Free entertainment threatens the bottom line

[Louis Proyect <lnp3@xxxxxxxxx>]

New York Magazine, June 10, 2002

Rock stars and music-industry execs once ruled the earth, but now -- in
terms of size and profit margins -- the music industry is becoming the book
business (minus the literacy).

BY MICHAEL WOLFF

Radio and rock and roll have had the most remarkable symbiotic relationship
in media -- the synergy that everybody has tried to re-create in media
conglomerates. Radio got free content; music labels got free promotion.

Radio's almost effortless cash flow, and mom-and-pop organization (there
were once 5,133 owners of U.S. radio stations), made it ripe for
consolidation, which began in the mid-eighties and was mostly completed as
soon as Congress removed virtually all ownership limits in 1996. A handful
of companies now control nearly the entirety of U.S. radio, with Clear
Channel and its more than 1,200 stations being the undisputed Death Star.
(Clear Channel is also one of the nation's major live promoters, and uses
its airtime leverage to force performers to use its concert services, as
Britney Spears and others have charged.)

Radio, heretofore ad hoc and eccentric and local, underwent a
transformation in which it became formatted, rational, and centralized. Its
single imperative was to keep people from moving the dial -- seamlessness
became the science of radio.

The music business suddenly had to start producing music according to very
stringent (if unwritten) commercial guidelines (it could have objected or
rebelled -- but it rolled over instead; what's more, in a complicated
middleman strategy of music brokers and independent promoters, labels have,
in effect, been forced to pay to have their boring music aired). Format
became law. Everything had to sound the way it was supposed to sound.
Fungibility was king. Familiarity was the greatest virtue.

Once Sheryl Crow was an established hit, the music business was compelled
to offer up an endless number of Sheryl Crow imitators. Then when the
Sheryl Crow imitators became a reliable radio genre, Sheryl Crow was
compelled to imitate them. (Entertainment Weekly, without irony, recently
praised the new Moby album for sounding like his last.)

[In other words, *competition* and *monopoly* are two sides of the same
coin. When you have a handful of corporations ruling the radio dial, there
is a much more intense need to produce a favorable bottom line.]

But then, just as radio playlists become closely regulated, the Internet
appears.

"Suddenly there was another distribution avenue offering far greater
product range," notes my friend Bob Thiele, who's been producing, writing,
performing, and doing A&R work in L.A. for twenty years (and whose father
was Buddy Holly's producer), and who, in my memory, never before talked
about avenues of distribution. "And then, before anyone was quite aware of
what was happening, file-sharing replaced radio as the engine of music
culture."

It wasn't just that it was free music -- radio offered free music. But
whatever you wanted was free (whenever you wanted it). The Internet is
music consumerism run amok, resulting not only in billions of dollars of
lost sales but in an endless bifurcation of taste. The universe fragmented
into sub-universes, and then sub-sub-universes. The music industry, which
depends on large numbers of people with similar interests for its profit
margins, now had to deal with an ever-growing numbers of fans with
increasingly diverse and eccentric interests.

It is hard to think of a more profound business crisis. You've lost control
of the means of distribution, promotion, and manufacturing. You've lost
quality control -- in some sense, there's been a quality-control coup.
You've lost your basic business model -- what you sell has become as free
as oxygen.

full: http://www.nymag.com/page.cfm?page_id=6099

Louis Proyect
Marxism mailing list: http://www.marxmail.org