Appetite for Self-Destruction

For nearly 70 years the music business and the record business were one and the same.  If an act wanted to be successful, they’d need to sign with a major label at some point.  That meant a record contract.

Never mind that the contract meant signing away massive amounts of control (and potential revenue) to a corporation driven by fickle trends in exchange for promotion:  that was the only way to go.  The labels knew it.  Everyone knew it.  It was accepted wisdom.

Artists lived under a modern-day feudal relationship with the labels.  If one was commercially viable and could turn out a few decent songs, they had a chance at making it.  Of course, it was the record company who ultimately profited the most.  Artists could expect to get a decent percentage of the revenue from live performances (as long as the label promoted them well enough to fill seats), but the label received most of the profits from the actual records sold.

And selling records was the business of the labels.  There was a good markup on records, and later cassettes.  The physical artifact was of immense value to listeners, and as long as the label had a lock on the distribution of that, they had a guaranteed revenue stream.

Then, in the 1990’s, the whole thing broke.

The first cracks became apparent in the late 1980’s.  The public had been forced to abandon records (and later, cassettes) in favor of compact discs.  To commemorate the release of their recently remastered catalog on CD, the Rolling Stones ran a full-page advertisement in Billboard under the tagline “Throw out Your Rolling Stones Records!”  Of course, that meant chucking LP’s once purchased for less than $10 in favor of compact discs costing almost twice as much.

Why not?  The labels made more money on a $16 CD than they did on a $9 LP, especially when CD’s were cheaper to produce in large quantities.  Especially when the advent of the new format allowed the labels to renegotiate contracts with artists to reduce royalties by 20% under the guise of “packaging reduction” costs.

Still, we’re talking about the record industry, and they’re probably the only industry in history that’s convinced consumers that it’s a good idea to buy the same thing they already own again, and at a 100% markup.  It was quite a coup, but the business model was doomed to eventual failure.

Back in the old days, people were well aware that records were padded.  You paid your nine bucks, knowing full well that you were likely getting two or three good songs surrounded by inferior “filler” material.  Of course, there was an alternative back then in the single.  While singles were a bit less of a value to the consumer, at least you knew you weren’t paying much more for a great deal of fluff.

In the CD age, the labels gradually phased out the single, and that was one of their biggest mistakes.  True, the cassette single (awkwardly dubbed the “cassingle”) was offered, but they weren’t cost effective for either consumers or labels, and were discontinued.  CD singles held on for a bit, but also fell off the radar.  In the end, the consumer was forced to pay $16 for two good songs and a great deal of fluff.

Then the game changed, and the labels had no idea how to deal with it.

CD sales dropped dramatically during the 1990’s.  When Napster appeared on the scene, it should have been a lesson.  Instead, the industry treated it as anathema and tried to kill it.  By the end of the last decade, they were dragged kicking and screaming into the 21st century, but at great cost.  The landscape has changed, and the old model doesn’t work any more.

From the mid-1990’s until roughly 2007, the industry waged war on its consumers.  They sued them for downloading music from file-sharing services.  They implanted rootkits on CD’s that wrecked computers.  They tried to force copy-protection technology on hardware vendors.  None of this helped, and consumers, already feeling bitten by increasing prices, were left feeling utterly betrayed.

Then in 2006, Eliot Spitzer uncovered evidence that payola (surprise!) was still an endemic problem in the radio side of things.  The industry found its channel to radio promotion gravely compromised.

Steve Knopper’s book, Appetite for Self-Destruction does a fairly good job of sifting through the wreckage. He begins by recounting Steve Dahl’s disastrous Disco Demolition Night at Comiskey Park.  The event serves as an interesting jumping-off point, showing all too well how fragile the hubris of an industry flush with cash, illicit drugs, and boundless optimism could be.

He proceeds through an overview of the industry’s history since then, detailing how Thriller saved the day during the post-disco doldrums and paved the way for MTV.  As with any historian of the period, he focuses on the most colorful actors, including abrasive symbols of excess like Columbia’s Walter Yetnikoff.  While there are certainly some stories worth telling, I’m not sure they all belonged in this book, especially considering that Frederic Dannen covered much of the same ground in Hit Men.

While the personalities are certainly interesting, the anecdotes often bog down the narrative, and the book feels as if it could have been edited down by about 20%.  Another factor that works against the book is Knopper’s inability to get firsthand recollections from some of the major players, such as Shawn Fanning and Steve Jobs.  In many cases, we’re left with secondhand accounts from subordinates, many of whom admit to inaccurate recollections of key events.

There are dozens of books chronicling the music industry’s rocky transition to the digital age, so why recommend this one?  For starters, Knopper’s not slanted towards any one technology.  There are plenty of books claiming that Napster was the catalyst, or that it was the iPod, or exclusive deals with Amazon or WalMart.  Knopper gives them nearly equal time and presents a more balanced overview.

It’s not a happy story at all, but there’s no way to spin it as such.  If there’s a bright light at the end, it’s that the new distribution models give much more power to musicians.  Radiohead, Nine Inch Nails, and Wilco have all proven that a performer can not only distribute his work successfully over the internet, but that he can profit from it.  Knopper gives suggestions as to how record labels can adapt and survive in the new infrastructure, but in the end, it’s up to them to decide whether or not it’s worth doing.