Sunday, January 29, 2012

RS 2: Katy Perry





No matter what people say, money is the driving factor in the business world. It’s behind all business activity and is the force that makes these corporations work. Today, the Internet has made certain corporations change the way they do business in order to make a profit. In particular, the music industry is facing a direct impact from the Internet; illegally downloading music, free radio stations, and websites like YouTube.
This podcast proved how record companies are having a difficult time profiting from sales and had to change the record deals as result of the Internet. Record companies used to be able to sell millions of albums and end up in the black. But now, it’s not as simple as that. A lot of songs are bought through iTunes where people only buy 1 song at time. With just that alone Apple has to get a cut, the artist has to get a cut, and song writers have to get a cut; All from the simple 99 cent song. Therefore, the record company only gets a very small percent.

The example that this podcast uses is Katy Perry, a popular artist who has hit 5 top songs on one album. The most top songs on one album since Michael Jackson. So clearly, Katy Perry is worth a lot of money and you would assume the record company would be making a lot of money. Unfortunately, the record company seems to be making the least and not profiting.
Overall there is a lot of money involved in the music industry. The only way to keep record companies from staying out of the red is a new kind of record deal. This new deal is known as the 360 deal, where the record company gets a small percentage of everything the artist is involved in. From the merchandising, to the tours and everything in between the record sale will become the least significant. This new record structure is completely changing things up in the music industry and will be interesting to see how the record companies profit.
What I found most interesting about this podcast, was the amount of money that record companies make in comparison to the artists- or lack of money. Other record companies supporting artists that barely make one hit song must be feeling this impact even worse. Its fascinating to see the way the Internet is changing business from so many different aspects. 

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