Back to the Future – Fixing the Music Industry by Returning to the Past

Heading into the new millennium everyone in the music industry was wishing for a “level” playing field; a field upon which independent music artists with less financial backing could compete with major artists and their major budgets. With the advent of the Internet, consequent evolution of digital music, a faulty music business model, and fleeting commercial opportunities, we can now say, voila! The playing field is officially leveled.

But what does it really mean?

I’m not an astronomer but I do know that as you look up into the galaxy two things determine your ability to see stars: (1) how brightly the star shines and (2) your vantage point. The music industry is the galaxy in which stars are often discovered and seen by their adoring fans. While there are many stars in the galaxy, some shine more brightly than others. It just so happens that in this music industry galaxy some (signed) stars get to shine more brightly because they have the resources (of a label) to do so.

For the longest time an invisible wall existed between “signed” and “unsigned” music artists. The unsigned often felt the stigma of rejection as they secretly sought validation by the record labels that shunned them. Then the 90s approached and talk of the playing field getting leveled became the impetus for a change in attitude about getting signed. Being “unsigned” suddenly became being synonymous with being unchained and unencumbered.

As record labels gained more infamy for being controlling, political, and creatively stagnating (thanks in large part to efforts by Courtney Love and Prince who displayed the word “slave” across his face for months during his bitter dispute with Warner Bros.) the stigma of being unsigned was transformed into a badge of honor and a more favorable business position for artists to be in.

Soon after the floodgates to independence swung open. With each passing decade an even larger constituency of music luminaries including Nine Inch Nails, Madonna, Tori Amos, Bobby Valentino, Keith Sweat, Velvet Revolver, and respected R&B crooner Joe, have joined the ranks of the independents.

And now what?

With the music industry in an overly reported state of flux (though many would say demise) what will become of this new breed of independents (those once affiliated with a major or have been the recipient of financial backing)? What impact will it have on true independents (those never affiliated with a major and have never been the recipient of financial backing)?

Will this independent movement create a rippling gridlock effect in terms of opportunity? How will both this new breed of independents and the true independents fair in a marketplace where there products can be obtained free of charge? Who will determine and create their viability? Without monetary support from a record company, how will they sustain themselves?

The answers to all of these questions can be found in a movie called Back to The Future. Some of you may have seen it. Others may have heard of it. The premise of the movie is this: The lead character played by Michael J. Fox must go backwards in time to change the events of the future, which is where he is from.

Bingo.

Because I teach a course on music industry career planning, I can asseverate that most people don’t know that the music industry was spawned from the music publishing industry. We often hear A&R executives say, “It’s about the song!” but we rarely hear them give an explanation as to why.

The music publishing industry, which began in the 1880s, originated by printers who manufactured a wide array of printed materials from newspapers, flyers, posters, and bibles became suppliers and retailers of sheet music. There was no television. There was no radio. Just families with pianos trying to entertain themselves by singing songs in the comfort of their own homes.

People wanted to share their (sheet) music with others and would buy additional copies from the printers. The printers offered to sell sheet music at their stores upon request in exchange for a percentage of the sale less their printing fees. Sheet music became a valuable product.

Printers hired singers to demonstrate (perform) sheet music in their stores to customers who came in to by other products and discovered that they could generate more sales. They quickly discovered that the more talented a salesman was, the more sheet music they sold. Eventually, these “singing salesmen” were sent to other locations to sell the sheet music that was sold by a particular printer. The advent of the transcontinental railway in the mid 1800s created a means for traveling salesmen to “go on the road” and perform songs for audiences who were eager for them.

This is known as the Vaudeville era; a time when a variety of performers (not just musical) would travel to new regions to entertain audiences. Printers took on more administrative duties in this era, often promoting songs and booking their traveling salesmen. They redefined themselves as publishers. The traveling salesmen became crucial to the sale of sheet music and the livelihood of the publisher. They redefined themselves as entertainers and discovered that they could financially sustain themselves on the road with their performance talent.

Fast forward.

According to the Associate Press, the concert business grossed just under $4 billion worldwide in 2008, the most ever for a year and up almost 13 percent over last year, according to Billboard magazine. In North America, the average box office gross was up 18 percent and the average attendance up 6.3 percent. Bon Jovi’s tour was the year’s highest-grossing, based on the trade publication’s data from November 14, 2007, to November 11, 2008. It grossed $210.6 million and drew nearly 2.2 million fans. Bruce Springsteen was second ($204.5 million gross) followed by Madonna ($162 million). The most lucrative country tours were Kenny Chesney, sixth on the list with $86 million gross; and Rascal Flatts, 10th with $55.8 million.

Compare those numbers with the repetitive theme that’s been reported for the last 5 years since the industry’s peak in 2000:According to data from Nielsen SoundScan, album sales have declined 45 percent, although digital music purchases continue to grow at a rapid rate.

The year’s biggest seller was Lil Wayne’s album “Tha Carter III” (Cash Money/Universal Motown), which sold 2.87 million copies, followed by Coldplay’s “Viva la Vida or Death and All His Friends” (Capitol), with 2.14 million. “Fearless” (Big Machine), the second album by the 19-year-old country star Taylor Swift, was third, with 2.11 million. (Ms. Swift also scored the sixth-highest seller this year, for her self-titled debut, released in 2006, which sold 1.6 million copies in 2008.)

The Associated Press goes on to state…”The music industry has grown accustomed to dismal sales numbers, and this year even the good news comes with disappointment. “Tha Carter III” is the first release in SoundScan’s 17-year history to top the year-end list with sales of less than 3 million.”

Back to the future we go. Performing is where the viability is. It always has been. The sale of (CDs) recordings will soon be secondary to the sale of talent that can perform any recording – just like the old days. And what happens to the recordings? They will serve their original intent: promotion of the song and marketing of the talent performing it. Other than that, they will merely be mementos.

Publishers will continue to make their money by exploiting recordings in any way that they can, and performing valuable administrative duties. Much hasn’t changed for them except for new mediums and revenue streams from which they now collect income. Oddly enough, music publishers don’t have to look back to the future; they never really moved forward. Their business model remains strong and in tact.

Record labels…they will have to redefine themselves and their functions – quickly. The market is presently wide open for any financially backed entity to supply operating capital to music businesses that have solid infrastructure; such infrastructure can be accomplished with the help of a competent manager and/or attorney.

Artists formerly signed to major labels and who have been fortunate enough to have hit songs will receive top consideration to perform in venues. New artists will have to step their game up tremendously to attract talent buyers and booking agents, but it can be done – especially with the help of a loyal audience. With MySpace and YouTube as marketing resources, their challenges aren’t nearly as daunting as the Vaudeville entertainers who had to blindly win over audiences.

Today’s new independents and true independents may want to follow their lead by attempting to win the allegiance of music lovers by performing quality songs that inspire them to make their music a part of their everyday lives…music that can be used as a form of escape or discovery, expression or therapy. When that occurs they will be rewarded with fan loyalty and a truly sustainable career will emerge.

It is said that those who don’t know their history are doomed to repeat it. Hopefully that holds true for today’s music artists. Those who will thrive in this new business model will be fully prepared to make the transition from being a successful recording artist (i.e., one who sells a lot of records), to being a successful performing artist (i.e., one who makes a living from his/her/their live performances) by traveling back to the future with great shows and polished talent.