McRecordCompany

[anechoic <kim@xxxxxxxxxxxxxxxxx>]

>Actually, the business model of a small label doesn't have to be
>exploitative:
>
>The most obvious organization, and one that is approved under
>McCapitalism :), is to issue stock. Everyone at the label, from the
>"CEO" and the "Janitor," would get the same amount of ownership (ie
>shares of stock) and thus would get an equal division of the profits.
>Presumably, everyone could agree on an appropriate hourly wage to
>compensate for their labors.

there have been some examples of collective run/operated record companies
but they are few and far between...this was a popular model for some punk
rock labels during the 80's: the artists were also the workers in the
warehouse and shared in any 'profits' that were made...now the problem is
what if an artist is working somewhere else? does the record company
janitor want to share equally in the profits along with the artist who
works elsewhere? the quick answer is 'no'...so the collective idea looks
great on paper but unfortunately it doesn't work in 99% of the time due to
economic realities...
I know a little about this since I ran and operated a record company for 10
years...you see, most of the time there is no profit in the economic model
of an indie label...that's why there is such a high turnover rate for indie
labels...there are other factors but then this gets into what it costs to
operate supply channels and why distributors rip off labels so often
etc...after all the money it takes an indie label to gain market mindshare
via advertising, promotions, band tours, etc and then factoring in
operational expenses such as salaries, rent, computers, electricity,
internet access, bad debt, taxes,etc. there is usually a lot of red ink on
the books...real 'profit' (revenue - expenses = profit) is a goal rarely
achieved...
KIM