Big Business Takeover
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Not a day has gone by in the last 18 months, that a label merger, or a music dot com start up hasn-t made the news. For almost two years now, we-ve been inundated with information about digital downloading, new music delivery systems, radio consolidation, copyright management, satellite and internet radio, super audio CD's and DVD's. We-ve seen unprecedented change and growth in the music business.
And all this newfound glory has led us to...greater creative directions never witnessed before? Definitely not.
Enormous financial growth for music companies? Nope.
A balancing of an uneven playing field? Not really.
Though some would like to paint a picture that the poor in the music business shall finally inherit the earth, I-m afraid, we-re far from that reality. What has really happened here is that a lot of people in the record industry has left the music business, and far more sophisticated corporate business interests have taken control.
Remember, the music business was primarily built by rebels and mavericks unwilling to take anyone-s advice. When the mavericks sold their companies to multinational corporations in the 80's and 90's, they had no idea they-d be selling the industry with them. At that time, these large corporations owned the labels, the distributor and even the manufacturing plants. That meant that they earned income from each and every part of the process of developing careers.
Then, a few years ago, when all the multinationals were faced with sizeable debt, they had to make major modifications. Rather than sell the labels at bargain basement prices, they began to sell their interests in manufacturing and distribution. In fact, they-ve begun to divest their financial interests in everything but the creative content. Unfortunately, with all the changes in the business, this move will not prove to be beneficial.
Just this month in England, it was announced that digital sales of singles have now exceeded the physical cd singles sales for the first time ever. Should record labels be jumping up and down with excitement? Hardly. That-s because the labels got out of that business 18 months ago.
Who is handling the digital distribution and manufacturing? In a digital world, manufacturing is no longer needed as you are not selling a product, but a digital file. Not surprising, companies most well versed in digital mediums have jumped into the music distribution void. Case in point -- Apple-s iTunes, who is the clear market leader, makes computers and iPods for their bottom line, as does Microsoft, Sony, and Dell. All of these companies are launching downloading services now.
Then there are the real cowboys of the trade -- the dot commers. They seem to be saying, "Hey, we know this business. It-s our landscape, and we-ll delivery the fans." And just like that, AOL, Yahoo, and Rhapsody (which is owned by Real Networks) all entered the downloading field. If you buy your downloads from Tower or Virgin, Circuit City or Walmart, chances are the distributor of that music is really a dot.com
So basically, the landscape of the American music business is now in the financial pockets of Big Business. And if you think that it won-t affect the kind of music you-ll be hearing in the future, it-s time to prick up your ears.
This is Celia Hirschman with On the Beat on KCRW.
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