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Will the Move Toward Selling Music by the Single Kill Off the Music Business as We Have Known It? Print E-mail
Thursday, 02 June 2005
My dad tells legendary stories of growing up in the suburbs of Philadelphia as a teenager in the 1950s who mowed neighbors’ lawns for pennies and then walked (sometime on his hands, uphill both ways in three feet of snow) to a store called EJ Korvette’s in order to buy one new record. His sacrifice allowed him to develop a collection of 45 RPM records from the Big Bopper, Buddy Holly and beyond, for which he played radio DJ on his record player at home for hours upon hours. His enthusiasm for music, radio and records led him to become a program director of one of the more famous rock radio stations in Philadelphia, WIBG, in the late 1960s, a time when the music industry experienced a landmark change.

The change at hand in the late 1960s, powered by Motown, The Beatles and the amazing rock scene, including the likes of Jimi Hendrix, Led Zeppelin, The Rolling Stones, Janis Joplin and The Doors, was the advent of album rock. With the radio play of seven-minute-long songs like “Light My Fire,” Baby Boomers were willing to buy more music and get deeper into the music artists and labels were selling. The move from a singles-based music business to an album-based business model caused a boom, the likes of which we wouldn’t ever really see again in the music industry. Baby Boomers (still to this day the largest demographic in U.S. history) were willing to pony up their hard-earned money while in college and even more so afterward in order to get more and more into the music of their time. The results were the makings of a whole new crop of music moguls, music publishing money like nobody had ever dreamed possible, the modern concert business and more, all resulting in what was to turn out to be a golden era for the record business that would last more than a generation.

Now it looks as if the music business has killed the goose that laid the golden egg.

The creative power that created, nurtured and developed the vast amount of artists that caused the musical renaissance of the late 1960s, which lasted well into the 1980s, dried up by 1990 when record companies out of sheer arrogance started to treat artists and bands more like raw commodities than the fragile (and often difficult to deal with) gems they are. Gone were development deals. Gone was any tolerance for not going at least gold with your first record. In were contracts of epic sizes for the likes of Janet Jackson, Prince and Michael Jackson that approached the nine-figure range. Record executives had become more bankers than entrepreneurs. It seemed like a great idea at the time, but nobody saw the end of the world that was coming a decade or so later.

Fast-forward to the days of Napster in the late 1990s. Record executives freaked out as they have never freaked before. They got the RIAA to sue everyone they could, including their own customers. They called in every political marker they could. As soon as the pipeline of the Internet got wide enough, the day of reckoning came for the music business – a business that was doing $30,000,000,000 in sales per year at the time, but that had clearly forgotten its roots. Record moguls of the day simply couldn’t see the marketing possibilities of Napster, so like every other technology that comes down the pike (DAT, CDR), they fought it. They couldn’t see how downloading a song was like how kids in the 1980s recorded hit songs from the radio of their boom boxes onto cassette tapes. For example, they couldn’t see how database marketing from registrants of Napster (or other p-to-p sites) could have allowed them to send 5,000,000 emails to fans of Rage Against the Machine when Audioslave became a new supergroup made up from the remains of Rage. They just couldn’t see that the party was about to be over.

Today, the record business has been rocked by its own incompetence, its own lack of R&D, its own lack of vision – vision that Apple and Pixar founder Steven Jobs rightfully viewed as opportunity. The biggest thing to happen in music in the last 10 years isn’t music at all – it’s hardware in the form of the Apple iPod. But the iPod is possibly the worst thing that has ever happened to the music industry in its modern era, because it is the iPod that has returned the business back to a model of selling singles instead of selling albums.

All isn’t lost, but it is close in terms of returning to the financial or creative glory of the golden era of the music business. Domestic record sales have dipped from near 30 billion dollars per year to around 18 billion in the past five years. Record executives quickly blame Napster and peer-to-peer file sharing. They should more accurately blame the demise of the album. They should blame the lack of effort they put into SACD and DVD-Audio, formats that provided additional value and surround sound. They should blame the record-setting popularity of the $24 DVD-Video movie, with as much as two-and-a-half hours of audio/video content on it (not counting bonus features), while they continued to price the compact disc at $16.95 when consumers were getting one hit song along with 44 minutes of filler. Right or wrong, Napster wasn’t the cause of the end of the Roman musical empire.

Today, DualDisc offers hope as a format. It offers the possibility of high-resolution music playback, surround sound music playback and video goodies. Some of the first titles have impressively sold into the platinum level. With Sony and Toshiba reportedly meeting this week over the next HDTV disc format in the hopes of working around a format war (which they will likely avoid), presidents of record companies should be burning up the phone lines to get a new disc format approved, one where they can sell entire catalogs of music in ways they have never though of before. They should be hiring more top in-house record producers to mentor bands that will not just look good but will also play good. Record execs should be mixing their entire back catalogs into high-resolution stereo (DTS 24-96) and 5.1 (MLP) surround sound. They should be working with Mel Karmazin at Sirius to get them enough surround sound content for a 24-hour 5.1 surround sound channel for oldies and classic rock. Sirius is interested. They should be doing whatever it takes to get surround sound in more than one or two cars as a stock option. People replace their cars far more often than they replace their stereo or home theater systems.

What is most frightening is, if selling songs a dollar at a time is the best trick these expensive-suit-wearing, Bentley Continental GT-driving executives have up their sleeves, the blood of the end of the music industry is on their hands and nobody else’s.

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