Wednesday, March 21, 2007

"My Consumers, Are They Not My Producers?"

We are witnessing a shift in the recording industry from an emphasis on music as product to one of music maker as performer. An article from today's Wall Street Journal (subscription required) notes:

Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. "Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream," says Mr. Rabhan. "It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."

The music industry, an oligopoly where a few gatekeepers control revenue streams, is undergoing involuntary democratization due to new digital technology and the Internet. Industry leaders believe that their declining sales are due to illegal file sharing and other forms of piracy. The issue here isn't piracy. The issue is the collapse of the the artificial environment within which we have been fed our music since the early years of the 20th century.

As Lisa Gitelman documents in her recent book "Always Already New," early phonograph producers created the record listening public by cannibalizing talent and revenue from the various live music circuits of the time. Performing artists no longer needed to travel to concert halls around the country to make a living. Concerts became a marketing device to sell records. This business and consumption model influenced the development of radio, film and television in the United States.

We are returning to an age when touring artists will earn their income from live performances, and this time around they will use CDs to market their concerts. Incomes for most may decline, but the most popular performers may still earn more in a year than I will see in my entire life.

It may also be that the trends affecting the music industry will impact the business models governing television and film.

The music industry has found itself almost powerless in the face of this shift. Its struggles are hardly unique in the media world. The film, TV and publishing industries are also finding it hard to adapt to the digital age. Though consumers are exposed to more media in more ways than ever before, the challenge for media companies is finding a way to make money from all that exposure. Newspaper publishers, for example, are finding that their Internet advertising isn't growing fast enough to replace the loss of traditional print ads.

The enormous popularity of YouTube and other similar web services demonstrates a pent-up desire of many to create and control distribution of their own works.

As James Joyce wrote in his opus Finnegans Wake: "My consumers, are they not my producers?"

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