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

Music Live

[Anonymous Coward]

I've always wondered about the power of copyright to collect per-cd revenue.

In Germany, where I've spent some time, local bands are more influential than US/International stars. Although there is some influence, it's "in" to know someone who plays in a band, and bands are hired for gigs often.

I've always believed that the future of music was in Live music, i.e. performers must play to get paid. I think with internet distribution of music, this and the tone of the article, the future lies in performers doing actual work.

Torsten

Re:Music Live

[BeBoxer]

I've always believed that the future of music was in Live music, i.e. performers must play to get paid.

There's a radical idea. Getting paid for doing something. Rather than getting paid to do nothing. This whole notion that I should have to pay somebody again and again for work that they did once will eventually have to go away.

At least in the case of buying a CD, the distributor did something for me personally. Sure, they didn't know I would be the one to buy that CD. But they had to expend both labor and materials to make that particular CD that I bought. So there is actually some exchange of real value in both directions.

But if I download a song on a P2P, the copyright holders have done absolutely nothing for me personally. They didn't write the music for me. They didn't perform it for me. And they didn't even have to make the copy for me. They did jack shit. Why should they get paid?

Musicians should get paid for providing a service just like everybody else. If you work hard, you can make good money as a live performer. Especially if you don't let the record labels steal it all. On the same note, programmers should get paid to write software. Not to just sit around and sell the same software over and over again.Personally, I have no problem with watching the entire shrink-wrap music and software business go away entirely. To anybody who insists that they should keep getting paid after they stop working, I say "Screw you. Get a real job."

Showing the rest what NOT to do

[W2k]

a) Screwing their customers by overcharging for stuff which doesn't hold up to the advertised quality in the first place. Think boy bands and CD's with 2 good songs and 18 filler tracks here...

b) Labeling their customers criminals by introducing copy-protected formats which do more harm than good. The DMCA. The SSSCA.

c) Failing to adapt to worldwide changes, such as the arrival of the Internet, home broadband, P2P technology. Attempts to fight the future rather than embrace it.

d) Pathetically holding on to their old business model, despite telltale signs that it's already outdated.

The list can go on for pages, and the four main points above can be split into several sub-points for those slow understanding the magnitude of this...

Re:Artists selling 30,000 copies?

[rodgerd]

Yeah, there are. About twenty or thiry of them. Everyone else sells dick.

The thing the author has missed is the trend in the publishing industry, which is moving more like the music industry, trying to aquire strangleholds on authors' works, doing deals with bookstores to charge authors for promotion and shelf space, and a whole bunch of nasty shit they've learned from EMI.

Isn't that was it *used* to be like?

[ShatnerTurbo2k]

Seems like the "bleak" future described was also a fairly accurate description of the music industry prior to 1950. No real pop-superstars or bazillion-dollar promotional campaigns.

That's the way things were.. and we liked it!

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.

Got it exactly right

[letxa2000]

The article got it exactly right and said what I've been saying for years.

Music is Free. For better or for worse, legally or illegally, music is now free. Period. I would submit it should be free, think of it as an advertisement for the tours. But whether or not people (including RIAA) think it should be free, it is. Improving technology and an archaeic business model based on control and scarcity has guaranteed that.

Famous musicians will earn less. Yes, Phil Collins and Celine Dion will probably earn much less than they do now. Instead of millions per year they might have to get used to earning incomes closer to what the rest of society does. Perhaps old Phil will have to scrape by on $200k a year... Then again, he sells out concerts which is where he make big bucks, anyway, so his income may be proportional to his desire to work (perform). I don't see a problem with that.

There will be more musicians. Although the most famous musicians will earn less, there will be more musicians because the barrier to entry will be greatly reduced. Eventually it will be eliminated. Some say that we'll be "flooded" with a bunch of untalented musicians and we won't be able to find anything good, but I'd submit that's the case now anyway.

The recording industry is obsolete. You used to need expensive recording equipment and studios to record quality music. A good studio is certainly still useful, but an amateur group can do a decent job at recording decent quality music that's definitely within their budget. They can burn CDs and sell them for $5/pop at concerts (pocketing $4.50 per CD), throw the music online (attracting more people to concerts). The recording industry is obsolete. Their legal attacks are, as the article mentions, a matter of squeezing the last dollar possible out of their business plan.

I live in Mexico right now. My sister-in-law is a 20-year-old Mexican young lady. She used to use Napster. That got nuked and now she has like 3 different P2P programs on her home PC connected to DSL. She has P2P programs that *I* have never heard of.

Last time I asked her she had downloaded 3200+ MP3s. That's more than 8 times what I, a techno-nerd, have downloaded. She doesn't listen to most of the music more than once, she just downloads everything she can because she likes to collect MP3s. She tells me her friends do too. She wants a larger hard drive for her birthday.

Believe me, the "music industry" is history.

Quality counts?

[fleeb_fantastique]

The music industry could start earning more income, perhaps, by improving the quality of the music it generates.

Sure, production value has improved, but today's music sounds much like a movie with great special effects but no plot; it lacks substance. The industry has concentrated so hard on vacuous marketing techniques aimed at various demographics, as well as absurd lobbying activities amongst politicians that it should truly come as no surprise that folks have become disgusted with today's music, by and large.

Truly, look at what they're coming up with these days; the better tunes are rehashed oldies (where they've taken advantage of improved production techniques to bring you better sounding copies of old tunes that folks are familiar with). And even some of those are downright offensive with 'corporate appeal'.

I could only think of two more possible solutions to their problems (although it may be too late).

First, recognize that the Baby Boomers are getting older. You aren't going to see that kind of explosive buying power again (at least not until the next major disaster that wipes out a third of the population, making room for another baby boom). So don't even bother. Go with a wider range of musicians and spend a little less money on production (something that's getting easier these days). Quick little hint: scarcity of resources breeds artistic endeavor. Some of the most clever bits of music ever crafted came from truly small production budgets. No need to starve their resources, though, just force your talent to grow their techniques and composition skills before exposing them to the big production dollars.

Second, instead of lobbying your congressman for these truly insulting and offensive abuses of law, put your money into the education system to improve the state of music education in our schools. If folks have no appreciation for music, what makes you think they're going to bother to listen to any of it? Branding? Today's youth barely grasps the concept of counterpoint (multiple melodies played on top of each other), can't appreciate a good groove (preferring an obnoxiously repetitive 'beat' instead), and do not have an iota of an appreciate for music without lyrics.

Krugman Had It Figured Out

[Mittermeyer]

In 1996 Paul Krugman, MIT economics professor and wirter of the Dismal Scientist column in Slate, wrote this column about a look back at what happened to content providers from 2096. Krugman's overriding point is that in a digital environment content ends up being free, and people that actually make tangible non-digital things (blue-collar-type jobs) will get the benefits of the future.

His model for music in a post-Napster environment is that music is delivered free to promote attendance at live concerts.

I particularly enjoyed the part where he predicts the demise of economists' perk jobs and he's writing part-time from a vet clinic.

I weep not for the end of Madonna and her ilk's excess. It's far more important what happens to the average plumber then it does for these pampered poodles.

I Don't Know If I Follow The Logic

[krmt]

The link between books and music is confusing to me, and it doesn't seem like the author follows the logic. He opens and ends the article stating that musicians will become as modern authors, then moves on to say that the music industry is facing shrinking profits with the technological changes. Huh?

I agree with both ideas. Today's titans of culture will become yesterday's classics of culture, and the music industry will surely figure out more novel and brutal ways to lose money. But how is this related?

Most famous authors were not particularly rich, to my knowledge, unless they came from money or were complete and utter superstars (Lord Byron is an example of both). Faulkner, Poe, Keats, and most other authors you can think of did not die with a lot of money in their pockets from their works, even though they are remembered as literary giants today. Then there are those who are not discovered until after their death, such as Blake and Kafka, who really did not make money off of their writings.

And then there's the idea that music replaced books as the driving force of popular culture. I would grant that only in part, but I would also say film and TV took equal parts of that massive share once held by books (and religion). Besides that, books still drive an incredible portion of culture. If you don't believe me, think about the sheer number of movies that are based off of books while you drive down to your local Barnes and Noble or Borders book superstore.

The thing that really bothered me about the article though, was that the author does not present anything to take the place of music as a dominant cultural mover. There will be some cultural form to replace music if it truly falls by the wayside, but until something actually comes forward to replace it, music isn't really going anywhere. The industry will change, as the article asserts, but musicians will not become mediocritized until something else comes forward. Given that internet distribution is making artists more popular than they likely would have ever been (watch TRL for evidence) I find it doubtful that music will lose its cultural power with the advent of the internet. If anything, it'll be strengthened.