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| November 30, 2007 | 0 Comments

What’s Going On?
Seeing Change In The Sea Change: The Music Industry In Flux

About six weeks before the music world descended upon Lower Manhattan for the 2007 CMJ New Music Marathon, one of the punk era’s great icons, CBGB founder Hilly Kristal, died at age 75. His club, which closed in 2006 after a rent dispute, was the portal from which punk rock emerged.

Punk spawned a new paradigm — or world order, as its strictest adherents thought at the time — and threatened to destroy the ’70s recording industry, whose gross indulgences had rendered it irrelevant and out of touch. Punks paved the way for new wave, hip-hop, and grunge as well as legitimizing a sub-industry that indirectly sired the CMJ convention, the reason so many of us were patrolling New York City in mid October.

Though the inmates ran the asylum for a while, the Nurse Ratcheds eventually regained the upper hand and by the ’90s punk was under control. The old paradigm shifted and subsumed (i.e. bought out) the new one.

While Kristal, CBGB, and punk weren’t on the discussion table, they inevitably crossed the mind of any conventioneer who approached the New York University campus heading west on St. Mark’s Place from 2nd Avenue. For there sits the CBGB/OMFUG retail shop, hawking fabled T-shirts in a variety of colors.

If you can’t beat ’em, join ’em.

No one’s levying judgement upon Kristal and his heirs. What easily would have been condemned as selling out just a few years ago is now smart, if only slightly outside the box. In case you haven’t heard, the music industry is changing rapidly.

Stay Home

An important distinction was made early at CMJ. During a panel called “Through The Looking Glass,” Celia Hirschman, manager at the U.S. arm of One Little Indian Records and an on-air music business authority for KCRW-FM (89.9) in Los Angeles, delineated, “It’s not the music industry that’s falling apart — it’s the major-label system. The music business is in great shape.”

This, of course, flies in the face of all we hear, that being everything is in disarray and Henny Penny is hailed as a seer. The public’s view of this so-called “decline” is tied almost exclusively to record sales, which have been in the toilet since Napster began dogging the bit rates of Internet service providers. We’re told music fans have been evaporating into the competing worlds of DVDs and video games.

But to paraphrase Hirschman, reports of the industry’s death have been greatly exaggerated. The painfully slow pace at which the major-label system has reacted to the digital age has obscured the fact a number of opportunities have opened up to musicians, independent label heads, and countless others.

Reached at her San Francisco base, Hirschman clarifies. “If you’re an indie artist or you’re signed to an indie label, it’s ideal to grow where you’re planted. What I mean by that is to develop a following within the community you live in. The reason is pretty practical: You have access to the nightclubs, you have access to the people that write reviews, access to DJs, access to a fanbase on a regular basis, which is perhaps the most important thing. Because it turns out that the gatekeepers — the nightclubs, the radio stations, and the journalists — are inundated with so many releases that most of them have their own filtering systems by which they determine what records they’re gonna program on the radio, write about, or book in their clubs.

“But consumers are, in a way, like children — I don’t mean that to sound pedantic — but they’re unencumbered, unjaded by the experience of listening to great music. They don’t look at their position in auditing music as a small and narrow tunnel by which things must attempt to pass through. They’re much more open: open-minded, adventurous, and willing to risk their time.”

But the hidden issue is determining who “consumers” are anymore. A great disappearing act has been accomplished by who we now call “non-music” fans. It’s a large group, people who buy flat screens, Chanel bags, and buffalo bites. And they’ve proven unreliable.

To put it in perspective, U2’s comeback album, All That You Can’t Leave Behind, has scanned more than 4 million copies in the United States, population 300 million, since 2000. The band’s previous high-water mark, Achtung Baby, in 1991, had sold 8 million by 1997 (where it more or less remains), according to the Recording Industry Association Of America.

Where do 4 million people hide? Did they all switch to illegal downloads? Are they protesting overexposure to Bono? U2’s fanbase isn’t exactly young, but, judging by ticket sales, is fiercely loyal. The type to fritter hours away on peer-to-peer MP3 networks like Kazaa or Oink? Hmm. They just spent that $15 elsewhere.

Where? Bands and marketing experts are figuring that out. What was your triple-mochaccino shamalama-dingdong habit in 1991? Negative? Rate the number of music retailers in your neighborhood versus the number of Starbucks, and ask yourself if Paul McCartney and Joni Mitchell are crazy to hitch their wagons to the coffee chain. And why stop there? On the same “Looking Glass” panel, Jason King, an NYU music professor, suggested selling in all coffee shops. McDonald’s. TGI Fridays. Jiffy Lube. 7-Eleven. The Sears on Lawrence Avenue in Ravenswood already carries “best of” CDs from the likes of Anita Bryant and Aldo Nova (how very Sears of them). A smart band says, “Hey, we’ll license some songs to your ad campaign if you let us have an endcap in your store.” Wilco should have tried it with Volkswagon dealerships.

And the industry will react. For years Billboard magazine had rules as far as who got onto its charts, and if you only made your music available through one retailer — too bad. That changed with The Eagles’ latest album, Long Road Out Of Eden, which the band sold exclusively through their Web site, Wal-Mart, and Sam’s Club. The 711,000 copies were too difficult to ignore, especially when the stat blew away Billboard’s old-standards number one, Britney Spears’ Blackout, which moved a relatively paltry 290,000. The fragmentation will open up a new world of market research and accounting for the music business, as well.

They Can’t All Be Radiohead

As the big names head for the exits, there are still thousands of smaller bands who’d do anything for a chance within the old model. Madonna signing a 360 deal with concert-promoter Live Nation is really just delegation of authority. Radiohead can pull off download stunts because they have a progressive fanbase to bank on and don’t need to work for publicity.

Luckily there are bands like Chicago’s The Redwalls, who have packed 20 years of experience into a three-year career. We put them on our cover in July 2005 to advance their major-label debut, De Nova (Capitol), which would garner them a spot on Lollapalooza and unequivocal praise from Oasis’ Liam Gallagher. But otherwise their exposure was stagnant.

Steve Forstneger

To find more about how the music industry is evolving, grab the December issue of Illinois Entertainer, free throughout Chicagoland.

Category: Features, Monthly

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