By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
By Dennis Romero
Art by Faile
“The record industry discovered some time ago that there aren’t that many people who actually like music. For a lot of people, music’s annoying, or at the very least they don’t need it. They discovered if they could sell music to a lot of those people, they could sell a lot more records.”
A weekend at sea
I’ve traveled to the southeast coast of England, having booked a weekend stay at the Camber Sands outpost of a cheesy U.K. resort chain called Pontin’s. Several dozen pasty attendants stalk the grounds in blue-and-yellow windbreakers. They look like scurvy-ridden basketball players in warmup suits. There’s something familiar about the Pontin’s logo on their breast pockets. I struggle with déjà vu until I fixate, and realize it’s almost identical to the logo for the Pokémon cartoon. Indeed, the mood of the place feels a bit like the stage set for a live-action Pokémon film, one that might at any moment break out into arty triple-X action. It’s a fetid, dour place, particularly so on the rainy afternoon on which I arrive.
The strange thing is, the people around me seem to be enjoying themselves. It’s obvious that no one is visiting for the charms of this seaside town — the fried food, the Technicolor alcohol, a few rounds of miniature golf. Instead they’re here for the second weekend of All Tomorrow’s Parties, a festival of independent music programmed 10 hours a day, for the next three days, on the holiday village’s two large stages. No one frets over the weather, because everyone will forgo the beach in favor of witnessing sets by three dozen of the globe’s most famous cult music acts. The legion of indie-music fans will leave with their record-geek ardor intensified and sickly pallor intact.
The music is a bit like my initial vision of a Pokémon skin flick — underground and mainstream all at once. Day 1, curated by former Pavement front man Stephen Malkmus, features a lineup drawn from today’s college-radio charts — Modest Mouse, the Shins, Fiery Furnaces. It’s notable that indie rock’s most popular bands have accepted Malkmus’ invitation to play this godforsaken place, but even more so is the presence of two bands from the ’80s — Mission of Burma, a wiry Boston post-punk band, and ESG, a primitive funk group from the South Bronx. Both were little celebrated in their prime and have been mostly dormant for 20 years. Both have reunited, their reputations blooming as influences on the strain of obscure pop music currently going through an unprecedented renaissance.
The subsequent day is a maelstrom of noise featuring drum-bass duo Lightning Bolt, indie film star Vincent Gallo, and Angelblood, whose main attraction is a warbling blonde in a full body stocking. It’s capped off by performances from MC Dizzee Rascal — Britain’s answer to 50 Cent — and a shambling pop band known mostly for their name. They’re called Fuck. This may be a bit of programming cleverness, since the final day features Jackie-O Motherfucker — an unreconstructed noise band from upstate New York — opening up for Love With Arthur Lee, a ’60s peer of the Doors.
The weekend feels like a rebuke to cynical rock-star machinations and industry pigeonholes. The audience is ecstatic. The musicians are in good spirits. Many of them, including Sonic Youth’s Thurston Moore, can be seen walking among the audience, paying close attention to their fellow performers.
Moore presides over the clamor of the event like a proud papa. His band was responsible for selecting day 2’s lineup. And as a group widely hailed as the godfathers of alternative rock, Sonic Youth is having a moment in the sun. The whole weekend is a series of alternatives.
“This song is called ‘Stones,’” Moore announces from the stage when it’s his band’s turn to play. “It’s about stones — not the Rolling Stones, though we like all those English beat bands from the ’60s.”
“I think they’re still together,” interjects guitarist Lee Ranaldo. The 48-year-old Ranaldo was schoolboy age when many of the classic early rock bands were in their prime.
“Cool for them,” spits Ranaldo. He sounds like a man on a mission to destroy corporate rock, and, most surprising, convinced his mission just might succeed.
The small new future
All Tomorrow’s Parties was full of odd conjunctions — hip-hop stars playing with indie rockers, bizarre noise bands warming up for ’60s veterans — but it would have seemed even odder a few years ago. The 21st century has found the music industry reeling and confused. In the last six years, a series of mergers have brought the number of major labels — the core of the corporate record business — down from six to four. Universal absorbed Polygram in 1998. After a recent thumbs-up from European regulators, BMG is set to merge with Sony. Now rumors abound that EMI and Warner Music may join forces and bring that number to three. Five years ago, people would paint this as a sign of the corporate industry’s dominance. Today it seems more like a circling of the wagons.Also in this issue ALEC HANLEY BEMIS debunks three myths about today’s record industry!
Meanwhile, as the majors are hurting or merging, small yet familiar indie labels like Sub Pop and Matador have been basking in a series of increasingly unlikely successes. Other, less brand-conscious indies like Domino, Or and Enjoy have discovered and had phenomenal achievements with artists such as Franz Ferdinand, Los Lonely Boys and Jack Johnson — looking upon majors as distribution partners to take them to the next level. Best of all, these indie labels are entrepreneurial ventures. They were founded by music freaks, oftentimes by music industry outsiders, or music industry insiders who decided to try their hand with artists that didn’t fit the cheesy major-label model. By dint of their origins and shielding from public markets, they are able to focus their obsessive vision on music rather than quarterly earnings reports. None of these indies are subject to the Wall Street profit pressures that cause most major-label “product” to be so milquetoast. The remaining majors have each created indie distribution arms to aid these upstreaming efforts — Warners with ADA (Alternative Distribution Alliance), BMG-Sony with Red, EMI with Caroline and, soon, Universal with Fontana.
Festivals like ATP are the best PR for the increasingly successful business model of selling eclectic music made by and for people who actually like it. There are a host of like-minded events targeted to the dedicated fan of niche sounds. The Coachella festival of Indio, California, has become a pilgrimage for followers of cult favorites and rising international acts. Bonnaroo of Manchester, Tennessee, has roots in the jam-band scene but an open-ended vision. Each of these festivals is far larger than ATP, gathering tens of thousands of hardcore music fans who are quickly outgrowing their niches. Where else but Bonnaroo could you see Yo La Tengo, Steve Winwood and the Dead in a three-day span? While Lollapalooza’s aborted rebirth indicates that this idea is not quite ready for prime time, it’s clear evidence that the changes in the music industry go beyond digital distribution and corporate structure to touch upon the aesthetics of what people are listening to and buying.
These are but a few of the signs that the record business is coming to grips with a small new future. That doesn’t mean the industry’s overall revenues will shrink, nor that record sales will go down. Right now, record sales are plainly rising (see “3 Myths About Today’s Record Business Debunked”). They’re just not rising in the ways we’ve become accustomed to — the biggest, most famous artists are no longer posting ever more impressive sales figures. Suddenly, there are more and more records selling 10,000 to 500,000 copies each year, and less and less selling 1 million to 10 million. To put it simply, the patterns that used to govern sales no longer work. The industry’s biggest successes are now small ones.
Industry insiders are just as confused by the good news as they are by the bad. Here are the kinds of questions they’ve been asking themselves: Why doesn’t Eminem break out on the order of the Beatles and sell 10 million copies of every release? Why can’t Britney, Whitney, Madonna and Mariah make hits like they used to? Why can’t the Strokes break through to the mainstream, stymied at 500,000 units shifted? Conversely, they wonder how a one-off Sub Pop release like the Postal Service’s Give Up — a mash-up of the niche genres of bedroom electronica and emo-punk — has sold well over 250,000 copies. How could Matador sell a half-million copies of the debut by an unheralded New York band like Interpol? Why are bands like Modest Mouse, the Shins, the Yeah Yeah Yeahs and Wilco selling hundreds of thousands of records, where a few years ago they would have — optimistically — sold 50 thousand?
1999: The year the music industry broke
With the benefit of hindsight, it’s evident that 1999 is the year that set the stage for the changes in the biz. 1999 was the year Goldenvoice founded Coachella and the year British concert promoters Barry Hogan and Helen Cottage inaugurated All Tomorrow’s Parties as an alternative to corporate music events like the Sprite Liquid Mix tour, the Vans Warped tour and, yes, various Tommy Hilfiger productions. It was the year the RIAA invented the Diamond, a term for albums that sell over 10 million copies. And 1999 was Year Zero for the file-sharing phenomenon, otherwise known as the birth of Napster.
These are snapshots anyone might note when reviewing that year in music. Together, they form a larger picture. The Diamond offers a window into the corporate record industry’s hubristic faith in endless growth. All Tomorrow’s Parties was an early indicator of the underground’s more modest vision of music as a curatorial exercise. And Napster was the catalyst with the power to set corporate America’s overzealous hopes and indie rock’s half-baked dreams on the odd collision course playing out today.
This is what happened: 1) By making “popular” synonymous with “piracy,” Napster almost single-handedly eliminated the possibility of 10-million sellers. (Basically, it’s far easier to find and steal tracks by Eminem online than it is an obscure indie band.) 2) Napster opened a back-door distribution channel to any band with good songs, a unique sound and access to a computer, solving niche pop’s eternal problem of distribution and access. For a band with buzz or good ideas but no access to typical gatekeepers — commercial radio, distribution through Wal-Mart — there was now a radically streamlined infrastructure for getting heard. 3) Napster allowed people to hear what they are going to buy before they buy it. The result is that good indie records are selling more copies, and bad major-label records are selling less.
This was only the beginning of a larger trend. Napster opened the floodgates to the notion that we should be able to preview music before we buy it. What followed were more and more audio samples on Amazon.com, on artists’ Web sites and on a hundred smaller sites and e-mail lists. This raised the bar for brick-and-mortar competitors. Barnes & Nobles nationwide now have listening posts with access to thousands of CDs. Formerly, you could have expected to sample a few dozen at best.
Previewability is probably the most important revolution in recent music. Despite what the RIAA would have you believe, the shifts the industry has witnessed haven’t been a matter of quantity so much as they’ve been a matter of quality. People are making their purchasing decisions less on the basis of hype and blind faith, and more on the basis of what they actually enjoy listening to.
And that has really screwed up the trend-driven marketplace it took the major labels more than 40 years to perfect.
The great schism
To fully understand where the music industry is headed, it’ll help to go back not five years but almost 40, back to a time when records were sold on the basis of what they sounded like, and how people responded to them — not by the size of their marketing budget, and how much hype they generated.
The last time this was true: June 16, 1967. It was the heart of the Summer of Love, when cool became something corporations endeavored to sell to the masses, and it was the opening day of the Monterey International Pop Festival, the first major festival devoted to rock music. Over three days, the Byrds, Otis Redding, the Grateful Dead and two dozen more of that era’s best emerging performers donated their talents for a benefit concert in Northern California. Like ATP, it was a weekend of odd juxtapositions — imagine Lou Rawls saying hi backstage to Ravi Shankar — but it was also a weekend of signal moments in pop history. The Who got a toehold in the American market after a devastating set ended with them wrecking their rented gear. Jimi Hendrix, in his U.S. solo debut, brought the weekend to a rousing conclusion, dousing his guitar in lighter fluid and setting it on fire.
More than 200,000 dreamy-headed music fans showed up to watch, and the hubbub awoke corporations to the earning potential of edgy pop music. A number of labels had sent representatives to Monterey to sniff around. A lot of them came back with the goods. Take, for example, famed record executive Clive “Golden Ears” Davis. Eventually he would gain renown for his ability to mold superstars with a snap of his fingers and a twinkle in his eye, but at the time he was merely CBS Records’ newly minted president. He attended Monterey Pop on a whim and, impressed by the goings-on, signed both Janis Joplin and Santana on the spot to their first major-label recording contracts.
While it’s hard today to imagine a time when these artists’ fame and cultural standing were in question, most were unknowns going into the weekend. Few of them had impressive sales histories, in part because there wasn’t much of a market for what they were selling. The LP had surpassed the single as recorded music’s most popular format only one year earlier. The Beatles had released Sgt. Pepper only two weeks prior, essentially creating the market for freeform, album-oriented pop. It took a landmark event like Monterey, though, to convince major labels that the hegemony of Frank Sinatra, Bing Crosby and Nat King Cole wouldn’t last forever.
After that, change came quickly. By the end of the ’60s, the majors were running preposterous ads, claiming the hippies as their own with overreaching slogans like Columbia’s “The Man Can’t Steal Our Music” and “The Revolution Is on CBS Records!” This was a major shift. Love would no longer be free, and a Great Schism would open in the marketplace.
This concept is important, because it marks as deep a divide as its namesake. (The historical Great Schisms broke Christendom first into two churches in the 11th century, then into three papal lines in the 14th.) Basically, the world of music split into two distinct faiths in the years after Monterey. On one side were the True Believers — music fans who felt their ideals had been co-opted by Big Business. On the other were the Cynics — hard-bitten capitalists who did their best to isolate or invent successive pockets of hip, exploit them and slowly bleed their spirit.
The Cynics were bean counters who, in the interest of reliability and growth, guided the business through a succession of ever lamer novelties and trends, from arena rock to disco, new wave to grunge. The logic behind this makes perfect sense. Another band as great as the Beatles might never come along, but, hell, you could invent the Monkees. So the Cynics decided to transform rock and pop music from an ephemeral trend into a predictable commodity — like soybeans, crude oil or pig iron, they had Vanilla Ice, Candlebox and Jet. A few artists such as Madonna ended up turning this trend-hopping cycle into the central facet of their art, but for the most part the Cynics caused consumers to grow jaded, and hastened the decline of much of the art they touched.
Meanwhile, the True Believers did something even stranger: They buried their heads in the sand as they got lost in successive waves of inaccessible sounds. As the major labels became obsessed with appealing to the widest possible demographic, the True Believers turned music into a private, cultish domain. Their first major counteroffensive was punk in the mid-’70s — a shift so counter to popular sensibilities that it took well over a decade for the mainstream to absorb it. In the ’80s, this led to support for the birth of indie rock.
It’s at this point that the divide between business and music fans began to take on political overtones. Favored indie labels like SST cloaked themselves in slogans like “Corporate Rock Sucks,” even though their business practices were often just as dubious as the majors’. Odder still were some of the subcultures that blossomed in the wake of punk and indie rock, a shadowy miasma of elitism, experimentation and obscurantism — hardcore, indie pop, post-punk, math rock, post-rock, goth, industrial, stoner metal, etc. In fact, whenever a new genre has taken off in the last few decades (techno, hip-hop), it’s quickly been joined by an intellectualized splinter genre (intelligent dance music, underground rap). The Great Schism caused many listeners to become as obsessed with taxonomic organization as young zoologists do after spotting their first platypus.Healing
In the 25 years after Monterey, the Cynics and the True Believers kept digging deeper trenches. The businessmen became pornographers, while some of the world’s most passionate music fans became aesthetes or neurasthenics, adrift in doubt and detail rather than big musical ideas.
It wasn’t until the ’90s that a few labels began to resolve these differences. A handful of indies began to develop responsible business practices just as they were flowering artistically — Sub Pop with ironic yet anti-intellectual rock from the Pacific Northwest (Nirvana, Soundgarden); Matador with sardonic, urbane cool (Pavement, Liz Phair, Yo La Tengo); and Touch and Go with terrifying Midwestern crunch (Slint, Big Black, Butthole Surfers). Today these are referred to in the trade as “core indies.”
One problem these labels faced was that their artists became wary when they succeeded on the indie level. Indeed, the very aesthetic of their art entailed built-in fail-safe mechanisms that prevented crossover. Indie rock stars were either aggressively amateurish (Liz Phair), overly self-conscious (Pavement), clinically self-destructive (Kurt Cobain) or downright hostile (Steve Albini from Big Black). Consider the ’90s pop music’s late existential period. Just as modern life seemed too complicated and difficult for the original existentialists, the stakes of modern pop seemed too high for these artists.
This takes us back to 1999. Relations across the Great Schism were as tense as ever. The True Believers were setting up their own network of events (ATP, Coachella) to avoid the wider marketplace, the Cynics were inventing new trophies like the Diamond to pat themselves on the back for their successes. Napster came along and changed everything. Suddenly, cynical businessmen couldn’t get their hits, and their trophies were useless; the indie-rock True Believers had their doubts about the market confirmed by the larger populace, and sensed an opportunity. Since 1999, we haven’t heard nearly as much about “indie cred” as we once did, in part because underground cliquishness and mainstream avarice have become side issues to a hitmaking game that’s suddenly open to all comers.
The state of affairs we now find ourselves in isn’t so much an end of the music industry as it is a new beginning. Today’s indie labels can realistically expect to have the same financial roll if not the cultural impact that Sun, Chess, Atlantic and Specialty did in the 1950s. In short, 2004 is beginning to look like 1959 all over again.
Sales sales sales
To bring home the way the market has shifted in the past five years, let’s dispense with the allegory and compare some present-day Billboard numbers with those posted five years ago.
First, look at the albums filling the top three slots the week of June 5, 1999. Numbers 1, 2 and 3 were albums by the Backstreet Boys, Ricky Martin and Britney Spears — the ultimate in manufactured pop. Then look at the chart for the week of June 5, 2004. There were still a few semifamiliar names in the top spots — R&B crooner Usher, Wu-Tang Clan member Method Man — and their popularity is easy enough to understand, even if a few years ago they would have seemed like one-week flukes. After that, though, the chart became baffling.
The third-best-selling record in the country was by New Found Glory, a veteran emo group signed to a fake indie called Drive-Thru (it’s funded by Universal Music Group). Where once there were only widely acknowledged superstars in Billboard’s upper reaches, now the charts are dominated by acts like these — artists that are known but are by no means world-famous, and probably never will be. ‰ 29
The differences get stranger still if we open up the sample. For instance, the top 25 of 1999 was home to the Dixie Chicks’ Wide Open Spaces (10 million records sold), ’N Sync’s ’N Sync (10 million), Britney Spears’ Baby One More Time (12 million), Backstreet Boys’ debut (13 million), and Shania Twain’s Come On Over(17 million). These five records had total sales of more than 60 million.
Compare this to the top 50 from June 5, 2004. With the lone exception of OutKast’s Speakerboxxx/The Love Below, there’s not a single record with over 5 million in sales — and even OutKast was helped along by the fact that each purchase counted as two (it’s a double-disc set). Dotting the list are albums by less-than-superstar acts like Morrissey and Modest Mouse. If you explore the Top 50’s lower regions, there’s even an ATP-worthy band like Franz Ferdinand neck-and-neck with Lionel Richie’s comeback, Just for You, and American Idol Season 3: Greatest Soul Classics.
The mainstream record industry would argue that p2p file sharing has decimated the ability to sell records by crossover acts, but on closer inspection the collapse seems more like a tumbling house of cards. The fact is, sales are going up overall, but the charts just aren’t being monopolized by the same big names that dominated a few short years ago.
A chalet full of diamonds
What happened? In plain English, 1999 was the year the RIAA began writing checks the record industry couldn’t cash.
For many years, when the RIAA was called upon to officially report on the growth of the recording industry, it did so only by responding to changes in the market. In 1958, at the dawn of the long-play record, it created the Gold award for $1 million in sales. This made sense. Pop music was changing from a regional, ephemeral phenomenon into an album-driven, culturally significant force. Similarly, when it introduced the Platinum award in 1976 — for 1 million units sold — it seemed a good response to the cresting wave of stadium rock.
It’s hard to attribute similar good judgment to the invention of the Diamond in March 1999. The Diamond award for 10 million units sold was nearly impossible to attain using anything short of exploitative measures — the most calculated crossover hits, yuppies’ favorites repurchased in muliple formats, new teen pop marketed to underage girls and dirty old men. Trumpeting these successes smacked of extreme arrogance. Three months after the Diamond’s invention, Napster was released, and it’s little wonder consumer response was so rapturous.
Here are the record industry’s all-time top sellers as listed at the unveiling ceremony for the Diamond sales award, listed in number of sales:
The Eagles, Their Greatest Hits 1971–1975 (Elektra) — 2/17/76 — 28 million copies
Michael Jackson, Thriller (Epic) — 12/1/82 — 26 million
Pink Floyd, The Wall (Columbia) — 12/8/79 — 23 million
Led Zeppelin, Led Zeppelin IV (Swan Song) — 11/8/71 — 22 million
Billy Joel, Greatest Hits Volume I & Volume II (Columbia) — 6/28/85 — 21 million
The Beatles, The Beatles (Capitol) — 11/25/68 – 19 million
AC/DC, Back in Black(Elektra) — 7/21/80 — 19 million
Shania Twain, Come On Over (Mercury Nashville) — 11/4/97 — 19 million
Fleetwood Mac, Rumours (Warner Bros.) — 2/4/77 — 19 million
This is a solid list, not only of best-sellers, but of critically acclaimed landmarks in pop history. You might even argue that these specific albums mark a rough chronology of the evolution of pop music as an art form. But when we look at it chronologically, the list takes on a far different cast:
1968 — The Beatles, The Beatles (Capitol) — 19 million
1971 — Led Zeppelin, Led Zeppelin IV (Swan Song) — 22 million
1976 — The Eagles, Their Greatest Hits 1971–1975 (Elektra) — 28 million
1977 — Fleetwood Mac, Rumours (Warner Bros.) — 19 million
1979 — Pink Floyd, The Wall (Columbia) — 23 million
1980 — AC/DC, Back in Black (Elektra) — 19 million
1982 — Michael Jackson, Thriller (Epic) — 26 million
1985 — Billy Joel, Greatest Hits Volume I & Volume II (Columbia) — 21 million
1992 — Whitney Houston, The Bodyguard (Arista) — 17 million
1997 — Shania Twain, Come On Over (Mercury Nashville) — 19 million
Looked at this way, the time line seems more like landmarks in the record industry’s slow descent into pabulum. These numbers are certainly evidence that, after 1980, the corporate music industry had given up on its golden age in favor of churning out purposely characterless dreck. The story behind Up!, Shania 27 29 Twain’s album following Come On Over, offers strong proof.
Released in November 2002, Up! marked the nadir of cynical pop. It was the masterwork of a well-seasoned team practically bioengineered to exploit — Shania Twain, a Canadian native who achieved breakout success by masquerading as a Nashville star, and her husband, a white South African named Robert “Mutt” Lange, the producer of an increasingly bland series of crossover stars, from Foreigner in the ’70s to Huey Lewis in the ’80s to Michael Bolton and Celine Dion in the ’90s.
Up! was intended as the pair’s triumph of commercial genius. Twain admitted that she deliberately rejected songs that smacked of introspection or personal detail. Up! was even released in three distinct mixes appealing to different target markets. The country-oriented “Green” mix featured banjo, pedal steel and fiddle; the pop-oriented “Red” replaced those with strings, guitars and keyboards; and the “Blue” international edition added a touch of Eurotrash beats.
Great art elicits passionate reactions, both positive and negative. It is idiosyncratic. It awakens a range of emotions — melancholy, joy, sadness, laughter. Up! studiously avoided every condition of great art. Having achieved their greatest possible triumph, the two retired to a chalet in Switzerland, an ideal home for a couple who turned neutrality into a virtue. Switzerland’s probably much nicer than any of the chalets at Pontin’s, so God bless ’em, they may have been the last two Cynics to get out of the old music industry with their lives.
“I often notice, when I’m talking with people involved in the arts, that their concept of what they want to do is to aim for the biggest, most obvious target, and hit it smack in the bull’s eye. That’s success, whatever the particular field is. Of course with everybody else aiming there as well, that makes it very hard to hit. It’s made hard to do. It’s made expensive. As Jon Hassell always says, I prefer to shoot the arrow, then paint the target around it. You make the niches in which you finally reside.”
So, where do we stand? I’d like to avoid predictions because, frankly, I’m not sure what it means that Apple’s iTunes sold 100 million songs or what it would mean if they sold 100 million more during Xmas season 2005. I’m certain most of the bottom-line businessmen in the industry feel the same way, because their real fortunes are tied to the Billboard charts, not the future.
I do have a gut feeling, though, and to confirm it, I traveled to the 18th annual South by Southwest music festival in Austin, Texas. SXSW is to non-blockbuster music what Sundance is to the world of non-blockbuster film, and this year it drew 1,200 acts and 7,200 registered participants, among them many of the future A&R men, club bookers, label owners and talent scouts of America. I came away with two case studies.
First, the convention’s biggest controversy: The scheduled keynote speaker, Arista CEO Antonio “LA” Reid, was replaced at the last minute by proto–rock & roll icon Little Richard. The reason? A messy boardroom war between Reid and that Monterey starmaker Clive Davis.
In the years after the Monterey festival, Davis had followed the same bland-is-better path as Mutt and Shania, with Chicago and Billy Joel in the ’70s, Whitney Houston and Kenny G in the ’80s. He was rewarded with his very own label, Arista, but by the ’90s, he was readily admitting that he “never got rap music” (he funded the rise of Puff Daddy), and his reputation for hits had increased as his reputation for “golden ears” had faded. His bosses at BMG deposed him in 2000, fearful of his increasingly out-of-step tastes.
Davis quickly got back on his feet, though, with J Records, a label funded by the same company that axed him, and by January 2004 he’d clawed his way back into their good graces. Reid was fired; Davis became CEO of the parent company, BMG; and Arista, the label he had molded and shaped for two decades, was dissolved. Now he’ll head the newly merged Sony-BMG. Rumor has it the company’s “music people” are rushing for the exits.
The lesson: Among old Cynics, corporate machinations trump music any day.
Second, the SXSW convention’s biggest news: Just prior to the event, Edgar Bronfman Jr., the impossibly wealthy heir to the Seagram’s liquor fortune, completed his purchase of Warner Music Group from Time Warner.
This was the latest of many Bronfman forays into the music biz. As a songwriter, he penned Dionne Warwick’s ’80s hit “Whisper in the Dark”; in the ’90s, he led Seagram’s purchase of Universal’s entertainment business. His luck turned disastrous in 2000, when he allowed the family empire to be purchased by Vivendi, the French utilities company that was attempting to transform itself into an entertainment enterprise. The new, scandal-ridden company would go on to lose 60 percent of its value, as CEO Jean Marie-Messier resigned in disgrace.
With the purchase of Warner, Bronfman did things differently. Rather than mix it up with various corporate behemoths, he banded together with a number of equity firms and transformed Warner into a privately held concern. While the amount of money they put up is intimidating — $2.6 billion in cash and other considerations — it doesn’t change the fact that these funds are private.
Bronfman’s purchase was heralded at SXSW by a widely circulated memo announcing the likelihood of a 20 percent employee layoff at Warner. To pick up on a theme, what once was big would grow small. Gone nearly unnoticed, however, was one odd fact: Now shielded from public markets, Warner Music Group would be the biggest independently owned label on the planet. The company’s new American CEO, Lyor Cohen, has since kicked off the “Incubator System” — incubate being a euphemism for “stealing bands from smaller labels.” Indies will be offered money and resources to help “develop” young artists.
The lesson: It looks as if Edgar Bronfman might just give new meaning to the phrase “Gimme Indie Rock.”
Here is the moral of our story: In a music industry filled with Cynics and True Believers, they say the good men die like dogs, and the bad men make out like bandits. “Good men” has always been code for the True Believers, people who actually like music. Well, it’s about time the Cynics start watching their ankles. Some of those dogs have grown teeth. And they might turn out to be pit bulls.