What Killed the Music Biz?

Apple recently announced that it is shutting down iTunes (for Mac users) and focusing support on Apple Music. The reasoning is simple; most people don’t actually purchase music anymore, and the idea of an iTunes library has become antiquated. This has brought about another round of complaints from all over the music world about how streaming services have ruined everything for artists and labels. All the sales numbers are in the tank, and people are wondering where we’re headed, and what to blame. The answers might surprise you.

I recently read a fascinating article about the origins of Smooth, the smash hit song by Santana and Rob Thomas that dominated radio in 1999 and 2000. Take ten minutes and read it if you want to understand the inner workings of the “old” music biz. The sheer amount of moving parts, executives, money, and time that it took to get that record made and to make it into a hit is INCREDIBLE. And make no mistake, that song is not an outlier. A little research will reveal that many of the great songs and albums of yesteryear involved hundreds of thousands or even millions of dollars spent on studio time, production costs, legal fees, promotion, etc.

The transaction was clear and simple. The decision makers at the label invested that money into artists and songs that they believed in because the potential returns were so high. Santana’s Supernatural sold 30 million copies. According to this article, record companies usually retain around 63% of the money from physical record sales. At $10 per copy, that would mean the label brought in a cool $189 million.

Fast forward twenty years, and sales of music are a tiny percentage of what they once were. People aren’t even buying downloads anymore, which is why Apple is moving away from iTunes. This Forbes article estimates that an album would need to have 8.5 billion streams to generate revenue equivalent to 9 million physical sales.

People wonder why commercial music has gotten so bad, and the answer is very simple. If record labels can’t expect to get a large return from investing in artists, they aren’t going to do it. That’s why commercial country music is just a revolving door of bros in baseball caps, and why pop music is filled with random people mumbling over the same trap beat on every song. They are focus-grouped faces plucked from obscurity, putting out pandering drivel aimed at grabbing whatever bucks are available. Great art is too expensive to make when you can’t make money off of it.

This has led to a steep rise in the number of independent artists. It used to be that if you were a burgeoning artist and entertainer, full of talent and ambition and something to say, you’d go to LA or NYC or Nashville, and you’d try like hell to get a record deal and break into the industry. Now, it’s a different story. Radio music has become so low budget and formulaic that there isn’t much room for anything outside of that formula.

If you are a true lover of music, that’s good news, because the number of high quality artists out there is staggering. The sea change in the industry has given voice to the formerly voiceless. Can you ever imagine someone like John Moreland or Reverend Peyton on the radio? Hell no! But thanks to the advancement of technology, and the way that the music business has fractured, the framework exists for them to be heard. That’s GREAT. But as Sturgill Simpson sings, it ain’t all flowers.

Sometimes, you’ve gotta feel the thorns. Jason Isbell recently tweeted, “Funny how news outlets still say ‘touring to promote their latest album,’ when in fact it should now be ‘touring to promote their survival.’

By and large, people have stopped buying music. And that means the only way to make money is from playing shows. According to Nielsen, concert attendance is up. But I think the really interesting statistic in that piece is this; 23 percent of concert-goers purchase artist merchandise on-site, while 19 percent buy new music. That article was profiling big venues and shows, but I’d say those numbers are dead on for our shows too. It isn’t just Spotify and Apple Music to blame; the realities of the New American Economy are impacting this, because 78% of American workers live paycheck to paycheck.

Interesting how that dovetails with those other numbers, isn’t it? Folks might have enough money to go out to a show every now and then, but probably not enough to buy music or merch. We’re the same way; we listen to Spotify all the time. Yes, because it’s extremely convenient, but also because we simply can’t afford to actually purchase dozens of albums.

Doesn’t this sound familiar? The music business has really followed the EXACT same arc as the rest of the economy. Globalization and massive technological advancements have caused a huge shift, which has made the music world better and created opportunities for those who didn’t have them before. However, on individual level, it’s difficult to earn a fair, living wage.

Blaming streaming services for how things are is the equivalent of blaming immigrants for the lack of good paying jobs. If we want to progress, we have to understand where we are, and start moving forward accordingly. Shaking your fist and wishing for the old days is a pointless exercise, because just like all of those rust belt factories, record sales and the old music business aren’t coming back. As in everything throughout history, the people who succeed will be the ones who figure out how to adapt.

About Brian Keith Wallen

Singer-songwriter and guitarist from Indiana. Proud dog dad.
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