record company expenses?

• production costs: recording studio/staging Gigs/P.A'S.
• manufacturing: physical cds,dvd's,vinyl
• signing on fee
• advertising/marketing,promotion
• staff employed
• legal fee's and contracts ( rent,lease& buy) Over heads
• file sharing, illegal downloads
• artist's expenses

How have record companie's benefited in the digital age?

• zero manufaturing costs for mp's
• internet is cheap and effective use of promotion
• mp3's can be encoded with digital rights management (coding so you can' share or copy)
• talent scouts can trowl myspace/social networking for new artists

One big disadvantage is the fact that the competition from internet only labels is emerging i.e they have no staff,no overheads,no offices!

Chris anderson- editor of wired magazine

his theory is called the long tail theory. It is hits vs niche, shops only used to sell the big brands because of the costs of shelf space so they only displayed music which were big branded and most likely to sell.