Charles Mann takes a spirited look at the future of the recording industry as we know it – it could disappear in the very near future:
- As recently as 10 years ago, the media conglomerates that own record labels regarded them as cash cows – smaller than Hollywood but more reliably profitable. Now all five major labels are either losing money or barely in the black, and the industry’s decline is turning into a plunge. In the next year, whether together or separately, the labels will have to set about totally reinventing the way they do business, a horribly difficult task for any institution.
To leap the hurdles posed by digital technology, the industry must find a way to make money selling downloaded music on a per-track basis, allow in-store CD burning, slash recording costs with cheap software and hardware, and change artists’ contracts to reflect the new economic reality. Doing any one of these will be next to impossible. Doing all of them would be one of the more amazing turnarounds in business history.
….the ability of Britney to change the hearts and minds of music fans depends on public sympathy.
That sympathy is in short supply. Rightly or wrongly, record companies are detested by politicians (for corrupting youth), by webcasters (for demanding royalties), and by their customers (for inflating prices). Musicians and songwriters are famous for loathing the labels, and many have resisted licensing their songs to MusicNet and pressplay. (Both are under investigation for possible antitrust violations.) Radio and MTV aren’t in the industry’s corner; the labels, through “independent promotion” programs, effectively have to pay them to broadcast music. And the electronics industry’s attitude toward the labels is summed up by an Apple slogan: Rip. Mix. Burn. Which, a music executive once told me, translates into “Fuck you, record labels.”
….If the industry collapsed, as he predicted, would artists and listeners be better or worse off? After a brutally difficult transition musicians and fans might on the whole benefit. The star-making machinery may crumble, but people will still pay for music, whether it’s live, licensed, or digitally delivered (at a competitive price). Look at the bluegrass and gospel circuits, which provide long careers and middle-class lives to some of America’s greatest performers. Look at the techno bands that are winning an audience by selling their music to advertisers. And look at artists like Phish, Prince, and Wonderlick, who are trying to use the Internet to deal directly with their fans and bypass the middleman.
To be sure, today’s middleman does a lot of good, too. Fans taught by two generations of rock and roll to loathe the Suits don’t appreciate the enormous contributions of producers and A&R executives (think Ahmet Ertegun or Russell Simmons). And the labels perform the invaluable function of backing young performers financially as they begin their careers. But in a post-label world, musicians might find other ways to get this help, from the American Idol model (building recognition as part of a corporate campaign) to the Broadway show model (getting ad hoc groups of small investors to provide funds). Eliminating the big-label overheads could cut the cost of making music, too, enlarging the pool of contenders and democratizing the process.
All of these models would produce fewer global superstars and more locally successful musicians. We might not see another Michael Jackson circa 1982, but we also wouldn’t see another Michael Jackson circa 2002. Not a bad tradeoff. [Wired]
The most immediate question, assuming he is right about musicians and the public coming out ahead, is how long is the brutal transition phase going to last?