(Editor’s Note: This is part 2 of a fascinating article by Mr. Spellman regarding the current state of the music business. Click here to check out part 1, and more installments soon!)

Artists seeking a major recording contract should seriously reconsider. It cannot be assumed that your record company will act in your best interest. Just the fact that musical artists are expected to foot the bill for the production of their music (just one of many "recoupments") should alert us to the horribly anti-artist bias prevalent in all major recording contracts.

Do "signed" screenwriters, directors or actors have to pay for the production of their films? No, they don't. Do "signed" writers have to pay for the production of their books? Very rarely. The companies themselves assume this risk.

The incessant quest to repeat and clone "hits" is also ruining record companies. It's what I call the "all or nothing" investment strategy. "All or nothing," because unless the act comes screaming out of the starting blocks with a "hit" album, it will not survive past its first or second album. Running multinational record companies like McDonald's franchises may be less stressful for the business affairs departments of these labels, however, unlike hamburgers, homogenized music that looks and sounds the same is ultimately doomed to failure.

Fortunately, with or without the bureaucratic corporate empires, music will flourish simply because it doesn't need a megastructure. A number of trends are encouraging this. While the dynamic nature of the industry resists full rational study, we can discern five broad characteristics, or "megatrends," that mark the industry on the eve of the new millennium. As you read the following pages, think of ways your music career can creatively engage with each broad trend.

Increasing Demand for Music-Making
In 1967, the American record industry passed the billion dollar annual sales mark for the first time. By 1973, annual sales had reached $2 billion, and by 1978, the industry had achieved sales of more than $4 billion. Music, by then, had become the most popular form of entertainment.

Check these current facts:
- Americans spend more money buying prerecorded music and videos than they do going to movies or attending sport events.
- One out of five Americans plays a musical instrument. These musicians spend more than $5.6 billion a year on instruments, accessories and sheet music.
- The annual sale of cassettes, CDs, records and music videos, combined with their primary delivery medium, broadcasting, exceed the GNP of over 80 countries in the UN.
- We own more CD and tape players than bathtubs, refrigerators and washing machines.

Recorded music sales steadily increased from 1984 (after a brief slump period), and have only begun leveling out over the past two years. According to the Recording Industry Association of America's (RIAA) annual report, worldwide-recorded music sales for 1998 were $40.8 billion, of which America had a 27% share, or, roughly $12 billion.