There's an article by Simon Napier-Bell over at the Guardian where he essentially says he realized record companies were useless in the 60s and nothing has changed. I'm not going to quote from it because, to be blunt, its foolish. The idea that the industry of the 60s is anything like the industry of today is contrary to everything I have ever heard (from people with more to their credit than "I managed Wham! for a few months"). The fact that they look the same from his limited position shows just how little he knows about what is really going on.
But for the record...Are there fools in every industry? Yes. Do record companies take advantage of new acts before those acts gain enough popularity to dictate terms? Absolutely. But that's about where his insight ends.
His article did get me to thinking though...
One regret I have over all the RIAA talk on this blog is that I've never gotten the chance to say what I think the Industry should do to save itself.
Due to the circles I travel in I've had the opportunity to talk to record execs, starving artists trying to get signed and everyone in between. So I have a pretty good idea of what is going on and how I think it could be best fixed. But I've never got a chance to put it into words.
Which brings us to this. I had planned on only one post but there's too much to say so today is what I think went wrong and tomorrow will be how I'd fix it.
All that said I think the reality of the situation, from all I've been able to find, is that the Record Labels are in trouble because they have been badly managed in the last decade or two. Not because of file sharing or p2p as many would have you believe. The music industry became so big in the 60s and 70s that it essentially become procedural by the 80s. It has come to the point where there are whole business units for every step of the process. Which is why the business practically ran itself for the next couple decades and, as successful businesses that need little management tend to do, became even more bloated.
This is something you see in every business or industry where there isn't much innovation. The tech industry saw it with early IBM when they essentially sat on their laurels and just became bigger and bigger for years.
Anyway, by the late 90s this had caused the management to be poor. When the business runs itself the people who rise to the top only need to know how to suck up to board members to be successful.
So you get situations like the ones revealed in the purchase of EMI where spending was so out of control that they were spending hundreds of thousands of dollars on "Fruits and Flowers" (whatever that means). Or the CEO of Universal saying "he couldn't find a good technology person" (this was at a time when Computer Science was the fastest growing major in existence). I could go on and on but the bottom line was that the music industries' fall was a result of bad management not technological innovation. It is hard to keep revenues rising when you are spending like a drunken sailor and doing absolutely nothing to innovate.
But in the same way that bad management got them into this mess I firmly believe that good management could get them out of it. In fact, I believe the music industry can not only survive but be reinvigorated by digital technology. But that, is for tomorrow...
Short Addendum: Since this is a technology blog I wanted to address file trading specifically.
I don't believe file trading had that much to do with the industry's downfall. There's no question that it costs the labels money though and what bothers me is that so much focus is on kids trading songs
Kids have always made copies of music without paying for it and they would have continued to do so in the digital age. The only thing that changed is the media. But by not embracing digital distribution early on (another sign of bad management) the labels forced adults to take up file sharing which has led to most of the losses that file sharing has produced.
Adults were in the habit of paying for music before the labels forced them into the hands of Napster 1.0. That's now the problem because people will pay for what they have always paid for but will resist paying for what was once free. Music now fits into the "was once free" category.
That said, I think good management and a little marketing could stop 99% of file trading and I plan to cover that (along with other stuff) tomorrow.