The Music Biz Is the New Book Industry

jonerik writes "The new issue of New York Magazine includes this intriguing article by Michael Wolff which makes the case that the music biz will soon be going the way of the book industry. Arguing that larger-than-life characters such as Ernest Hemingway, John Steinbeck, and Dorothy Parker were the rock stars of their time, Wolff points out that 'where before you'd be happy only at gold and platinum levels, soon you'll be grateful if you have a release that sells 30,000 or 40,000 units -- that will be your bread and butter. You'll sweat every sale and dollar. Other aspects of the business will also contract -- most of the perks and largesse and extravagance will dry up completely. The glamour, the influence, the youth, the hipness, the hookers, the drugs -- gone. Instead, it will be a low-margin, consolidated, quaintly anachronistic business, catering to an aging clientele, without much impact on an otherwise thriving culture awash in music that only incidentally will come from the music industry.' Wolff also relates a recent lunch he had at Sony Music in which a sort of paralyzed acceptance had set in; 'The recent past was very bad; the future was likely to be worse. All money earned from here on in would be harder to earn. This felt like acceptance to me: We simply don't know what to do.'"

Comments

Wishful Thinking

[Carnage4Life]

Some bitter journalist forgot to factor in ticket sales which still bring in millions of dollars for artistes. Here are last years numbers

1. U2, $109.7 million
2. 'N Sync, $86.8 million
3. Backstreet Boys, $82.1 million
4. Dave Matthews Band, $60.5 million
5. Elton John and Billy Joel, $57.2 million
6. Madonna, $54.7 million
7. Aerosmith, $49.3 million
8. Janet Jackson, $42.1 million
9. Eric Clapton, $38.8 million
10. Neil Diamond, $35.4 million
11. Matchbox Twenty, $28.4 million
12. Rod Stewart, $27.2 million
13. Jimmy Buffett, $26.9 million
14. Andrea Bocelli, $26.8 million
15. Ozzfest 2001, $26.4 million
16. Sade, $26.2 million
17. Tim McGraw, $24.9 million
18. Britney Spears, $23.7 million
19. James Taylor, $23 million
20. Tool, $20.4 million

No more glamour, the influence, the youth, the hipness, the hookers, the drugs...Yeah right.

Even without concert sales, people are still buying CDs anyway. After all the crap about Eminem's album being pirated before it was released he still managed to sell 1.32 million copies in his first week. I think the reports of the death of the music industry have been greatly exagerrated.

Finally, innovative musicians can parlay their fame into dollars from other means. Just look at Ozzy Osbourne who's about to pull in 20 million for his reality-sitcom.

Re:Wishful Thinking

[Detritus]

Ticket sales are revenues. What are the profits? Many bands lose money while on tour.

Re:Wishful Thinking

[swillden]

Ticket sales are revenues. What are the profits? Many bands lose money while on tour.

It varies, most bands more or less break even, some make money, some lose money.

The really popular bands (i.e. the ones on the radio) tend to lose money on touring, but they and the labels who front the cash don't mind because it helps sell CDs.

Other bands, however, see it exactly the opposite. They try to have just enough radio and CD-shelf presence to become able to attract large crowds to their concerts, and then make all of their money from tickets and sales of merchandise at the concerts (CDs, t-shirts, etc.). This is pretty much how all metal bands have made a living for the last twenty years.

A lot of the difference in profitability comes from whether or not the band and label feel like they *need* to make a profit from touring. The really big bands can afford to view touring as a marketing exercise and so they can afford huge budgets for elaborate stages, lighting, laser shows, fireworks, etc. I don't know about the last couple of years, but U2 has historically been notorious for losing huge amounts of money on concerts, because they put on such an extravagant show. Their label never minded because whenever they went on tour their album sales went through the roof, far more than making up the concert losses (which record companies generally split with the bands).

Lesser-known bands, without radio airplay to push CD sales and without the ability to sell out huge concert venues, have to settle for more modest shows because they need to turn a profit. And many of them are quite successful, particularly in genres that are a bit off the beaten path but still have a solid core audience with a concert-going tradition.