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FROM THIS EPISODE

Ringing Out the Old-
The year, backwards and forwards

This is Celia Hirschman with On the Beat for KCRW.

As we get ready to close the door on 2004, many in the music business are breathing a heavy sigh of relief. It-s been a difficult year, with little hope of the outrageous fortunes of the past returning anytime soon. Though the record industry has traditionally celebrated the holiday season with lavish business parties and expensive gifts, this is certainly not true today. Now every penny counts.

Many top executives, uncomfortable with the economic changes facing the business, have moved into related worlds, like gaming, movies, television and radio. Those still left standing are determined to fight a good fight. Make no mistake about it, you gotta be tough to stay in this game. Toughness produces new wisdom. It-s a wisdom built on the necessity of survival.

In the past, a good senior record executive was expected to have a macro view of the business, but was encouraged to leave the details of the day to day to their middle managers. Senior management never sweat the small stuff.

But that-s not true in today-s environment at major labels. Presidents and Senior Vice Presidents must now have an up to date working knowledge about the economics of every facet of the record business, or risk losing their job. There-s too much at stake these days for errors.

This kind of pressure has been caused by a few different factors. One reason is that more money is now spent trying to break through the clutter of today-s media, and therefore, less money is available to spend on the high cost areas of recording budgets, videos and touring. Add to that the consumer-s demand that record prices stay low, which has forced the record labels to choose fewer marketing options, and lose any wiggle room they previously had.

Finally, the third reason execs need to manage the troops closely is because there are far less folks on the field. With all the major labels mergers in the past five years, there have been sizeable layoffs and firings.

The rosters haven-t decreased proportionally, so everyone is working much harder to earn the same dollar.

In spite of all this seemingly bad news, I believe there-s a different way to look at this situation. Historically, inventiveness and ingenuity have flourished under difficult economic times, and I expect that creativity will begin to burst at the seams again. In addition, as all these interesting new sounds and cultures pour into our worlds, the economic schism between the artist and the business will no longer be so vast.

In the past, most musicians struggled long and hard to gain entrance, only to see record executives earning security, position and praise on the backs of their efforts. So, in spite of the difficulty in change, many artists have been waiting for this day, when the art takes precedence over the business.

Like executives, musicians who have been working for the big pay day will probably get out of the business and find careers elsewhere, where the money flow is easier. Many will stay, particularly those whose creative energy isn-t driven by chart numbers, Grammy nominations, or Range Rovers. New businesses will develop and there will be a whole new outgrowth of activity from this temporary loss. There-s a lot to look forward to, in the years ahead. The star making machine behind the popular song may not survive, but at the end of the day, the artist always does.

This is Celia Hirschman with On the Beat for KCRW.

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