How to Sell Out Properly: Update

The Economist just put out an article describing the new function of A&R staff at major labels, and covers a few familiar ideas along with some new ones.

With less returns to album sales, labels want to reduce the risk of their investments:

One is by outsourcing the discovery and promotion of artists to television. Sony Music was quick to realise that singing competitions such as “American Idol” and scripted shows such as “Glee” were a uniquely powerful means of touting artists, especially in America where most radio is local. As The Economist went to press, Scotty McCreery, an “American Idol” winner, was perched atop Billboard’s album chart. Earlier this year Universal Music signed a deal with “The Voice”, a new competition show.

An even better way of reducing risk is to bet on acts and albums that have already hit the jackpot. Mr Joseph describes himself as “fairly obsessed” with what is known as catalogue A&R—repackaging old albums. Universal has done splendidly with new editions of the Rolling Stones’ “Exile on Main Street” and Nirvana’s “Nevermind”. Next month it will release anniversary editions of The Who’s “Quadrophenia” and U2’s “Achtung Baby”. The 30-, 40- and 50-somethings who buy such records have more money than teenagers, and are less likely to pirate music.

TV compeitions are playing the lottery and catalog A&R is recycling old major label material. Both of these methods are about major labels trying to sustain the old business model as long as they can.

"Getting signed" isn't as lucrative as is used to be, either. Average first-album advances are stagnant, with increasing demands on rights.

Those longed-for record contracts, when they finally appear, are seldom lavish. Robert Horsfall, an artist manager at Sound Advice, says the normal range for a first-album advance in Britain has been stuck at £75,000-150,000 ($119,000-237,000) for many years. And record companies increasingly demand a slice of live-music and merchandise revenues. Bidding wars for talent have become rare, partly because there are fewer record companies. There may be fewer still when EMI is sold, as is expected soon. Small wonder that a few artists, having reached the point where they could get a record deal, decide to go without.

Is there any doubt that a huge part of being a successful band is being a solid small business?