Monday, January 11, 2010

Lessons Learned from the Demise of the Recording Industry

In college I was THE music snob around campus. Or, at least I thought I was. Friends of friends would stride up to me in the media center or outside of class, asking my opinion on this release or that release, or requesting names of albums that I deemed worth hearing. I was, of course, only too glad to oblige, since I practically lived in independently-owned record shops and spent the majority of my meager income on CDs. To some extent, I was the local in-house expert. So when the recording industry began to tank, I managed to patch together a few credible guesses as to why it happened and for what reason, but I didn't have the luxury of a full understanding, the way that only someone on the inside would really know.

Steve Knopper's recent book, Appetite for Self-Destruction: The Spectacular Crash of the Recording Industry in the Digital Age answers most, if not all of my questions. It is a work of interest to even those who are not ravenous audiophiles, since the music industry took such a massive role in the American consciousness, particularly with the rise of rock 'n roll, and since its decline, a massive void has been left that has never really been filled.

Even before reading the book, I had not much in the way of sympathy for the recording industry. Avarice is one of the easier sins to spot and since it is so omnipresent, we are fine-tuned to detect each and every instance. Sometimes we are mistaken, but often we are not. Even a few minutes skimming through the book could provide a tremendous body of evidence for anyone inherently skeptical or openly hostile to capitalism, or at least unregulated capitalism. What I personally found most interesting is just how many times that the recording industry has crashed, only to revive itself, Phoenix-like based on a combination of dumb luck and embracing the future rather than being stubbornly rooted to the tried-and-true.

An additional irony to add to all of this is that the compact disc, which revolutionized the industry and temporarily made it wealthier beyond belief, was very nearly vetoed by suspicious major label executives whose reservations primarily stemmed from the fact that they were unwilling to take a chance on something that wasn't a proven seller. The demise of the industry is a combination of a metaphorical compulsion to kill the goose that laid the golden eggs and an often childish desire to cut off one's nose to spite one's face. In an earlier era, the backlash against Disco brought the industry to its knees, but the invention of MTV and the promotion of Michael Jackson and Thriller removed it from life support and returned it to profitability. A decade or so later, billions upon billions of dollars flowed into the coffers due to the adoption of exploitative profiteering.

By the late 1990s, the record business had boiled down much of the business to a simple formula: 2 good songs + 10 or 12 mediocre songs = 1 $15 CD, meaning billions of dollars in overall sales. Cassettes, too, gradually fell victim to this formula, and were phased out. Attempts to resuscitate the singles market, like the "cassingle" and a shorter version of an album known as the EP, ultimately failed.

"It's no coincidence that the decline of cassettes and the rise of CD burning arose simultaneously," says Steve Gottlieb, president of the independent label TVT Records.

Despite withering criticism and tremendous hostility at first, once the CD became the chosen format, it quickly became a cash cow, and suddenly all the initial reservations were mysteriously cast aside. Music industry execs willfully revised the history of the proceedings and sang hosannas, claiming they had been in favor of this exciting new technological advance all along. But yet again, they never even considered restraint or long-term consequences.

Or, as it is written,

But see, there is joy and revelry, slaughtering of cattle and killing of sheep, eating of meat and drinking of wine! "Let us eat and drink," you say, "for tomorrow we die!"

The perverse are hard to be corrected, and the number of fools is infinite.

In the context of modern capitalism, it would be easy to draw parallels.
Cycles of boom and bust have been our fate over the course of centuries, often for identical reasons. The difference between the recording industry and the major power brokers on Wall Street is that much thought is given to keep the system profitable and stable, since its lasting health is of paramount importance to all with a dog in the fight. This doesn't mean, as we have recently discovered, that the American economy or the Wall Street pirates don't take dumb risks at times or play fast and loose with otherwise sensible strategies, but most of the time it is fortunately not one unforeseen development away from complete meltdown. Part of the shock among many during our latest financial crisis was that the existing framework, designed to prevent another Great Depression, completely collapsed, and with its demise came the discrediting of theories that had stood unchallenged for years and years. Economists will have their theories and counter-theories for years to come, but in this circumstance, how it happened is not nearly as important as the fact that it did.

Any industry reflects in large part its clientele and those under its employ, and musicians don't tend to be the most fiscally conservative bunch, nor the most inclined to restrain their impulses. Record executives often partied as hard as the acts they signed, which often necessitated a desire to keep pumping out inferior product. And it is for this reason that I believe that the industry has only itself to blame. Indeed, if there were a way for us to rip apart any major corporate entity, I would surely advocate for it. This is a bold pronouncement, and I justify it from a moral stance, since the more I read about the way any massive conglomerate functions, the more it makes me want to take a hot shower. As for the recording industry, major movers and shakers acted like low-level mafioso, and none of them comes across the least bit sympathetic or personable. I believe that the demand for certain services will always exist and since necessity is the mother of invention, someone with a good idea will step forward to satisfy a need. In time, the systems proposed by today's enterprising soul will probably grow corrupt, but I see human progress as a constant cycle of building up, revising, tearing down when necessary, and then building up again.

To return to the subject at hand, with the CD boom came excess of all kinds. Major labels hired far more staff than was necessary and in an effort to keep everyone on payroll, they went for the low-hanging fruit in the form of copycat bands. For every original act, ten sound-alikes were signed, purely to bleed dry the record buying public and generate the maximum possible revenue. Profit became more important than discovering new talent and facilitating musical advances. It was this degree of sustained unethical business practice that led frustrated consumers to embrace wholesale file sharing and illegal downloading of music files. Though the industry managed to shut down Napster, Pandora's Box had already been opened and it has never been shut.

To summarize from the book,

Labels were fat and happy, although some executives worried about a market peak. "You have the huge infrastructure of people...on a ton of floors and all of a sudden you're stuck with these huge costs. And its harder to cut people than it is to hire them," says Lyor Cohen, chairman of the Warner Music Group.

"All these companies did was try to find fabricated s**t so they didn't go through having to let people go. Then you go into an era of fabricated, highly promoted, highly advertised stuff--it's very flimsy, it sells quickly, and we're also hurting our credibility with the long term music lover. And then [the fans] go away to college."

Teen pop was one last squeeze of the sponge to get the world to spend millions and millions of dollars on compact discs. It wouldn't last.

As for the music industry, well, Knopper seems to think that it has finally destroyed itself for good. I wouldn't disagree with his conclusion. What I am waiting to see is what means of music dispensation the future will provide. Today we cling to our ubiquitous iPods with the omnipresent white ear buds. If recent history reveals anything, it promises that in the immediate future we'll be using something else altogether. As for the established powers, the industry itself is in a bit of a death spiral, running in a million different directions, desperate to find a Messiah. I admit I do feel pangs of nostalgia at times for the excitement I once felt when looking forward to the latest release by a favorite band and the gratification of buying a CD copy to take home. Still, there's enough of the DIY anarchist left in me that enjoys the ability to focus more on live music and the amateurs who play for the love of it, not for the love of money. I have always been a believer that there is something eternal about art; art always survives. In stating this, I note that I have always believed that it simply isn't compatible with capitalism and never really will be. Some of the most awkward compromises I have ever observed attempt to bridge the gap between the two with minimum success.

When we discuss change in any context we find that its enemy is a system designed to resist, not facilitate reform. I honestly can't think of any gathering or organization off the top of my head whose stated agenda is to eventually pass along the torch to new ideas and new generations. Change we can really believe in is not change in the abstract, rather it is change that is both well said and well done. It may be against human nature to predicate any organized group on the assumption that incorporating new strategies and new plans of action is a matter of course, not just a a good suggestion and an interesting proposal worthy of contemplation. Pushing forward in time rather than stubbornly clinging to the here-and-now is a discomforting notion to some, since we often relish control, and in so doing believe ourselves to be obsolete to some extent the instant when we pass the baton, but it is the only way we will ever accomplish anything worthwhile and lasting.

We as humans are frequently paradoxical creatures, and each of us wishes to leave our mark, to some extent. We prefer edifying experiences, shall we say, in which we might be remembered by subsequent generations and thus find a way to live forever. Here in DC, this is evident by the number of public buildings bearing the name of some elected representative or all around important person. For a time, people might hold close to them the memory of someone who rose to a position of high authority or accomplished something supremely influential, but the passage of time renders that memory fainter and fainter. Eventually, inevitably, most people see merely two proper nouns and a building, not some rich legacy of accomplishment. Our greater accomplishments might not be measured in individual achievement, but in the immeasurable elements that go well beyond personal gratification. The edifying tendency keeps those who have always had power from sharing when it justifiably becomes the duty of a younger generation to take the reins.

We often are confused because our hearts lead us one direction and the world leads us another. The world tells us to put our own selves first and our heart compels us to use our talents and gifts for the betterment of others. Perhaps those things that do not threaten another person, no matter how unintentionally, and cannot be perceived for any reason as a direct challenge to someone else's competitive spirit and personal insecurities are those that truly stand the test of time. The memory of sales figures may fade and so too a lifetime's worth of legislative accomplishment, but a contribution to the ongoing business of finding ways for people to live in peace proves to be immortal. Proposing the means to co-exist based on love and not fear will live on beyond a few paltry decades. Compassion and kindness cannot be commodified or copyrighted, nor should they, else they soon be the domain of the archaeologist.

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