EMI Group‘s, the world’s third largest music group, recent announcement that global product sales are down and that they are in the “red,” which will lead to about 1,800 job losses, is not the fault of MP3 file–swapping on peer–to–peer (P2P) networks. The fault lies with EMI themselves and they have no problem admitting that. It’s the general news media that is padding this particular headline with “blame file–swapping” claims.
EMI admitted in their press release that they needed a leaner staff and that business operating procedures needed to be updated. Where the P2P slant came into play is entirely a question for the news reporters covering this story.
But on the controversial subject of whether file–swapping has been the major cause of what the major labels will have you believe are “poor” record sales … don’t believe the hype. Record sales are good, they just aren’t what board members have promised their investors, and this was especially the case for EMI with they released their annual report. The hype is merely fabrication by the Recording Industry Association of America (RIAA) and its cartel of major label partners like Universal and AOL Time Warner. And don’t forget about the international equivalents of the RIAA. Royalties are an asset to the RIAA conglomerate, not the artists, in general.
I won’t even mention Sony or BMG because their views on this issue vary from department to department apparently.
Yes, it is true that the escalating mainstream usage of the MP3 file format and file–sharing have both dramatically changed the power of the customer in that the customer is now (thankfully!) learning about artists other than Limp Bizkit and Britney Spears and P. Diddy. The customer is becoming better educated and more cultured, maturing their musical palette and demanding more from the major labels. And major label executives and accountants are downright pissed that they have lost their 20–year control of the promotional piece involved in selling music. (I’ll explain my 20–year reference below.)
For example, have you noticed the fairly dramatic changes in artists and albums topping the U.S. music charts over the past year? More eclectic and with more genres breaking the top 20. Country, heavy metal, and soundtrack scores have become mainstream, popular. Such breakthroughs haven’t occurred since Soundscan was implemented 10 years ago, then proving that country music and r&b/hip–hop were heavyweight contenders in the music industry, major cash cows. Hell, even progressive bands like Dream Theater and Tool were at the top of the music charts in the past six months, and there ain’t nothing too mainstream or commercial about these acts, other than that they are two of the very few of their sub–genre signed to a major label (a shame, really).
By the end of the year 2001, it was becoming clear that the music customer was no longer willing to shell out the same dollar amount on a CD (with 80–percent filler) that the customer could instead invest in a steak dinner cooked–to–order, or even one person’s weekload of groceries.
I am a true music customer. I have about 2,000 CDs, yet I also hit the P2P networks and underground FTP sites. The only difference today is that I do not buy CDs that cost more than $10. That is, in essence, my budgeting technique. And most new CDs will not fall into this plan. And let’s not forget that 9/11 and recession are a huge part of “poor” CD and concert ticket sales. It affected me, that’s for sure.
Haven’t the major labels learned anything from their “new artist” deals (less than $9) at Target, Best Buy, Circuit City, etc.. Why haven’t they figured out that today’s new music customer is willing to gamble on a “new artist” album (priced at a reasonable $8) before they will buy a radio–hit artist for twice that dollar amount (around $16)? And there is a huge reason why people like myself hit the pawnshops or used CD stores (online and off) for $4 product.
Oh, and eBay! Think about it: most people would rather drop their cash for something brand–new, fresh out the box, regardless of what kind of product we are talking here. It is in human nature to get something new, something that has not been used by some stranger; something that, underneath the sealed packaging, has only been touched by the factory and you. Yet, the inflated, cartel–driven retail price of new CDs has driven customers to find used product, often before even considering the retail store down the street. And if you do buy a “lemon” of an album, you feel forced to get some money back; hence, the need for the used CD market.
And the current retail price of CDs has obviously driven the music customer to file–swapping to make sure that what they buy is in fact something worthy of their money.
If the major labels would downsize there legal and promotional departments, stop investing wasted money on copy–protection technology, and instead start signing more talented artists to “fair” (not millions, but also not rip–offs) contracts, the quality of music could improve and their accountants would once again be happy. Eighty–percent quality content on a CD … imagine that idea! And let’s not forget to include the lyrics and pictures in every single CD release. I’m not one to judge a book by its cover, but a table of contents and/or glossary make the purchase all the more worthwhile. Oh, and there is no need to sign a singer for $80 million. Talk about throwing your money away.
Remember in the 1960s and 1970s (if you’re not that old, just imagine!) when radio stations didn’t do pay–for–play with the major labels and station DJs had free reign over what music they wanted to play, often introducing the public to some great new music, whether signed or not? That is what MP3 and P2P is doing today, and unfortunately for companies like EMI, the labels are not going to be able to control this sector with pay–for–play. The first attempts have already failed.
I am not saying that the major labels shouldn’t promote their artists. But please, start promoting all the artists on your roster, not just they few you think more highly of. Don’t hire producers to create designer bands. Sign bands that already exist and have proven themselves to clubs across their metro area. Sign vocalists that have raw talent; don’t hide some sixteen–year–old’s voice behind months of remixing, daring clothing, new dance moves, Pepsi commercials, and a pornographic face.
I am saying that the major labels need to harness the power of file–swapping, of allowing people to sample an album online so that the customer can confidently buy more CDs (and DVD music videos, for that matter). And if the customer is spending their money more wisely in the CD market, who knows, they may feel they have more money to invest in live concerts, which is where the artists themselves make the most money. The major labels just need to keep up with the times and change their marketing strategies accordingly, not further alienate fans.
And to those of you that keep yelling, “Boycott major label albums!” I can only tell you that this not the solution. Buy music, but buy it used or on sale. That will send a message. CDs do have a superior sound compared to MP3 files, whether you want to believe it or not. Spend your money wisely (after listening to some MP3s first!) and that will show the labels what artists are truly talented and which stink. Not to mention that increasing sales for independent artists and labels will send a clear message to the labels. It’s only a question of who will listen.
