Editor's Note: This article was originally published at Relax Online in October of 1997. We felt that some of the concepts originally expressed in this article, bear as much relevance today as it did in 1997. It also serves as a snapshot, of both the Music Industry and the Internet, circa 1997, and how much things have changed in both areas since then.
Decline of the Music Industry - 1997
Who could have predicted, that the Internet would take over the Music Industry in less than a year? After all, for the last few years, the Music Industry has been one of the driving forces behind commercial applications of the Internet. From the ever present Major Labels, to the irrepressible Indies, the web serves as the cheapest form of advertising available to the Music Industry. From net heads to audiophiles, the Internet is drawing consumers of modern music by the millions. However, record sales have plummeted, in just the last few months, driving Retailers, Distributors, Indies and even a Major Label or two, into a state of freefall.
With the impending bankruptcy of a major record retail chain, MusicLand, several indie distributors have had no choice than to dump indie labels by the hundreds. From the streets to the boardrooms in New York and L.A., one catch phrase keeps repeating itself over and over again. "Nothing is moving at retail". This situation is not limited to Indie Labels. Sales remain flat throughout all genres, with few exceptions. Rap Music, where albums by Wu Tang Clan, and the posthumous Notorious B.I.G., have both gone multi-platinum. Country Music continues to produce chart-toppers on a regular basis, with the likes of LeAnn Rimes. But these are the only genres that seem to be moving the most product.
Both of these genre’s, especially Country, offer limited appeal to "Net savvy Gen-X’ers". Yet there have been no clear cut, multi-platinum blockbusters in the rock/alternative genre so far this year, and even the ‘sure thing’ of U2’s Pop, is selling far short of expectations. This situation is particularly acute in the "Alternative" scene, where the Indies and the Majors are getting hit hard. After spending millions over the last decade to bring alternative music into the mainstream, alternative music is not selling enough records now, to recoup the long-term investment.
Dismal record sales is only a small part of the overall problem with alternative music. Concert tickets are not selling either, prompting changes in the line up of alterna-fests like Lollapalooza and the HORDE Festival. An attempt to bring in a more diverse audience, like adding Snoop Doggy Dog to the Lollapalooza line-up, has helped make up for sagging ticket sales in some markets. But Lollapalooza has been such an overall disappointment for some concert promoters, that Perry Ferrell himself has come out to say, "Lollapalooza is not about making money, it’s about exposing art, and culture and music to a new generation." However it’s the bottom line that motivates concert promoters to bring in festival shows, and the future of the "Festival" remains uncertain.
How has this come to pass? Where have all the record buyers gone? What is happening to the Music consumers, and why aren’t they buying records anymore? What happened to the late ‘80’s, when anything branded "alternative" would sell? I can give you the answer in two words. The Internet. The current modern wonder of the world, the hottest thing to come down the pike since sliced bread, has cut through the Music Industry like a double edged sword.
The problem the Music Industry has with the Internet is two-fold. First of all, the Internet allows anyone with a modem and a guitar to start an "Indie Label". There are just too many bands making average music, recording, pressing and releasing their own CD’s, with the hope of getting "The Coveted Record Deal". There are too many indie labels pushing average indie bands to an oversaturated market, and obviously, not enough people buying them. And just when an Indie Label starts selling records with one particular artist, a Major Label will buy them out, pouring money into all of that label’s catalogue. This only helps to fuel musical mediocrity. Consumers can now see this because the Internet is helping to educate them, and these consumers just aren’t buying into the hype the way they used to.
But there is another thing that the Internet is doing to the Music Industry, that is far more dangerous. It is taking people away from their radio’s and CD players, and delving them into multi-media info-bahn overload. How could the calming effects of passive music listening compare to chatting with a French Girl half a world away about Sex. Even sites such as the AudioNet Jukebox, now offers thousands of near AM quality, CD length Real Audio files. Although is doesn’t come close to low-fidelity, with standard modems and connections, it still gives consumers the ability to try it before they buy it. Again, music consumers just aren’t buying today.
People are spending more time with their Computers, than with their CD players. When it comes to spending fifteen dollars a month on a compact disk, or on Internet access, where do you think consumers are going to get more value for their dollar? Internet Access! Why spend money on a CD, that may have one or two good songs on it, when you can spend the same amount of money accessing the world. And as the Internet grows in population, more and more consumers will flock away from record stores, in favor of computer stores.
Despite sagging sales, Major and Indie labels are still generating hits. Web Hits. This may look good to the webmaster that’s making more than a hundred grand a year, but it’s killing the marketing department, drowning it in red ink. Again, this is far more acute for the indies than the majors, as the majors, being conglomerates, need only sell a few thousand records per project to recoup. If an independent label does not reach marketing goals, it goes out of business. Quickly.
But selling a few thousand records on a project is a much harder goal to reach these days. The downward trend first started to appear in 1995. SoundScan statistics from that year indicate more than 26,500 records (CD’s & Cassettes) were released, across all genres of music, on both major and indie labels. That’s more than 500 new releases every week! 90.5% of 1995 record releases sold 5000 units or less. 9504 of those releases sold 100 units or less. Again, there is far too much product released into an oversaturated marketplace. There is little room on retail shelves, for product that will only collect dust.
The glut of music not only impacts at retail, but radio as well. College Radio, which started the "alternative movement" in the ‘80’s, is now overwhelmed by an onslaught of new records each and every week. College Radio is worked as hard as commercial radio, by major and independent labels alike. Trade magazines like CMJ and Gavin, who report college airplay, are enjoying huge amounts of support from the music industry. From major ad campaigns, to financing keg parties at trade conventions, college radio is worked so hard that it is nearly impossible to recoup the amount of money spent, for the meager record sales attributed to college airplay.
