Post by Arc Arsenal on Aug 24, 2005 19:42:43 GMT -5
Music industry is fighting for survival
By George Varga
POP MUSIC CRITIC
August 21, 2005
The record industry pondered and wrestled with its uncertain future at the 47th annual National Association of Recording Merchants (NARM) Convention, which concluded last week at the San Diego Marriott.
The confab, which was not open to the public, attracted nearly 1,600 attendees. It featured winning performances by such locally based artists as Nickel Creek, Tristan Prettyman and Bradley Leighton, who were part of a lineup that included everyone from Rod Stewart to Liz Phair. (San Diego's Switchfoot, which was named NARM's Christian Breakout Artist of the Year, was absent, but accepted via video.)
Yet, despite a record 45 live performances (the most at any NARM convention ever), the focus was mostly on the business of recorded music. And in one panel discussion after another, industry experts agreed that the record biz is facing dramatic challenges if it is to survive, let alone again thrive.
"Working in the industry today often feels like taking a ride on Disney's Space Mountain," NARM honcho Jim Donio said in his Aug. 5 president's speech to the gathering of record industry executives, manufacturers, distributors and retailers. " . . . This past year has once again tested our resolve. The year ahead is unlikely to be much different."
Mitch Bainwol, the chairman and CEO of the Recording Industry Association of America (RIAA), was even more direct in his keynote address, "We have to win the message war." The former chief of staff for Senate Majority Leader Bill Frist declared, "This is a culture war."
But at a time when illegal digital downloading, peer-to-peer file-sharing, CD burning, and sales of pirated bootleg albums have caused a staggering 22.5 percent drop in national album sales over the past four years, there seemed to be a serious disconnect in how best to remedy the situation.
And with album sales in 2005 already down by 23 million units from this time last year, recent events have further muddied the picture.
For example, last month saw Sony/BMG Entertainment, one of the record industry's biggest conglomerates, agree to pay $10 million in fines to settle allegations that it bribed radio stations – including San Diego's KHTS/FM Channel 93.3 – to play music by its artists.
Speaking on the record, several NARM panelists were quick to downplay the $10 million fine (which, granted, is barely enough to cover wardrobe expenses for the ongoing farewell tour by Destiny's Child). Off the record, the consensus is that similar fines, or larger, may be levied against other major record labels that also engaged in illegal payola to gain radio airplay.
But the record industry was understandably buoyed by the Supreme Court's June 27 decision that the makers of software like Grokster and Kazaa, which enable Internet users to freely (read: illegally) borrow and copy songs from one another, can be sued for encouraging copyright infringement.
This court's ruling was hailed by both Donio and Bainwol, whose keynote address featured a dizzying array of charts, statistics and public opinion survey results, but almost nothing about the methodology used to collect and compile this data.
"The court gave us a gift," said Bainwol, who acknowledged that, a week after the court's decision, "56 percent of Americans" were unaware of the ruling.
Nevertheless, he said, "We need to seize the moment on questions of right and wrong (regarding illegal downloading and copying). I'm optimistic about the future. We've had a ton of challenges, but I believe the future really is about music technology and making music more ubiquitous, and we're beginning to turn the tide. . . . "
Yet, while digitally delivered music-on-demand is clearly the wave of the future and the present, record companies and retailers seem unable to agree on what they can do to make such technology their ally, not their enemy.
Bainwol believes the main challenge is to educate young music consumers and their parents that downloading and file-sharing without paying is not only illegal, but "morally wrong." He said that suing young offenders, and their parents, as the RIAA has done, is an effective tool.
"But we have lost a generation," Bainwol said. "Kids 18 to 25 fell in love with computers at a time when there were no rules, and they are very hard for us to talk to. The next generation knows there are rules."
Some NARM panelists pointed to CD kiosks as a possible solution. These kiosks allow shoppers to buy and download music directly on to portable devices compatible with Windows Media Player 10. They also touted the potential of these kiosks to promote small-label indie artists and major-label acts alike, and spoke excitedly about offering customers live performances on disc the day after a concert has taken place, locally, regionally or nationally.
The kiosks could also offer favorite tracks of employees' and compilations of songs by popular artists, in addition to promoting songs by similar artists and offering songs before their official release. In addition, the kiosks can allow listeners to sample music before buying and downloading it.
But the panelists seemed unconcerned that these kiosks do not allow shoppers to download music onto iPods, which many consumers clearly favor for playing recorded music.
Nor did any panelists adequately address the fact that the kiosks are unlikely to attract young music fans, even while admitting that many young listeners prefer to acquire music from the Internet, legally or not, from the comfort of their homes or dorm rooms.
The panelists acknowledged that the major labels "didn't like" proposals to use the kiosks to introduce pricing flexibility, even though a drop in prices is vital to draw new or disenfranchised customers. And there were ominous hints that the current 99-cents-per-song rate may soon be raised, despite (or, perhaps, because) this rate has fueled Apple's iTunes Music's sale of half a billion songs over the Internet in the past two years.
Virtually ignored were such key issues as the fact that most CDs are overpriced and provide little value for the money, and that great albums are increasingly rare, while albums with a good song or two and a bunch of inferior filler tracks have become the norm.
These issues were also avoided by the music biz veterans who participated in NARM's Media-On-Demand Roundtable last Sunday, and who favored abstract business model themes in their discussions. But they were pointedly raised by four college students and one recent grad, including USD sophomore Christie Osborne, who all spoke during the roundtable's second half.
The students, who ranged in age from 19 to 23 and are based mostly in Southern California, complained about high music prices, major-label dominance and the irrelevance of most commercial radio stations. They deplored Clear Channel by name and expressed a preference for "mom and pop" record stores, indie labels and supporting their local music scenes and artists.
They also addressed DualDiscs, the doubled-sided CD/DVD hybrid that the record industry introduced with great fanfare here at last year's NARM convention. While the students like the idea of having a DVD and CD on one disc, they are unhappy that the music on DualDiscs can't be downloaded on iPods (although at least one student hinted that they'd found a way to circumvent this restriction).
The roundtable was a good idea that failed to realize its potential, largely because there was no interaction between the record biz veterans and the music-loving students the industry is increasingly at odds with. Had there been, the students – who praised artists while condemning record companies – might have realized that many artists eagerly seek record contracts to make their music widely available.
The disconnect between the students and the industry was further demonstrated by the repeated praise the record biz panelists gave to Jack Black's record store clerk character in the 5-year-old movie "High Fidelity." Minutes later, the students dismissed the need for better-informed record store employees, stating emphatically that they get the majority of their information about new music from "everywhere," in particular the Internet.
The key for music's survival, then, may lie more with musicians and fans than with a record industry that has repeatedly shunned and attacked the same technology that could provide its salvation if properly utilized.
"I think musicians will have a lot to do with the future of the record industry," said Nickel Creek's Chris Thile. "It's our product being presented, our art. There's nothing more satisfying than buying an album where you feel like you're buying a piece of the band, like the way Radiohead works with such great visual artists on its CD covers and packaging.
"The online stuff is great, but the industry has to stay a step ahead, sonically, to make sure were presenting a product that's superior."
Union-Tribune editorial assistant Kyle Proehl contributed to this story.
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By George Varga
POP MUSIC CRITIC
August 21, 2005
The record industry pondered and wrestled with its uncertain future at the 47th annual National Association of Recording Merchants (NARM) Convention, which concluded last week at the San Diego Marriott.
The confab, which was not open to the public, attracted nearly 1,600 attendees. It featured winning performances by such locally based artists as Nickel Creek, Tristan Prettyman and Bradley Leighton, who were part of a lineup that included everyone from Rod Stewart to Liz Phair. (San Diego's Switchfoot, which was named NARM's Christian Breakout Artist of the Year, was absent, but accepted via video.)
Yet, despite a record 45 live performances (the most at any NARM convention ever), the focus was mostly on the business of recorded music. And in one panel discussion after another, industry experts agreed that the record biz is facing dramatic challenges if it is to survive, let alone again thrive.
"Working in the industry today often feels like taking a ride on Disney's Space Mountain," NARM honcho Jim Donio said in his Aug. 5 president's speech to the gathering of record industry executives, manufacturers, distributors and retailers. " . . . This past year has once again tested our resolve. The year ahead is unlikely to be much different."
Mitch Bainwol, the chairman and CEO of the Recording Industry Association of America (RIAA), was even more direct in his keynote address, "We have to win the message war." The former chief of staff for Senate Majority Leader Bill Frist declared, "This is a culture war."
But at a time when illegal digital downloading, peer-to-peer file-sharing, CD burning, and sales of pirated bootleg albums have caused a staggering 22.5 percent drop in national album sales over the past four years, there seemed to be a serious disconnect in how best to remedy the situation.
And with album sales in 2005 already down by 23 million units from this time last year, recent events have further muddied the picture.
For example, last month saw Sony/BMG Entertainment, one of the record industry's biggest conglomerates, agree to pay $10 million in fines to settle allegations that it bribed radio stations – including San Diego's KHTS/FM Channel 93.3 – to play music by its artists.
Speaking on the record, several NARM panelists were quick to downplay the $10 million fine (which, granted, is barely enough to cover wardrobe expenses for the ongoing farewell tour by Destiny's Child). Off the record, the consensus is that similar fines, or larger, may be levied against other major record labels that also engaged in illegal payola to gain radio airplay.
But the record industry was understandably buoyed by the Supreme Court's June 27 decision that the makers of software like Grokster and Kazaa, which enable Internet users to freely (read: illegally) borrow and copy songs from one another, can be sued for encouraging copyright infringement.
This court's ruling was hailed by both Donio and Bainwol, whose keynote address featured a dizzying array of charts, statistics and public opinion survey results, but almost nothing about the methodology used to collect and compile this data.
"The court gave us a gift," said Bainwol, who acknowledged that, a week after the court's decision, "56 percent of Americans" were unaware of the ruling.
Nevertheless, he said, "We need to seize the moment on questions of right and wrong (regarding illegal downloading and copying). I'm optimistic about the future. We've had a ton of challenges, but I believe the future really is about music technology and making music more ubiquitous, and we're beginning to turn the tide. . . . "
Yet, while digitally delivered music-on-demand is clearly the wave of the future and the present, record companies and retailers seem unable to agree on what they can do to make such technology their ally, not their enemy.
Bainwol believes the main challenge is to educate young music consumers and their parents that downloading and file-sharing without paying is not only illegal, but "morally wrong." He said that suing young offenders, and their parents, as the RIAA has done, is an effective tool.
"But we have lost a generation," Bainwol said. "Kids 18 to 25 fell in love with computers at a time when there were no rules, and they are very hard for us to talk to. The next generation knows there are rules."
Some NARM panelists pointed to CD kiosks as a possible solution. These kiosks allow shoppers to buy and download music directly on to portable devices compatible with Windows Media Player 10. They also touted the potential of these kiosks to promote small-label indie artists and major-label acts alike, and spoke excitedly about offering customers live performances on disc the day after a concert has taken place, locally, regionally or nationally.
The kiosks could also offer favorite tracks of employees' and compilations of songs by popular artists, in addition to promoting songs by similar artists and offering songs before their official release. In addition, the kiosks can allow listeners to sample music before buying and downloading it.
But the panelists seemed unconcerned that these kiosks do not allow shoppers to download music onto iPods, which many consumers clearly favor for playing recorded music.
Nor did any panelists adequately address the fact that the kiosks are unlikely to attract young music fans, even while admitting that many young listeners prefer to acquire music from the Internet, legally or not, from the comfort of their homes or dorm rooms.
The panelists acknowledged that the major labels "didn't like" proposals to use the kiosks to introduce pricing flexibility, even though a drop in prices is vital to draw new or disenfranchised customers. And there were ominous hints that the current 99-cents-per-song rate may soon be raised, despite (or, perhaps, because) this rate has fueled Apple's iTunes Music's sale of half a billion songs over the Internet in the past two years.
Virtually ignored were such key issues as the fact that most CDs are overpriced and provide little value for the money, and that great albums are increasingly rare, while albums with a good song or two and a bunch of inferior filler tracks have become the norm.
These issues were also avoided by the music biz veterans who participated in NARM's Media-On-Demand Roundtable last Sunday, and who favored abstract business model themes in their discussions. But they were pointedly raised by four college students and one recent grad, including USD sophomore Christie Osborne, who all spoke during the roundtable's second half.
The students, who ranged in age from 19 to 23 and are based mostly in Southern California, complained about high music prices, major-label dominance and the irrelevance of most commercial radio stations. They deplored Clear Channel by name and expressed a preference for "mom and pop" record stores, indie labels and supporting their local music scenes and artists.
They also addressed DualDiscs, the doubled-sided CD/DVD hybrid that the record industry introduced with great fanfare here at last year's NARM convention. While the students like the idea of having a DVD and CD on one disc, they are unhappy that the music on DualDiscs can't be downloaded on iPods (although at least one student hinted that they'd found a way to circumvent this restriction).
The roundtable was a good idea that failed to realize its potential, largely because there was no interaction between the record biz veterans and the music-loving students the industry is increasingly at odds with. Had there been, the students – who praised artists while condemning record companies – might have realized that many artists eagerly seek record contracts to make their music widely available.
The disconnect between the students and the industry was further demonstrated by the repeated praise the record biz panelists gave to Jack Black's record store clerk character in the 5-year-old movie "High Fidelity." Minutes later, the students dismissed the need for better-informed record store employees, stating emphatically that they get the majority of their information about new music from "everywhere," in particular the Internet.
The key for music's survival, then, may lie more with musicians and fans than with a record industry that has repeatedly shunned and attacked the same technology that could provide its salvation if properly utilized.
"I think musicians will have a lot to do with the future of the record industry," said Nickel Creek's Chris Thile. "It's our product being presented, our art. There's nothing more satisfying than buying an album where you feel like you're buying a piece of the band, like the way Radiohead works with such great visual artists on its CD covers and packaging.
"The online stuff is great, but the industry has to stay a step ahead, sonically, to make sure were presenting a product that's superior."
Union-Tribune editorial assistant Kyle Proehl contributed to this story.
===end swipe===
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