The Day The Music Died

It used to be the goal of every performer to sign with a record label. Times have changed.

Album sales are currently in freefall all over the world. The 10% drop in the UK over the past year is dwarfed by a 15% slide in the US, 25% in France and a whopping 35% in Canada. The bankruptcy this summer of the CD retail chain Fopp, HMV’s announcement that its profits halved in the first six months of this year and Richard Branson’s recent decision to dump the Virgin Megastores – which have reportedly lost him more than £50m in 2007 – are only the most visible signs of a crisis that has rocked the music industry on its axis.

The point isn’t just that people are buying fewer CDs; they are paying as much as two-thirds less in real terms today for the music they listen to on their iPods than they used to when the compact disc first took over the market. Twenty years ago a chart CD cost about £14. Today you can buy the same in a super-market for £9.

The online market may have grown recently, but not enough to fix the hole. Here, too, margins have shrunk. A download of a single track now costs 79p against the £4 a CD single cost in 1999.

The internet is changing the world in many ways. This is just one of them. These days, new talent is crazy to sign with a label. It’s often not worth the trouble .  In a way, this makes the playing field more level. Certainly, if artists can succeed, they will do much better not having a record label stealing all their profits, as they have for so many artists in the past.

For a long time now, artists have made most of their money from concert sales and merchandising. Expect that to be a continuing trend with a new emphasis on finding other ways to market a band.

Though I haven’t been in a record store in years ( I used to go to one every week back in the day), it’ skind of sad to see them go. But time marches on and the future is an unpredictable thing. I suspect the internet will change the world in many other unforseen ways in due time. 

I don’t see record stores nowadays, either.

What exists are used CD outlets and multimedia stores like FYE (which will probably go out of business in the near future), Best Buy, and Circuit City.

The former two will probably have to reinvent their CD section if they intend to keep it, too.  They can’t keep devoting large sections to product that isn’t selling and helping to pay their electric and leasing bills or they’ll end like Toys ‘R Us—a large warehouse of goods not selling that just isn’t worth its real estate space.

While I don’t forsee music COMPLETELY disappearing from stores, I don’t think we’ll see dedicated record stores/chains ever reappear again.  Selection across multiple genres will, unfortunately, continue to shrink.  I’m more of a classical/symphonic music guy myself (think opera, symphonic orchestra scores for movies, etc.) and I certainly can’t get my fix for that stuff at Wal-Mart, either!

I know people talk about downloading killing record sales, but personally I’ve never been crazy about mp3s, period.  Quality just isn’t that good. 

What killed CD buys for me is A) poor quality of available new product and modern pop music since the early 1990s; B) corporate marketing and promotion of marginal talent and overly obnoxious little boys, girls, and gangster thugs; and C) too high of prices on individual CDs.  $18.99 MSRP for a single CD is ridiculously overpriced when I can often get feature film DVDs for less than that in their first week of release!  Unlike feature films, you rarely see year-old CDs get marked down anything like 33%-50% off, too.

Poorly-run businesses with substandard product generally don’t survive well as niches when the top talent and execs all try to live as multimilllionaires.

I’ve often wondered HOW the comic book industry has survived with its head cut off like a chicken for decades.  I guess we’ll see how that plays out on a larger scale with the music industry.

Posted by  on  10/08  at  06:27 AM

Comics have survived because of die hard fans. And licensing money. But talk about an industry that’s clueless on how to run their business!

And, yeah, the mark up on CDs is absurd. You do see some places selling them for $7. But I won’t be surprised when Best Buy, et al stop carrying them, or cutting way back on their store space.

Posted by  on  10/08  at  08:51 AM

There are a few success stories out there, such as the classical company Naxos.  They simply licensed recordings from lesser-known orchestras playing lesser-known pieces and sold the CDs for $7 or less.  Result: enormous success.  The blunt fact was that classical listeners were not interested in yet another performance of Beethoven’s 9th from yet another “top” orchestra.  Lots of others would rather check out one of the tens of thousands of “lost” compositions that have been ignored, sometimes for centuries.  And only the hardest of the hard core can distinguish an excellent from a very good orchestra, anyway. 
Naxos is also happy to sell you downloads, too, offering high-bitrate and even lossless files.
During a period when classical music sales have slumped nearly 50%, Naxos has tripled the size of its catalog.
Wonder why.

TW: “economics” Heh.

Posted by  on  10/08  at  12:28 PM
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