Money: Record Labels and Credit Cards

For the majority of the last century this was how record labels worked:

1)  Find some band who people will like, sign them to an exclusive contract.

2)  Give the musicians a lot of money to make their album and then give them money to go on tour and stay in fun hotel rooms - encourage them to live the life of rockstars - it makes for good press, it makes them happy, it makes them seem like super stars.

3)  Make sure there is this one caveat in the contract:   Whatever is spent, they will owe the label from future sales forever.

And that is why most musicians no matter how successful might be living the high life, but end up bankrupt.  It takes an average of five successful albums for the musician to start earning money.

How would the label make money?  Just like movie studios - in-billing...  you charge for every service.  If you shoot a studio movie on a studio lot - you have to pay for the studio lighting and grip equipment... so, the studio is making money.   Even if the movie was SO expensive on paper that it shows a loss even after 100 million in sales... well... what company made a lot of money in services off that movie?   Right - the studio.  This is why the actor's union negotiated a gross deal and not a net deal - because they knew that was the only way they'd ever see profit participation for their members.  There are so many of these little opportunities in both music and music that no matter what happens - if you're the studio you make money.

Today the music industry is changing a bit...  but I'm sure the basic concept hasn't vanished overnight.

But it strikes me how similar this is to credit card companies....

...you can have whatever you want....   "new car... $30,000.... new home entertainment system.... $10,0000.....   new interior furnishings... $20,000.... going in debt before you're 25... priceless...." ;)

Credit Card companies, banks, and any institution pushing you to spend what you don't have is playing the exact same game with you....   Hey - live the life of a rockstar.... you'll owe us later of course... but why worry about that!

It's the same concept though in many many financial structures.  It's a good thing to keep an eye out for at all times - what does this person you're dealing with have to gain from you living a more material life....   what do they have to gain from your consumption or... whatever...   The best thing any company can do to become powerful is to create a dependency.... think of the big industries... cigarettes, alcohol, pharmaceuticals...   this is the core philosophy - create a dependency.

It's not a bad idea to look at every institution in your life and ask yourself if it has set up a situation where you are dependent on it.

Relationships - sometimes people become dependent on one person's appreciation (father, mother, girl or boyfriend, bff).  Once that happens, the other person is invited to manipulate that relationship.  You are in emotional debt.

Religion - many religions offer forgiveness which people are desperate for - or answers which people are desperate for - or community to solve loneliness....  Again - emotional debt.

Work Environments - obviously you become reliant on them for both money and often self worth.  So much so that people forget they can just change jobs if they want.  What happens so often is that bosses are allowed to abuse their positions because people have become to miopic - too focused on this one thing as their source for money and pride.

Consumption - I already mentioned addictive substances - you could add a lot of types of food to this list though.

The list goes on - just things to think about while on the subject of dependence.