Two headlines crossed my screen the other day…one concerning yet another grotesque MAFRIAA file sharing judgment.  The other, this little tidbit from SlashDot…

The Music Industry’s Crisis Writ Large 

The NY Times has an opinion piece that makes starkly clear the financial decline of the music industry. It’s accompanied by an infographic that cleverly renders the drop-off. The latest culprit accelerating the undoing of the music business is free, legal online music streaming.

"Since music sales peaked in 1999, the value of those sales, after adjusting for inflation, has dropped by more than half. At that rate, the industry could be decimated before Madonna’s 60th birthday. … 13- to 17-year-olds acquired 19 percent less music in 2008 than they did in 2007. CD sales among these teenagers were down 26 percent and digital purchases were down 13 percent. … [T]he percentage of 14- to 18-year-olds who regularly share files dropped by nearly a third from December 2007 to January 2009. On the other hand, two-thirds of those teens now listen to streaming music ‘regularly’ and nearly a third listen to it every day."

The moron who wrote that Time’s piece, seems to agree with the Music Industrial Complex that the internet is killing the business.  Starting off with how the speed at which the industry is falling apart is "utterly breathtaking", he proceeds, as in the quote above, to blame this new fangled thing called streaming music.

First, piracy punched a big hole in it. Now music streaming — music available on demand over the Internet, free and legal — is poised to seal the deal.

Okay…when I was a kid, streaming music was called RADIO.  And we listened to it constantly.  For…free.  Yes it had advertising…but back then it wasn’t the constant barrage of screaming in your face ads that broadcast radio is now. And then, as now, RADIO doesn’t pay per song royalties (at least not here in the U.S.).  They pay a flat licensing fee to the big music royalty groups, that’s based on a sampling survey of their programming.  Internet streaming radio on the other hand, has to pay Per Song Served.  So…yes Mr. New York Times…kids are listening to steaming music for free.  That doesn’t mean the Music Industrial Complex isn’t getting any money from it.  In fact, they’re getting more Per Song then then get from broadcast radio.

When I was a kid back in the late 60s and early 70s, we listened to tons of music for free…on the RADIO.  And what was more, if you had a good tape recorder and a good radio, you could tape the music you were listening to and play it back later, as often as you liked.  But back then there was an incentive not to.  You could actually buy the songs you really liked for a price most of us kids could afford.  This New York Times jackass seems to want everyone to forget that…

This is part of a much broader shift in media consumption by young people. They’re moving from an acquisition model to an access model.

Even if they choose to buy the music, the industry has handicapped its ability to capitalize on that purchase by allowing all songs to be bought individually, apart from their albums. This once seemed like a blessing. Now it looks more like a curse.

In previous forms, you had to take the bad with the good. You may have only wanted two or three songs, but you had to buy the whole 8-track, cassette or CD to get them. So in a sense, these bad songs help finance the good ones. The resulting revenue provided a cushion for the artists and record companies to take chances and make mistakes. Single song downloads helped to kill that.

Previous Forms.  Previous Forms.  Previous Forms. 

Ahem…

This is a shot I took of myself (before the haircut…) with my 45rpm collection for a post last year.  These are Singles.  Well…doubles if you counted the B side that nobody ever listened to.  That was what you bought back then when you were a kid in the 1960s into the early 70s.  Yes…even during the days of the 8 track tapes.   Music stores back then usually had a whole wall devoted to the 45 rpm singles, and they were all the top forty tunes, plus a lot of also-rans that sold enough to keep them on the shelves.  Singles didn’t kill the music business back then.  They brought tons of money into it.  That was how teenagers bought music back then.  Because that was what we could afford.  Teenagers you see, have no money.

Those 8 track tape machines, an early attempt at letting car owners play their own tunes while they drove, were for…car owners.  And they were an expensive add-on.  And so were the tapes, which often jammed after getting warped while baking inside a car.  Kids…that same age group that Mr. New York Times is bellyaching aren’t buying enough albums anymore…didn’t buy 8 track tapes, and only bought an album if it was a particularly favorite group and you had the money.  So the Beatles for example, sold tons of albums.  But super star bands like the Beatles were the exception.  Until the mid 70s, most top-40 hits were singles and they were all available as 45rpm singles.

But the Music Industrial Complex wanted more.  So they decided kill the single, to force listeners to buy albums.  And in the late 70s it worked pretty much.  We boomer children were getting older, had jobs, had money, and albums then weren’t extravagantly expensive compared to singles.  You could buy a Led Zepplin album for about 5 to 8 bucks depending on where you shopped.  Singles by then were selling for around a buck twenty-five, so if an album was mostly good to listen to, it made more sense to buy the album instead.  But soon, many of the top-forty hits couldn’t be found on singles.  That was a decision the music companies made, and…surprise, surprise…kids started taping songs and passing them around instead of buying. Music sharing didn’t start with the Internet and this generation of teenagers didn’t invent it.

You really began to see that the greed of the music companies would eventually kill them with the advent of the Compact Disk.  Initially their expense was related to the newness of the technology, and its superiority over the vinyl record.  But the price never came down and it’s still outrageously high.  I remember one day shopping at Tower Records, and seeing a set of new releases of James Bond movie scores (I am a film music buff…).  I picked up a few, thinking that my old vinyl LPs were getting a little worn and it would be nice to have fresh, all digital copies.  I picked up a copy of Dr. No….From Russia With Love…GoldFinger…Thunderball…Live And Let Die…  I had five CDs in hand and was about to walk to the cashier when I realized I was holding, and $22 a pop which was the price then, over one-hundred dollars of CDs in my hands…and there were only five of them.  So I put them back. 

Eventually I bought them second-hand for a lot less.  I was a grown adult then, with a job that let me afford to buy CDs at the grossly inflated price the Music Industrial Complex was charging for them, and I still balked.  $110…plus tax…for just five albums?  I just couldn’t justify it.  What the hell did the music companies think teenagers were going to do when faced with that decision?  Let me see…  Er…make copies?

The Music Industrial Complex profits from album sales in the 70s, and CD sales in the 90s were driven by the shear size of the baby boomer population.  We liked our rock bands.  We had jobs in the late 70s, and vinyl LPs were affordable, so the disappearance of the 45rpm single didn’t bother us too much.  In the 90s we were buying our old favorite albums all over again in CDs and we had careers by then and we could afford it.  But teenagers have no money.

If your business model is based on the impulse buying habits of teenagers, you need to make your product affordable to them.  And convenient enough that the impulse to buy won’t flip over to the impulse to…well…borrow a friend’s copy and copy it.  You can lecture them all you want about stealing, but when you can’t afford to buy music you copy it and that’s what a teenager is going to do.  Ask me how I know.  I still have those hours of music tapes I made off the radio.  The nice thing about taping music off the radio I discovered back in the early 70s, was you could skip over the commercials.