When I interned at Atlantic Records in the early 90’s, I became friendly with one of the VP’s of sales. He took me under his wing a little bit and taught me some of the basic rudiments of how sales and distribution worked. We were talking one day about a Led Zeppelin re-package (they were doing a smaller version of the box set), and when I told him that the package seemed redundant to me, as it had just come out in different form a year or two prior, he smiled and said, “Ben, I’m going to tell you the three rules of the record business.” I eagerly awaited the pearl of wisdom that was going to come from out of his mouth, thinking that this was knowledge that would be invaluable to me.
“Ben, the rules are this. Fuck them once, fuck them again, and then fuck them one more time after that.” He smiled broadly. I didn’t say anything.
I didn’t think about that conversation for years, but in the past few years I’ve thought about it often, almost like a “chickens coming home to roost” tale, as the record business has come face to face with an existential crisis. Whatever relationship the record industry had with it’s customers is gone, as the choices available to the consumer from the Internet, file sharing, downloading, CD burning, hard drive swapping, et al, have shattered the control that allowed the industry to dictate the terms of the experience of purchasing recorded music. Sales are down at least 25% from their peak in 2000, and sales are already down 15% this year compared to last year. If you talk to people in the record industry, you’ll get agreement that the system as it stood is broken. But you’ll get very little consensus in terms of what should be done.
Coming tomorrow: My proposed first step for the record industry.
Thursday, February 01, 2007
The Chickens Come Home To Roost
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2 comments:
Boy oh boy, do you hit the nail on the head here.
In the late '90s, we caught a lot of grief for selling CDs at $18.99, as if we'd made up the prices ourselves, or as if we weren't paying $13-15 wholesale. Everyone in the music business saw the downloading revolution coming a mile away. But the boneheads who ran the major labels chose that exact moment to get even greedier than usual, and so they raised list prices AND stopped making singles while pushing singles-oriented acts, so that if you wanted one Britney Spears song you had to spend $19 on her whole stupid CD.
As music fans, we were pissed. As music retailers, we were even more pissed, because we took a lot of the blame for the state of affairs. And now, as music retailers who are struggling mightily to stay afloat, we're even more pissed, because the shortsightedness of the majors contributed directly to the state of affairs we're in now.
We feel like the innocent bystanders who've gotten caught in a shootout between consumers and the RIAA and major labels, and we're the ones who are getting hit.
I think the thing that got the ball rolling in terms of killing music only retailers was the chains like Best Buy. When music became a tool to lure Mr. and Mrs. America into the store so they'd get that CD for $6.99...and then buy a washing machine for $800...well, it got fucked.
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