09/07 Editorial: Am I Crazy, or Is this What's Going Down?

[Anderton]

(Every month, a new editorial is posted in Sound, Studio, and Stage. Your comments and feedback are encouraged!)

 

AM I CRAZY, OR IS THIS WHAT'S GOING DOWN?

 

By Craig Anderton

 

I have this monthly ritual of going through the Grammy Awards Guide, which is a listing of recently-released CDs that NARAS members can buy at a discounted price (typically, around $8.50 per CD). I used to drop $100 a month or so on recordings, sometimes more, and look forward to getting that box with the latest goodies showing up on my doorstep.

 

These days, months go by when I'll order maybe one or two CDs, or maybe none. Is it because music sucks these days? No, there's more and better music than ever before-regardless of whether or not you can find it on major labels. I think the answer has more to do with an economic model that works fine for durable goods but fails miserably in an artistic context: Publicly-held companies.

 

The deal with corporations that are responsible to stockholders is that they must show profits to keep the stockholders happy. After all, people don't want to buy a stock and watch it tank. In an ideal world, the companies would produce innovative, bitchin' products that everyone wanted, sell them at a fair price, and make a fair profit. Some of this would get plowed into R&D to create more innovative, bitchin' products, and some of which would go to making stockholders happy. Apple is a pretty good example of a company that makes this system work.

 

But companies, like people, go through good and bad times--and this is particularly true in "fashion" industries, which includes the music biz. Yet companies that go through bad times aren't allowed to re-trench: They must still produce profits for the stockholders. And when the products aren't producing profits, then there are other ways to be more profitable: Fire people, reduce benefits, forego the Christmas bonus, cut back on R&D (but of course, not cut back on executive bonuses), downsize customer service, and the like. True, these produce a short-term boost, but at the expense of mortgaging the future. When a company sacrifices the long-term for the short-term, it's the beginning of the end.

 

When the record business was run by entrepreneurs, they had a viable, if highly volatile, business model: You took risks, because when you hit, you hit big...and that would tide you over during the lean times. Sure, some bet the farm and lost; others bet the farm, and became rich beyond belief. But what kept the process humming was that these entrepreneurs were always looking for the Next Big Thing. They didn't have to please anyone other than the intended audience. They failed big, but they won big. And many of them became so successful they got bought out by large, multinational corporations that saw an endless profit machine.

 

Those corporations took their back catalogs, and did extremely profitable re-issues on CD. The sessions had already been paid for, and sometimes, the artists had conveniently died so they didn't need to get paid, and wouldn't hire a lawyer if they weren't. Consumers were happy to replace their old, scratched-up vinyl with shiny new CDs. Profits soared.

 

Then came the re-mastered CDs, and the boxed sets. Again, more profits without any investment other than new artwork. Signing new bands was getting to be too risky. Instead, record companies got infected by the "blockbuster mentality" of Hollywood: Pay lots of money to established "superstars" who would guarantee sales. Even if the records weren't that good, the companies would be able to ship enough copies to generate a profit--until the public got wise, and stopped buying the artist's next release (see: Michael Jackson).

 

Companies didn't take chances because chances didn't pay the stockholders: Sure-fire hits did. A&R departments were cut. Lawyers and accountants, not ex-musicians, made the artistic decisions. Are there any Chris Blackwells at today's labels who would take a chance on some pot-smoking black guy into a religious cult, who created music that was definitely not conventional pop music? I don't think Bob Marley--or Bob Dylan, for that matter--would get signed by today's labels.

 

As I went through the latest Grammy Awards Guide, I noticed just how few new artists were represented. I saw that all of Amy Grant's back catalog had been re-released. The jazz labels were re-issuing CDs by Stan Kenton, Miles Davis, and Count Basie. There were greatest hits packages from Ringo Starr, Frankie Goes to Hollywood, Joe Cocker, the Jackson 5, and Queensryche. Sure, there were some independent labels in there, and some new releases. But by and large, I felt like I was browsing a museum, not a record store.

 

There's something to be said for playing it safe; I like airlines that play it safe, for example. Ditto companies that make elevators. But I don't want record companies that play it safe. I want to hear new things. I want to hear a band whose reach exceeds its grasp, and was signed because of a gut feeling, not the reaction of a focus group. I want to see a band with a girl singer who's butt ugly but sings great, rather than one with a fabulous body who's pitch-corrected into a shaky kind of acceptableness. I want to see stockholders who say "Okay, so the stock isn't doing so great this year. But I'm going to hold on to it because those people are sharp, and I'm pretty sure they're going to strike gold next year. In fact, I think I'll buy some more shares while it's cheap."

 

Am I crazy?

[Anderton]

Oh, and one more thought: Think of what happened when CBS bought Fender, compared to how well the company's been doing since control returned to the employees.

[Dean Roddey]

I think that a lot of the blame also has to be laid at the feet of the buying public as well. Yes, these companies are profit concerns, but if making adventurous, challenging music was profitable, they'd do it. But it's not, because the bulk of people don't want to adventurous, challenging music. For them, music is not an end in and of itself, it's no different from milk or Cherios. It's just something they consume.

 

This was less the case in the 60s and 70s, when music was an integral part of powerful movements in our society, and so there was an audience for music of the sort Marley and Dylan or Joplin or The Doors and so forth were making. That just isn't the case these days, and music is not just a commodity to the sellers, it's a commodity to most of the buyers as well.

 

Obviously the smash hit mentality, which I guess kind of really started with Frampton Comes Alive, hasn't helped. Instead of pushing more bands, for much less money each so that they can take time to develop and the failures cost much less, since it is a commodity to both sides now, it's treated the same as other commodities, with more emphasis on advertising budget and tie-ins and all that.

 

And, frankly, the current environment of complete lack of respect for IP rights in the consuming public isn't doing much to encourage anyone to take risks anymore either probably.

 

Also, it's hardly a new thing. It's not like the Brill Building era, one of the most prolific, wasn't a completely commercial factory concern, pushing out reams of music which, though certainly enjoyable and by now classic, it wasn't exactly challenging or socially conscious or technically powerful music. It was commodity music sold as a commodity.

[Anderton]

 

I think that a lot of the blame also has to be laid at the feet of the buying public as well. Yes, these companies are profit concerns, but if making adventurous, challenging music was profitable, they'd do it. But it's not, because the bulk of people don't want to adventurous, challenging music.

 

 

But I'm not asking for adventurous, challenging music...I've given up on that. I just want something new, as opposed to constant streams of re-issues!

[Dean Roddey]

It's out there if you want to find it. Go to sites like the NPR All Songs Considered web site. There's a raft of stuff there that you've probably never heard of. I scarf through it pretty regularly and find all kinds of interesting things.

[Anderton]

 

Also, it's hardly a new thing. It's not like the Brill Building era, one of the most prolific, wasn't a completely commercial factory concern, pushing out reams of music which, though certainly enjoyable and by now classic, it wasn't exactly challenging or socially conscious or technically powerful music. It was commodity music sold as a commodity.

 

 

But in a way, that makes my point: The record companies set up a bunch of writers to come up with New Stuff. They didn't just re-issue Benny Goodman and Artie Shaw records with "bonus cuts" and different covers. I'm not talking quality of music, or whether it's a commercial commodity or adventuous: I'm talking about companies that shoot themselves by milking a cow until it's dry, and not buying a new cow or two to take over when the old cow doesn't have any milk left.

[Lee Flier]

 

I'm talking about companies that shoot themselves by milking a cow until it's dry, and not buying a new cow or two to take over when the old cow doesn't have any milk left.

 

 

I wonder if the best and brightest of the "young cows" are now hip to the shoddy business practices the major labels have always lived by, and are choosing not to sign with major labels. Independent record sales account for something like 20% of the total market, and those aren't reported by SoundScan and don't get considered for Grammies.

[Anderton]

I do believe the good music is out there. But what I'm talking about goes far beyond music. The relentless quest for profits is what makes chains downsize their staff to the point where no one can get their questions answered or even find out what price something is, so they go elsewhere. In other words, because companies choose the route that generates the most income short-term, they fail to give the people what they want long-term, and in the process, shoot themselves in the foot. We have a paradoxical situation where there's more music out there, and more being circulated, than ever before - yet companies don't have the imagination to take advantage of this. The companies that HAVE shown some imagination (e.g., Apple), and the independents who have taken the bull by the horns, are doing okay. But they're entrepreneurs, not bean counters.

[Beck]

I want to hear new things. I want to hear a band whose reach exceeds its grasp, and was signed because of a gut feeling, not the reaction of a focus group. I want to see a band with a girl singer who's butt ugly but sings great, rather than one with a fabulous body who's pitch-corrected into a shaky kind of acceptableness.

 

Amen to that!

 

I'm really tired of what I call the dancersize genre. Perhaps we could trace that back to Janet Jackson watching one too many Jane Fonda workout videos. The rest is history.

 

 

[Billster]

#1 - A&R = R&D. the "big" record companies don't dig for the new. Don't know how to fix that except for doing my own thing, and looking for other folks doing their thing outside of the major distribution system.

 

And I agree with Lee, the up and comers are smart enough to stay away from exploitation.

 

#2 - As you say, once upon a time, companies were run and decisions were made by people who understood the nature of what they were doing (making music or making donuts). Now the decisions are being made by people whose primary skill is counting cash.

[Dean Roddey]

I know that

[Beck]

 

That just isn't the case.

 

 

It is for me and many of my peers. The number of listeners reaching back in time for good music is substantial.

 

I know the noise floor is deafening for many people, but I know what

[sventvkg]

Craig, I just don't think anyone other then us Musicians and a few serious geeks gives a {censored} about music anymore to the level that we need them to for things to change.

 

Things are really {censored}ed up all over and the all the little Dutch boys with their fingers in the Dykes in our society are running out of hands.

[doug osborne]

 

I think the answer has more to do with an economic model that works fine for durable goods but fails miserably in an artistic context: Publicly-held companies. The deal with corporations that are responsible to stockholders is that they must show profits to keep the stockholders happy. ... Am I crazy?

 

 

You see this very clearly.

 

This is a pervasive and harmful part of our society right now. And it is created by the relationship of corporate America to our government.

 

I agree that the music industry is a fashion industry; it's not directly comparable with the healthcare industry, but their problem is exactly the same one - satisfying corporate profits.

 

When us old guys were children, our folks paid far less of their paychecks for medical care, and the biggest reason is that we didn't have to satisfy the C-Level executives, board members, and shareholders first. If, as you claim, this can work for durable goods but not for the music industry, it should be obvious that we have to remove this influence from the healthcare industry. Increased use of expensive technology and expensive pharmaceuticals make up the rest of the difference in healthcare cost to consumers now v. then (no one should bring up malpractice insurance and traaaahl lawyahs - these were a factor then, too, and aren't the major part of higher healthcare cost now).

 

The big airlines are another example. They made their own problems, were rescued by our tax dollars, and are now profitable again. Customer service and the experience of flying is poor compared to what it was a generation ago, and employees, from baggage handlers to pilots, are being paid much less than they were a generation ago, yet executive compensation and shareholder return are ever increasing. Unlike the medical industry (where there really is no competition unless we pay for all of our medical care at retail prices without any insurance), we as consumers have a voice here since most airlines have competition for most of their routes, yet we continue to accept that being treated like cattle is the best we can expect.

 

I know many examples of companies, in many fields, that have been kept private while providing their owners with a great life, through good and bad times. None of these companies would have survived had they gone public.

 

There is more music being made by more people than ever before. There is also more music being listened-to by more people in more ways than ever before. The existing music industry obviously can't figure out how to be the big dogs in this (ten years too late to sell downloads, etc.).

 

What many people don't realize that none of these companies in the music industry are losing money. While their trade lobbying organizations get overreaching laws passed by congress and sue their best customers, these companies remain profitable.

 

I'm not in the mood to collect much these days, but what new discs and downloads I buy have been direct from the artist as much as possible. I can't discover new music from radio or record stores anymore, and satellite radio, social networking, and other outlets have started to replace them. I always try to influence industry by voting with my dollars.

 

Corporate profits and their ties to our elected officials are our biggest threat to our economy and to our national security.

[Dean Roddey]

 

It is for me and many of my peers. The number of listeners reaching back in time for good music is substantial.   I know the noise floor is deafening for many people, but I know what

[Dean Roddey]

Someone posted a link to a sight for Luna guitars in the SONAR forum. So I popped over there. They have a page of artists who use their guitars and all of them have tunes of theirs made using those guitars. I was browsing through there and there's some really nice stuff in there:

 

http://lunaguitars.com/artists.php

[Roy]

 

I don't want record companies that play it safe. I want to hear new things. I want to hear a band whose reach exceeds its grasp, and was signed because of a gut feeling, not the reaction of a focus group. I want to see a band with a girl singer who's butt ugly but sings great, rather than one with a fabulous body who's pitch-corrected into a shaky kind of acceptableness. I want to see stockholders who say "Okay, so the stock isn't doing so great this year. But I'm going to hold on to it because those people are sharp, and I'm pretty sure they're going to strike gold next year. In fact, I think I'll buy some more shares while it's cheap." Am I crazy?

 

 

 

Aint gonna happen.

 

Everything Craig talks about has already happened in the film industry. The only films that get made are clones of what was a hit before. The problem is "The emporer's new clothes". For an exec to keep his job, he must be perceived as successful. The last thing anyone is going to do is voice a negative opinion of their own or anyone else's work (political suicide). So all I hear is how great every single production is. Then I see these productions...not so great. Will I say anything? Heck no, I like having a job too. Anyway, the point is...this has been happening in film for decades and has only gotten worse. I suspect the same will happen to the music industry. Investors will not demand or think things will change when the CEO is telling them how great the company is doing (any bad financial report can be blamed on the internet). Investors believe they've already struck gold and have no desire to change the business model.

 

I think change will happen because the business is changing. You no longer need hugely expensive gear to record an album (or make a movie) and the internet is enabling distrubution and marketing without relying on the resources of the majors. I see labels and investors continuing on the same path but losing ground to independent labels (and even individual artists)with a bit more vision.

[Beck]

 

Are you kidding? It's a sign of the huge diversity of music being made, because the cost of doing so has gotten so much lower.

 

 

The quality of music has declined with that reduction in cost

[Dean Roddey]

IMO, America

[amplayer]

 

The big airlines are another example. They made their own problems, were rescued by our tax dollars, and are now profitable again. Customer service and the experience of flying is poor compared to what it was a generation ago, and employees, from baggage handlers to pilots, are being paid much less than they were a generation ago, yet executive compensation and shareholder return are ever increasing.

 

 

I think you are forgetting one very major difference in airline travel now and a generation ago: Price.

Just about anyone can now afford to fly somewhere, and that was not the case a generation ago.

[amplayer]

 

But companies, like people, go through good and bad times--and this is particularly true in "fashion" industries, which includes the music biz. Yet companies that go through bad times aren't allowed to re-trench: They must still produce profits for the stockholders. And when the products aren't producing profits, then there are other ways to be more profitable: Fire people, reduce benefits, forego the Christmas bonus, cut back on R&D (but of course, not cut back on executive bonuses), downsize customer service, and the like. True, these produce a short-term boost, but at the expense of mortgaging the future. When a company sacrifices the long-term for the short-term, it's the beginning of the end. When the record business was run by entrepreneurs, they had a viable, if highly volatile, business model: You took risks, because when you hit, you hit big...and that would tide you over during the lean times. Sure, some bet the farm and lost; others bet the farm, and became rich beyond belief. But what kept the process humming was that these entrepreneurs were always looking for the Next Big Thing. They didn't have to please anyone other than the intended audience. They failed big, but they won big. And many of them became so successful they got bought out by large, multinational corporations that saw an endless profit machine. Those corporations took their back catalogs, and did extremely profitable re-issues on CD. The sessions had already been paid for, and sometimes, the artists had conveniently died so they didn't need to get paid, and wouldn't hire a lawyer if they weren't. Consumers were happy to replace their old, scratched-up vinyl with shiny new CDs. Profits soared. Then came the re-mastered CDs, and the boxed sets. Again, more profits without any investment other than new artwork. Signing new bands was getting to be too risky. Instead, record companies got infected by the "blockbuster mentality" of Hollywood: Pay lots of money to established "superstars" who would guarantee sales. Even if the records weren't that good, the companies would be able to ship enough copies to generate a profit--until the public got wise, and stopped buying the artist's next release (see: Michael Jackson). Companies didn't take chances because chances didn't pay the stockholders: Sure-fire hits did. A&R departments were cut. Lawyers and accountants, not ex-musicians, made the artistic decisions. Are there any Chris Blackwells at today's labels who would take a chance on some pot-smoking black guy into a religious cult, who created music that was definitely not conventional pop music? I don't think Bob Marley--or Bob Dylan, for that matter--would get signed by today's labels. As I went through the latest Grammy Awards Guide, I noticed just how few new artists were represented. I saw that all of Amy Grant's back catalog had been re-released. The jazz labels were re-issuing CDs by Stan Kenton, Miles Davis, and Count Basie. There were greatest hits packages from Ringo Starr, Frankie Goes to Hollywood, Joe Cocker, the Jackson 5, and Queensryche. Sure, there were some independent labels in there, and some new releases. But by and large, I felt like I was browsing a museum, not a record store. There's something to be said for playing it safe; I like airlines that play it safe, for example. Ditto companies that make elevators. But I don't want record companies that play it safe. I want to hear new things. I want to hear a band whose reach exceeds its grasp, and was signed because of a gut feeling, not the reaction of a focus group. I want to see a band with a girl singer who's butt ugly but sings great, rather than one with a fabulous body who's pitch-corrected into a shaky kind of acceptableness. I want to see stockholders who say "Okay, so the stock isn't doing so great this year. But I'm going to hold on to it because those people are sharp, and I'm pretty sure they're going to strike gold next year. In fact, I think I'll buy some more shares while it's cheap." Am I crazy?

 

 

+1

If you are crazy, then so am I. You have stated this very succintly and I applaud you.

[Beck]

 

This, of course, is why they steal billions of songs a year, because they think it's junk :-)

 

 

Whatever theft there may be doesn

[spokenward]

I think that you can make the point that a certain kind of corporate control injured the record business. Mortally.

 

Interestingly, there was a middle period between entrepreneurship and the current corporate control that lasted for almost 20 years. The record labels were rolled up into larger corporate holdings in the '70s. They operated with relative independence from their holders for 20 years until the early '90s. They were run in many cases by the same entrepreneurs who grew them. But those same entrepreneurs had nearly co-equal CFOs in many cases. The only person who could ruin the entrepreneur's day was the CFO who worked at the end of the corridor. Those CFOs were a hard-eyed group and much tougher critics than the corporate holders.

 

With the exception of a couple of downturns in those 20 years, things grew pretty steadily. They acquired or built distribution companies. They gained more control over promotion and sales (end of regional distribution and less use of independent promotion). They still developed acts (because it was cheaper than bidding for them). But other entertainment products grew faster. Video games (boom bust boom and still boomier), Movies developed secondary markets (home video), publishing expanded with foreign money and national retail chains, the licensing business got hot, and eventually even television syndication made bazillions. The record business that the corporations had left alone became less attractive. While the record business did not fundamentally suck (yet), it suffered from not being the movie or game business that could throw more dollars at once.

 

There is a list of other contributing factors that I think deserve as much blame. Radio died with controlled playlisting. The entrepreneurial wise men and women who actually could tell the bosses to f* off left or were left. Independent record retailing died. If people do their peak music acquisition in adolescence and early adulthood - there were suddenly a lot fewer of those around. (babyboom > X > Y)

[Anderton]

Consequently, music doesn

[Anderton]

 

The segment of youth that are uninspired by popular music are stealing Aerosmith or Earth, Wind and Fire, not Kanye West.

 

 

I used to ask kids at airports with iPods what they were listening to, in the hopes of getting turned on to some hip, new music that only kids with iPods knew about. But after hearing a continuous litany of "Led Zeppelin," "Pink Floyd," "AC/DC," "The Who," and the like, I've pretty much given up.