Posted by: yogmoney | February 6, 2009

What’s right with the music business?

What’s right with the music business?

(February 2009)

I work on the fringes of the music business. I’ve been fortunate to work with some amazing artists and industry executives in my career. I’ve produced music for TV commercials for some of the world’s biggest brands. I’ve participated in the creation of music, music videos, and concert tours. I’m not a music industry executive. I used to aspire to be one but have come to the conclusion that the seat I sit in is a better place for me. I believe that I can do more to help emerging voices in music more from where I sit than I could at a record label. I am writing this as I sit on a plane heading for LA. I am lucky enough that I get to go to things like the Grammy’s. I am going to spend the weekend with people in the music industry. These people are some of my best friends. Some of them won’t be happy with what I am about to say.

The music world is changing. Well actually, it has been experiencing one of the biggest industry changes in the history of modern day business. It is in a freefall. The model that once worked so well has imploded. Record labels used to be the home of creativity. They used to be important places for artists. The labels used to be the key player in bringing new and important voices to the rest of the world. These labels as we used to know them brought to life the voices of people like Dylan, the Stones, the Who, Pink Floyd, and the Beatles.

Today the idea of the record label has a much different meaning. Labels used to be independent minded. They took risks and they stood for the art. They were critical in helping to advance our culture. It is from our culture’s art that we as a civilization evolve and grow. Without art, we are a lost cause.

Big business and major corporations have ruined what was once a great industry. Small independent minded labels were scooped up by corporations like Sony, Vivendi, & GE. The people who run these companies became enamored with the idea of hanging out with rock stars, maybe even recording their own music. The problem is that these people began to treat the business like it was another operating unit within the portfolio of businesses it owns. It forgot about the art. During the quarterly reviews in the board room the music division had to report its numbers just before the jet engine or light bulb team presented theirs. The business became about numbers. The idea of music as art was somehow lost during the quarterly meeting, probably during the part of the meeting when the trash collection unit was reporting their quarterly revenue.

The independent labels that we all loved. The ones that mattered. The people who brought the art to the world in the name of art, not cash, sold out. They saw the opportunity to cash in and they did. How could they have possibly ignored the offers from the big corporations. Its hard to blame them. But, they do play a critical role in the demise of this business.

It used to be that a label’s role was to support, develop, and promote artists. It wasn’t uncommon for a label to have multiple blockbuster artists on its roster. They invested in their artists. They were committed to long term growth of their artists. These artists were brands. They were nurtured over time. Some of them put out dozens of albums – some great – some terrible. The artists went out on label supported tours. They worked together to build a fan base. In many cases it worked. Look at bands like the Stones, U2, Srpingsteen……(add in others).

When the big corporations and their fat cat executives entered the business it became all about the quarterly profits. Yeah, they had fun for a while. They threw elaborate parties and everyone was loving it. They did what any big business man would do – they raised prices of the product. Remember, its about the money. Who doesn’t love music, they told themselves. People will pay more. They were sure of it.

The game shifted. Labels had to deliver the numbers. And, for a while they did. The economics of the industry are counterproductive to its health. In the past labels invested in their acts. They gave them time to develop. They built brands. These brands delivered extensive catalogs of music. They made lots of cash from their catalogs. They still do.

But, the parent company demands profits. They need the money right now.

Exit the idea of building artists as long term brands. Ok, maybe we have room on the label for 1-2 big artists to help us pay the bills. We should keep them on the roster, they said to themselves. Everyone else, all of the promising young voices were shown the door. The labels moved from the brand building model of the past to a “one-hit wonder” mentality. The little known secret of this business is that new artists make very little money. They sign a 3 record deal (if they are lucky). The first record pays the artist very little. They are enticed by the possibility of becoming a big star. The labels tell them this is going to happen. They make them feel like kings or queens of the world. The kids party, have lots of sex, bust up a few hotel rooms, and get a story about them in SPIN. They are the next big thing. All the time, while this is happening, they are making money for their label (the major corporation) that signed them. Their deal provides a little more money when they deliver their second record. And, on their third record they will be making some serious money…..or so they are told. Get out the sunglasses. The future is bright.

The labels find the artist with one or two potential hits on their demo. They put out the record. They give it attention. Sometimes they even pay to get it on the radio (don’t tell anyone). The track explodes. The clock starts ticking for the artist. As a guy named Warhol once said everyone has their 15 minutes of fame. Well, these guys are now on the clock.

The record, once it begins to fall on the charts, becomes less of a priority to the label (the major corporation). The label says to the band, “get back in the studio, we need a second record, we need to keep the momentum going”. They say, I need the new record ASAP. This is when we are reminded that we’re dealing with major corporations. The band enters the studio, coming off their successful first record. The record they spent their entire life writing, recording, and perfecting while on the road playing in smoke filled clubs.

So, they enter the studio with a new producer. They label has a new idea for a slightly different sound. The band and the producer clash. The artist feels like they are selling their soul. In the end, they listen to the producer. What the heck do the artists know, this guy produced the Peebo Bryson record. They finish the second record. The one they wrote, rehearsed, and recorded in the last two months. They deliver the record. The label guys play it in their fancy conference room (I must say these conference rooms are pretty cool….the speakers are insane). The label listens to it. They aren’t feeling it. Back to the studio guys. Try again.

The label exec is like a bug drawn to a light bulb. They lose interest in their little band in the studio. They’ve just found a new band. They have a new hit on their hands. They have to get the record released right away. They need to get the track featured on Grey’s Anatomy. The people will love this song. They put the album out right away. They don’t care that of the 15 songs on the record that the only decent one is the single. So what, this young chick is hot and we can get her in a reality program. A goldmine. The album gets released. No one buys it. The CD sits on the counter at Starbucks (sorry, I had to include them). The cover is beautiful and its been placed right next to the biscotti. How could it not be selling? This chick is on the cover of every magazine. She is HOT for crying out loud. She is doing every talk show. She is booked at Bonnaroo, Coachella, Reading, and the new Lilith Fair. The kids love her! But why isn’t it selling?

Ah, the kids. Those damn kids who are stealing music from us they say to themselves. Those damn kids. They think that music if free. We need to take legal action. There is an important point that is being ignored at this moment. These kids are this artist’s biggest fans. They have her posters on their walls. They dress like her. They want to be like her.

Nope, we don’t care about that the labels say. We have to go after them. Oh I almost forgot, there is another key thing the label exec (the major corporations) overlooks here. Because these labels are now operating divisions of electric companies the fact that they miss this key point is what is the most surprising to me. They miss the point that their price/value proposition is out of whack. Remember, earlier in the story – they raised prices. CDs are now selling for $17.95. The CD has a beautiful cover and a nice shinny CD in it. They throw in some small font liner notes, a few thank you comments, and they get it to market. The problem is that this little jewel of art only has one good song on it. They are asking kids to spend almost $20 bucks on one good song. Yeah, I remember when I was 15. I had a few bucks in my pocket and I took hours to pick out that vinyl record. I wanted to get the most for my money. I sold Coke’s at concerts so I could have money in my pocket to spend at Peach’s Records & Tapes.

Here’s something to think about. I understand the example is a bit extreme but please indulge me for just a minute. OK, you are now an executive for a major soft drink company. You’ve just been appointed the president of Coca-Cola. Just like music, everyone loves Coca-Cola. OK, as your first executive decision you decide to start selling 12 packs of Coke (or Diet Coke) for $18 bucks. The twist here is that you’ve decided to only put one good Coke in each 12-pack. The other 11 are there to fill out the package. You can try to drink them but they just aren’t as good as the one good Coke. So, how long do you stay in business? You are selling a simple product. You’ve delivered a creative strategy to the company. The problem is you’ve forgotten all about why people buy Coke to begin with. They love the taste. They have come to count on its consistency.

Well, the music industry is selling 12-packs of Coke with one good drink in them. This is a fundamental problem. Its not a sustainable proposition. Something has to give.. Coke would never stoop to such a business practice. They have too much integrity.

So, back to the kids. They are creative little boogers. They have little money in their pockets. They are on to what the record labels are trying to do to them. They decide to spend their money elsewhere (on Chuck Taylor’s, I hope). They find a way to “share” music with each other. They are music’s biggest consumers. They are fans. They love music. It defines them and they define their tribes by the music they listen to. The labels (the major corporations) decide to sue them. Yep, lets press legal charges against our best consumers they say to themselves. (I understand the soft drink companies are considering similar strategies…just kidding). Instead of focusing on new and innovative ways to use music and their artists to connect to these kids they decide to go after them in court. Kids who are telling the labels through their actions that the model they’re being presented with doesn’t work for them. These are not bad kids. They are not trying to hurt anyone. I believe that an overwhelming percentage of people are good at heart. They are not “stealing” music because it makes them feel good to break the law. They are simply saying to the labels that you’re not listening to us.

The grown ups won’t listen to what the kids are telling them. Nope, lets punish them. That will scare them into going back to buying CDs. It should be noted here that I’ve done some research along the way and its been proven numerous times that the kids who “share” the most music are also the same kids that buy more physical CDs than the average music consumer. But, lets not let the facts get in the way of the proposed punishment of these out f control kids.

Thus, here we are today. The model breaks down. It goes into a tail spin.

The labels sign acts. They milk the artist. The artist becomes a one hit wonder. When they deliver a crappy 2nd record they get dropped. They are back on the street. They become a trivia question (what was the #1 single in September of 2008?). They give up on their art and go back to working at Starbucks. The dream is over.

The kids continue to “share” music because the industry has been so messed up for the past 10 years that these kids never know a world where paying for music was something they had to do.

The major corporations, because they have to beat last year’s numbers, continue to sign acts, promote them for a few minutes, and then dispose of them before they have to pay them any real money. They sit n their big offices and shout out to their assistant to bring in the next starving artist. They yell out of their office, “Next!”. They treat the process like the directions on a bottle of shampoo. Lather, rinse, repeat.

And so, the cycle continues. Music fans are forced to listen to bands that they know are completely disposable. The deep love for music is somehow lost. They idea of growing up with a band no longer exists. Do we really think that the Killers or the Kooks are going to still be pumping out records when these kids reach their thirties? Not so much.

I know, the title of this article is “what’s right with the music business?”

I’d say that there’s not much right with the business of music.

What is right is that music has never been more popular. Its also never been more important. We’re living in a world economy that we’ve never seen before. We can only hope that our own kids will never had to face an economy as bad.

The one thing that I know. The thing that I believe in. I believe in the power of art to change the world, to help us through a tough time. Music has always lead us out of troubled times. New voices emerge. These voices challenge us to think differently. They challenge us to push on all that’s socially accepted. Music has a way of challenging the status quo and changing it.

This is what is right with the music world. Forget music as a business. Until it wakes up it will continue its demise. Focus on the good. The music is good. Get out to a club. Listen to college radio (the last independent voice we truly have). Trust in these new voices. Help them be heard. When these kids have a chance to have their voices heard things will change. They won’t get rich over night but that’s not why they are in it to begin with. They are in it because they have something to say. Its going to be up to each of us to help them be heard. Forget about the old model. Find new ways to advance the cause of music. Support the local music scene. Remember why you love music and forget about all the noise you hear about how bad things are in the music business.

Music makes us think. It makes us laugh. It brings us together. It can unit\e. it can divide. It can make you feel good. It can make you cry. It can take you to places you never imagined you could go.

Music is alive and well. Do something to help support it.

Do what you can to help these new and emerging voices to be heard.

Donate time, energy, and money to schools. Keep the arts alive and well.

This is the only way we can make sure it stays alive, thriving, and important.

We need music now more than ever.

As always, thanks for listening.

G


Responses

  1. Geoff, glad to read your opinions and reconnect.

    Arthur Valadie

  2. Geoff: It has been some time since we have talked but I have enjoyed your blog since we have connected on LinkedIn. I have especially enjoyed your blogs on music. When we worked together on the Potter project I knew you were a fan but I now appreciate your belief in music and the power of music and the way you express it on your blog. I will also always remember one of the most memorable musical experiences I had at a concert when you hosted me at the Sheryl Crowe concert in Park City UT. during the Salt Lake City Olympics. I will never forget the encore she played that night, Whole Lotta Love, she was on bass and it was awesome and a musical experience I will never forget. Small club big act great time. Thanks for the experience and keep up the good work on the blog, it has been fun to read!

  3. BRAVO Geoff. I could not have said it better. I am a music head like you with 14,000 songs on my iPod and I am so sick of hearing the industry execs spin the problem away from what it really is and you have so eloquently laid it out. I always really enjoy reading your blog. Keeps writing man, you have a gift.

    PS: Still digging my new Who Cons. They make me feel @ least 10 years younger every time I put them on. And each time I wear them, someone asks me about them.

    KTF,
    –Hal

  4. The Coca Cola Corporation has integrity?

  5. Geoff,
    working with a new startup that you’ll LOVE…since we started it because we ALL felt exactly the same as you! Excellent points! Glad to hear that we’re not alone! We should connect on LinkedIn and I can send you the beta and get your input when we launch!
    Katie Guido

    • Katie – thanks for the note. that sounds great. i am always interested in stuff like this. i’m on both f’book and linkedin. let’s connect and i will check it out right away.

      G


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