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Whats Wrong with the Music Industry in One Long Sentence (annotated)

Let's review our plot so far:

We have an industry that is afraid of technology, its senior spokespeople lie to congress, they use Enron-like accounting, they somehow --WHOOPS! -- forget to pay their artists, they are convicted price fixers, at the first sign of any kind of an economic rebound their instinct is to raise prices, they have ignored competitive pressures from other forms of entertainment such as DVDs, they ignore the devastatingly negative effects of radio ownership consolidation to their business model, they engage in all kinds of anti-competitive protectionism, they are unconcerned with the quality of their product, their customers are harried for time and distracted by other interests, their customers see nothing wrong with downloading music for free, some of their biggest stars are hoping the Internet will replace the labels, despite all too many signs that their product is over priced, they refuse to allow market forces to set competitive prices, they have consistently been one of the most mismanaged businesses in history, oh, and they somehow think they are immune from the business cycle.

How are these guys still in business?

Tuesday, May 18, 2004 | 12:04 PM | Permalink | Comments (8) | TrackBack (18)
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Comments

If people think that music started in the 60's then we all need to get back to reality, yes the industry needs a shakup, but with so many people doing so much to continue its coruption there's no way we can ever get it back. there are some that belive that music is owned by the artists and those that belive that they need to be payed for there efforts, but it appers to me that if we use what has been around from the begining of time that we all need to except that music was never ours in the first place and if thats the case, shouldn't music be free for every one. if its not, then why do we support the majors and not the band down the road, are we going to help those that need help and listen to music that they havent told us to listen too.
Eg in the whole time of the grammies only one person in the world music catagory has ever one outside of America, if we are so worryed about changing this go out and support music that is not Americaized..

Posted by: ed | Apr 1, 2005 2:04:35 AM

I have heard the solution, well one anyways.
Charge the manufacturers that make products that enable users to make copies of the music or video. The idea is not new and I wish I could claim it as my own idea as it is a good one. Steve Gordon Esq from The Future Of The Music Business actually came up with that idea and a few others. This does not solve the dirty parts of the music biz but it may shut them up for a few weeks.
The artists must take charge today at least the grass roots part, in addition get a smart lawyer on your side right in the beginning.

Posted by: Dan Coleman | Dec 27, 2006 7:03:24 PM

Ya see, me an Vito have an arrangement wit certain ... shall we say... investors. Thats how we stays in business punk. Now go shut up an play yer gitar!

Posted by: Tex Archangel | Jan 1, 2007 1:01:19 PM

I think people are beginning to tire of the limited material churned out by commercial radio and what is supplied off the shelf and are looking for something more.
While the mainstream music industry is facing new challenges - ie keeping sales from decreasing,independent artists beginning to take advantage of online distribution and new developments in streaming media.
It's good to see a paradigm shift occurring.

Posted by: Mark Spivey | Mar 17, 2007 1:38:36 AM

While I agree with several of your points, a few of your ideas are based on a great deal of misinformation. Universal Music Group slashed their CD prices in September of 2003 (http://www.macworld.com/news/2003/09/05/umg/?lsrc=mcrss-0903) in an attempt to promote record sales. It was in vain, however, as CD sales continued to decline during the period following, as it has every year since the Napster explosion. Also, consumers drive the quality of products in a capitalist economy, not manufacturers. If people stopped purchasing poorly constructed pop music, it would not be nearly as prevalent as it is today. I do agree that the music business is inundated with mismanagement and a general malaise. Ironically, though, artists are not nearly as interested in working with knowledgeable people as those who have the power or authority to help them. For this reason, the horrible cycle continues.

The comments made by visitors of your analysis are just as misinformed and, worse, only laughable at best. One comment argued that music “was never ours in the first place and if that’s the case, shouldn’t music be free for everyone.” Clearly, the understanding of intellectual property was never properly explained to this individual who apparently believes that ideas are “never ours in the first place” and therefore subject to thievery. Every college student I have ever met has made this argument. Please, do yourself a favor and enroll in the next subjective morality class so you can understand precepts beyond “free love.” Another user provides the solution: “charge the manufacturers that make products that enable users to make copies of the music or video.” Although this idea is not a bad one, it was actually attempted with the Audio Home Recording Act of 1992. This legislation was ratified to prevent the significant losses of revenue caused by digital media and its means of loss-less duplication. It was clearly a good step forward; however, it did not really take the Internet into consideration. Because of this oversight, we have the deteriorating music industry of today.

Today is the day for significant changes in the music industry. The changes should not come from people looking to listen to music for free. It should not come from businessmen looking to line their pockets with other people’s money. It should not come from Internet businesses looking to capitalize on the creativity of others. It should ultimately come from the artists themselves, who will have to confront massive conglomerates and their own selfish needs to devise a system in which ethics and creativity triumph greed and corruption. On that day, the music industry may actually change.

Posted by: Sean O | Mar 20, 2007 1:21:59 PM

Thanks Sean, for your timely comment on this post from 2004.

I'm not sure whether to unpublish it, or simply leave it here as an example to others of the folly of open comments . . .

Posted by: Barry Ritholtz | Mar 20, 2007 8:16:59 PM

Personally, I think that all of the music artists are getting old.

Posted by: Chris Myers | Oct 1, 2007 12:15:53 AM

Oh, this is 100% correct. But, you want to know how they stay in business? These guys ACTUALLY BELIEVE that music fans NEED major labels and their over-paid A&Rs to decide what WE should listen to.

They really feel that without them, the best artists wouldn't rise above all the "noise" that's out there.

In other words they proudly admit to being the "big brothers" of the industry.

Posted by: Iceman | Feb 28, 2008 4:01:16 PM