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A Fine Mess

“There must be some way out of here,” said the joker to the thief “There’s too much confusion, I can’t get no relief…”
— Bob Dylan, “All Along the Watchtower”

The popular music industry has become astoundingly big over the past couple of decades, pervading nearly every aspect of society in some way. The entertainment landscape is littered with thriving companies big and small that are connected either directly or tangentially to the music business, and that employ hundreds of thousands of people. Look at the current Billboard album chart and you’ll find one album after another that’s selling in the millions, with new ones bulleting upwards, bubbling under, ready to explode to a mass audience any day now. Magazines and television programs are filled with glowing hype about singers and bands of every stripe: Has there ever been a bigger celebrity culture in this country? Rock and hip-hop stars are the new entertainment royalty, like the film stars of yesteryear. Isn’t it wonderful?

Well, yes…and no. Under the glittering veneer, there is a darker story emerging — about Trouble, with a capital T, right here in River City. It’s a story about people losing jobs, companies folding left and right, and the bedrock of the music industry turning into quicksand. It’s a story about greed, ineptitude and a changing of the guard — a new world order in the industry. There’s been plenty of name-calling and finger-pointing, as everyone tries to figure out what’s really going on, who the players are, what the game is and what it all means in the grand scheme of things. Life would be so much simpler if we could all just be Oliver Hardy — you know, the chubby half of the ’30s comedy team of Laurel & Hardy — and frown disapprovingly and stick a plump finger in Stan Laurel’s chest and say, “Well, Stanley, this is a fine mess you’ve gotten us into.” And Stan would sort of squeak and cry and nervously play with his tie, but with the blame applied, we could feel better about the situation and ourselves. But, of course, it’s much more complicated than that…


The issue that has nearly everyone in the music industry in a lather, fretting and sweating like some scared character in an R. Crumb comic, is the proliferation of Internet “file-sharing” sites, which have made literally millions of songs available to music fans for free, without regard to such niceties as paying royalties to musicians, songwriters and record companies. Strictly speaking, most of the file-sharing that goes on over the Web is not “piracy,” because 99% of the time, no money exchanges hands. Anonymous folks upload digital files to a site; anonymous folks download the files to their computers and then either transfer them to CD, carry ‘em around on MP3 players, or just listen on computer while they Instant Message or play video games. However, it ispiracy, inasmuch as many people now view the free Internet swapping sites as their primary outlet for obtaining new music, and money they might have spent on CDs is being “stolen” out of the pockets of the rightful recipients of their entertainment dollars. (Of course, there’s no telling how many people would buy much of the music they currently get for free off the Web, but there’s no doubt that billions of dollars are being drained out of the music industry every year by this practice.)

It turns out that the rise of digital technology has been a double-edged sword. On the one hand, it led to the development of the great cash cow of the ’80s and ’90s, the compact disc. But all those lovely little ones and zeros that make up the digital bitstream also allowed music to find its way to every corner of the Internet faster than you can say “Napster,” and to be reproduced on millions of bootleg compact discs spanning the globe. (Actual CD piracy is especially a problem in Asia, Africa and Eastern Europe, where there are not as many home computers; otherwise the bootleggers there would be suffering just like the record companies here!)

“We didn’t understand what the unexpected consequences of moving into the digital domain would be,” one record company executive candidly told me. “We thought we were doing this great thing of improving the sound and being able to make perfect copies and all that, and we just did not understand that we had crossed a line that meant we could never go backward. That’s the realization that is finally dawning on the record companies — there’s no turning back. As long as we were in the analog domain, we had an advantage in the marketplace, but now we don’t. As soon as we made it possible for things to be transmitted over the Internet and for copies to be pretty good or perfect, we could never go back.”

Many people who work in the audio industry were initially skeptical that the public would tolerate the at-times mediocre sound that Internet music files offered. After all, weren’t we always striving headlong for higher bit rates and better sound? But, horror of horrors, for many consumers, especially young ones “raised” on the squashed sonics of computer audio (not to mention MTV), MP3 is fine. There is a precedent for this, too: Think for a moment about the success of cassettes, a medium that was undeniably inferior to vinyl records sonically, but which had the distinct advantage of convenience and portability. As my record company source noted, “I remember having conversations 20 years ago with the head of production [at my label] when they were busy trying to develop a better-sounding cassette, and he said, ‘I don’t understand this. Why are we developing a better cassette? Have you seen how people treat their cassettes? They throw them under the seats of their cars. They leave them in the sun. The cassette is the thing that people abuse.’ And he’s right. For most people the cassette was good enough, and you can say the same thing about music on the Internet.”

For those of us who believe that artists and record companies should be paid for the fruits of their labor (and investment), it’s difficult to accept the notion that Internet file-swapping is here to stay, yet that appears to be the case. No lawsuit filed in Santa Monica Superior Court is going to stop the shadow companies based in untouchable foreign capitals, obscure Pacific archipelagos and ever-shifting U.S. offices and make them disappear overnight. No harangue from the RIAA or the Recording Academy is going to stop it. Occasionally, you hear the specious argument that Britney and Nelly and Eminem don’t need the money they might lose to the Internet services; sort of the Robin Hood argument. But that doesn’t make it either legally or morally right, and it does not address the very real needs of the thousands of less fortunate artists and songwriters who are losing potential income online. There are always more musicians and songwriters living on the edge of poverty than in the lap of luxury, and they have fewer options for other revenue sources than today’s most popular performers.


Even those who decry the state of affairs on the Internet seem to agree about one thing: Compact discs are too expensive, and that fact has aided the proliferation of online music sharing. When compact discs were introduced in the early ’80s, they were priced several dollars more than vinyl discs because, we were told at the time, there were only a couple of plants worldwide equipped to manufacture the discs, and because the packaging (remember the bulky “longbox”?) had required factories to retool. The record companies trotted out the figures to back up their claims; at the same time, they assured us that the price of CDs would drop as more plants were built.

But guess what? The price never did go down. The CD became an enormous success, embraced by all but a few vinyl junkies and anti-digital audio cranks. After a relatively brief period of really harsh-sounding new albums and bad-sounding remastering jobs (ever hear the first Born to Run CD? Yuck!), engineers learned to work with the new medium and a wave of magnificent recordings paved the way for a true digital revolution. And by the time CD players started turning up in new cars, the war was over: Vinyl was dead, and the cassette had been mortally wounded. Now all that remained was for us all to re-buy our entire record collection. And the record companies cleaned up, because not only did they make obscene amounts of money on new compact discs, which became cheaper to manufacture with each passing year, they cashed in because we had to have that CD version of Hendrix’s Electric Ladyland. (Wow! Four vinyl sides on one compact disc!) And then there was the remastered version made from the original masters instead of the bogus copies they never told us were copies of the masters, and then — what’s this? — the new higher bit-rate version authorized by engineer Eddie Kramer himself!

Now, consumers were not the only people to get the shaft in this arrangement. It wasn’t long before artists realized that the record companies were suddenly achieving profit margins worthy of a scheming oil company, and many succeeded in restructuring their deals to give them more of the compact disc profit pie. Prices continued to rise during the ’90s, and there was grumbling among the public at large, but it wasn’t until computer manufacturers began to routinely include a CD burner as part of home computer packages that people began to openly revolt. After all, the price of blank media kept moving south, and it was obvious that the record companies could get them even more cheaply than consumers, so why is that new Sting CD carrying an $18.98 list price? Increasingly, people borrowed CDs from friends and burned their own, or bought used copies, or went online to find the songs they wanted.

The last couple of years marked the rise of DVD-Video — visuals and good sound (including surround!) andlonger playing time for either movies or music/concert videos — often priced below what a conventional CD costs, and all of a sudden the compact disc looks even more like a big rip-off.


It’s hard to feel very sorry for the major record companies in all this. They’re still making money — heaps of it. Album sales may have “trended down” (to use a particularly odious bit of corporate-speak) the past couple of years because of factors discussed above, but there are still more multi-Platinum artists today than there were 20 and 30 years ago, and there are more albums in general being sold today than during the so-called Golden Age of the record companies (late ’60s through the early ’80s). Meanwhile, companies are running much leaner and meaner, and many labels have disappeared completely, as labels have been swallowed up by larger companies, leaving many an artist with broken contracts and shattered dreams. With a few exceptions, “artist development” has become a cruel oxymoron at the major labels. More common is for labels to drop acts that don’t show some commercial clout right away. Can you imagine if Bruce Springsteen was coming up in today’s record business climate? He probably would have been dropped after his second album, The Wild, The Innocent and the E Street Shuffle.

Record companies have always depended on cashing in on the latest musical trends to make their enormous profits, and nothing has changed in that regard. This business has always been both fickle and cyclical. Right now, we’re in a period in which both country music and “urban” music (that’s African American artists, plus Eminem) are topping the charts, with a little residue from the great teen pop wave of two years ago still in the mix. But it wasn’t that long ago that anyone who wore a flannel shirt and could claim some connection to the Seattle grunge scene was being signed and selling a lot of records, and before that there were the synth-driven “haircut” bands, and before that the new wave and disco and every flavor-of-the-moment that preceded that, all the way back to the Fab Four, which is when all hell first really broke loose in the record industry. The difference between 15, 20, 25 years ago and today is that the big record companies used to have large, dedicated A&R staffs that went out of their way to find exceptional talent across a broad spectrum of musical styles, and were always looking to anticipate trends, rather than reacting to whatever was popular and then scrambling to find a way to grab a part of the trend-dollar. The other thing that has changed is that as the major labels have been gobbled up by larger corporate entities, there has been more pressure on them to make larger and larger profits to feed the über-company’s bottom line. As a result, fewer chances — both artistic and financial — are taken all along the line. The CEO of AOL Time Warner does not care whether this or that artist has great potential; it’s “Why is that record division not meeting its profit goals? Fix it!” And suddenly there’s a slashing of the artist roster, a purging of middle managers and an increasingly frantic determination to sign artists who can quickly make money for the company.

Add to this the ’90s phenomenon — evidently lifted from that paragon of fiscal ineptitude, professional sports — of major record companies trying to lock up artists to ridiculously extravagant long-term contracts, and then plunging even deeper into potential debt by letting their marquee artists run their own “custom” vanity labels, and you have a further recipe for financial disaster. How many great artists could have been signed and recorded for the $30 million dollar buyout Mariah Carey received as a severance package, when she was released from her original deal? And you wonder why CD prices are so high…


Our own little corner of the universe — the professional audio industry — has been hugely affected by both the digital revolution and the changing fortunes of the record industry. The rise of digital technology has been both a boon and a bummer. On the one hand, it has brought a number of new products and manufacturers onto the scene, ranging from makers of computer plug-ins to expensive all-digital recording consoles. The analog vs. digital debate that has been fought out in the pages of Mix and in recording studios all over the world for the past two decades has done nothing to slow the proliferation of new digital technology, but it has also had the unexpected effect of spurring other areas of analog product development, from preamps to compressors to digitally controlled analog consoles. And, of course, the supposed “coldness” of digital sound — more an argument 10 and 15 years ago than today — has fed the entire retrosonic movement that worships vintage microphones, compressors, limiters and preamps, and has led to the resurrection of several pieces of classic gear.

The ascension of budget-priced modular digital multitracks occurred at a point in history when conventional recording studios were already beginning to be supplanted by home studios stuffed with decent-sounding, easy-to-use semi-pro equipment. This affected midline studios the most, as now nearly anyone could make a reasonably good demo at home, and many musicians found that using inexpensive MDMs in creative ways — perhaps adding just a good mic or two; maybe a high-quality rented preamp — let them do more at home than had ever been possible before. High-end studios continued to offer professional equipment and unsurpassed recording spaces, but most of those facilities had to accept the inevitable and offer MDMs to musicians who couldn’t afford the higher rates that better-sounding two-inch tape demanded. The situation has only been compounded by the runaway success of Pro Tools and other computer-based recording and editing systems, which have been embraced by home recordists and top studios alike, and which have effectively changed the economics of professional recording for the time being.

While the price of some recording equipment has fallen over the years, top- of-the-line consoles, microphone and outboard gear is still quite expensive, and both studio construction and labor costs have gone up significantly. Studios are expected to keep up with the latest shifts in technology to stay competitive. Yet, across the board, studio rates have remained stagnant or even dropped because of intense competition from home studios and other commercial facilities. At the same time, recording budgets have absolutely plummeted in recent years — the days of the six-month studio lockout are long gone (for all except the first-tier artist), and extreme budget consciousness has seeped into every facet of the recording process. Just the other day, I was visiting a top studio and asked whether a certain well-known producer still had his private workspace there. “No, when his budgets disappeared he had to find a cheaper warehouse space to set up in,” was the melancholy reply. This is happening all over the country, as record labels find that cutting production costs by shaving time off a project, using cheaper materials and paying desperate studios, producers and engineers below-rate-card fees, is a quick, easy way to save money for their corporate overlords — even if it’s at the expense of the quality of the project.


Just as there has been a huge amount of corporate consolidation and attendant fiscal conservatism in the record industry, the radio airwaves are also controlled by fewer and fewer major players, and one — Clear Channel Entertainment — has become so dominant in many of the top 25 markets, that its main competition is often with itself. This is what media deregulation has wrought, and you might very well believe that this represents a great triumph for the free enterprise system, but the fact is this is very bad for the music industry. Any time there is a move toward greater standardization and homogenization of radio formats — an inevitable by-product of corporate centralization — it is bad for artists and record companies, because play lists inevitably become narrower and less flexible, which means fewer records are making it onto the air.

Radio has always been a tough nut to crack — an unpredictable and at times cruel monster, devoid of memory or loyalty, fractured into hundreds of tight formats that keep changing their own requirements for entry. But radio is still the single most important medium for selling CDs (although landing a video on MTV’s TRL sure gives a disc a pretty good boost, too). The trick for record companies is to match their artists to the appropriate station format(s) in each market; find programmers who are willing to take a chance on new artists (or in the case of more established or “classic” artists, to play their newer music instead of their 30-year-old hits — no easy task); and then hope that other stations will follow the risk-takers and give their discs some exposure. No matter what the format, the majority of stations around the country will wait for some sign that a song is “happening” in some major market before they add it to their play list, but even the hippest commercial stations are under tremendous pressure to “guess right.” And they are much more likely to yank a song from their rotation if it doesn’t get a quick response than they were during the halcyon days of progressive FM radio, when DJs were allowed to go deeper onto an album than the predetermined “focus” track. At least the major labels have the promotional machinery in place to bring multiple tracks from the same album to radio over a period of several months — if they think it’s worth the money and effort to do so. But pity the tiny independents who have neither the clout nor the de facto payola (whatever the current currency) to go beyond a simple, expensive first mailing of a CD to hundreds of radio outlets already deluged by “product.”


It was just a few years ago that a friend in the industry joked, “Some day we’re all going to work for Clear Channel.” He wasn’t kidding. Not only does the mega-corporation own more than 1,200 radio outlets and 39 television stations in the U.S., it also owns dozens of live entertainment venues of varying sizes (as well as three quarters of a million outdoor advertising display sites of all types, but that’s another story). Through the aggressive acquisition of various production companies around the country, Clear Channel has also become one of the leading tour promoters in the world, which means it can place tours in its own venues and then promote shows locally and nationally on its own radio stations: What a sweet deal (for them)!

Even before the emergence of Clear Channel as the capo di tutti capi in the touring music industry, concert ticket prices were escalating rapidly, thanks in part to groups such as The Eagles and Fleetwood Mac, whose exorbitant demands on their reunion tours in the mid-’90s forced promoters to charge more for tickets — and people eagerly paid the high prices. The Eagles getting $75 a seat opened the floodgates for other popular bands, and now we have yuppies in $300 seats at Rolling Stones shows, U2 tickets near the back of hockey arenas for $150, and decent seats for most major arena and stadium concerts hovering at somewhere between $75 and $100. No wonder so many tours are playing to way under capacity houses — the greed of bands, managers, promoters and, perhaps most villainous of all, the ticket services, has turned concert-going into an elitist entertainment available only to the well-heeled; sort of like what opera has become, except on a grander scale. In retrospect, it seems almost comical that rock impresario Bill Graham originally closed the Fillmore East and Fillmore West in the early ’70s because of what he claimed was the unchecked avarice of everyone in the live music chain; why, he was going to have to charge $7.00 a ticket!

While it is true that the economics of touring have changed significantly in recent years, with travel and lodging becoming more expensive and the record companies increasingly reluctant to support “showcase” tours (i.e., tours to gain exposure, not to make money), the tight control of a few monopoly companies, such as Clear Channel and Ticketmaster, has only made the situation worse, as there is no longer serious competition in most major markets, so pricing structures cannot be effectively countered or challenged. When you’re basically the only game in town (or the country) you can make up your own rules, and that is precisely what’s happening.


So, those are a few of the problem areas that have music industry people wringing their hands and running for cover from what they perceive as a falling sky. They’re serious and they’re real.

But the good news is that this is an industry filled with bright, resourceful people who are capable of figuring out ways to extricate us from this depressing swamp. We’re all in branches of this business because we love music and we’re inspired by the boundless energy and imagination of musicians, and by the thousands of behind-the-scenes support personnel — technicians, engineers, roadies, secretaries, etc. — who keep the starmaking machinery running smoothly. It is incumbent on all of us to come up with practical solutions to our common woes, and that is partly what this special issue of Mix is all about.

Join us as we explore many of these issues in greater detail and, hopefully, shed some light on some of the technologies, people and companies that are successfully adjusting to the new economic realities of the music industry, and in the process changing long-established paradigms and rewriting the roadmap to the future. Yes, the Internet can be your friend. Studios will survive. You can still make a living in this industry. But it’s time to think and act boldly and creatively, or be swept into the dustbin of history like your old collection of 45s.