New Yorker Article: "The Money Note"

[Curve Dominant]

Has anybody read this? July 7 2003 issue of The New Yorker, feature article by John Seabrook about the current state and future of the recording industry. It has got to be the most objective, comprehensive and logical breakdown of the subject I've seen to date. I'd post a link, but it's not posted on the New Yorker's web site, so you'll have to spring the $3.95 for the magazine to read it, but I can assure you it's money well spent. I'm going to the Xerox machine to make copies for everyone involved with our goings-on here.

[doug osborne]

Here's an exerpt: THIS WEEK IN THE NEW YORKER PRESS CONTACTS: Perri Dorset, Director, Public Relations (212) 286-5898 Jodi Bart, Junior Publicist (212) 286-5996 "There is no precedent for what's happening now in the music business," Jason Flom, the president of Lava Records, tells John Seabrook in "The Money Note," in the July 7, 2003, issue of The New Yorker. "What would happen if groceries suddenly became free, or hotels—do you think those businesses would survive?" Over the past two years, sales of recorded music in the United States dropped by more than a hundred million units; worldwide, the record business has shrunk sixteen per cent since 2000. Flom, who has scored hits with acts as varied as Kid Rock, Twisted Sister, Matchbox 20, Sugar Ray, and the Corrs is still on the lookout for superstars, but the cost of failure has risen recently. Even the most successful companies only produce one hit for every ten albums. Seabrook's account focusses on Flom's plan to make a pop star out of Cherie, an eighteen-year-old French singer with North African Jewish roots. Flom says he will do "whatever it takes to put her over." David Foster, another top hitmaker at Warner Music, tells Seabrook, "It's basically a five-million-dollar bet. It might cost only five hundred thousand to make the record, but it's so expensive to promote it. If you get on the 'Today' show, you've got to get a band together, fly everyone in and put them up, and by the time you're done it has cost you fifty thousand dollars." For a singer like Cherie, "in an era like this," Flom says, "when the audience has more distractions than ever, you have to reach critical mass to put an artist over. And the outlets that you need to do that, the Teen Peoples and whatever, are not going to take you seriously unless they know you are going to put a major push behind it." There are many disparate reasons for the record industry's decline—the popularity of downloading music from the Internet (which is most common in the critical teen audience), widespread copying of CDs, corporate consolidation, the splintering of music genres, and so on—and they have come together to make the record business "a commodity business not a content-and-creation business," Lyor Cohen, of Island Def Jam, who has managed both Public Enemy and the Beastie Boys, says. "What was lost was secchie—it means 'touch.' " Seabrook notes, "whereas CDs made the record industry extraordinarily lucrative, MP3s are making it extraordinarily painful—a gigantic karmic correction that may lead to a bigger music business one day, although not before things get worse." Some analysts even fear that file-sharing networks will develop into what Microsoft programmers last year called "the Darknet," which Seabrook describes as "a vast, illegal, anarchic economy of shared music, TV programs, movies, software, games, and pornography which would come to rival the legitimate entertainment industry." One approach to the problem, according to Jim Griffin, a former executive at Geffen Records, is that, through the introduction of a mandatory licensing fee for use of the Internet, "You monetize anarchy. Charge them five dollars a month to be thieves." Seabrook writes, "Everything depends on getting people to pay for recorded music that they now get for free." So how does Jason Flom help Cherie break through? Flom hopes that Cherie's music will appeal (like that of Norah Jones) to older listeners, who are less likely to download music from the Internet. "But who knows?" Flom says. "It's difficult to compete with free. All I know is what I know—if the star is big enough, people will buy the album, because it's like a piece of the artist. But if the star doesn't have that kind of irresistible appeal, then people just say, 'What the heck, I'll download the good songs.' So we just have to figure out how to make her a big star." Doug Morris, the head of Universal Music Group, says that it still comes down to something simple. "The basic thing is you've got a singer, and you've got a song, and you put them together and it makes people feel good."

[D. Gauss]

i read it. good article, except when trying to explain where the term "money note" came from (pun intended), there is no mention of the porn movie industry....money shot perhaps????????? -d. gauss

[KenElevenShadows]

I glanced over it before, and it seemed like a good article. Thanks for the partial reprint!!

[fantasticsound]

[quote][b]One approach to the problem, according to Jim Griffin, a former executive at Geffen Records, is that, through the introduction of a mandatory licensing fee for use of the Internet, "You monetize anarchy. Charge them five dollars a month to be thieves."[/b][/quote]Screw that! :mad: I will not be charged one [i]penny[/i] to subsidize someone else's lack of morals and sense of fairness. They (The gov't and the music industry) better not punish honest people using the internet by charging them an extra fee for internet use! Sheesh! People steal something of value from them, and rather than find a way to stop it, this guy wants to extort $5 a month from me to cover his losses. Now who's attempting to steal from whom? Personally, I'd love to see the huge record companies go bye-bye. Somehow, some way, musicians will find a way to reach the audience and make money at it. Ridding ourselves of the "machine" will give more musicians a chance to make a decent wage off their music, rather than a few, lucky, label-annointed personalities. :rolleyes:

[flyscots]

Oi Neil, PM

[Anderton]

<> I'm writing a Coming Attraction for the September issue of EQ that I think you will find very, very interesting!

[Bubbajazz]

Just an observation - the article cites a 16% drop in the business since 2000. And the industry howls about the losses - but doesn't do anything on their end to make their products more attractive. Or more affordable. Over the same period, car companies see their losses heading toward 7-8%. They react with more, improved product, lower effective prices via large rebates, and zero percent financing - more product for less money. Hmmm...maybe they're on to something here. Apropos of that - I just bought the new Steely Dan and threw it on in the car for my hour ride home - and was shocked when it only got me a bit more than half way. That's a rip-off of a different sort - charging full price for a glorified EP disk. Can we shoot ourselves in the foot again? Please? I have yet to download my first Napster/KaZaa/you -name-it song. On the balance of the ride home, I found myself thinking that I could understand people who are really fed up with being jerked by the music industry. And ready to just pick it up for free. And now, for the other side... At the same time I bought a Joan Armatrading work. For the same price as Steely Dan's EP, I got a CD (full hour, mind you) and a value-added DVD. For the same $13.98. What a concept - real value-added. It felt like a great purchase to me.

[ernest828]

This is an issue thats been discussed endlessly and will continue. MIX magazine had some interesting articles last month or was it two months ago? Amyway, the truth is the content of CDs is nowhere near the price for CDs. People will gladly put out $5 for a 45 minue CD and even $10 if its enhanced. I think todays kids get a bad rap. What troubles me more is the fact that there is so much lousy music on the radio and kids do not get the diversified programming they should. If anything, once Radio starts changing back to what it was then you`ll have better chances of selling CDs. My album which is due for an early 2004 release will have the entire album (45 minutes of music) plus the same songs (acoustic version with just me playing guitar) and then an additional 10-15 minutes of ther making iof the album with a vried interview and me discussing where each song came from lyrically. All for $10. This is the only way that the music industry will survive. You buy a DVD and you get a movie that had a 100million dollar budget, surround sound, extra features, directors comments, music video for the same price of a CD in Tower ($18.99). Its not that people don`t want music anymore, they know they getting screwed buying a CD for the same price and only getting 45 minutes of music. Peace, Ernest

[mars_dup1]

"You can't compete with free." Well, somebody better tell the bottled water industry! Oh yeah - and cable TV, too. Sorry, the music industry missed the boat on the this one. In all the hoopla about Napster, an important point was forgotten: It was a REALLY GOOD IDEA! The music industry should have done with Napster with they did with radio in the earlies - cut a deal with them to ensure that artists, publishers and record companies got paid. The rot set in from the time the record industry killed the singles market with CDs. During Napster's heyday, even if I wanted to purchase the latest single via the net from a record co's site, I could not do it. Don't even talk about back-catalog. Now that they've finally got a halfway-decent serivce together via the Apple Music Store, I can't access it because I'm outside the US and not using Mac OS X.

[fantasticsound]

[quote]Originally posted by Anderton: [b]<> I'm writing a Coming Attraction for the September issue of EQ that I think you will find very, very interesting![/b][/quote]Somehow I had the notion that comment would pique your interest, if you hadn't already been wrapping your mind around it, Craig. ;)

[Jotown]

[quote]Originally posted by mars: [b]Sorry, the music industry missed the boat on the this one. In all the hoopla about Napster, an important point was forgotten: It was a REALLY GOOD IDEA![/b][/quote]Fee based file sharing would have been a good idea. Free software that allows you to steal other peoples music was not a good idea. The record companies should have gotten involved in this earlier; but that doesn't legitimize theft.

[Anderton]

<> Actually, someone else has been wrapping their minds around it for over a year, I just happen to know about it. The concept is very, very cool and I'll be writing about it, as well as the company behind it, in September.

[Henchman]

[quote]Originally posted by Doug Osborne: [b] If you get on the 'Today' show, you've got to get a band together, fly everyone in and put them up, and by the time you're done it has cost you fifty thousand dollars.[/b][/quote]What I want to know is why the fuck it costs 50k to fly 5-6 people to newyork to play a song on the today show? Because they want to be treated like the stars they're not? If anyhting, it's statements like that, that show the majors are still completely fucking clueless, and are so used to spending money like water. And they can't seem to figure out that a new artist needs to sell records before staying at 5 star fucking hotels. First albums by unknown artists should NEVER cost more than $75-$100k Give me a fucking break. Too many peopl making too much money on the front end. Instead of the backend the way it used to be. Also, thgey should up the fees Commercial radio and Msuic Video stations pay. And find a way to split that with the labels. It's commercial stations that are making the money. They should be charged $1,- minumum for radio and $50,- to $100,- per video. That seems like alot. But look at it this way: If a radio staion plays 15 songs per hour, then it costs them $15,- to fill an hour of content. $15,- to pay for the main source of advertising income. Pretty cheap if you ask me. And Music Video: If they play 15 songs per hour, it costs them $1500,- to fill an hour worth of airtime. Again, pretty cheap when you consider what they pull in. That's where the new money shoudl come from. Radio and TV have been making tons of dough off of msuicians for years. It's payback time. If the RIAA, ASCAP and BMI got together to work this out, then there woudl be a ton of dough to go around.

[dj jud]

I agree about albums costing so much to make. Why does it cost half a million dollars to put together a product? Wasn't the whole point of the digital revolution that you could bring the powers of production into the hands of the little guys. It's never been more cost-effective to record high-quality tracks. And what about musicianship and experience - that's one thing that can really slow down an artist's progress in the studio. A lot of the people who come out as new artists have no experience with performance, and have not really paid their dues. They take somebody from the street, put 'em on a TV show for a few performances, or run by the mall for a few 20 minute sets. They then expect these young people to make albums to compete with mature acts. It's no accident that even now the top selling acts - Matchbox 20 and Linkin Park, Shania Twain and Celine Dion came up through the ranks after long performing careers. Finally, it seems that everyone today expects the "star treatment" - they want to be whisked around in a limo, sip champagne in the VIP section. That really shouldn't be a priority for a new artist. No wonder that when the bill comes, it's half a million.

[Griffinator]

"Why it costs 50K to fly 5-6 people out to NY to do the Today show" Because the Today show charges the label $40,000 to play host. That said, I can't agree more with the idea that the labels have to pull their belts in (not by cutting back recruitment, but by dispensing with the "rock star" spending) and start dropping the price of CD's across the board. Tapes and LP's were more expensive to make, yet they cost less (even in real dollars) than CD's do now. If anything, the pirate revolution just awakened people to the reality that CD's really are cheap to make, and there's no real justification of how much they are forced to pay for store-bought music. But hey - it's always taken the industry forever to wake up to reality - what makes us think they'll be different this time...

[Salyphus]

[quote]Originally posted by Anderton: [b]<> Actually, someone else has been wrapping their minds around it for over a year, I just happen to know about it. The concept is very, very cool and I'll be writing about it, as well as the company behind it, in September.[/b][/quote]It's public knowledge that Shawn Fanning is working on something like this. I'll need a better explanation though, because so far the concept of paying for the right to share music doesn't make any sense to me... I look forward to the article.

[doug osborne]

[quote]Originally posted by Henchman: [b][QUOTE]... If the RIAA, ASCAP and BMI got together to work this out, then there woudl be a ton of dough to go around.[/b][/quote]Right! I don't think the RIAA cares or wants to put any effort into supporting a revenue stream to the artist, so I don't hold any hope there. The Performance Rights Organizations already have a successful infrastructure in place to compensate artists for use of the artists' work. The PROs now collect money from venues and broadcasters to redistribute to artists, and IMO the new venue/broadcaster is the internet, and the ISPs are the venue owners, so they are the ones who have to foot the bill; this of course raises their cost of doing business, and these costs will be passed along to the consumer as they already are in ticket prices, drink prices, and higher product prices from higher advertising fees. Not simple to execute, but right and fair. Trading a file is not IMO material theft, like stealing a CD from Wal Mart (in fact, Wal Mart has already paid the artist whatever pennies he or she will get from that CD, so it's just Wal Mart that is going to lose). The intellectual property rights can be addressed with a system as above. The free flow of ideas will continue, and the limited exclusive right of an artist to profit from his or her art will continue. We've got to move away from the idea that technology is bad, and even from the idea that people are bad. The absurd conclusion to any argument about the evils of technology is that any one of us could walk up to anyone else and kill them, that doesn't mean we should outlaw, or never should have invented, knives, guns, or hands for that matter.

[Fishkid]

Sorry, but the gentleman interviewed in the article doesn't get it. If I go into my local grocery and half the lettuce is rotten, there's only one good tomato in the bunch, only one of the steaks is fresh enough to eat, and there's only processed cheese product well I won't be shopping there anymore. Free or not, I don't want it and I certainly ain't paying for it. Bad product, bad profits. He also doesn't get it when it comes to foisting another 18 year old soft porn starlet onto the public airwaves. Personally, I hope he loses his shirt on the 5 million dollar bet. Last thing the music industry needs is another 18 year old with no band and no songs. "Putting her over" on the public is about the most honest statement he makes. No sympathy here. ---------- Scott