The Biz Sux

We all know labels are money hungry machines. That’s fine. Their kids got to eat right? Hell, if they didn’t make money there’d be no show business to talk about and we would all be confined to hanging out in dark cafés, smoking little brown stinking cigarettes while listening to a man and his guitar cry about the goddamn war.

So what’s my problem?

I have discussed the decline of the metal market in the US in previous articles and since I of course realize not everybody is into metal I am instead going to put the problem into a larger context and show you how today’s super shallow music market will affect your musical future. It’s not a pretty sight so grab a cup of coffee and sit tight. We’re going to kick some doors in.

First of all… What is the musical food chain? Who gets what? Well… Up until recently it looked something like this:

For a CD list priced 18.99 the cut is as follows:

Artist royalty 10 %  $1.90
Union     1% $0.19
Packaging/manufacturing   5 %  $0.95
Publishing Royalties     5 %  $0.95
Distribution    6 %      $1.14
Marketing     15 %      $2.85
Retail  Profit  29 % $5.51
Label Profit   29 %      $5.51


Wow! Retail is making some good money on a CD huh?

Friggin’ 29%!!! Three times more than the actual band, right?

No. Wrong… When was the last time you actually paid full list price for a CD in the store? The list price is just a suggested price from the label and then the retailers sell it for whatever they feel is more appropriate. Most $18.99 CDs go for 14.99 – 15.99, leaving a profit of a couple of bucks instead for the dealer. With a coupon… another buck off… All of a sudden the retailer’s kids don’t eat.

This is the way it has been working since the dawn of time.

Not anymore.

There is a new middle hand called the internet.

In the beginning the internet was a bad place where morally depraved fans “stole” music from their idols to enjoy it in the shady sanctity of their homes, remember? Who cares? People have been taping music at home since dinosaurs walked the earth, what harm can it do? Well, how many tapes did you make out of that one album back then? Three? Four? That’s how many albums that group sold less because of us taping at home and sharing with our friends. On the other hand… In many ways it spawned more interest for the band and the labels calculated with the hometaping loss anyway. It was all good.

You didn’t make a couple of million tapes and gave them away right? However, that’s in theory how many albums a band today sells less than they would have without the ongoing "download thefts".

“In theory” I say, because we have to realize that the availability of the music makes more people try out things they wouldn’t ever have touched with a radio controlled cattle prod to begin with… Especially since it is free. So maybe it’s good then? The internet is the biggest word of mouth a band can get right? True… You could think of it as a huge universal radio where you pick and choose your own play list… We all taped the radio back then too, so what’s the difference?

Everybody with me so far? Internet both bad and good? Kills sales, but stimulates interest for a group to generate future sales?

Good.

I'm so proud of you all...

As always when we have a good underground thing going, it all goes corporate if there’s enough money to make in it.  Said and done…

Two things happened:

1. Napster got sued and was served with a cease & desist order.

2. Apple iTunes launched an “online music store” where you now legally could download millions of songs with the click of a button and a credit card. iTunes is 100 % backed (read: sponsored) by over 600 labels, including the four giants.

The fact that Napster disappeared was probably inevitable. It was getting too big, and as all empires do when they expand too quickly, it was just a matter of time before it would have collapsed anyway to give way to new and better file sharing programs.

My problem is instead with iTunes. The new hot “legal” file sharing solution for musical downloads.

Why am I such a party pooper now all of a sudden? Internet was good right?

Let’s think about it…

Who gets the short end of the corporate shaft when a sound file is sold over the internet?

I am going to show you how this affects us all by giving you an example.

A classic album like Rolling Stones – “Let it Bleed” has a list price of $18.99. Even sold at mere cost for the retailer, making no money, it would still fetch a price of around $13.99.

To get this album you could then spend the $13.99 at the local record store or download it from iTunes.

ITunes charge you $0.99 per song. “Let it bleed” has 9 songs. That’s $9 for the whole album. You can even print out the booklet in their print workshop.

$9 for the CD at iTunes.

$13.99 for the CD at Honest Harry's Hot Wax.

Of course... A band like Rolling Stones might actually still be attractive enough to the classic record buying Joe Schmoe who wants something solid in his hands (please refrain from dirty thoughts) to make him get in the car, go to the store, pony up the money and drive home again.

Honest Harry gets his measly cents and everybody’s happy.

But what about artists who are not as established and “high profile” as the legendary Rolling Stones?

What about the young new artists of today? Who cries for the children?

Their CDs won’t be stocked in the stores to begin with since the store owners would have to sell them at a couple of bucks below cost to compete with iTunes, thereby the artist loses that physical presence you need in order to be in that right place at the right time. When Joe Schmoe’s kid walks into the store with money in his hand that is.

The kid sees nothing he wants, all old fart music in this joint, so he goes home and buys a bunch of tracks off iTunes instead.

OK… So what do we care if a bunch of record store retailers go out of business?

I could go on and on about how that’s where music derives from, how all our tastes in music took shape between those packed browsers, right on that brown wall to wall carpet in that suspicious smelling mom and pop store where the guy behind the counter knew you by name.

But I’m not going to…

I would like to ask "the industry", the powers that be, what the long term plan is?

Will artists be signed on a song-to-song basis now? There is really no need for material to fill whole albums anymore. The hardened iTunes buyer picks and chooses what he/she wants anyway. Never mind writing ten good songs for a CD anymore. One or two is good enough. Just scrap the rest of them from the beginning already.

Where is the consistency in such an iTune artist? What message is the label sending out? Where will artists go from there? Always be pressured to write hit singles?

You got it.

Bands and artists will stop in their growth, they will be bred and maintained in their fashionable prime, like that fabled goose laying golden eggs. Nobody is interested in tomorrow. Now and here is what sells.

Where will that leave the next Led Zeppelin or the next Rolling Stones? They will never have the chance to establish themselves and grow an army of supporters from album to album since they don’t have "snazzy download hit factor potential" written across their foreheads and will therefore not be signed to begin with. They are totally useless to the modern record label.

And what of the very young bands, just starting out in some poor mom’s basement somewhere? Sure, in the beginning of your angry little career you can afford to shove that middle finger in the face of everybody and their mother, but one day you have to start paying bills and since labels don’t sign you left and right like they used to, you have to go put on that McDonald's hat, start frying those fries and forget all about living the rock dream… Unless you sell out of course and write a couple of really good flash in the pan hits for cybernetic mass consumption.

The formula that has always applied to top 40 music has now been taken one step closer to the edge of ruin for all music.

The labels are royally fucking the music scene up the ass.

By eliminating all the middle hands between label and buyer, they bury the heart and the soul of the industry. The little guy.

By selling albums on a track by track basis they eliminate the need for full albums. By eliminating the need for full albums they eliminate the need for the long term planning needed to establish "album artists” and the label can focus on their “one hit wonder artists” instead. That’s where the money is.

Speaking of money… The artist still gets his 10% of course, the union and the publisher get their little cut. The rest? All of it straight into the pocket of the label. Ingenious! Their kids are eating like motherfuckers! Whole roasted pigs and caviar and shit.

Even though the bands still get a cut, that’s not where they make their money. Those royalties usually pay off the advance they got back when they first signed on the dotted line and they also pay the bills for the studio time. A band makes most of its money on the road touring, selling tickets and merchandise.

Who’s going to tour? If there is no album to promote there is no band to promote. You can only go around so long on a couple of songs… The label could care less. Tours were just a mean to sell more albums to them. Who needs that aggravation now?

This all leaves us with a drab hit factory conveyer belt music scene… Every artist eerily predictable, easily accessed and quickly forgotten.

Meanwhile the next Rolling Stones are rotting away in dive bars in Manchester, wasting their talents while dying from poverty.

This is all a nightmare dreamscape I've been painting of course, a bit over-dramatic and maybe somewhat exaggerated...

But the fact remains:

If we let the labels get away with it, they will take your money and run with it. They could care less about artistical integrity or the future of rock'n'roll.

Unless they can cash in on you today, you're just another bad check from Honest Harry.

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