The Velvet Underground

This is Celia Hirschman with On the Beat for KCRW.

The most interesting news to hit the wire services this week was the Velvet Underground master-acetate story. The acetate was bought at a NYC flea market in 2002 for 75¢. Last Saturday, it sold to the highest bidder on eBay, for $150,000, after a fierce bidding war ensued. The recording featured alternative mixes of the band's debut album, as well as completely unreleased songs. It was the very same master that manager-producer-artist Andy Warhol took to record companies, to try and get the band a record deal. The eBay bidder who won the auction, has since reneged on the purchase but it doesn't really matter. I'm sure someone out there is interested in owning the first studio session of this seminal rock band and willing to pay tens of thousands of dollars to get it.

Just how ironic it is that a recording, over forty years old, has generated more heat than any new music right now. Take the #1 record in the country this week. Billboard Magazine reports that Incubus debuted at #1 on the Billboard Top 200 with 165,000 records sold. That's OK for the uninformed, but to the trade, the news is Bah Humbug; 165,000 sales on the number one record, just two weeks before Christmas signals a very bad year for the music business indeed.

Consumers are fickle. They may love their iPods, but it turns out, they're not necessarily buying music with them. This week, the online research company, Forrester, announced the results of their iTunes buying-habits study. It turns out, only 3% of online households made an Itunes purchase in the last year. And of those 3%, half of all the transactions were $3 or less.

With 63 million iPods sold, one can only assume that most ipods are filled with illegal files of music. That's a pretty terrifying statistic for the record business.

So what is working financially?

I'd ask you to consider the Rolling Stones. Decades after they began playing live, folks are begging to drop $500 a seat to see these 60 year-olds rock. The same is true of Paul McCartney. And artists like Bruce Springsteen, Dave Matthews, U2, and the Red Hot Chili Peppers continue to pack houses. The revenue from their live performance far outweighs that of their record sales.

I think the ceremony of the live performance, which has always been valued, will return to center stage, no pun intended.

It's not that CD's are now irrelevant. But CD releases are rapidly becoming brand-marketing devices for other revenue streams for the artist. They are the highly leveraged telegram, that sends a message to the trade to play a song, cover a tour or stock a record.

Meanwhile, musicians who can deliver a great performance live, will always to be able to call the shots. But those who deliver an average performance, as many do, will find themselves suffering in this new music business economy.

Like a fine oil painting or a brilliant live performance, the Velvet Underground acetate-master is a one of a kind creation, reminding us that some things cannot just be ripped, or ripped off.

This is Celia Hirschman with On the Beat for KCRW.