A Buzz in the Industry
I got an extra hour of sleep Sunday.
Normally I get up at 4:45 a.m. and head to Iowa Western Community College to host “Sunday Morning” on 89.7 KIWR, but this week I snagged some extra shut eye before catching a plane for L.A. for the annual National Association of Recording Merchandisers convention.
There is a buzz for the convention this year. The last few years have been especially productive but something feels different this year.
After a decade of legal action pursuing illegal P2P sites and lawsuits brought by the RIAA against consumers, lawsuits between consumers and labels over embedded spyware, judicial decisions affecting copyright laws and the First Sale doctrine, and constant bad news about declining sales, all parties appear ready to work together in new ways to address this complicated mess we call the music industry.
Good news doesn’t hurt, either. While the physical industry is down only slightly for the year, digital has rebounded and when combined, overall sales are flat against last year. Catalog sales, albums older than 2 years, are up considerably and Record Store day blew the doors off this year.
Indie stores are regaining market share and becoming a much-heralded destination shop in the cities still lucky enough to have one. Streaming of new music online, legally, is at an all-time high enabling consumers to preview loads of great new music and ticket prices have come down from the bloated prices of a couple years ago.
The industry has much to discuss. Streaming audio and potential new services like Spotify may begin to influence sales to a larger degree and force terrestrial radio to address their shit poor playlists just like MTV forced radio to wake up in the early ‘80s. Streaming is quickly becoming as big a music discovery on YouTube and will cause shifts in popular culture over the next 5 years, the new projected length of time predicted for digital to finally overtake physical sales. 2015. Wow.
But just like radio, physical isn’t going away and now all parties are ready to really discuss the future of physical. Prices have come down on deep catalog and indie stores are rocking this stuff out the door forcing labels to reconsider price points. A win-win for consumers. Why buy crappy audio digital when you can score the CD for $7.99.
Another exciting development is the recent sale of Warner Music Group, one of the four largest music and distribution groups in the world to a Russian billionaire. No, it’s not that Russian gangster featured in the satellite TV commercials with the miniature giraffe. Len Blavatnik already owned 2 percent controlling interest in WMG and plans to take the company private after a couple decades of being publicly traded.
This is what I find most encouraging. I think part of the reason America has become so corporate driven is due to every company being traded on Wall Street. It forces organizations to constantly be focused on quarterly profits versus focusing on running the business.
Instead of placing too much emphasis on immediate hits to make the quarterly balance sheet look good Warner can now focus on developing careers. This is the way record companies used to approach the business. Instead of an act having to hit platinum on the first record said act was given three or four albums to develop their craft and then they would hit paydirt. Rush, U2, R.E.M., Kiss, the list goes on and on.
Instead today we get Katy Perry and Christina Perri. Totally disposable. Cannot sell out large rooms, poor album sales instead selling just digital tracks and forgotten in a year. I don’t normally bag on any artist because I like stuff others would find stupid but I gotta say I hate Christina Perri. Seems the worst totally manufactured garbage amongst a trash heap of the stuff recently.
Blavatnik may end up acquiring EMI Music as well, the fourth largest music conglomerate and rescue it from habitual financial problems potential revitalizing the home of the Beatles, Beach Boys, Pink Floyd, Coldplay, Seger and more.
Some would argue consolidation is bad, and I usually agree, but in this case, I think this is a good move for the industry.
Getting our industry refocused on music and less on Wall Street can only be a good thing.
Mike is the General Manager of Homer’s Records and has been active in the music industry for more than three decades as a retailer, writer, musician and radio deejay. He currently hosts “Sunday Morning” on 89.7 the River, and serves as a board member for the National Association of Recording Merchandisers and the Coalition of Independent Music Stores.