The future of the music industry is sketchy at best. While we have enjoyed popular music for more than 50 years you wonder for how long it can go re-inventing itself, playing what are basically the same set of notes and being able to develop new and exciting talent.
Over time we have seen the re-emergence of genres such as Ska and Punk and a multitude of variations on dance and rock themes but just how long can it continue doing so?
For many years the process of buying music remained the same. It consisted of either a single (7″ or 10″) and the long-player album (LP). Then new formats emerged such as tape and cassette and collectors items such as the 12″ remix and picture discs. This form of line extension and marketing kept the record company profits up and hungry fans lapped it up.
As the 80s progressed the CD and videos were introduced and the music buying public felt obliged to buy replacements for their vinyl in a crackle free format.
Subsequent attempts to sell to us further with digital audio tape (DAT) and mini-disc ultimately failed and it soon became clear that we were reaching saturation point. Having said this, sales still remained steady as fans continued to follow stadium acts such as Madonna, Michael Jackson and the Rolling Stones in huge numbers.
Throughout this period there was always an issue of pirate material with music industry claims that ‘home taping is killing music’. Basically blank tapes were being used to record songs and albums without the need to pay for the privilege of hearing it.
As the world moved into the digital age a whole new set of issues appeared. While pirate tapes were a problem the record companies knew that they could stay one step ahead as long as they held definitive, high-quality version of material but that all changed with the advent of the CD-R or recordable, blank CD.
This was a real problem because if there was no difference in quality in a recording from the original and the computer created counterpart, what was the point of paying high prices for the real album?
To combat this the record companies used Internet sites to host their material for sale where consumers could download songs legally directly onto their computer via sites such as iTunes.
In general terms this was a good thing that allowed the consumer the power to choose what they listened to but this only highlighted yet another problem.
How many of us have bought an album in the past where we only liked two or three songs? For whatever reason the rest of the songs are rarely played but the purchase price does not take that into account. Whether we liked it or not, we paid for the lot.
This is the trouble with buying albums on release because we can never be quite sure what we are going to get. The iTunes site, however, allows us preview songs for 30 seconds so that we can more accurately judge whether we want to buy the full set or cherry pick the best songs.
Once upon a time a record label could accurately project its earnings based on previous album sales, chart placings and merchandise earnings. Today they are a very nervous bunch. They used to deal in whole units but now its fractions with each track having its own value.
What about the artist? How does this all affect them? Well, it is obviously in their best interest to make the album as good as it can be and not resort to filler material but there’s more to it than that and it is this aspect that is sending ripples throughout the whole music industry.
If an album is inconsistent or an all out disaster, a label will have an almost impossible to job to recoup its expenditure. Listeners only purchasing three or four songs will only make about $5-6 when a complete unit will bank around $20. It is in this climate whereby music legends such as Annie Lennox are being dropped by their record company, in this case, Sony BMG.
A star of Ms Lennox’s caliber will require a certain level of financing that cannot be maintained if sales no longer match their stature. This doesn’t necessarily mean that she isn’t making great music but that tastes and the needs of the purchaser are changing.
As far back as 2001 Mariah Carey was dropped by EMI Virgin despite only recently signing a five album deal worth a reputed $100m. The first album of which, ‘Glitter’, sold just two million copies worldwide compared to the 20 million of her earlier ‘Music Box’ release. It’s worth remembering that digital downloading was still in its infancy back then so the risks are even greater today.
The mega-buck music deals now appear to be a thing of the past. The life-span of the artist is becoming ever shorter and as profits are squeezed by choosy consumers, the record companies still have to contend with those pesky illegal downloads.
As fans exploit the hazy legal loophole of making unavailable material available to share and download, it has forced the labels to re-examine its back catalogs and to re-issue old material in collectors’ box-sets. It was once seen as not financially viable to release deleted albums but it is clear that a demand does exist so rare tracks can now help claw back some of the labels lost revenues.
While I welcome the freedom of choice and convenience of iTunes I lament the fact that design and artwork costs are seen as expendable. Part of the music buying experience was always for the sleeve design and now that has been taken away, this anonymizes the artist still further.
In age where image is supposed to be everything, this is very strange. There are very few band members I would recognize past the lead singer these days which is I feel a very sad indictment of the industry as a whole.
There will always be a music industry but it is going to have to look very hard at how it develops existing and future acts if it is going to have any chance of recreate the profit margins of the past.