How Music Works (38 page)

WHAT IS MUSIC?

First, a definition of terms. What is it we’re talking about here? What exactly is being bought and sold? In the past, music was something you heard and

experienced—it was as much a social event as an aural one. As I argued earlier in this book, before recording technology existed, you could not separate music from its social context. It was pretty much all tied to specific social functions.

It was communal, and often utilitarian. You couldn’t take it home, copy it, sell it as a commodity (except as sheet music, but that’s not music), or even hear it again. Music was a singular experience, something connected to a specific time and place. It was part of the continuum, the timeline of your life, not a set of

“things” that lived outside of it. You could pay to hear music by going to a concert or hiring musicians, but after you did, it was just a memory. Or, as many people did, you could make it yourself or with your family or friends.

Technology changed all that in the twentieth century. Music (or its

recorded artifact) came to be regarded as a product—a thing that could be

bought, sold, traded, and replayed endlessly in any context. You didn’t have to go see a performance to hear music, and you didn’t have to perform the music yourself, either. Other people did those jobs. This was, of course, hugely convenient. Most of us grew up in an age when the existence of recorded music

was a given. We heard music in other contexts as well, but at least half of

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what we heard had been pre-recorded or was played on the radio—and much

of that was pre-recorded as well.

As record companies flourished, singers and songwriters began to earn

additional income from the sale of recorded music, beyond their income from

concerts. This must have seemed pretty exciting. Though there were lots of

small record companies early on, the industry was soon dominated by a hand-

ful of large companies that signed artists (all of us were at least given the dignity of being referred to as artists), paid for their recordings to be made, and then promoted the hell out of them (sometimes). These companies would

then get the records into any place that sold singles or LPs, and they’d also get them played on the radio. In return for this up-front and sometimes risky capital investment, most traditional record companies kept the lion’s share of the income, passing on a relatively small percentage of the sales to the artists. The songwriter (if that person was different from the performer) got paid something too, as composers had with sheet music in the preceding decades.

These changes upended the function and use of music, transforming

it from something we participated in to something we consumed. But our

instincts remain intact: I spend plenty of time as a music consumer, with

buds in my ears listening to recorded music, but I’ll still go out to stand in a crowd as part of an audience. I also sing to myself, and, yes, I perform and play an instrument (not always well).

We’ll always want music to be part of our social fabric. We gravitate to

concerts and bars even if the sound sucks; we pass music from hand to hand

(or via the Internet) as a form of social currency; we build temples where only

“our kind of people” can hear our kind of music (opera houses, punk clubs,

symphony halls); and we want to know everything about our favorite bards—

their love lives, their clothes, their political beliefs. Something about music urges us to engage with its larger context, beyond the piece of plastic it came on—it seems to be part of our genetic makeup that we can be so deeply moved

by this art form. Music resonates in so many parts of the brain that we can’t conceive of it being an isolated thing. It’s whom you were with, how old you were, and what was happening that day. Trying to reduce and package such a

changeable and unwieldly entity is ultimately futile. But many try.

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WHAT DO RECORD COMPANIES DO?

Or, more precisely, what did they traditionally do? As I outlined earlier, the record company not only has the capital to fund some of the recording

and promoting, they presumably also have some skills, expertise, useful con-

tacts, and access to the latest technology—more than a bank would have, for

example. A bank would never give a kid with a guitar a loan; the kid has no collateral from a bank’s point of view.

The idea used to be that the record company A&R folks all had good ears, and, as Lenny Waronker said, they could sense that these kids and their songs could, just maybe, become hugely popular and make a pile of money for the

record company. At some point in the eighties these guys with the special ears began to disappear. Most of the major labels began to merge with one another, or even with non-music businesses. Warner Brothers, where I was, got absorbed by Time, Inc. (Maybe we’d all get good reviews in
Time
from now on!) And then, to make it even more confusing, that entity merged with AOL. The new stockhold-ers and boards soon demanded quarterly accouting, which pressured the labels to produce significant hits on a regular basis. The “ears” who spotted and nurtured talent were well paid, so to pay off the debts accrued by the recent merg-ers, these guys were let go. Then even the guys who managed and used to own

the record labels were paid handsomely to go away. Other guys who didn’t have a history of dealing with musicians thought they could do just as well or better by being more ruthless and efficient. Mostly, though, they didn’t do any better.

The smaller labels that survived still relied on their love of the form and their gut instincts, and because they were actually paying attention, sometimes they hooked a big one. They knew when something moved them, but they didn’t have

the same financial resources and marketing manpower as the big boys. Turning one’s heart, ears, and love into cash could be a sometime thing.

Here’s the traditional breakdown of what record companies used to do:

• Fund recording sessions

• Manufacture product

• Distribute product

• Market product

• Advance money for expenses (concert tours, videos, promotional events, hair and makeup)

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• Advise and guide artists on their careers and recordings (managers are supposed to do this, but record companies do as well)

• Handle the accounting of all of the above and eventually funnel some of the leftover cash to the artist

This was the system that evolved in the twentieth century to market the

product, which is to say the container—vinyl, tape, or disc—that carried

the music. Can you imagine a business in which most of its investments prove to be bad? That was the record business before the collapse—the few massively successful acts were supporting the many who weren’t exactly failures. So, in effect, Robert Palmer’s sales funded the Pogues, and Madonna’s income funded Randy Newman’s idiosyncratic records. This system of corporate arts funding, however wacky, held up until the foundations began to crumble. Since 2000,

many forces have conspired to reduce the value of the services those record

companies offer to artists. The deals offered are no longer supported by the same a priori assumptions regarding what a label will do for an artist. Here are some of the things that have changed:

CHANGE 1: RECORDING COSTS

BEGAN TO APPROACH ZERO

Years ago, most artists simply didn’t have the $15,000 (minimum) to pay for

studio time, engineering fees, and mixing and mastering costs—the base

investment needed for making a record. But now an album can be made on the

same laptop you use to check email.

I still utilize proper studios fairly often, but I have come to realize that it isn’t an absolute necessity anymore. The cost of a laptop and the gear that went into recording my vocals on “Lazy” (my collaboration with X-Press 2) might

have come to a few thousand dollars, and though the laptop has been retired, it was also used for other recordings (as well as email and lots of other functions).

Microphones, speakers, and other gear used for that project are still in use. So that “startup” cost gets amortized rapidly over a few years.

But what if you want to record a large band and not just yourself singing

on a laptop? A company called ArtistShare, run by Brian Camelio, offers a

new approach to funding recordings that require capital investment. I heard

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about them when an ArtistShare record by jazz composer Maria Schneider

won a Grammy. (That put the lie to the argument that semi-self-funded

recordings should be looked down on as vanity projects.) Schneider works

with modest-size orchestras, a bit like Gil Evans did some decades ago. The

cost of rehearsing with these ensembles and recording them is consider-

able—way beyond what would normally be available to jazz artists whose

record companies anticipate fairly modest sales and adjust their funding

accordingly. Camelio tried to solve this problem by initiating fan-funded

recordings. Fans of Schneider’s give money to ArtistShare before the record

is made—an act of faith that won’t necessarily work for everyone. The fans

who can give just a little get a CD when it’s done, and those who give a lot can get thanked on the CD, given free concert tickets, backstage passes, and all the rest. Kickstarter campaigns work in a similar way. Neither is a conventional investment, because the fans don’t get a percentage of sales, but

they are an investment in keeping artists working and recording at a high

level. One might say these models facilitate investment in the continua-

tion of our own culture. So one way or another it is sometimes feasible for

a musician to find a way to record without going into serious debt—if they

are careful.

CHANGE 2: MANUFACTURING AND

DISTRIBUTION COSTS ARE APPROACHING ZERO

There used to be a break-even sales point below which it was impractical

to distribute a recording. With LPs and CDs, there were base manufac-

turing costs, printing costs, shipping, warehousing of stock, and so on. It was essential to sell in volume, because that’s how those costs got amortized. The costs per record came down the more records were pressed and potentially

sold. If you sold less than a few thousand LPs or CDs, the initial costs of not only the recording, but of pressing the vinyl (or CDs) and making the covers and shipping to warehouses and record stores couldn’t get paid back, so the

record company would inevitably lose money. This meant that marginal music

tended to remain marginal because of economics and technology, rather than

the quality of the music. This also meant that for a record that only sold a few thousand copies, the percentage of each record sale that went back to the 214 | HOW MUSIC WORKS

artist was lower than for those that sold millions, for which the percentage of the recording cost that is paid back by each record sold approaches zero.

Records that sold well not only brought in more profit per copy sold, but a

larger percentage of those profits per copy went to the record companies and the artists. Popular records could therefore be sold at a discount, which would undercut the little guys while still bringing in more money than the records the little guys put out. The music business was like Walmart that way.

No more: digital distribution is pretty close to being free. Digitally, it’s no more expensive to distribute a million copies than a hundred. Well, one

needs to use the services of a heftier server if larger quantities of music files are being downloaded at once and more credit-card payments are processed,

but there are no more warehouses, trucks, damaged goods being returned, and

pressing plants that consume natural resources. The big “stores” where digital downloads are available are few (iTunes, Amazon, and eMusic in the United

States), and they do take a percentage of the digital sales—around 30 per-

cent—which some people, including me, regard as unreasonable. So, to be fair, the distribution isn’t really free. That percentage is often less than what old-school record stores took in as their percentage of the the retail price, though sometimes—surprise!—it works out the same for the artist in the end.

So, although distribution costs have dropped precipitously, there are

still corporate gatekeepers who charge hefty tolls. The savings aren’t

passed on as fairly as one might hope in most cases, although, as we’ll see, there are workarounds.

CHANGE 3: ARTISTS NO LONGER GET BIG ADVANCES

Due to the large percentage of each record sale kept, the record companies

often broke even way before the artists began to see their own shares

trickle in. Many bands lived off the money given them in advance of the estimated sales of their upcoming records, and these amounts were often based

on an A&R person listening to rough demos or seeing a live show featuring new material. Most artists, however, never saw a cent from record sales after they got their advances. Their percentage of each record was still being used to pay off the recording and marketing costs and advances loaned to them by the record companies. The artists would then be obliged to write more songs in

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order to get an advance for another record—they’d be living record to record, advance to advance. The artists essentially went into debt—willingly, following the carrot of fame dangled before them. Making music and performing it

is hugely enjoyable, so a reward was built in that the record companies didn’t have to pay for. Artists would be having a pretty good time writing and playing music, making a name for themselves, but they’d be quietly getting deeper and deeper in debt. Most artists accumulated a debt that was hard to dig out of unless they managed to have record sales that stayed consistently high. The list of successful artists who at some point in their career went completely broke is astounding—TLC, the Ramones, Terence Trent D’Arby, Seal, Ron Wood, Meat-loaf, MC Hammer, Michael Jackson, Sly Stone, and Toni Braxton, just to name