I believe that profits may be greater now in the recording industry
because costs are so much lower. It was expensive to record and
produce LPs. Now bands ship digital masters to the record companies,
who sometimes need do no more than have CDs printed for pennies
apiece, and market them. So was there a lot more money to be
made in the recording industry in 1990 than, say, 1950? Did anyone
get as rich in the recording industry in 1950 as David Geffen
got in the 90s?
(This is an involved question, and I'm offering a good price because
I want a thoroughly researched answer. Please don't take it on
if you're not sure you can deliver that.) |
Request for Question Clarification by
jbf777-ga
on
06 Apr 2004 13:57 PDT
bugbear -
My preliminary research -- which has involved web searching and
contacting a few trade organizations (including the RIAA) -- shows
that this is a highly involved question, as profit/cost data from the
1950s isn't readily available. Data for today is available at $5000
from commercial research houses. I have also have talked to a known
author in the industry who says he has never heard of a book that
discusses the finances of the industry "then" and "now." To quote
his book directly:
Do Record Companies
Really Make Any Money?
=============================
The answer is not as obvious as you might think. If you look at
entertainment shows, you'd expect that the music business is alive and
healthy, with everyone making zillions of dollars. Careers are built
and huge salaries paid to executives, artists, and other pros. But
does it make money for the one entity footing the bill-the parent
record label? This is a difficult question to answer, since we don't
know exactly how much money they make after they pay out all those
huge advances and salaries. But we can use some information that is
public to build a gauge. MCA, for example, was sold to the Seagram
beverage company for approximately $10 billion-a shockingly high price
to those in the know. It sent ripples throughout the industry and gave
other multinationals the expectation that they could sell their record
divisions for high prices. EMI and WEA both restructured, trimming the
fat to make them lean and attractive for hungry purchasers.
When the smoke cleared, there were none. EMI was considered
substantially more successful than MCA, yet even at an asking price of
only $9 billion ($1 billion lower than MCA's closing price) it could
get no takers. For a company that's supposed to earn $7 billion a
year, this is fairly pathetic. What's the story?
The answer lies in how these companies fit into the portfolios of
their parent companies and how they fare over the long haul ....
-----
This author's book has 3 small chapters that go into the economics of
owning a record company and if they really do make any money or ever
have in the past 20 years. There are also financial flow charts that
break out the numbers from record divisions verses other divisions
owned by their parent companies, and a complete family tree of who
owns what in the entertainment world.
He has said he will be able to address these 2 questions for $20 (or $10/ea.):
"So was there a lot more money to be made in the recording industry in
1990 than, say, 1950?" and "Did anyone get as rich in the recording
industry in 1950 as David Geffen got in the 90s?"
Here's what I propose: You lower the price of this question to $50 and
I provide a link to his book ($14 used w/o shipping) along with a link
to his website where you can ask him a question at $10/ea. You can
also opt for his commercial research option at $180 which includes
references and citations.
Let me know if this is of interest.
|
Request for Question Clarification by
jbf777-ga
on
06 Apr 2004 14:05 PDT
In addition, I can supplement the answer with some facts on the number
of units sold in the 50's and 60's w/ high level market share data.
|
Clarification of Question by
bugbear-ga
on
03 May 2004 11:12 PDT
Sorry to keep you waiting for so long. I no longer need the
answer to this question, but since you spent time on it, just
submit what you have and I'll pay you.
|
Request for Question Clarification by
jbf777-ga
on
03 May 2004 12:06 PDT
bugbear -
I appreciate the offer, but don't worry about it. You can just close
out the question (or let it expire tomorrow).
Thanks,
jbf777
|
Clarification of Question by
bugbear-ga
on
03 May 2004 12:21 PDT
No, no, I would feel terribly guilty not to pay you. What if
we split the diff, and I change the parameters to lower the
price, and you just submit what you have so far?
|
Request for Question Clarification by
jbf777-ga
on
03 May 2004 17:06 PDT
bugbear -
Most questions require a certain amount of preliminary research to see
if they're doable independent of whether an answer is posted. If you
give a read through my original clarification request, it's actually a
proposal for a different means of answering the question (a link to
essentially someone else). If that wasn't something you were
interested in, I wouldn't have posted that as an answer anyway.
Does that make sense?
jbf777
|
