Another interesting analysis of the travails of the global music biz, this one from Sathnam Sanghera in the Financial Times:
- It is not hard to see why piracy is perceived as the biggest factor behind the industry’s woes. There are now some 900m music files available to be downloaded free on the internet, compared with 345m files in February 2001, when Napster, the free file-sharing service, was at its peak.
According to the International Federation of the Phonographic Industry, the global trade body, four big markets – the US, Japan, Germany and Canada – accounted for 86 per cent of the overall global drop in value in 2001. Tellingly, these four countries are the most technologically advanced in terms of internet access, broadband penetration, compact disc burner penetration and sales of blank CD-Rs.
Hence the music industry’s concerted campaign to tackle piracy, by shutting down Napster and other sites, prosecuting criminals who sell illegally copied CDs and developing new business models to distribute music legitimately online.
The usuual litany, but then … a reverse:
- But could it be that some of this effort is misdirected? Might there be other, less convenient reasons why the $33.6bn-a-year global recorded music industry has entered a period of decline? Some executives are beginning to think so.
One theory is that the music industry is losing sales simply because consumers have so many other entertainment options to spend their time and money on: digital versatile discs, video games, television, mobile telephones. According to the IFPI, there was a 10 per cent drop in per capita music sales among the world’s top five music markets, from $42 in 1999 to $38 in 2001, a decline many believe is due to the increasing popularity of other forms of entertainment.
“When I was a kid, I’d buy an album and spend hours listening to it and reading the sleeve notes and everything,” says Hasse Breitholtz, chairman of BMG UK and Ireland. “But my kids get an album and they’ll flick through a couple of tracks while they’re on their mobile phone and playing on a computer or watching TV. They consume music differently – and when you’re spending £20 a week on a mobile phone, how much money do you have to spend on music?”
Another factor, undoubtedly, is the maturation of the CD-replacement cycle in the world’s largest music markets. Consumers are not repurchasing albums on CD that they previously owned on cassette or LP at the same rate that they did in the late 1980s and early 1990s.
Factors, yes, as is the overall economy, but the writer’s main thesis is something else:
- But, as some executives concede, there may be a still more basic reason for the industry’s predicament: namely, that the fall in sales has a lot to do with the poor quality of music being released.
Of the causes of decline, creative bankruptcy is the most difficult to evaluate and the idea that divides the industry the most. “That’s one of the most ridiculous explanations I’ve ever heard,” says Jay Berman, chairman and CEO of IFPI, the industry body. “If the music is lousy, why are so many people downloading music from the internet and burning CDs and buying pirated copies?”
Glance through the release schedule for the final quarter of this year, however, and the idea that the industry is struggling to inspire its customers becomes harder to dismiss. The Christmas album charts are likely to be dominated by greatest hits packages from old stalwarts such as Elvis Presley, the Rolling Stones, U2, David Bowie and Elton John, plus a range of pop acts discovered through reality TV shows such as American Idol.
Simon Wright, chief executive of Virgin Entertainment Group, which incorporates Virgin’s music retail business, is among those prepared to acknow-ledge that the record industry may, in part, be the author of its own misfortunes. “The industry is making piracy the excuse for falling sales when, in fact, one of the big reasons is that there’s less diverse artists out there,” he says. “There’s no oomph in the music industry at the moment – and there’s no movement like punk or grunge or Britpop to excite people.”
Ah yes, the crappy music argument.
- Alain Levy, head of recorded music at EMI, the world’s third largest record company, concurs. “The industry is not good at creating stars who last for a long time [any more],” he says. “Over the last three years I have noticed that the second albums from new artists generally don’t sell as much as the first.
“This is a problem because over time the industry is not going to create catalogues. Coldplay, one of our bands, are an exception – the second album looks like it will sell more than the first and that’s exactly what you want because you are developing the artist as a long-term prospect. But as an industry we have become too short-term and too marketing-oriented – we spend more time thinking about the timing and packaging of a release rather than making sure we have the right album. We need to change the way we approach music.” Five years ago, before free peer-to-peer file transfer services such as Napster had become popular, trade associations including the Recording Industry Association of America and the National Association of Recording Merchandisers were so concerned about stagnating growth that they commissioned research to examine what the industry could do to return to the heady growth of the 1980s and 1990s. Among the findings was an allegation that record companies were spending millions of dollars promoting music that was uninspiring and sounded too much like everything else available.
The main problem with the writer’s analysis is that she confuses two separate matters: the quality of music, and the industry’s ability to market that music.
Regarding the first, I simply don’t believe that music is drastically better or worse at any given point in time. There is always good-to-great music being made. I’ve been listening closely for 35 years and there is plenty of music I love from every era. In programming my radio shows from the ’70s to today, my problem has NEVER been a lack of super new music, it’s finding time to play it all.
People typically favor music from their teens and young adulthood – a time when they are on the cutting cultural edge and have time and energy to devote to such things as popular culture before children, career, home, and life edge popular culture out of the way. That’s why classic rock, oldies, and “music of your life” radio are all so popular with their respective generational target audiences.
So I’m a freak in that I’ve maintained my relationship with popular culture into my 40’s, although my kind isn’t nearly as unusual as it used to be with the aging of the Baby Boomers.
As a result, I don’t believe the quality of music is the problem: it’s that the majors don’t know how to nurture that talent along and build careers rather than simply hits. Part of this is the change in the corporate personality of the labels, now basically run quarter-to-quarter by accountants and finance people, not record people; another part is marketing and knowing how to sell quality rather than the fad of the moment.
The article correctly points out all of the latter but doesn’t differentiate between knowing what to do with talent – which is a big problem – and the existence of talent, which is not.