Well the majors used to own distribution. Also manufacturing where they could apply economies of scale, and sales channels where they would operate deals. They also brought an effective monopoly on promotion to the party (street posters, radio, in-store etc). One of the biggest value adds was that they would act as a kind of banker, giving an interest free and unsecured loan to artists to create their first record. (And then there's stuff like putting the whole piece together with producers, designers etc.)
The role they played was more like a movie studio (where the artist might be something like a leading actor, as the face of a production). And like movies, the economic model is a classical publishing one where most productions lose a ton of money and the whole enterprise is supported by the runaway successes.
The percentages you hear about (e.g. 10-20) are calculated on dealer price and might equate to closer to 30-40% of profit - and are meant to be easier to count this way (per unit sold). There were some shocking deals in the 60's and 70's, many of which were exposed in court, but since then most of the real evil has lain in the complexity of the system and therefore how easy it is to squirrel money away and make highly questionable deductions e.g. record clubs, or more recently spotify (often legitimately, within the bounds of a poorly negotiated contract).
I've read Albini and know he worked in the industry. I think it's good that he put this out there to make bands think twice but at the same time I think he gives an extremely one-sided and misleading impression, largely telling people what they want to hear.
The role they played was more like a movie studio (where the artist might be something like a leading actor, as the face of a production). And like movies, the economic model is a classical publishing one where most productions lose a ton of money and the whole enterprise is supported by the runaway successes.
The percentages you hear about (e.g. 10-20) are calculated on dealer price and might equate to closer to 30-40% of profit - and are meant to be easier to count this way (per unit sold). There were some shocking deals in the 60's and 70's, many of which were exposed in court, but since then most of the real evil has lain in the complexity of the system and therefore how easy it is to squirrel money away and make highly questionable deductions e.g. record clubs, or more recently spotify (often legitimately, within the bounds of a poorly negotiated contract).
I've read Albini and know he worked in the industry. I think it's good that he put this out there to make bands think twice but at the same time I think he gives an extremely one-sided and misleading impression, largely telling people what they want to hear.