PG received a tip from Evan for an article about the evolution of the music industry. Evan suggests there are a lot of similarities between the development of the market for indie musicians and indie authors.
I’m going to first explain a few things about myself. I’m 52 years old, I have been in bands continuously, and active in the music scene in one way or another since about 1978. At the moment I’m in a band, I also work as a recording engineer and I own a recording studio in Chicago. In the past I have also been a fanzine writer, radio club DJ, concert promoter and I ran a small record label. I was not terribly successful at any of those things, but I have done them, so they qualify as part of my CV.
I work every day with music and with bands and I have for more than 30 years. I’ve made a couple thousand records for independent bands and rock stars, for big labels and small ones. I made a record two days ago and I’ll be making one on Monday when I get off the plane. So I believe this puts me in a pretty good position to evaluate the state of the music scene today, as it relates to how it used to be and how it has been.
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I hear from some of my colleagues that these are rough times: that the internet has cut the legs off the music scene and that pretty soon nobody will be making music anymore because there’s no money in it. Virtually every place where music is written about, there is some version of this troubling perspective. People who used to make a nice income from royalties, they’ve seen the royalties dry up. And people who used to make a living selling records are having trouble selling downloads as substitute for records, and they no longer make records.
So there is a tacit assumption that this money, lost money, needs to be replaced and a lot of energy has been spent arguing from where that money will come. Bitchiness about this abounds, with everybody insisting that somebody else should be paying him, but that he shouldn’t have to pay for anybody else. I would like to see an end to this dissatisfaction.
It’s worthwhile to remember from where we’ve come. From where this bitchiness originates. In the 1970s through the 1990s, the period in which I was most active in bands in the music scene – let’s call this the pre-internet era. The music industry was essentially the record industry, in that records and radio were the venues through which people learned of music and principally experienced it. They were joined by MTV and videos in the 80s and 90s, but the principle relationship people had with music was as sound recordings. There was a booming band scene and all bands aspired to getting recorded, as a mark of legitimacy.
But recording was a rare and expensive enterprise, so it wasn’t common. Even your demo tape required considerable investment. So when I started playing in bands in the 70s and 80s most bands went through their entire lifecycle without so much as a note of their music ever being recorded.
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As a yardstick for the economics of the day or for the era, in 1979 you could buy a 45rpm single for a buck, a new album for $5, go see a club gig for $1 or a stadium gig for $7. I know these things because I still have some old ticket stubs and price stickers on my records. Note the relative parity between the live show costs and the recorded music costs. A gradual inflation of prices remained under way through the 90s, making recorded music more expensive, though it remained the principal means of experience.
The whole industry depended on these sales, and sales depended on exposure. Bands on big labels toured, essentially to promote their recordings. And the labels provided promotional and logistical support to keep the bands on the road. This supported a network of agents and managers and roadies and promotional staff, so the expense was considerable.
Retail outlets also offered special placements and promotion: displays, posters, mentions in print ads, giveaways, trinkets and what were called end cap displays. Record labels paid handsomely for these promotions and the stores used the sale of these promotions as additional income. Chain stores especially relied on corporate chain-wide promotions, regardless what the stores might think their local clientele might like. It wasn’t uncommon to see big displays of hair metal bands in urban outlets where they couldn’t sell a single stick but the labels had paid for their utility, so up they went.
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So it was a leaky system, riddled with inefficiencies, but a lot of people made a living through it. Record store owners, buyers, employees, ad agencies, designers, club owners, label reps, A&R, producers, recording studios, publicists, lawyers, journalists, program directors, distributors, tour managers, booking agents, band managers, and all the ancillary services they required: banking, shipping, printing, photography, travel agencies, limos, spandex wardrobe, cocaine dealers, prostitutes. Because of this great bulk of the industry needed to sustain itself. Every facet of the industry was tailored to this need.
The most significant bit of tailoring was an accounting trick called recouping costs. The costs of making a record wasn’t borne by the record label, except initially. Those costs were recouped or taken out of the income the band might otherwise run as royalties. The same was true of all those promo copies, posters, radio pluggers and payola men, producers, publicists, tour support, 8×10 glossies, shipping, freight – basically anything that could be associated with a specific band or record was ultimately paid for by the band, not by the record label.
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In the end the bands operating under this system earned very little from their record sales, unless they were monumental stars. Often enough bands would conduct their entire careers with a label and never reach the point where they had sufficiently recouped to get paid anything at all. Now the label made its per-piece profit on every record sold. And could recoup the cost of any records unsold. And all those other people got paid using the money that would have otherwise gone to the bands as royalties. Unsurprisingly, those other people also got paid pretty well. It stands to reason that if the label is paying you with someone else’s money, the label doesn’t need to care how much you charge.
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Now bands existed outside that label spectrum. The working bands of the type I’ve always been in, and for those bands everything was always smaller and simpler. Promotion was usually down to flyers posted on poles, occasional mentions on college radio and fanzines. If you had booked a gig at a venue that didn’t advertise, then you faced a very real prospect of playing to an empty room. Local media didn’t take bands seriously until there was a national headline about them so you could basically forget about press coverage. And commercial radio was absolutely locked up by the payola-driven system of the pluggers and program directors.
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So these independent bands had to be resourceful. They’d built their own infrastructure of independent clubs, promoters, fanzines and DJs. They had their own channels of promotion, including the beginnings of the internet culture that is so prevalent today – that being bulletin boards, and newsgroups. These independent bands even made their own record label. Some were collectives and those that weren’t were likely to operate on a profit-sharing basis that encouraged efficiency, rather than a recoupable patronage system that encouraged indulgence.
That’s where I cut my teeth, in that independent scene full of punks and noise freaks and drag queens and experimental composers and jabbering street poets. You can thank punk rock for all of that. That’s where most of us learned that it was possible to make your own records, to conduct your own business and keep control of your own career. If a bunch of pimply glue sniffers could do it, we reasoned, then anybody could.
The number of records released this way was incredible. Thousands of small releases made their way into the “mom and pop” independent speciality stores, which then provided a market for independent distribution. It was the beginnings of an alternative to the label paradigm. It was cumbersome and slow but it was more efficient than a shotgun approach with the big labels, whose answer to every problem was to spend more of the band’s money on it.
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It was the beginning of what we would call the peer network. By mid-90s there were independent labels and distributors moving millions of dollars of records and CDs. And there was a healthy underground economy of bands making a reasonable income owing to the superior efficiencies of the independent methods. My band, as an example, was returned 50% of the net profit on every title that we released through our record label. I worked it out and that earned us a better per-piece royalty than Michael Jackson, Bruce Springsteen, Prince, Madonna or any other superstar operating concurrently. And we were only one of thousands of such bands.
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You may have noticed that in my description of the mass market music scene and the industry as it was pre-internet I made little mention of the audience or the bands. Those two ends of the spectrum were hardly considered by the rest of the business. Fans were expected to listen to the radio and buy records and bands were expected to make records and tour to promote them. And that was about all the thought either were given. But the audience was where all the money came from and the bands were where all the music came from.
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This audience-driven music distribution has other benefits. Long-forgotten music has been given a second life. And bands whose music that was ahead of its time has been allowed to reach a niche audience that the old mass distribution failed to find for them, as one enthusiast turns on the next and this forgotten music finally gets it due. There’s a terrific documentary about one such case, the Detroit band Death whose sole album was released in a perfunctory edition in, I believe, 1975 and disappeared until a copy of it was digitised and made public on the internet. Gradually the band found an audience, their music got lovingly reissued, and the band has resurrected, complete with tours playing to packed houses. And the band are now being allowed the career that the old star system had denied them. There are hundreds of such stories and there are speciality labels that do nothing but reissue lost classics like that once they surface.
Now look at the conditions from a band’s perspective, the conditions faced by a band. In contrast to back in the day, recording equipment and technology has simplified and become readily available. Computers now come pre-loaded with enough software to make a decent demo recording and guitar stores sell microphones and other equipment inexpensively that previously was only available at a premium from arcane speciality sources. Essentially every band now has the opportunity to make recordings.
And they can do things with those recordings. They can post them online in any number of places: Bandcamp, YouTube, SoundCloud, their own websites. They can link to them on message boards, Reddit, Instagram, Twitter and even in the comment streams of other music. “LOL,” “this sucks,” “much better,” “death to false metal,” “LOL”. Instead of spending a fortune on international phone calls trying to find someone in each territory to listen to your music, every band on the planet now has free, instant access to the world at its fingertips.
I cannot overstate how important a development that is. Previously, in the top-down paradigm allowed local industry to dictate what music was available in isolated or remote markets, markets isolated by location or language. It was inconceivable that a smaller or independent band could have market penetration into, say, Greece or Turkey, Japan or China, South America, Africa or the Balkans.
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In short, the internet has made it much easier to conduct the day-to-day business of being in a band and has increased the efficiency. Everything from scheduling rehearsals using online calendars, to booking tours by email, to selling merchandise and records from online stores, down to raising the funds to make a record is a new simplicity that bands of the pre-internet era would salivate over. The old system was built by the industry to serve the players inside the industry. The new system where music is shared informally and the bands have a direct relationship to the fans was built by the bands and the fans in the manner of the old underground. It skips all the intermediary steps.