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Music, Business and Technolgy:
Adapt or Die

by Christopher Knab - Fourfront Media & Music - June 2000

Back to Music Business 101

When FM radio began taking away listeners from the inferior sounding AM band in the late 60's the recording industry viewed that as a threat to their sales. "Why" they said "People will begin taping off the radio onto reel-to-reel tapes and they will have a near perfect analog master…people will never buy records again".

People still bought vinyl LPs and 45s by the truckload.

When the cassette tape arrived in the 70's the recording industry was so concerned they lobbied for and got a blank tape tax to cover any possible losses of income they might have incurred from people dubbing off vinyl recordings for private listening. "Why", they said, "People will never buy records again".

People still bought vinyl LPs and 45's by the truckload.

When CDs came out in the early 80's the recording industry was concerned that a digital recording in the hands of a consumer would severely hurt their sales, so they raised the price of the new CDs and left their recording contracts with artists with a clause stating that because CDs were a new technology the artist should be paid less per unit sold. That clause can still be found in some recording contracts today. They also encouraged the rapid demise of vinyl records from retail store shelves in order to force the consumer to adapt to the new technology.

People bought their new and favorite old music over again on CD and the recording industry went from a multi-million dollar annual business to a multi-billion dollar business in less than a decade.

People bought CDs by the truckload.

When downloadable digital music arrived in the late 90's the recording industry saw another threat to their income. Instead of embracing the new technology immediately and seeing MP3 as the greatest promotional opportunity of the century, they huddled in hotel meeting rooms devising ways to encrypt and watermark music, and while they were spinning around and around like an old 78, computer nerd music lovers were busy downloading and sharing the label's music, becoming an army of unheralded promo reps.

Napster was born….and people began downloading music by the gigabyte truckload.

All hell broke loose, and computer illiterate label executives lost their load. "Off with their heads", "Put those SOB fans and greedy young computer genius turks in jail. We are the only ones who can be greedy!!" they screamed. And the recording industry became a police force armed with leaden lawsuits to punish their customers for spreading the music around for free. (What is radio all about anyway…hmmm) and lies were spread and press releases were written and many outraged millionaire artists piped up, threatening too to sue their fans, (those dirty bastards who dared support them when they were nothing). Why the next thing you know, some of those mighty celebrities might even threaten to stop recording altogether….
ah come on, say it isn't so!

It is an outrage...can you imagine….people are taking music for free off the internet and not bothering to pay the artist properly the way a record company always has paid an artist. (?!)

"We can't have people taking for free a digitally perfect master recording of the music we own. Why, its not fair" said the labels. (MP3 the same as a digitally mastered studio recording?????)

Well, let's pause for a moment to reflect on some facts. In 1999, the sales of music product went up again. Almost $14 billion truckloads of dollars were spent in the U.S. on music. We are a long way from music fans completely detaching themselves from the emotional attachment they have to a plastic storage device that contains a plastic disc surrounded by paper product with pictures and lyrics of musicians on them. Yes, the future of the music business will mean an eventual shift in the general order of things. More and more music lovers will continue to take legally, or illegally the music of creative people. Yes, both artists and labels will have to adapt to this inevitability. Artists and labels will always need each other. Not every artist will want to start and run their own businesses devoted to promoting and selling their music.

All parties need to get a bit of a grip right now.

The number of people downloading legal and illegal music files will be growing rapidly. As of the spring of 2000, over 3,000,000 blank CDrs are being sold every month, and as CD burners get cheaper and included in more and more computer packages, the number of people burning their own CDs of favorite music will escalate dramatically.

What this means is that there will be an ever-increasing need to investigate other sources of income from music. For example, the live performance and touring phenomenon will never go away. You cannot download the live experience of being at a club or concert, and you can't autograph a bit or a byte, so there will always be a demand for popular acts to play live and musicians should prepare to live on the road more weeks out of every year.

Also more creative thinking will have to come about regarding finding alternative sources of income from music. Songwriters and Publishers will have to devote more time to securing film and television sychronization deals for their songs, as well as advertising opportunities. Merchandising of artist-related products must be produced and sold more aggressively by aspiring artists, as well as the time-tested classic acts. The internet itself will also continue to open up new ways for musicians, labels and music fans to benefit from working together.

But it is time to stay on your toes, and looking for alternative ways to expose and sell music should be an around the clock activity for the new millennium musician.

Things are changing. Adapt or die.


Christopher Knab is an independent music business consultant based in Seattle, Washington. He is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net

Visit the
FourFront Media and Music website for more information on the business of music from Christopher Knab.

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