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What Happened, Why, and Where the Music Business is Going Part II

Written by Barry DeVorzon – Follow us on Twitter

In my last blog, we took a brief trip through the fifties and sixties and the events that drastically changed the music business for songwriters, publishers, artists and record companies.  The main villain in this scenario was corporate thinking.  Doing away with the single record, only signing singer/songwriters, and the cost associated with recording albums before you knew if you had something or not, changed the business in a way that we would have to pay for later.

Corporate thinking and its consequences

Corporate thinking continued to zig when they should have zagged.  Radio lost its freedom and individuality, and became an advertising medium owned by a precious few corporations. The tight play lists did very little to break new artists, independent radio personalities disappeared and the most popular stations adopted the oldies but goodies format which was good for the oldies but not good for new product.

Greed will get you every time

The CD came out and offered a quality of sound that far surpassed vinyl and tape. Digital came at a price however, and as good as it was, it was also expensive and the sound was a little cold. As the consumer and the business itself embraced the CD, the sound quality improved, but for some reason or other, the price stayed the same.  With every other product, greater volume in sales usually results in the price coming down. This was not the case with the CD and once again it was corporate thinking at the major record companies who made that decision.

Since $16 was a lot of money for a kid to spend on an album each week, and kids were in the habit of wanting more than one album, they found a way to steal the albums. The new digital world made it easy and the record companies, instead of dropping the price, thought they could contain the problem legally. They finally realized that the cat was out of the bag and there was very little they could do about it. They finally did drop the price but by then it was too late, and convincing kids to pay for something they could get for free was not going to be easy.

The music business in transition

The rest is history, iTunes helped, but the business in general continued to suffer and here we are today – in bad shape, in transition, and nobody is 100% sure of exactly where it’s going.

To sum it all up, corporate thinking is not always a bad thing, it can be very powerful and positive, especially when it comes to developing and marketing products.  When it comes to the arts you have to be careful. The term music business says it all, it’s a delicate partnership between creative entities and business entities.  If either partner gets too powerful, it doesn’t work.

Where do we go from here?

I’m not that involved in the music business these days and what’s even worse, I’m getting old, but my guess is probably as good as anyone’s so for what it’s worth, here’s what I think is going to happen:

The new home of the record business is on the Internet. On this level playing field, independent record companies will be able to compete with major record companies. Boutique and specialty labels will also play an important role. We will take more chances and dare to be different. The cost of making records will normalize and the concept of the single record will be reborn. The cost of manufacturing will disappear since everything will be downloaded and companies like Pandora, Spotify, Amazon, iTunes, Emusic.com, Napster, Rhapsody, MP3Mix.com will provide interesting alternatives.

Exactly how this will end up? I don’t know, but it will certainly be better than what we have now. Better for the creative community as well as the record and publishing companies. Let’s hope I’m right!

If anyone has anything to add on this subject, your comments will be welcome.

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