successful record labels today are independent labels. If major record labels realize that artists no longer depend on them to distribute their music, these labels will lose the power to exploit artists and control the music market.

In conclusion, it is obvious that the laws that regulate the violations that tend to be performed by record labels are necessary. In the present moment, these legal regulations make sure that artists have the ability to claim copyrights to the work they themselves create and that record labels do not attempt to control the music market. Furthermore, it is clear that the influence of major record labels is highly decreasing, and this is something that musicians can find highly advantageous. If major labels continue to lose control over the industry, they will also lose the power to exclusively control the distribution of music. In a sense, this will give smaller artists the capacity to enter the music market, opening the door for a large diversity of talented music that merits recognition.

Bibliography:

1) Mitchell, J. Listener Supported: The Culture and History of Public Radio. CT: Greenwood Publishing Group, 2005.
2) Miller, P. Rock & Roll: A Social History. NY: Basic Books, 2006.
3) Manly, L. “How Payola Went Corporate.” New York Times. 31 July, 2005.
4) Leeds, J. “Radio Payoffs Are Described as Sony Settles.” New York Times. 26 July, 2005.
5) King, B. “Rule Reversal: Blame It on RIAA.” Wired Magazine. 10 August, 2000. Pg. 26.
6) BMG Canada Inc. v. Doe, 2005 FCA 193, [2005] 4 R.C.F. 81
7) Geist, M. “Exploit Now, Pay Later If At All.” L.A. Record Magazine. December 2009. Pg. 32.
8) Lindgren, H. “The Way We Live Now.” New York Times. 2 November, 2003.