Dirty Little Secrets of the Record Business is an analysis of the economic and cultural forces affecting the marketing of music and how the industry has always responded in a dysfunctional and short-sighted manner to those changes. The book ends with an acknowledgment that the music industry is enduring a rebirth and that although no one can predict what the new world of music will look like, we can at least be assured of its continued existence.
The author is a 30-year veteran of the music business and writes in the disappointed tone of a family member who can’t quite grok watching a self-destructive relative implode through bad choices. He states that the issue is not that music sucks but that the music you hear through typical media outlets is, for the most part, homogeneous and dull.
Music has been a commodity for thousands of years, so the concept of making money from the creation, performance, and distribution of music is not a new one. The record industry itself, however, has never been terribly artist-friendly. Many of the great musicians on the Chess jazz label, for example, actually owed money to their label at the end of their careers! We’re talking Etta James and Bo Diddley here. Rock and rap labels were not much more forthcoming with their artists. Apparently, no one told the musicians that the piles of coke in their dressing rooms and the limo ride to the Grammys came out of the band’s royalties. Bordowitz points out that you can hardly blame the labels: they are businesses and thus the bottom line supersedes love of music in this industry where the major players are publicly owned and thus responsible for favorable quarterly reports to their shareholders.
The book contains an in-depth and business-oriented analysis of the corporate aspect of the music business: the mergers (there are only four major labels now), the basic structure of a band’s management, A&R, and promotion (all of these people have to be paid!), and the emphasis of video in marketing. The latter is interesting: artists such as Milli Vanilli and Ashlee Simpson being caught with their pants down, lip-syncing… but who cares? They look good on camera! The major labels use voice manipulation to remedy problems created by artists who can’t sing as good as they look.
As margins shrink and the audience’s entertainment dollar is increasingly fragmented, the larger companies become increasingly risk-adverse, thus perpetuating the cycle of all bands sounding the same. For example, in the 80s, REM blew up out of Athens, GA. So the labels sent A&R people to Athens to sign anyone else who sounded similar. The same thing happened in 90s Seattle with grunge. Now, it is artists who are popular on Radio Disney. The major labels have either completely dispensed with artist development, or cherry-pick those who have already been developed by independent labels. The author laments that Bruce Springsteen would have been dropped in today’s quick-buck climate.
Bordowitz is particularly disappointed with the record business‘ prideful responses to a recent challenge to its financial hegemony: file sharing. Although one study shows that 70% of those who illegally downloaded music went on to purchase the CD, the industry has attacked these (mostly) young people by slapping fines on them, upwards of several thousand dollars. These downloaders are music fans. Can you imagine if another industry behaved like this? If people who sold apples attacked and fined customers who liked, say, apple sauce? Ridiculous.
Other changes in the music business landscape are the centralization (and attendant risk-adverse behavior) of terrestrial radio, the advent of internet and satellite radio, the disappearing distribution outlets replaced by the overweening and arch-conservative influence of Wal-Mart, and I-Pods and their clones.
The changing demographics of the audience are discussed as well. The majors typically aim their marketing at the 12 – 25 year old group, but these consumers spend their entertainment dollar also on video games, cell phones, DVDs, etc. Each of these products gives the perception of hours more entertainment than purchasing a CD. Additionally, with the decline in art and music funding in schools, this group has little or no exposure to anything other than what the popular media offers it. On the other end of the spectrum lies the 30 – 56 year old demographic. These consumers still purchases CDs but are not as easy to compartmentalize as their younger counterparts. Their tastes are broader and more sophisticated. However, when 5% of the new releases each year actually make a profit – and thus support the release and distribution of the other 95% — one can see why the majors would focus on a blockbuster sale to their younger customers.
Bordowitz sees a sustainable model for the music industry in the book business, where companies can sustain themselves with sales of 30-40,000 copies and an occasional bestseller. Smaller runs and the company breaks even. Of course, this is not as sexy as the current high roller adventure of the music business and there are still issues of the changing technology. This is the author’s suggested model for the future, but even he, with his seasoned experience in the business from artists to label to management to production, cannot predict what will happen next.
This book would make a great text for a Business of Music class… or would that perpetuate the problem? Certainly, musicians should read this. Know thy enemy!
Written by Hank Bordowitz
For more education on careers in the music industry, check out: http://www.music-career-guide.com
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