Music Business: Meet The New Boss

While it seems like only yesterday, it was actually a couple years ago when I went into a tirade in this very column about the inexcusable sin of illegal online music file sharing. Even though the practice persists to this day, it has hardly become the unstoppable menace that Napster and the like once appeared to be. In fact, the Internet is considerably friendlier toward musicians because of the burgeoning popularity of the iPod and subsequent growth of online music sales.

Yet I couldn’t help shuddering when I read last year that the once mighty Tower Records declared bankruptcy, and then, finally, after much speculation and denial, that CD sales plunged by 20 percent in the first quarter of 2007. It was no longer guesswork — the model for music distribution has changed, whether you like it or not, and very few people appear to know how it will impact most working musicians.

In one sense the trend as it presently stands is egalitarian. Browse through the “rock” category in iTunes, and the newest baby band owns just as much real estate on your computer screen as The Rolling Stones (unlike the day when Mick and Keith commanded a full display at the end of an aisle while a newcomer scrounged for a fraction of an inch of rack space).

To that extent, online music sales have leveled the playing field between artists. And there’s an excitement in the air. We’ve reached a tipping point that’s not unlike the birth of the punk movement in the late ’70s, when Stiff Records was as important as Atlantic because the pioneering British indie label released albums by artists like Elvis Costello and The Damned that were largely overlooked by major labels at the time, and helped fuel the movement.

But does the move to online music sales represent a true democratization of the music business? Hardly. Its advocates celebrated the slow demise of the recording industry, decrying it as a top-heavy dinosaur that institutionally ripped off artists. But the new numbers aren’t any better than the old ones. For example, while bands typically received a 12 percent royalty share for the sale of a CD single at a record store, they now can expect about half as much from a song sold on iTunes.

Frankly, I don’t get it. When a band signed a recording contract back in the glory days, the record label would advance money to the group to record the album, bankroll the design and production of the packaging and marketing collateral, promote the album through its publicity department, schmooze radio programmers to get the song played on the air, and underwrite tour support. Record labels were in the business of building music careers, but what does iTunes do beyond putting a song in a database, then collecting a royalty larger than what had once been considered appropriate?

As far as I can tell, all risks are now assigned to musicians. You pay to record the music, design and produce the marketing collateral yourself, promote your band by any means you can afford, and cover all expenses incurred on the road. Suddenly, this new system doesn’t seem very egalitarian at all, since the likelihood of profit shifts even further toward the even more monolithic music distributor and away from the artists who make the actual music.

I hasten to say that the new boss isn’t the same as the old boss. The truth is that it’s never been easy to be a professional musician. But something tells me that musicians will find a way to make this new system work. It just might be a bumpy road in the meantime, so hang in there.