Published February 26, 2002
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— Bob Dylan," Love and Theft"
What happens when an industry mistreats its customers and its suppliers? When 8,999 of 9,000 audits show shoddy accounting practices? When a core business is bungled and the marketplace shrugs and moves on? When scandals and greed lead to massive layoffs and massive disgust?
I'm not talking about Enron. I'm talking about the record industry.
Tonight, on the eve of the Grammy Awards, there are four star-studded concerts in Greater Los Angeles. There's a country show at the Universal Amphitheater with the Dixie Chicks, Dwight Yoakam, Emmylou Harris and Trisha Yearwood; an alt-rock version in Long Beach with No Doubt, the Offspring and Weezer; Beck and Eddie Vedder and Mike Ness at the old Wiltern Theater; and a classic-rock concert at the Forum with Sheryl Crow, the Eagles, Stevie Nicks, Billy Joel and John Fogerty.
An elaborate pre-Grammy promotion? No. The four shows are protests against the Record Industry, which is represented by the National Academy of Recording Arts and Sciences ... which puts on the Grammy Awards.
The musicians — the suppliers — say the increasingly consolidated record industry treats them like dirt. Contracts exceed limits imposed on less musical people. Royalties vanish thanks to creative accounting. Legal victories over Internet music-sharing services have put huge settlements in the hands of the record labels, but musicians say they haven't seen any money. And for every squashed Napster, another five file-swapping Web sites rise like mushrooms.
A quick glance at last week's pop charts shows the industry is lost. Nothing against country singer Alan Jackson and prolific 1970s hitmaker Barry Manilow, but when these guys are at the top of the February 2002 pop charts — the same charts where Britney and N'Sync live — we're looking at a record and radio industry on the ropes. They can't sell what they're supposed to sell. There's a reason why those acts on the cover of Spin and Rolling Stone seem so unfamiliar. A big act today sells millions less than the name acts of only a few years ago. And with sales down, a screeching rap-rock band like Nutbukit or a recycled Pearl Jam/Neil Diamond act like Creed appears to be very popular. But hardly anyone knows who they are. One company dominates American pop radio, and we're tuning out.
And it's not just because you're old, pal. I'm old, too. Yet people over 35 buy a third of all rock and pop records. And 14 percent of all rock/pop purchases are made by folks over 45. What we've got here is a severely fragmented market. If Frank Sinatra or Louis Armstrong appeared today, they'd be in the jazz ghetto with Diana Krall, not making No. 1 pop hits. Thankfully, listeners can now find their favorite stuff online.
When you bum out your customers, the customers go somewhere else. Swapping music online has spread from college dorms to just about anybody with a computer and a fast Net connection. Digital music exchange has gone mainstream.
Before my wedding last year, my bride and I didn't have time to collect and compile special music for the DJ. Three couples — all in their thirties, all law-abiding professionals — quickly assembled all the music we needed, from Web file-sharing services. Sure, we had the records at home. But it was easier for our pals to just grab the stuff off the Net. And now we've got the soundtrack to our wedding party on four CDs. Arrest us!
Some would do just that. Music industry attorney Peter Paterno has become the first guy to call when doing a Napster-related story. Metallica and Dr. Dre are among his clients. He was also fired by Weezer, spent years in legal battles with former Guns 'n Roses drummer Stephen Adler, and is infamous for running Disney's Hollywood Records for six years without a hit, unless you count Queen reissues.
Twice in the past week, Paterno has lashed out at those who exchange music on the Internet. To Paterno, we are all "Little Johnny," and Little Johnny must be stomped:
"If I was running a record company, as opposed to the wimps that are running one, I'd say, 'You know what, I have no interest in compromising, and I'm going to go sue Little Johnny who's downloading this stuff.'"
And, in a Monday article:
"If I were in charge, I would put viruses everywhere on these services," he said. "That would stop Little Johnny from stealing this stuff."
Take a Valium, Pete. You're sounding like Alexander Haig.
The odd thing is, Paterno is quick to run to the newspapers when his musician clients feel cheated by the record industry ... you know, the industry he'd save with digital anthrax?
Instead of acknowledging that music swapping is here to stay, industry goons lash out at the technology their own corporate parents sell. As the New York Times' Neil Straus wrote on Sunday, the labels will lose this fight:
If you're Sony, and you're making $4.6 billion in music sales but taking in $40 billion in sales from electronics, who are you going to listen to: the music industry complaining about people downloading music without authorization, or the electronics executives trying to make better, more expensive CD burners and MP3 players?
So how does a musician make a living in the New Era? Loyal fans will always be glad to pay money to an act they like. A good example can be made from the career of a band I generally loathe, the Grateful Dead (with the beautiful exceptions of "American Beauty" and "Workingman's Dead"). They encouraged fans to tape concerts long before the Web existed. And those fans repaid the favor by swarming the band's concerts, repeatedly putting the Grateful Dead at the top of the highest-grossing concert list. Sophisticated fans realize the musician will see pennies from that twenty-dollar CD. They also see it takes a few minutes to copy a record onto a CD-R that costs 50 cents. And the nascent attempts to prevent a CD from even being played on a computer have already collapsed.
I can buy a Buck Owens collection from the record store — probably assembled from master tapes he doesn't own — or I can go to Owen's Bakersfield concert hall and see the man in person and buy a disc knowing the money will go to Buck. I'll take the latter. Sure, there's that whole copyright problem, but we'll work that out without the record industry.
When you watch the Grammy Awards on Wednesday, you might want to tape it — and not just because Jon Stewart will be a swell host. The record industry has squandered the faith of its artists and its customers. We all grew up hearing music for free on the radio and teevee and now we can save it via the Internet. When we like something, we'll pay to have our own copy — or to see the artist play live. Few will weep when the Record Industry collapses.
Ken Layne types from a shack behind his Los Angeles home. The author of trashy thrillers such as Dot.Con and the upcoming Space Critters, he has written and edited for a variety of news outfits including Information Week, the Sydney Daily Telegraph, UPI and Mother Jones. Since the Enron-like collapse of his Web paper, Tabloid.net, in 1999, he has been posting commentary to KenLayne.com.