Tuesday, November 27, 2007

Music Biz Still Hemorrhaging From Deadly Self-Inflicted Wound

Former Reprise Records prezzie Howie Klein has a post, How To Destroy A Profitable Industry, over at his wonderful Down With Tyranny. It's his response to this New Yorker piece describing backward Universal Music honcho Doug Morris' ineptitude in dealing with the introduction of MP3 technology almost a decade ago. Howie mentions a key aspect of this equation a key that deserves elaboration. By hemming and hawing (and suing rather than embracing MP3s, record companies alienated an entire generation of young music fans. This is important particularly since teenage consumers traditionally spend a large part of their disposable income on music. At this time they also tend to establish specific buyer behavior that may last at lifetime.

One again the Luddite old school record company presidents foolishly believed that they could bend the marketplace to their will instead of pro-actively responding to the marketplace's demands. The result is a whole generation of music buyers with a deeply ingrained belief that they should always get their music for free. Furthermore, they believe that by not paying for this product, they are striking a blow against the evil, greedy music biz establishment. The same corporate forces that had been suing people just like them.

Once the record companies finally surrendered it was too late. The music industry's belated demand to charge the consumer for mp3s was akin to locking the barn door after the cow was stolen. To make matters worse, they've been spectacularly unsuccessful in convincing these music fans as to why they should pay for music. Just telling people that it's stealing doesn't cut it.

The extent to which this fandango has negatively impacted recording artists has been largely and typically ignored. Without going into mind-numbing specifics, the wholesale distribution of "free" MP3s makes it exponentially harder for musicians to make a living. Any directly related reduction in sales further limits artists' leverage with their record co. as well as the music industry at large. This affects everything from recording budgets, tour plans and radio airplay. These factors may force musicians to compromise their artistic vision in ways hitherto unthought-of of. Thus discouraged an artist could feel compelled to cut their career short before its time.

Wholesale sharing of free downloads can be murder to a developing artist. It can wreak havoc on a new release by an established artist too. A few years back I worked with an artist whose intricate marketing plan was sabotaged by a college kid who somehow got his hands on an advance copy. 125,000 downloads later we were forced to release the album's six weeks earlier than planned. We had to forgo some important set up in the process. This cost us a good third of our projected sales before this album's new street date. Once the album was in stores the lost six weeks of marketing setup cost us dearly too as it's impact was lessened considerably.