The bilious stew of the music business at the turn of the millennium – and hope for deliverance (IV)

Unfortunately, contractually, the artists generally don’t own these tracks. The entities whose permission the downloaders require are the record companies themselves, and they are generally so scared of the new technology they didn’t invent and do not control that they won’t even consider it. “Part of the reason for the major label decline is that there are a lot of old-school people still running the show,” noted manager Ed Majewski.

I think their train of thought is they will/can run the system to the ground. Basically, they are still going to do business like it was in the ‘70s. But the business has changed. One would think that they should change with the times. But why? Their mindset is, even if they run all the bigs right into the ground, they still can’t lose. If the big labels all were to be out of business next week, what upstart “new model” wouldn’t want to hire a Clive Davis or Donnie Ienner as a consultant? So there are people in power who know, no matter what happens, their ass is safe.

So if things go the way Wolff sees them, the way of the book business, can the record business scale back to a place where it can sustain itself on sales of 30,000 and 40,000 and the occasional bestseller? It would certainly take a good amount of the romance out of it, make the record business, like the book business, only marginally sexy. It would also require a major downsizing in the record companies, both in actual manpower and in clout. As in the days before the corporations descended on the record business, the independent companies would have a bigger piece of the pie. And due to the advances and changes in technology, in both the production and the distribution of music, DIY artists would likely have a much better shot at making a living with their music and reaching the fans who actually like the kind of music they make.

“Henceforth.” Todd Rundgren said when he announced his A2P (artist to public) internet subscription service, “I’m creating at the mercy of kindhearted fans.” Of course, Rundgren realized that he’d been at the mercy of his fans for the previous two decades anyway. He now just has the means to rely on their mercy (and patronage) more directly.

Many more artists are seeing the advantage of owning their means of production. This doesn’t just mean the custom label deals like Madonna’s now-defunct Maverick Records or the Isley Brothers’ T-Neck Records, which affiliate the artists with a major while giving them the illusion of autonomy. The new artist-owned and –operated labels are often companies either for artists who have developed a following on their own through touring and can sell CDs regionally or directly to fans along with T-shirts and other swag at shows or on their website, or for the artist who has previously developed a following via releases on a major label, and can capitalize on that following with their own label. We’ve done the math on this and seen that they can do very well for themselves selling a fraction of what they sold via a major label, because the margin of profit is so much higher.

For example, the band Hanson had a massive, chart-topping hit with “MMMbop” in 1997 from its major label debut on Mercury Records, but by the time it came to make a third album for the label (actually for Island/Def Jam, as Mercury effectively ceased to exist in one of the Universal Music Group consolidations and reorganizations) the group parted ways with UMG and formed its own independent label. This was not unknown territory for Hanson, which had started out recording for its own DIY label some seven years earlier. The new album, Underneath, peaked at #25 and sold a respectable 130,000 copies. The whole four-year adventure was captured in a film called Strong enough to break.

Other artists, like veteran folk-rocker Dean Friedman, do all their business on the web. Friedman had one fair hit in the late 1970s, a song called “Ariel” that, because it was set amid landmarks familiar to New York suburbanites, became much bigger in the New York metropolitan area than anywhere else, but managed to go top 30 nationwide as well. His subsequent musical endeavors didn’t go quite so well commercially,  at least at home in the U.S. He remained something of a legend in England, but quickly discovered that you can’t feed a family of four on legend. He moved on to interactive design, creating games for computers and working on the Nickelodeon TV show Arcade. When the web came along, he put up deanfriedman.com and suddenly his fans had a nexus. Said Friedman:

I knew they were out there, I just didn’t have the means to reach them or they me. The internet allows artists and audience to communicate directly and pass over the middlemen – the record companies, the distributors, etc… . I am selling CDs directly to these fans. I have sort of a cottage industry.