Capital Records Drops Artists, Merger

Record label mergers are a common event in the music industry these days. In the past five years, the number of major labels has gone down from 5 to 3, and that number may yet shrink further. It was inevitable that the smaller factions of these major labels would start to cannibalize each other.

The latest merger: Capital Records and Virgin records decided to join forces under major label EMI. This is a direct result of EMI facing significant profit losses due to the transition from physical distribution of music to digital distribution. While the industry has started to embrace digital downloads as a legitimate business measure, illegal downloads are still derailing a significant amount of potential revenue. This means that the major labels can't stay as large and segmented as once was possible.

However, the real victims in this kind of decision are not the labels - they will always be a market for music sales, and the music industry will always bounce back in some way. Nor is it the fans, even though many labels and music groups are starting to crack down harder than ever before on illegal downloading.

Sadly, it is the artists that we listen to that are being punished in all of this. The Capital/Virgin merger has resulted in at least eight acts losing their recording contracts. These acts are: alternative band The Dandy Warhols ("Bohemian Like You"); newly signed band Sound Team; Swedish indie-pop band Shout Out Louds (featured on the TV show "The OC"); rock band The Redwalls (charted with album "De Nova"); experimental artistic metal band Otep (frequent Ozzfest performers); electroclash duo Fischerspooner (charted with album "Odyssey"); Australian alternative rock trio The Vines (both released albums, "Highly Evolved" and "Winning Days" received significant critical and commercial success); and new Australian rock band Airbourne. Also rumored to be facing loss of contract is popular Grammy Award nominated electronic musician Moby.

This announcement comes mere weeks after independent label V2 announced a similar series of cutbacks, including The White Stripes, The Raconteurs, Alkaline Trio, and Moby's other record deal.

With more and more labels starting to cut back on their artist roster, it becomes increasingly important for the artists to begin exploring new methods of promoting and sharing their music. While digital music seems to be the future of the industry, the business model is only just beginning to develop. Anyone interested in representing themselves in an effort to avoid this kind of record label turmoil needs to exercise extreme caution.

Sources:
"Capital Records dropping lots of bands." BrooklynVegan. 21 February 2007. http://www.brooklynvegan.com/archives/2007/02/capitol_records.html
Goodman, Elizabeth. "V2 Restructuring..." 16 January 2007. http://www.rollingstone.com/rockdaily/index.php/2007/01/16/white-stripes-cast-out-bob-dylans-new-pad-michael-jackson-sued-by-drug-dealer/