Week 8 - Human Capital: The Record Industry

Question 1

Reputation of contracts in the recording industry

Answer 1

-artists generally have poor contracts

e.g. Prince had a disupte where he wasn’t allowed to use Prince as his stage name, even though it was his real name
e.g. LeAnn Rimes forced to signed contract where she must live in either texas or Tennessee - contract meant to last 7 years but went much longer

Question 2

Why are contracts so strict in the recording industry?

Answer 2

-Music is a hit industry, so labels invest a lot in advances, radio promotion, etc (must pay these expense off)
-records don’t earn money until after first record release, so labels have a strong incentive to keep deals

Question 3

How do contracts at indie labels differ?

Answer 3

-won’t do multi-level deals but don’t promote

Question 4

360 deals

Answer 4

labels take a cut of revenue from all income streams of an artist