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The Biz: When Dollars And Cents Meet Heart And Soul
Posted on Wednesday, June 14 @ 14:54:30 MDT by roadrash
 MD NewsThe music industry, in decline and disgrace, like many others today, faces almost certain implosion if it continues on its path to self-destruction. Global music sales decline consecutively, year after year. Record labels point to illegal file sharing as a reason for falling revenue. Other possible factors for the deterioration include decreased disposable household income and a rise in video music and games sales. Simply put, the post-recession financial rewards that many businesses now reap aren't being realized in the music business. Therefore, the leaders in this industry must examine their driving corporate values.

When Dollars And Cents Meet Heart And Soul
The Cost Of Dedication In The Music Industry
by Richard J. Atkins,

MusicDish Network Sponsor
"The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side." - Hunter S. Thompson

"Your Money or Your Loyalty"

The music industry, in decline and disgrace, like many others today, faces almost certain implosion if it continues on its path to self-destruction. Global music sales decline consecutively, year after year. Record labels point to illegal file sharing as a reason for falling revenue. Other possible factors for the deterioration include decreased disposable household income and a rise in video music and games sales. Simply put, the post-recession financial rewards that many businesses now reap aren't being realized in the music business. Therefore, the leaders in this industry must examine their driving corporate values.

The day-to-day operations of the business speak loudly of the problems within. Bands are signed and dropped in the twinkling of an eye. Artists are promised the moon and then shown to the dumpster. The whimsical winds of taste determine the flavor of the week without regard for greater potential in later days. Through it all, the question is raised, where is the sense of loyalty? What happened to all those campaign promises prior to election? In such a bleak environment, it is difficult or even impossible for an artist to create.

Rosanna Arquette's "All We Are Saying" provides a shocking exposé of the music scene. The film expresses the acrimony and disillusionment about the "business" of creating and producing art in today's society. Among the vast stable of artist input she presents, icons such as Joni Mitchell express a complete refusal to jump through the hoops held by the media giants. David Crosby mourns the loss of the numerous smaller record companies as a few big corporations that are responsible for today's entertainment are the replacement.

Devotion, faithfulness, dedication

Since the latter half of the last century, a sense of obligation

In the business world, this sense of responsibility is supplanted by the drive for personal recognition, frequently in the form of ego stroking and a paycheck norms then take on a life, personality, and power, all their own that dictates how business should be conducted." When attitudes and behaviors are especially self-centered, negative, and destructive, the consequences for a damaging corporate culture manifest themselves in numerous ways.

Sharing At the Smorgasbord

Examining the modern corporate promotion scheme reveals another factor of culpability in the disintegration of zeal for today's artists. Modern-day brand loyalty today is usually rewarded, however its illusory nature goes undetected. Frequent flyer miles, points, cash back, and other such gimmicks create the false impression of loyalty; however, true fan devotion used to be its own reward. Supporters of "undiscovered" music always knew what their treasure was. They savored, supported, promoted, and even shared it. In recent years, "sharing" implied something different.

Another explanation for erosion to artist dedication can be found in investigating the mindset behind distribution of music via the MP3 format (its beginnings date back to the days of 45s--singles), which is so widespread today among the "forward-looking" listeners. By offering the opportunity to take only the "desired song (or songs)," buyers aren't exposed to the other tracks from the act that may entice further attention and create a new and wider audience. It allows listeners to fast-forward to only the favorite parts and leave the rest.

Steven Tyler decries Internet downloading he sees it cheapen Aerosmith's catalog. Yet, younger musicians such as Radiohead seek alternative distribution possibilities via the Internet. It is important to note that music appreciation by smorgasbord does not require the same outmoded dedication that was necessary to listen to both sides of a record (yes, a passé reference). This piecemeal approach to music appreciation is, at best, superficial not substantive.

Actually, the prevalence of MP3s is more of a reflection on modern society's attention-span problem. Doctors have applied swanky acronyms such as ADHD, but at the root of the challenge is how contemporary culture encourages people to be over stimulated (a trip to the local mall will demonstrate this properly) and to pay attention only to that which is liked. By fostering this pick-and-choose attitude, the social order has deemed it appropriate that, "further research is not necessary. You already have everything you need to know."

Commitment Versus Consumerism

One such group that has felt the first nip of the wringer, Vertical Horizon, delivered Everything You Want to the 2001 music scene. During their meteoric rise to fame and stardom, the band earned a number one song and certified platinum album, which sold two million units. Front man Matt Scannell spoke of what commitment was to him when he was growing up: "We were proud to wear our favorite band's t-shirt or emblem. When I discovered a band, I would take the time to research the back catalog of albums and listen to them. Today, we find a sort of Omicrowave mentality.' Instead of two minutes to popcorn, it's six weeks to superstar."

Scannell accurately describes what pop culture and modern business have spun into the new wave of consumerism. Younger audiences today are discouraged from dedicating themselves to that which requires great attention or hard work. Looking at the change in music since the 1970s, epic-spinning super groups such as Pink Floyd, Emerson Lake & Palmer, and Yes raise the question, could today's younger listeners marshal the commitment to explore and absorb themselves in longer and more complex music? Must consumer-friendly entertainment be an instant-hit assembled package, American Idol style? Star-Searching shows (and Reality TV) shamefully provide an accurate study of current US culture's values, according to Scannell.

Vertical Horizon's problems started after completing two years of touring to support their hugely successful 2001 album. When it came time to begin recording a follow-up, the record company had already experienced two regime changes. Although the label was once a comfortable home for these musicians, it had turned into an unfriendly and micromanaging entity. In the studio, the band was under constant pressure to deliver the kind of "money-track" hit demanded by the company. The group's first single from GO (their current record), "I'm Still Here," was a corporate consensus-made hit. Ironically enough, the lyrics express great distaste for this committee record-making approach. Having artistic decisions made by those who are very far removed from the art parallels the quandary faced by so many school districts in which, educational decisions are made by those who have no real contact with the true end users look to the art only for their own profit.

Rising Stars, Falling Stocks

Having once shared the same record label as Scannell's band, Bruce Hornsby remarked that in his almost-two decade tenure with RCA Records, he had seen 10 company presidents come and go. Frequently, with each regime change comes new demands on the artist, or a complete abandonment. In a conversation after one of his appearances in New York, Hornsby echoed Scannell's comments about the music industry (almost word-for-word) when he said, "The music industry, as we know it today is finished. It's over." Both musicians were referring to the industry's lack of profitability.

Drummer Neil Peart of Rush authored "Traveling Music: The Soundtrack to My Life and Times," which, among other things, recaps some conversations he shared with Vertical Horizon's Matt Scannell. With more than three decades' experience in the industry, he rightly indicates that due to his own band's commercial success (a large and loyal enough audience), they were insulated from any kind of company intrusion on the creative process. The author/musician's advice to his friend was to, "Tell the record company to shut up and let you make your own record" (easier saidS). Peart mentioned the "kind of meddling of the Obusiness' in the Omusic'" that could only lead to difficulties for all concerned parties

Sony Music's Columbia Records recently discarded singer Nellie McKay over a conflict about the length of her record

Doug Derryberry (producer of Vertical Horizon's Running On Ice and guitarist for Hornsby's band) remarked that, "Companies forsake everything to make a buck. To see this happen in the music business is tragic. We see large companies (Home Depot, Lowe's, and IKEA) sell billions in inferior products because they're cheap

In another case, Sony was discontented with Fiona Apple's album, Extraordinary Machine, and had chosen to withhold it. Understandably, the artist was becoming more and more frustrated with the record company. In protest, fans organized freefiona.com demanding her music's release from industry prison. Apple has talked about how insulting corporate meddling in the creative process is

"Put the artist into a cannon and blow him/her up. Once that's done, after the big blast, they're out there looking for the next big thing." Such was Scannell's description of the record company's approach to signing new acts. Reiterating this sentiment, a former BMG executive, speaking under the condition of anonymity, referred to the A&R "day trader mentality" (A&R stands for Artist and Repertoire

Unethical and disingenuous practices are nothing new to this industry. In a July 25, 2005 press release from the office of New York State Attorney General Eliot Spitzer, it was announced that Sony BMG Music Entertainment agreed to halt pervasive "pay-for-play" practices in which the entertainment conglomerate was "making payments and providing expensive gifts to radio stations and their employees in return for Oairplay' for the company's songs." Four months later, Spitzer's office once again announced that another industry giant, the Warner Music Group, was the second to settle in the payola investigation. Spitzer did go on to say, "Unfortunately, other companies continue to engage in [these practices]. I applaud Warner's decision to halt this conduct, cooperate fully with my office, and adopt new business practices." Currently, Spitzer is seeking evidence of collusion between major labels. Apparently, the "most-favored nation" clause between labels and onl! ine services guarantees better prices and upgraded agreements.

(Un) Sound Decisions and Legalities

A detailed explanation of corporate desertion and neglect can be found in Jacob Slichter's "So You Wanna Be a Rock & Roll Star." The 2004 text describes (his band) Semisonic's journey to stardom and subsequent disregard by the record company. The group slipped into oblivion. Fans didn't even have a chance to forget about the sincere musicians. It was corporate mismanagement and other industry red tape that squelched a follow-up to their first and only smash hit, "Closing Time." Slichter's story shows that artist development is nonexistent. He suggests that record companies seem not to care about building a band's career. Their greatest concern is the third-quarter P&L statement: "Under the current system, major labels can only be loyal to the shareholders of their parent corporations."

Slichter's understanding of corporate loyalty, sadly, is "right on the money." A 1919 Michigan Supreme Court denied Henry Ford's attempts to use the company's surplus (cutting shareholder dividends) of more than $100,000,000 to employ more workers, help them build up their lives and their homes, and increase the number of people who could afford to buy his cars. Due to the objections of minority shareholders hungry for larger payments, the Court held that a business corporation must operate primarily for investor profit. Essentially, if efforts to better serve customers and employees mean less in shareholder return, it risks being in conflict with the duty of the corporation, which is to the shareholders first.

This hard-line approach can be countered with what is known as The Business Judgment Rule. In its application, it frees members of the Board of Directors from potential liability for certain "harmful" decisions. Essentially, it protects board members from legal action for making a flawed choice. The justification for the rule shows judicial recognition that businesses must be allowed to take risks and not necessarily face legal action for making such decisions. This can be a reliable record company justification for maintaining an artist that is not an immediate blockbuster. Acts may have long-term potential, despite the first album not being a smash.

When Cajun Meets Corporate

The subdudes, a New Orleans-based act spanning numerous genres (blues, folk, R&B, country, Cajun, funk, gospel, and rock) has survived numerous attempts on its creative life. The band faced a multi-personality implosion in 1997 and since then, has been recovering from a rather lengthy recording hiatus. Through the years, they've also felt the sting of record company corporate mismanagement.

In June 2004, after a show at The Cutting Room in New York, subdude Steve Amedée commented about the band's experience with stability of record company staff saying, "When we were with Atlantic, the A&R guy who signed us was there for a very short time and then left. Then, the next person came in and wasn't quite as interested in us. All the time we were with Atlantic, and even through East-West Records, it was the same thing. Three or four A&R people

When it comes to sincerity of A&R personnel, Matt Scannell says, "I've seen both sides. Some wear their hearts on their sleeves. Others, you can see right through. But these are the people who, in the boardroom, should be speaking the loudest, saying, OThis is the band we need to be promoting right now.' Instead, now they want to please the higher-ups. They're looking for the next stock to trade" or the next hot act to sign. Jacob Slichter reinforces this idea, saying, "Unfortunately, my sense is that the major labels are structurally incapable of pursuing any other goal than pushing up the price of the company stock."

Saving Grace

The subdudes and Vertical Horizon share the similar experience of shopping themselves around and waiting for the right record company. Scannell's band recently signed with Hybrid Recordings. When asked his impression of the new label, the guitarist/singer/songwriter spoke about the notion of team "from the top of the company down to the fans." With the previous company it was, "like running the race, crossing the finish line, and the other runner is getting water, but there's none for you. [The people at] Hybrid are all there cheering for us."

The subdudes have high praise for their Midwest-based Back Porch label (a division of Narada Records), especially in an industry dominated by New York and California companies. Amedée adds, "They bring that Middle-America hard working ethic. We've been with them three years and we still have the same people as when we began. There's a big difference right there. All the other labels we had, we'd have been on our third or fourth A&R cat by now." Band member John Magnie also praises the Milwaukee label saying, "They're normal, hard working people. Not being in one of the big Omusic centers' they have a little bit less jive. They're solid and honest."

Both Vertical Horizon and the subdudes have an extremely loyal fan base because of their ability to tour, give excellent concerts, and thus, self-promote. In fact, when Vertical Horizon arrived at RCA, they brought their pre-existing "grass-roots fan base. The label didn't have to do much." Similarly, the subdudes tour relentlessly. By delivering what the fans want, they maintain their own reward system, building listener loyalty. Vertical Horizon just completed a tour to support the re-release of GO 2.0, an album that was under promoted by RCA and as a result, probably lost out on some well-earned commercial success.

The notion of waiting for the right place and time is a recurring theme for veterans of the music business. According to biz.yahoo.com, "Musical artists left homeless by the soulless big machines that are today's mega-labels don't have to look too far to find sanctuary." The US representation of the British Sanctuary Group record label provides artists "who may not be at the top of the charts, but who are still artistically and commercially viable" a place to call home. Sanctuary offers a safe haven for acts such as Kiss, The Allman Brothers, Blondie, and Morrissey.

How individuals and businesses treat others is a clear demonstration of what they value. It is very informative to watch how a person treats even a sales clerk or waiter to discover her/his own self-perception. At the same time companies such as Wal-Mart make news, demonstrating how not to treat employees. Wal-Mart currently faces litigation over gender inequity in salaries and promotions, and illegal anti-unionization efforts, as well as criticism for poor health coverage for employees (What do they value?). On the other hand, companies such as Costco and Target are praised for higher-than-average salaries and generous health benefits, even to part-timers. Target is openly committed to community, diversity, and the environment. Whether it's avoiding the swarm of negativity or basking in the buzz of praise, treating workers and customers well continues to mean building morale and loyalty, which translates into staff retention and profits.

Better Business

The heart of the solution to the problem starts with a focus on values. "Integrity" is a firm adherence to a code of moral or artistic values. A return to traditional values would restore some sense of decency and civility to this almost spiritually bankrupt music industry. The irony in it is that the business itself is driven by art. Creation is the very soul of the industry that is in such serious financial decline partially because of the heartless machine that runs it ("By the way, which one's Pink?").

From a personnel perspective, it is imperative to identify and hire those who exemplify Integrity. One Marine in Aaron Sorkin's "A Few Good Men" admonishes the casual attitude toward values: "We use words like honor, code, loyalty. We use these words as a backbone to a life spent defending something. You use them as a punch line." In addition to workplace honesty and sincerity, a restoration of decency coupled with a stronger work ethic will begin to provide businesses with the financial rewards that are due to that kind of behavior. Its essence is the key ingredient for "an honest day's pay."

Slichter offers a view on patience in waiting for value: "When the band's first effort fails to sell millions of records, as is almost always the case, the label has to then decide whether or not to hang in there or drop the band. It's expensive to promote a band, and in recent years, major labels have faced pressure from their parent corporations to produce instant blockbusters instead of finding bands whose appeal grows slowly but endures. That's too bad, because many great bands (R.E.M. is a good example) take years to reach their peak success, even though they are all the while making great music."

Second, an effort must be made to uphold industry stability. Retention of employees in business is a challenge faced in so many companies today. The cost of hiring and then training new staff makes it even more urgent to reduce corporate turnover. By maintaining industry workers, artists will form greater alliances with their business partners, the record companies. The components to successful employee retention are not secret, either. Fair wages, appropriate rewards, accurate and frequent praise/encouragement, opportunities for personal and professional development, and goal setting all go a long way toward building employee loyalty.

The third necessary factor for better business is the possession of foresight. Many companies have a foresight department, more commonly referred to as Research & Development. According to Slichter, "Just like discovering and marketing a new gizmo, launching a band takes time. Who should produce the album? Which songs should be recorded? What's the first single and what radio format best suits it? Those are vexing questions, and not surprisingly, record companies are stumped as they look for answers." Having forethought and insight are not always natural skills for everyone. These, however, are the alchemist's tools that turn potential into gain. It takes the right group of advisors to see and plan for upcoming events. The former BMG employee (quoted earlier) suggested that record companies should have "more musicians as executives and fewer Osuits' sitting on the boards."

Forecasting and preparing for the future could not have been more valuable than when illegal Internet downloading was hot on the radar. Artists like Todd Rundgren and David Bowie jumped on the downloading bandwagon years ago and have used it to their advantage ever since. Dale Carnegie promoted the idea of cooperating with the inevitable. Downloading music was a reality not to be stopped. Those who cooperated with it (no thank you, Metallica), were able to change with the times and profit from their own flexibility. Some let the wheel of change roll. Others hold on and are dragged.

Finally, personal and professional improvement must be the basis for constant growth and change. According to Matt Scannell, music industry artist development that was prevalent is 1960s and up through some of the 1980s is practically nonexistent today. Although money was once allotted to this kind of development, record companies now expect artists to arrive as an assembled product. The principle of investing in people is no longer seen as worthwhile. Yet, research indicates that companies that invest in employee (and in this case, artist) development tend to have happier work environments and retain personnel longer. In the past, staff development was its own prize. Companies would invest in people because it made the individuals and the company stronger and more effective. The "unforgiving bottom line" has caused many an industry leader to forget these facts.

The Heart of the Matter

The real reason for the problem goes beyond corporate greed. It's a societal problem. Greed is only a symptom of the deeper sickness, which is self-centeredness. The evidence can be found in society's lack of attention or dedication. Too many people don't want to work hard to get results. They want a big prize to appear magically in their hands. According to corporate lawyer Karen DeMeo, it is a "complicated problem caused by too much TV; the way media presents things to the public; the way parents want to be best friends with their kids instead of teachers; the instantaneousness of the internet; reaping the rewards of living in the richest, most powerful country for so long, etc. Our society feels entitled and it's causing all sorts of social breakdown."

Put simply, (the music) industry needs to put values first. By addressing the intangibles before profits, greater results will follow. To get the stakeholders to trust in that process will take some great selling. They need to see the benefit in such a "risk." But ethical gains will create true profit. Through taking care of improving people, stability of jobs and personnel will provide continuity that serves employees, artists, and individual consumers well. People are creatures of habit and want some kind of predictability. This same constancy and steadiness will yield another beneficial effect

According to most music business insiders, it's a broken industry; it's not working as is. Some would say it's without hope. To sell such "unorthodox practices" such as operating the industry as a values-driven enterprise, the question to ask is, "Is the current methodology working?" If the answer is "No," it's time to try something different.

Values, stability, foresight, and development

Provided by the MusicDish Network. Copyright © MusicDish LLC 2006 - Republished with Permission

 

 
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