May 1, 2003 12:00 PM

Give Them What They Want

The high-level answer is simple: give consumers what they want. Digital music is all about flexibility, so we have to deliver services that offer more value than the peer-to-peer options—not less. We have to think about music on the Internet as a service, not retail music sales.

Steve Grady
general manager, EMusic.com Inc.

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The Future of Labels
This is the most radical change I'm seen in the music industry in the 33 years I've been in it. Music is losing its prominence as a form of leisure time activity, competing with DVD, video games, 100 channels of cable, etc. plus rampant copying and downloading. The announcement of the closing of almost 300 record stores happened in the first two months of 2003.

In five years, I expect there will still be recorded music for sale, but the number of legitimate, nationally distributed releases will be half what it is today. This will fit with half the number of record retailers that we have today. Probably 40% of the music sold in the USA will be sold at “big box” retailers like Target and Wal-Mart. I imagine the 'majors' will still exist, but there will probably be less than the five we have now. They will all be multimedia conglomerates.

Either DVD-Audio (with 5.1 mixes) or SACD will survive, and there will probably be a fair number of concert or live performance or other sorts of music+video DVDs available.

Many indie labels will cease to exist. Companies like mine (the better-established ones) will survive, but with a smaller number of new releases and much more dependence on direct sales to consumers, mostly online. We'll probably be selling downloads, either ourselves or in conjunction with other labels. Amazon or some entity like it will probably be our Number One retail outlet.

We will cautiously experiment with new technologies, especially if they involve copy protection. I'm not sure surround sound is the future, but there will be interest in it, so we'll probably try some surround mixes, maybe with some video content.

One thing we can be sure of is that there will be less selection of music available to the public than there is now, and the public will have to be more proactive in seeking out what it wants to hear.

Bruce Iglauer
President, Alligator Records

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Value-Added
Well, I wish I had a clue as to what we can do, other than make better records with better songs that people will actually buy. But wouldn't it make sense for the labels to add value to the CDs they're trying to sell for $18 apiece? Like perhaps an automatic entry into a sweepstakes to win tickets to the artist's show, swag or a car or something? Something you can't download or copy.

I believe surround versions of albums could become a substantial market when the hi-fi manufacturers get onboard and put a "music" button on their surround receivers that bypasses any DSP designed to enhance movie soundtracks. Until then, and until the general public gets an explanation of what it is and what gear they need to play it, surround is sure to remain a novelty.

How about nuking Clear Channel? That's sure to help!

Bob Clearmountain
engineer, owner of Mix This!

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Music First
I, for one, am glad to see the industry "die" as we know it.

Everyone's blaming MP3's and downloading music on the Internet, but the reality is the record companies are selling the public mediocre music with bad sound quality, with no artist development to let talent blossom. Record companies don't stand behind the records they sell longer than the first ship date. It's a glut of information the public can't sort through, and if we as an industry won't stand behind what we're selling, can we expect the public to embrace it?

The music business survived cassettes, they'll survive MP3's if it's a business worth keeping alive.

The music business perpetuates a myth of money, sex, drugs and rock ‘n’ roll. Rather than show the dedication required to learn musicianship and engineering skills, promotion and publicity departments center around glamourous images of stardom and how easy it is to attain. Make a party video with lots of handsome guys and girls, become a star.

Manufacturers of recording gear and musical equipment are equally to blame by perpetuating the dream that "even you, the home hobbiest and half-assed “talent" can write a mediocre song, record it at home and with AutoTune and Beat Detective, and it will sound as good as any record you hear on the radio.

Unfortunately, it's true. More and more artists are recording at home to keep budgets down using these same bad recording techniques and quick fixes. It's estimated 35,000 new titles are registered every year with soundscan (and probably another 50,000 new titles without). Our standards have been lowered to accept bad sounding MP3's as a "norm." I can't blame the public for not wanting to buy these CDs either. They sound like bad > MP3's. Too many records with no identity and terrible sound makes a risky purchase for the consumer. It's a vicious cycle.

I do see rays of hope. The Norah Jones record swept the Grammys in every category. This was a record sung with passion, a couple of out-of-tune notes, used real musicians, and was made relatively quickly with a small budget and good marketing ideas. It proved that people will buy records without overproducing and correcting every little beat out of place. It wasn't a record that took two years to make.

Give the public something they can't get free on the Internet, and they will buy. New formats (like SACD and others using 5.1 and larger systems) will require more skills to engineer and produce. Fewer people will have the ability to record at home. Record companies will take greater care in which artists they support in these formats, because it will cost them more money to produce. DVD players have now outsold CD players at a comparable time in history, and there's consumer appetite to be filled.

The larger entertainment machine won't go away too quickly, but as it becomes less profitable and more risky, fewer people will want to be involved. Downsizing will hurt for a while, but those who love music will always find a way to succeed in this business. Distribution networks for music will become more like other industries: fewer revolving doors and returns, fewer products on the market, more focus of marketing a good product over a longer period of time and maybe even the retailer paying for the product in advance as a grocery store buys their products.

Musicians will become more dedicated to their craft and welcome making records that take less time and are more natural. The undercurrent happening in the jam band scene proves that people still love to go and listen to musicians playing music. Even without radio airplay these bands succeed on touring and word of mouth. It's supply and demand. If there's no demand for the music or the musician, then it goes away. Good riddance.

The promise of the Internet is real, even though we've had a temporary setback with the fall of the dotcoms. Once broadband has established itself and larger files can be transmitted, purchasing over the internet will become a reality, whether through subscription services or other marketing devices.

I believe there's an opportunity to make great sounding home theatres or listening rooms fashionable, as it was 20 years ago. But if we as an industry continue to make crap, then there's no incentive to have great-sounding music systems. It's up to us to promote great sound as well and make great-sounding records.

This is not a time for the weak-hearted to be in this business. It's a welcome time for change for those of us who have been waiting for this for so long.

Cookie Marenco
producer, engineer, label owner

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Platforms, Convenience
It's a wired world and the game has changed. Consumers want convenience and the labels needs to stay nimble and proactively create win/win models with emerging content delivery platforms.

Stuart Dubey

Dubeytunes

San Francsico, Calif.

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Music Always
Who says the almighty Music Industry needs saving? Is it just your assumptions or your job or your little corner of it that's under attack? Get over it! The theater has been dying for twice as long as I've been alive, but in recent years, it has been just as vital and fascinating and even profitable as ever. Music (like theater and dance) will always be a part of culture. Don't try to save the industry; try, instead, to serve music.

John Flynn
partner, Timeline Films

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Artistic Control
It will be musicians, if anything, and the revival of local and regional music scenes. Consumers are taking more of an interest in, and supporting acts at, that level. Musicians are taking a more active role in handling their own careers, managing their own business, recording their own art, booking and promoting their own tours. Consumers are fed up with the major-label side of the industry, and many bands have felt let down by the indie label side of the industry. It's only natural that artists are progressively taking more advantage of the newer technologies to produce, distribute and promote their own work.

Brian Herb
Engineer

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Teach Honesty
Education can save the record industry. The record industry should teach the young consumers that the music they steal today will lead to no music being recorded tomorrow. The whole point of mass pop culture is that everyone gets to comment and get in the same groove on the same thing. If there are 200 million Americans listening to 150 million bands, by definition, none of them will achieve critical mass. Therefore, the only thing that will save the record business to educate the consumers about the fact that the critical mass is important enough to pay for.

Peter Fish
composer, principal, Tonic Studio

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Scare Tactics
Refresh my memory (grin) again on why the average-Joe would pay for air, when he can breathe it for free? There is only one way to stop illegal file sharing, period. Fear. By labels anonymously uploading virus-infected-versions of popular tracks. Scary thought, eh? We are not talking brain surgery here, I am quite honestly surprised no has thought of the idea until now.

Luke Eddins
song bounty hunter
LukeHits.com

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Support Live Music
Lower CD prices, Lower ticket prices, Lower artist fees. People who download free music and burn CD's, the money they save MUST be spent on going to hear live music (especially local bands) and when they are at the show, they need to buy loads of merchandise.

Marshall Lamm
Yoshi's at Jack London Square
Oakland, Calif.

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Saved by Technology
The same technology which is currently causing such upheaval in the music industry will be its ultimate salvation. Ultimately, the only thing I'm certain of is that it is the artists who make emotional connections with their audiences who are able to have genuine long term success on their own terms. The developing technologies will simply increase the efficacy in which this type of artists can make and monetize their connections to their constituency. It's a wonderfully exciting time to be working in the music business.

George Howard
Essex Riverworks

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Time For The New School
I think it's a fool's errand to try to "save" the music industry as we know it. The quicker we are to let go the old model, the more active each of us can be in helping to shape the industry's inevitable re-invention. Of course the accepted scapegoat of this whole mess is internet file-sharing. But let me propose a different way of looking at what's happened: In the intense competition for the consumer's time and money, the visual has ecplipsed the aural. Movie grosses are continually setting new records. The entertainment dollar that once might have gone towards music might now go toward a movie ticket, server fees or even a new playstation. In the era of CG animation and theatrical surround sound, it might only be a less technical, more feeling kind of music that can give the consumer something that the movies can't deliver--a resonant soundtrack for their own, very real, life. Obviously, because of the democratizing influence of the internet, even the best of this music will be sold in smaller batches than before. We should get used to that, and find ways either to make our music beat out the visual competition, or to work in harmony with it.

Brad Jones
producer

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What Are We Trying to Save?
I'm not sure the "Music Industry" needs saving. There is a large contingent of independent musicians, labels, studios, college radio and distribution that are doing just fine. Why should we bemoan the death of 4 or 5 companies that have grown so large and ineffective that they have for all intents and purposes outlived their usefullness?

When there are full hour TV shows dedicated to the manufacture of "the next big thing", radio conglomerates that control the majority of US venues, while what seems to be the bulk of radio programming done from a 4 story building in Iowa, who are we trying to save? NARAS (tm)? Sony? Universal? Klear Khannel Kommunications? F*#k 'um. Let 'um die.

What antiquated concerns like the RIAA seem to fail to notice is that many "unsigned" artists are gaining recognition and exposure they so richly deserve because of P2P file sharing. This recognition allows them a 'grass roots fan base' from which they can ply their craft. No, they may not be the next 'Beatles', but they may be the next 'Sparklehorse' if we would stop trying to save the "record industry" and start supporting true artists that are just trying to make a living.

What concerns like the "Grammies" (tm) fail to acknowledge is that the other categories besides the 'televised 8' are the categories that embody the real music industry (OK, the "engineering categories" are a bit lame... but hey, that's why there are the "TEC Awards" (tm) [oh gee sorry, were those your shoes I just puked on? ...send me the cleaning bill]).

In the days when most of us in this "industry" were barely a concept, independent labels grew the music that would be the backdrop of several countercultures. It was independent studios, whose clients' were independent record labels that made music that was great and exciting. They brought us the music that shaped several generations, unfortunately those generations have refused to let go of the power structure they created as a 'counterculture'.

While I fondly recall High School days scrounging for Led Zeppelin and Rolling Stones tickets, it sickens me to hear Led Zeppelin blasting during a party my neighbors kids' are having while the neighbors are away. It repulses me that a pair of floor seats for a Rolling Stones show on the 40 yd. line in a football stadium cost more than most 'second engineers' make in a week. That's just wrong.

The original pioneering and independent spirit has never left the music industry. There are studios like "Electrical Audio" in Chicago, and "Big Blue Meenie" in Jersey City, NJ and a thousand like them that bring us new and exciting music every day. Studios, that are owned and operated by "small time" sole proprietors are not only prospering, but bringing us the backdrop for my children's generation. There are a myriad of pioneering artist with true vision (and like every generation, a myriad who totally suck). When artist's like 'The Black Eyed Snakes' can't be found on commercial radio with a Geiger counter? Burn it down and start again.

There are a whole slew of artists that have found a voice. There are clubs that are packed, "all ages" shows with band upon band that will never be bigger than "Styx", but these artists have found a way to make a living by doing nothing more than playing and recording music. They just haven't found "mass public appeal", they haven't found proper "corporate sponsorship", but they have found an audience. That audience has had to look a little deeper, dig a little harder, and be a bit more dedicated to sifting through the rubbish than the audiences of my generation... but they're out there.

Fletcher
Mercenary Audio

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Harness the Genie
Rumors of the demise of the music industry are greatly exaggerated. That is if you count the number of songs being traded and downloaded in the overall numbers as a measure of health. Record sales were down another 10% in 2002, while overall music consumption was up by as much as 20%.

Demand is well, sales continue to slip. Any high school student could tell you from these two simple numbers that the music industry is selling the wrong product, delivering it badly or pricing it incorrectly. The answer: all of the above.

As an industry, we have to bring value back to music or inevitably follow the same track as the railroad companies who also failed to recognize the exact same issues. The difference is that I don’t see Congress paying to prop this one up.

The core product has to improve – it cannot all be blamed on Kazaa. It’s time to place less reliance on designing songs and signing artists that can provide good call out research in the first month at radio. We need to go back to building a foundation of true A&R and artist development and long-term marketing; where careers are built over time. Commercial music has become a crap shoot limited to those players who can afford the minimum bet. This has to change or change will be forced upon us. It already is.

We also need to deliver value for money. Why would anyone put out $17.98 for something they can get for free when one can spend less on a Harry Potter DVD that offers better entertainment, six hours of bonus features and a game? We are competing for limited entertainment dollars and losing. Most retailers are giving progressively greater shelf space to DVD movies – there’s a reason for that.

Earlier this year I bought Bruce Springsteen’s “The Rising” for $4.99 at a major retailer on the day it came out. There’s a reason for that also.

A bright note on the horizon is the advent of DVD Audio. Although in its early stages we have a format that delivers stunning5.1surround sound at much higher quality than a CD. Not only that but a typical DVD Audio disc can have the “making of the record,” “artist commentary,” “deleted songs,” Web links and all of the features that have made the format for movies such a resounding success. Imagine having a record that feels as though the artist is in your living room or car and also being able to listen to the band as they talk you through what the lyrics mean. DVD Audio plays on all of the 80 million or so DVD players sold so far and also in your computer or on an Xbox or PS2 so there’s no new player to buy. Oh – it also can’t be copied.

Here’s a slightly controversial thought – how about making a DVD Audio disc that has all of the high-resolution 5.1 surround sound, compelling bonus features, has a hybrid CD layer for those who don’t have DVD in the car or in their boom box, and also contains MP3 versions of some of the music that you can legitimately rip and share for free? Why fight peer to peer networking and play into the image of the “big, greedy industry” that tries to shut down your favorite Web site – the genie is out of the bottle and it isn’t going back. We should harness it instead – can you think of a more powerful marketing tool?

This to me is something that reeks of value and could potentially revitalize every area of our industry – from the mixing studio to the retail register.

John Trickett
President
5.1 Entertainment

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It’s All About The Art
Norah Jones and the Dixie Chicks have just exemplified the best solution to many of our problems. Great, unique artists and music. The business side will adapt to market forces.

Luke Lewis
chairman, Universal Music Nashville

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