Brief Summary
This video explores the issues with record labels, particularly the "Big Three" (Warner Music Group, Sony Music, and Universal Music Group), and why they are often disliked. It examines how these labels have consolidated power, their impact on artists, and their controversial practices, especially focusing on Universal Music Group (UMG). The video also discusses the impact of the internet and streaming on the music industry, the rise of 360 deals, and UMG's problematic approach to copyright, social media, and AI.
- Record labels, especially the Big Three, hold significant power in the music industry, often at the expense of artists.
- Universal Music Group (UMG) is highlighted as particularly problematic due to lawsuits, mishandling of master recordings, and aggressive copyright practices.
- The internet and streaming have changed the music industry, but labels have adapted through tactics like 360 deals and aggressive copyright enforcement.
- UMG's stance on AI in music has shifted from criticism to active involvement, raising concerns about the future of the industry.
Why Do We Hate Record Labels?
Record labels are widely disliked due to stories of copyright strikes, exploitative contracts, and shady business practices. The video aims to answer two main questions: how record labels are allowed to operate without consequences and which major record label is the worst. Record labels provide two main services: manufacturing and distributing physical releases, and facilitating connections, especially for international distribution.
The Big Three
The music industry is dominated by the "Big Three": Warner Music Group, Sony Music, and Universal Music Group. These companies own and operate the works of almost every artist, often buying out smaller labels. This consolidation limits artists' connections and can lead to them being abandoned on the distribution and promotion side. The lack of competition allows these labels to operate unchecked.
The Rise of the Big Three
Historically, the music industry was controlled by the "Big Six," but through mergers and acquisitions between 1999 and 2013, they consolidated into the current Big Three. This consolidation involved companies like Polygram, BMG, and EMI being absorbed by Universal Music Group and Sony. These mergers were driven by financial interests, often at the expense of artists, who faced damages and lost deals. The Big Three now hold immense power, influencing distribution and artistic freedom.
The Internet's Impact and the 360 Deal
The internet initially disrupted the major labels' control, with services like Napster and Limewire enabling unauthorized music sharing. Artists like Nine Inch Nails and Radiohead experimented with independent releases. In response, record labels introduced the 360 deal in 2004, pioneered by Atlantic Records (owned by Warner Music Group). This deal allows labels to profit from all aspects of an artist's career, including album sales, merchandise, and touring, in exchange for increased promotion and support. Paramore's Hayley Williams was among the first to sign such a deal, which led to the band centering around her to maximize profits. By 2010, the Big Three had regained their dominance, offering career sustainability that many artists found essential.
Universal Music Group: The Worst of the Big Three
Universal Music Group (UMG) is identified as the most problematic of the Big Three, holding 34% of the global music market share. UMG is accused of not paying artists, exemplified by a $200 million lawsuit filed by Limp Bizkit for allegedly withholding $50 million in royalties. The band is suing for fraudulent concealment, fraudulent business practices, and copyright infringement.
UMG's Controversies: Fires and Copyright
The 2008 Universal Studios fire resulted in the loss of over 100,000 master recordings (around 500,000 songs), including historically significant jazz recordings. UMG initially downplayed the incident, claiming nothing was lost, but later faced criticism for inadequate preservation. Additionally, artists like John Waite, Joe Ely, and Salt-N-Pepa have publicly stated their intent to sue UMG for the rights to their masters under the US Copyright Act of 1976, which allows artists to reclaim copyright after 35 years. UMG has resisted, claiming the artists were "works for hire" and never owned the copyrights.
UMG vs. TikTok and Creators
UMG has removed Salt-N-Pepa's music from streaming platforms due to their lawsuit, setting an example for other artists. In February of last year, UMG removed its music from TikTok, citing issues with artist compensation, content moderation, and AI music promotion. TikTok accused UMG of greed and demanding excessive fees. The video argues that UMG's claims about artist compensation were misleading, as TikTok pays the copyright holders (UMG), who then fail to adequately compensate the artists. UMG eventually restored its music to TikTok without any changes to TikTok's terms of service, suggesting that UMG's negotiation tactics failed.
UMG and YouTube's Content ID
UMG's relationship with social media, particularly YouTube, is strained due to copyright issues. YouTube's Content ID system, implemented to address copyright concerns, allows labels to monetize, mute, or block videos using their music. However, the system often fails to adequately address fair use, placing excessive power in the hands of the labels. The response system for fair use claims is slow and ineffective, often requiring creators to take labels to court.
UMG's Legal Battles and Fair Use
In 2007, UMG took down a video of Stephanie Lenz's baby dancing to Prince's "Let's Go Crazy," leading to a lawsuit that lasted 11 years before Lenz accepted a settlement with undisclosed details. More recently, music YouTuber Rick Beato received numerous copyright strikes from UMG, even on videos clearly protected by fair use. Beato, like many creators, lacked the resources to fight a legal battle with UMG. The video argues that YouTube should shift its stance to presume fair use unless proven otherwise.
UMG and AI Music
UMG's stance on AI music has evolved. Initially critical, UMG partnered with companies like BandLab and Daer to promote ethical AI use in music and sued Udio for unlicensed use of their music to train its AI tool. However, UMG has since embraced AI, partnering with SoundLabs.ai, YouTube, and Stability AI to develop AI music tools and platforms. This shift raises concerns about the future of human artists and the potential for UMG to prioritize profit over artistic integrity.
