Changes In The Way We Do Business

By, Wendy Day (www.HelpfulAngel.com)

“The only thing constant is change.” --Heraclitus, Greek Philosopher (535 BC-475 BC)

“Wow! Our shit is fucked up!” --Wendy Day, circa 2009

1. The Absence of Retail From Our Economic Landscape: Whether you want to download music or not, that’s the way it’s going. CDs are going the way of vinyl, cassettes, and 8 tracks. Get used to it. Because downloads are seen by title on a screen instead of pre-packaged in a tangible format, the music business has switched from an album culture to a singles culture. Fans and consumers can pick and choose songs instead of being forced to buy 10 to 18 songs packaged altogether in a cohesive unit. If you want to sell more than singles to your fans, your shit is going to have to be an album of hot singles.

Upside: Consumers only shell out 99 cents for the songs that they want. Artists can see exactly which types of songs their fans want and can offer more music in that direction.

Downside: Some of my favorite songs are the ones in between the singles on albums that grew on me as I listened to them over and over. Now fans make compilations of songs they already like by their favorite artists—it’s like making their own albums by the artist. But it certainly isn’t how the artists intended us to be listening to their music. It’s no longer an art form to sequence albums perfectly because very few people will listen to their music in sequence.

2. Prices Are Plummeting… According to RIAA, CD sales have declined every year for the past 8 years, falling 26% in 2008 from 2007 (the most recent measurement for 2009 sales won’t be available until January 2010). Retail stores are going out of business very quickly. The remaining stores that do carry CDs are mostly big chain stores, so their focus is Top 40 (the mainstream CDs with the highest sales demand). Very few of the places where you buy music are meant to sell music. So you can pick up your CDs along with tampons and greeting cards, refrigerators or washer/dryers, or your weekly groceries at WalMart (if the music has no cursing), Target, or BestBuy. CDs sell for $9.99 to $12.99. In an effort to compete, FYE is trying a new program in 75 of their 600+ stores: they are selling all CDs for $9.99.

Upside: At least there is a place to go for those who still want to get their music on CD. When CDs first came into fashion, cassettes were phased out within five years. I can’t even buy a cassette today if I want one. Also, consumers want to pay less for music and instead of spending $17.99 on a CD that costs less than 30 cents to manufacture (not including marketing and promotion), they can now spend ten bucks. And lastly, the lower price point is forcing the major labels out of the music industry and leveling the playing field so smaller indie labels can compete. Whoever has the best music and can make it for $10 a CD, wins.

Downside: A $10 CD means a wholesale price of $5-- down from a high of almost $12 ten years ago. CDs now retail for a lower price than what the wholesale price was 10 years ago.


3. …And The Labels Will NOT Be Taking The Loss From That Plummet: Almost every label is offering only “360 Deals” to sign artists or for current artists who aren’t selling millions of CDs. A 360 Deal means the record label gets to share in the other income streams for artists besides just music sales. They get a percentage of publishing, a percentage of the touring and show money, a percent of the merchandising, sponsorships, and endorsements….shit, if the artist quits and goes to work in corporate America, I think the label gets a piece of that job paycheck too (just kidding, I hope!).

Upside: As leaner, meaner, more profitable companies, record labels can do what they do best. Additionally, artists who have no access to investors and no business acumen to put out music on their own, can actually still have a career (although, arguably, at a high cost). Lastly, if you absolutely refuse to sign a 360 Deal, you can build your leverage so strong by selling your own music that you can negotiate another type of deal, or you can just do it yourself--finding investors and a team of experienced people to help you is far easier than finding a record deal with a major label.

Downside: Artists no longer just make 12% of the retail price of their CDs after they pay back all of the recording costs, promotional and marketing expenses, etc. Now they get to lose 50% of their publishing, and 30% of their tour money, endorsement deals, and film/tv/book deal money. Where else can you go to pay back everything spent on you to build your career and then keep on paying out of every dollar you make?

4. Magazines Are Dying While Blogs Are Sprouting Up Daily: Bloggers are the new mixed tape DJs. Just as mixed tape DJs used to break new music back in the day, today it’s the bloggers. According to RapRadar.com, the Huffington Post of the rap bloggersphere, there are 100 Blogs or Websites worthy of being listed in their “Blog Roll” list. This means that anyone with a passing interest in rap and some writing skills (or not) can weigh in and have their opinions read by others.

Upside: We get our news and information instantaneously. Voicing opinions have come into the hands of the people and have been taken away from the traditional gatekeepers.

Downside: We sacrifice journalism, quality in-depth reporting, and sometimes accuracy for the sake of having instant information. Also, any idiot with a following can seem credible (Perez Hilton, stand up!) regardless of their training, their access, their ability to write or research, or their own agenda. Additionally, those who are reporting on the famous often want to be more famous than the famous they are reporting on. And lastly, an industry that was lacking in journalistic integrity to begin with has entrusted information into the hands of sycophants, plagerists, idiots, and whores (male and female). Oh, and a few very qualified people with integrity and fact checkers who do this because they love it. This is who and what we depend upon to get our “news” as it occurs.

5. Too Much Information: In an effort to get up close and personal with our stars, we have gotten, well, up close and personal with our stars. There was a time where there was some mystery and glamour to the façade of the entertainment industry. Now we have inner circle access to everyone with a reality TV show, videos to post on World Star Hip Hop, a twitter account, and YouTube uploads. I don’t care what brand of tampon that R&B songstress uses or her ghetto mama, I don’t need to know how much that rapper likes to fuck and in what positions, nor do I need to know what an asshole my favorite DJ can be when he’s drunk. We’ve gone too far… and we wonder why sales have dropped. Stars that we used to respect look like sellouts trying to get paid off of any and everything they can find to keep them in the limelight—Dancing With The Stars, America’s Biggest Losers, their own reality shows (the more bizarre, scandalous, or embarrassing, the higher the ratings). When did it become all about the check, fame whores?

Upside: One can see the reality of what it’s like to be famous so we can either avoid it at all cost or go racing towards fame. People we thought we wanted to get to know-- we can either get to know who they really are or avoid them. People with products to hawk and no shyness can go full out to sell their books, movies, music, clothing, etc. Also, people who got into this fame induced fantasy industry can fully realize their dream--to have all eyes on them.

Downside: Our image of the star is blown to smithereens. After all, familiarity breeds contempt (you may not know that though, as the 48 Laws Of Power hasn’t had its own reality show yet). Also, we get to see how truly ghetto our stars can be…instead of just suspecting it.

6. Fuckboys And Inept Teams : Bad economic times means layoffs and less money circulating in the world and in the music industry. That also means more people out of work who are looking to survive and make a quick buck. While this industry has always attracted a disproportionate amount of people who take money and don’t deliver (or possibly can’t deliver because they are inept), these tough economic times have them out here in droves looking for their next meal. There are more new artists than ever getting jerked (it’s hard to rip off those who know and have been around for awhile), and more than ever coming into the industry with their own trusted teams of inexperienced “managers” who are inadvertently fucking shit up. At least have one person around you with some industry knowledge before you burn yourself out doing all of those features with no-name rappers. In a minute, you’ll have no value, and that unsuccessful label you are signed to will give up on you and shift focus to someone with a better team who’s easier to work with.

Upside: Hey, fuck boys gotta eat too! Also, most people who get jerked out of a couple thousand dollars quickly move onto other industries. This “natural selection” process weeds out all of the extra people in this industry who don’t take the time to learn about it before jumping in with both feet. The last person standing is usually those who know better, or the fuck boys because they have all the money.

Downside: A fool and his or her money is soon parted. Fool! I’ve seen people lose millions of dollars in this business by having the wrong team around them.

Things in life change. Either we keep up with the changes and adapt or we become irrelevant. The upside is that new people coming into the business never knew any other time so there is no reminiscing over “better times” like my generation seems to like to do. None of the changes in the music business have occurred over night. We’ve all seen them coming and been given ample time to adapt and learn the new systems and approaches that work.

One thing that has never gone out of style is hard work. Work hard and educate yourself—no, work SMART, and educate yourself. You’ll find you’re ahead of the game no matter what the changes are.