New York Times OP-ED on collapse of music business
The New York Times has an Op-Ed piece online here (reg might be required) that recounts how the music business shot itself in the foot trying to stem the tide of illegal downloads. The article is an interesting read, in case you wonder why your favorite local record store disappeared from the landscape.
The provides a pretty comprehensive recent history.
A few things they missed:
part of the '90s boom was the labels reissuing (and re-issuing again) albums encouraging the comsumer to first buy a title on CD and then re-buy it when they figured out the original transfer sucked and then re-buy it again with bonus tracks, and then again on the landmark release's birthday and so on.
Over the years several new hard-goods formats (mini-disc, DAT, SACD, DVD-A) have come and gone as labels tried to replicate the gold-rush days of getting consumers to rebuy their collection. The consumer resisted, in part, because we were taught that CD sound was such a dramatic improvement over LPs that the next step up would be incremental, at best. Allow me to editorialize for a moment that my LPs sound amazing.
The labels changed hands for obscene amounts of money as large corporations looked for vertical integration and cross-selling opportunities. The bigger indies were purchased by the majors. Most of those ideas of vertical integration failed miserably, but the end result was the "record" people were pushed out and replaced with business people. Music was just the widget sold by the monolithic corporation. While labels like Warner had already started the purge of "prestige" artists, this consolidation accelerated that process and, simultaneously, left the corporations chasing the next big thing instead of developing talent. And, David Geffen got filthy rich, powerful and, by all accounts, became a bigger asshole which is just another unpleasant side-effect of thie era.
The advent of Napster shoehoned in pretty neatly with the period where reports indicated people had finished repurchasing their collection. CD sales began to flatten because that market disappeared. It didn't stop the labels from continuously repurposing old content into new and improved best of collections while failing miserably to build careers. The resentment towards buying the same title over allowed for some fuzzy personal rationalization on where the boundries of what consituted theft was calculated in an individual's head. Everyone I know has music they didn't pay for. I have boxes of mix cassettes in the basement that were traded. That's before the advent of anonymous downloading.
I've purchased London Calling five times over the years. Should I have to pay for it again if I want the album in digital form for my iPod? Like I said, it gets fuzzy very quickly.
The cost of marketing a new act also skyrocketed in this period. Record store chains began to view their shelf space in the same way a a supermarket. Those that paid for price and positioning would find their titles on end-caps, displayed above the racks, at the front of the racks, in POP displays at the register. If it was standing still, the space was for sale. This became a primary source of profit for stores. Primary, not gravy. Labels feeling the pressure to compete wanted preferable exposure for their artists.
Radio, too, became prohibitively expensive. What is talked about as a symbiotic relationship was, in fact, a one way street of cash going to the radio stations in exchange for airplay. While some of this money has dried up as folks like Elliot Spitzer expose the dirty secret, I would guess lobbying by the National Association of Broadcaster is involved in the egregious rates the Copyright Royalty Board is trying to impose on Internet Radio. That's a digression. Labels have in-house radio departments and also hired independents. Much of the efforts of both of these are legitimate and legal, but still expensive.
You want exposure in print? In-house PR and outside PR are common. Wonder why your favorite indie-band never gets a review? Because money is being spent to keep another title front and center.
An attorney friend has a client that has gone platinunm (that is, moved more than 1 million copies of a title) He said the "break even" point for the label was 700,000 units because of all of the sales and marketing costs.
While it is easy to place the bulls-eye on the back of the music business, they, at best, share responsibility for the collapse of the business of music. It has just been happening in slow motion for 20 years and there are many parties to its failure.




Not that my vote matters, but if there has to be a RRHOF, I agree that Patti belongs in it. Her notebooks won't make the same compelling display as Elton John's Duck costume (pic courtesy of the BBC) but the thoughts on the pages are every bit as important.

