The Record Company - who does what?

by Marlyn Ntsele and Russel Hlongwane

 

A record deal, almost every musician dreams about it. I am sure that you have also heard the horror stories about all that can go wrong with a recording contract. This article will explain how the South African recording industry works, why you would get yourself a recording contract and what to keep in mind while negotiating.

 

 

Unfortunately there are not a lot of facts and figures available about the South African Recording Industry. Most South African major record companies seem to spend most of their marketing budgets on international artists. The most money ever spent on a marketing campaign of a local artist was R2 million on kwaito artist Mandoza. This is a tiny budget in comparison with most American artists, Lady Gaga’s “Judas” video cost $10 Million USD to make (around R140 Million).

Internationally the music industry is dominated by 4 multi-national companies: mainly Universal, Sony BMG, EMI and Warner Music. 40% of the music in South Africa is produced by these record companies and 60% by Independent Labels. In 2003 49% of music sold was local and 51% international product. Some of the independent companies have services like distribution; marketing and promotion handled for them by a major company, some of them do it themselves.

The major companies have the highest profits, but also are into all market segments. While the independent companies usually focus on one market segment (music genre or age).

Who does what?
Within a record company there are different employees implementing different tasks.

  • The company is lead by a CEO (business manager) and a CFO (financial manager);
  • The department national product is lead by a marketing manager. He is the chef of the department and decides the strategy.
  • The A&R manager (Artists & Repertoire) is looking for new talent and maintains the contacts with the artists that the company is working with. He guides the choice of repertoire and recordings and works with his colleagues on setting up a solid marketing campaign and release schedule.
  • The department of Creative Services takes care of the covers, designs the adverts and other printed work. Also music videos are being guided from this department.
  • The Product manager does the practical arrangements around the release. He makes sure that the masters & the artwork are at the CD pressing factory in time. He makes sure that there is enough stock of the album. Often he also takes care of part of the marketing, for instance to come up with a special campaign. He also looks at how the music can be exploited. For example he maintains the relations with the labels that release compilations.
  • The Manager International Exploitation takes care of bringing the local productions under the attention of foreign departments of the record company and other international relations.
  • The Promotion department is in charge of exposing the record company’s products to the media as much as they can. Usually there are various employees in this department who are responsible for: press, radio and television. The radio promoters are also referred to as pluggers.
  • The Sales department is doing what is actually the main goal of a record company: which is selling records. For the smaller stores there are usually representatives on the road and for the bigger chain stores there are usually separate, specialized sales managers.
  • Besides all the above record companies usually employ one or more lawyers, have their own music publisher and run an administration

In smaller companies more tasks are often being fulfilled by one person. In those cases the CEO is the manager of the company and makes the decisions around which artists are being contracted. The distribution and promotion might be done by other companies and a lawyer is only hired when needed.

A trend of the last years is the all-in-one organizations that run a label, a management company, a booking agent and a publisher under one roof. The reason for this is that it is getting more and more difficult to run a profitable organization on record sales alone.

The internet revolutionized the music industry as we know it, first there was radio and then came music TV and now the INTERNET. The question is how does the internet affect the A&R, has it made his quest to find acts with highest potential easier or has it made artist more reluctant to sign with major labels? To be continued.....

 

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