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Music as Commerce: Understanding a Mindset

How_the_Mighty_Fall_And_Why_Some_Companies_Never_Give_in-49123 music_phases56 moralpanics

Kyle Bylin, Associate Editor

It is unfortunate, that, at a time when the record industry is coming to terms with some of the most complex, multifaceted problems it has ever faced — that what is being talked about, debated about, and is at the fore-front of this conversation is not music as culture, the role it plays in our society, and how significant it is to our personal and national identities.  Instead, music as commerce, as it pertains to the media conglomerates and multi-national corporations whose business models are based it, is what’s being discussed, and, from a purely commercial point of view, critical decisions are being made that affect music, creativity and copyright.  The problem with this perspective is that causes people to see ‘music as only something through which money is made.’1

"it only distracts those in a position of influence..."

What this point of view does, in turn, is that it only distracts those in a position of influence over the cultural industries further from the real-world ideas and activities through which they might actually help artists re-create some value for themselves.  Rather than coming up with logical solutions or establishing a middle ground that tries to address changes in the media landscape and consumer behavior that have occurred over the last ten years, and allowing artists to reclaim their ability to generate wealth directly with their fans, ‘the old guard’ has sought out to prop up institutions whose sole purpose remains to usurp that ability from artists.  Of course, if an artist chooses to sign into contract, it is they, who give up that ability, but, the system in place, favors those that do.

By and large, thinking of music as commerce, as strictly a means through which money is made, is what got the record industry into this mess in the first place.  Long before the Internet and file-sharing became common scapegoats, the record industry’s growth was already based on the notion of a forever expanding market for music that never existed.  Because music is such a definitive part of the human experience and passionately embraced the world over, it was supposed that quarter to quarter not only could record labels achieve exponential growth, but that from album to album an artist ought to be able to achieve the same results.  But, as we now know, this mindset can only persist for so long, because music as commerce expands rather differently from music as culture.

According to media critic Douglas Rushkoff, in order to achieve this feat, businesses start to “make decisions catering to the agenda of the investing shareholders who seek to extract short-term gains at the expense of the companies long term stability, research and development, or even basic competence.”2  Then, what transpires is that they “outsource core processes, lose access to innovation, and depend on branding to make up the difference.”3  What happens, in relation to this mindset, is that music as culture suffers, because when the focus is solely placed on the parts of popular music that return a profit, the politician whisperers speak for commercial music and fail to acknowledge music that is about our cities, our heritage, our shared experience and ourselves as people.4

When these other parts of popular music are even considered, creating real, sustained value for fans and thinking about the longevity and stability of culture, “is less often seen as a plus than a problem.”5  Rushkoff contends, “In the zero-sum logic of corporatist economics, creating value for anyone other than the shareholders means taking value away from the shareholders.”6  What the Internet did, in theory, as a medium, is that it gave artists the opportunity to exchange value directly with their fans, rather than through centralized corporations.7  It became a platform where genuine bottom-up value creation occurred and potential for a new participatory culture — that treated audiences as part of the music process and invited them to actively participate inside it — thrived.

II. 

In this convergence culture, as media scholar Henry Jenkins describes it, what’s facilitated is a move “toward ever more complex relations between top-down corporate media and bottom-up participatory culture.”8  The difference being that, while artists embraced the Internet as a platform for value creation — that gave them the opportunity to exchange value directly with their fans — record labels ended up using it to try to extend their cooperate industrial model, the CD-Release Complex, to try to extract more value out of fans, to shrink time, and to try to optimize fans to technology.9  What this amounts to, in the words of Andrew Dubber of New Music Strategies, is that record labels kept trying to go through the motions and make music, rather than adapting creatively to the environment that they’re in.10

“When institutions fail to distinguish between current practices and the enduring principles of their success, and mistakenly fossilize around their practices,” Jim Collins writes in How the Mighty Fall, “they’ve set themselves up for decline.”11  During the CD boom that took place from 1984-2000,12 record labels entered into the first stage of institutional decline that Collin’s named Hubris Born of Success.  What happens in this stage is that “people become arrogant, regarding success virtually as entitlement, and they lose sight of the true underlying factors that created success in the first place.”13  In Ripped, Greg Kot argues that in record industry’s “single-minded pursuit of profit” they abandoned “the cornerstone principle” that had allowed them to flourish:  artist development.14

"they began to discount the role that luck played..."

As the record industry moved through this stage there was a decline in learning orientation — in learning what fans actually wanted — both in terms of how they consumed music and what they were willing to pay for.  So to, they began to discount the role that luck played in their success, to assume that the mass-marketing successes that occurred near the end the CD boom, which sold 3-4 million copies, applied to the natural laws of the universe, rather than that of a relatively short-lived phenomenon.  This addiction to blockbuster artists is what characterizes the second stage of decline, which Collin’s deemed The Undisciplined Pursuit of More.  Here, the record industry started out on an unsustainable quest, and, because of their huge successes, they were pressured to grow.

how-the-mighty-fall-stages

Having reached the peak of the CD boom in 1999, the record industry had become a nearly $15-billion-a-year juggernaut,15 but under the pressure for more growth they collapsed, and, in the process, a vicious cycle of expectations had been set that strained the artists, the fans, the culture, and their systems to the point of breaking.  Since record industry was unable to deliver new music with “consistent tactical excellence,”16 they began to fray at the edges.  Disruptive technologies were released, an epidemic of file-sharing proceeded, and, at this critical juncture, vested interests of music executives struggled and competed to achieve repetitive consumption through obsolescence.  But these executives were too late, as the record industry, by externalizing the blame for their decline in sales, had already started to show symptoms of stage three, Denial of Risk and Peril

Music executives began discounting negative data, amplifying positive data, and putting a positive spin on ambiguous data.17  In stage three, Collin’s argues that those in power start to blame external factors for setbacks – “or otherwise explain away the data”18 – rather than accepting responsibility and confronting “the frightening reality that their enterprise may be in serious trouble.”  Right away, the Internet and file-sharing became easy scapegoats for the decline in sales that the record industry faced.  From the perspective of William Patry in Moral Panics and the Copyright Wars, the decline that occurred “is attributable to the industry’s inability to force consumers to buy albums.”19  He argues that, “The period in which the Napster suit was being litigated coincidentally overlapped with the natural end of the CD era.”20

III.

What’s the problem with any of this?  The problem is that institutional decline at this point amounted to cultural neglect, which is to say that as the record industry struggled to remain profitable, they began to act against their own better judgment and pursue short-term advantages, rather than trying to ensure the longevity and stability of the social ecology of music culture that still existed offline and wasn’t just going to reappear overnight online. During this period, music as commerce, over music as culture, had received much of the attention, and instead of seeking to represent and give voice to how music becomes tied to people’s lives and provides value to society as a whole, politician whisperers ensured that the record industry landscape remained tilted towards corporatism.

“But in the long term,” Kot argues, "the effects of consolidation would be even more profound,”21 because, as Rushkoff explains further, “The more media empires merged and conglomerated, the less control they seemed to have over the independently created media that trickled up through their empires.”22  Leaving the record industry fighting for its life, not solely against the Internet and file-sharing, but against the opportunity for genuine bottom-up value creation that they provided for unsigned and independent artists.  It has been suggested by Jenkins, “that it is the interplay — and the tension — between the top-down force of corporate convergence and the bottom-up force of grassroots convergence that is driving many of the changes that we are observing in the media landscape.”23

This brought the record industry into Collin’s forth stage of institutional decline, Grasping For Salvation, which, instead of offering services that were more in step with the emerging social norms of Digital Natives and promoting the development of social ecology of music culture that was starting to reappear online, came it the form of reacting to their downturn in sales by “lurching for a silver bullet.”24  He says, “This can take a wide range of possible forms, such as betting big on an unproven technology, pinning hopes on an untested strategy, relying upon the success of a splashy new product, seeking a “game changing” acquisition, gambling on an image makeover, hiring consultants who promise salvation, seeking a savior CEO,” or, by “expounding the rhetoric of ‘revolution.’”25

"music is not just commerce..."

At this point, The Copyright Wars became, and, to this very day, are “an effort to deny the type of experience consumers want on the Internet” and “to deny the very nature of the present by changing it back into the past.”26  Politician whisperers, the world over, sought out to ensure that those in a position of influence over the cultural industries indentified with the “plight of abstract corporations more than that of flesh-and-blood human beings,”27 than that of the artists who actually create genuine value.  What the plight of the record industry relates to more strongly than that of Digital Natives and the epidemic of file-sharing that has preceded them, is the consequences of over-looking a very important point – “that music is not just commerce, it is an important part of our culture.”28

In order to begin the process of Recovery and Renewal, rather than the final and fifth stage of decline called Capitulation To Irrelevance or Death, “we can look to those who are reclaiming territory, creating value, and reconnecting to others in ways that we might actually be able to try ourselves.”29 Rushkoff says, “Small is the new big, and the surest path to global change in a highly networked world is to make an extremely local impact that works so well that it spreads.”30  What the artists who’ve succeeded at doing this have figured out is that by creating genuine from the bottom-up and exchanging that value directly with their fans, music as culture, thrives.  That they no longer have to accept the standards of an operating system, based on the idea of music as commerce, which was put in place approximately 100 years ago, by business people, who likely weren’t thinking on their behalf anyways.

Question:

  • How many instances can you name that the record industry bet big on an unproven technology, pinned hopes on an untested strategy, relied upon the success of a splashy new product, sought a “game changing” acquisition, gambled on an image makeover, hired consultants who promised salvation, sought a savior CEO, or anything else along these lines?

Additional Reading:

Contact:

  • kyle(dot)bylin(at)gmail(dot)com

References:

  1. Music As Culture, at UnConvention
  2. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  3. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  4. UB40: Live, Loud and Local
  5. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  6. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  7. Radical Abundance: How We Get Past “Free” and Learn to Exchange Value Again& How the Web Ate the Economy and Why it’s Great for Everyone
  8. Jenkins, H. (2008). Convergence culture. New York: NYU Press.
  9. Radical Abundance: How We Get Past “Free” and Learn to Exchange Value Again
  10. Video from last week’s conference in Brussels
  11. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  12. Knopper, S. (2009). Appetite for self-destruction. New York: Free Press.  
  13. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  14. Kot, G. (2009). Ripped. New York: Scribner.
  15. Today's music industry: Not the same old song and dance
  16. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  17. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  18. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  19. Patry, W. (2009). Moral panics and the copyright wars . New York: Oxford University Press.
  20. Patry, W. (2009). Moral panics and the copyright wars . New York: Oxford University Press.
  21. Kot, G. (2009). Ripped. New York: Scribner. 
  22. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  23. Jenkins, H. (2008). Convergence culture. New York: NYU Press.
  24. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  25. Collins, J. (2009). How the Mighty fall. Colorado: Jim Collins.
  26. Patry, W. (2009). Moral panics and the copyright wars . New York: Oxford University Press.
  27. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  28. Music as Culture
  29. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  30. Rushkoff, Douglas. (2009). Life inc.. New York: Random House Inc.
  31. Graph Taken From How The Mighty Fall     

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