It’s understandable why it’s a problem for artists – disrupts the workflow, messes up the dates, takes off a bit of steam for the release… But why, still, in the age of the internet, do these leaks affect them so much to the point where they scrape the songs and never release them? Besides possible contractual label complications, wouldn’t all parties — artist, public and label — benefit from it just being released in streaming services nowadays?
In: Economics
A lot of the money comes from the viral spike of use after the recording becomes available for streaming. If something “messes up the release” this viral spike might not occur and there might not be as much money made. Artists really like money.
It’s a handful of things, not all of them are “real”.
The first is that a lot of times, being new means a song or album does a lot more sales. That’s why a lot of times the release date might get moved around: if someone really popular like Taylor Swift releases an album on the same day, you won’t sell as much. If people get to hear the music BEFORE that release date, and the music isn’t for sale/streamable, then by the time the music releases people won’t be as excited and it’s provable that it hurts sales.
Second, a lot of money gets spent on promotion, as well. That’s posters and ad baners and other materials to try and let people know the music is releasing. If, by the time that campaign starts, people have already heard and moved on from the music, all of that promotional money will not translate into as many sales. So the leak wastes that money.
Third, it’s emotional. Artists *tend to be* emotional people. Maybe they were really excited about seeing the world’s first reaction to their music at a release party. Now everyone who is there might’ve already heard it. If it was REALLY important to them to see that first reaction, it can make them mad enough to not want to bother releasing it at all. If they are popular enough, they might have the power to do that. (If they’re not super popular, the label probably won’t let them, but they’ll be mad about it either way and may never perform the songs live if they aren’t contractually obligated.) From this perspective, they don’t care about the money. It was about the art, and they wanted surprise to be part of it.
When it’s *just* 1 and 2, something else may come into play. As you said, it seems to make sense to release anyway. Smaller sales are still sales, so why get $0 back when you can at least get SOME profit? Well, why is Warner Bros. in the business of cancelling so many projects? It turns out if they cancel a project and NEVER sell it, it becomes a “loss” on their taxes and they don’t have to pay any taxes on the money spent to create it. If they feel like that tax deduction is worth more than the sales, it makes the most economic sense to erase the music and never sell it. Think about it: would you rather get $50,000 off on your next taxes (and potentially get a huge refund) or make $30,000 and have to pay $10,000 in taxes on that? The $50,000 discount probably sounds better than making $20,000.
Business is strange, and the way companies with a lot of money pay taxes is very different from how you pay them.
Latest Answers