I was born in the early 1970s. My parents were music fans, and I grew up at a time when the record labels actively developed and supported new artists. As long as they could count on a few big hits each year, they’d take risks on new artists. In many cases, those new artists would start trends and go on to be hitmakers themselves.
Granted, we were only hearing what they wanted us to hear, but music was relatively affordable. More to the point, it was accessible. Radio stations acted as venues to promote new music, record stores were in every strip mall, and concerts were affordable to an adolescent on a budget.
The most empowering thing at that age was the Sony Walkman. We take things like the iPod for granted now, but at the time, portable music was a novelty. Paired with headphones that allowed me to tune the world out, it was incredible. The industry was taking chances, and it seemed we never wanted for new and original music.
Then the Compact Disc happened. At first, it seemed like a great idea. Anyone who remembers the days of analog hi-fi remembers dealing with warped records, clogged needles, and the annoyances of wow and flutter on tape. Now we had a new format that promised an end to all that. We were also promised it would be cheaper.
Instead, the labels took it as an opportunity to fleece everybody. Early CD players were expensive and adoption was slow at first. Then we were told we’d have to buy into the new equipment and media because tapes and records were being phased out. We were promised that CD’s would cost less than prior formats (less than $10 by 1990), but that never materialized.
Instead, consumers had to pay more. And the artists? Royalties and other remittances remained the same, despite the higher prices (and higher profits) being charged. In fact, artists were hit with “new media” fees that lowered their bottom line.
To say there was a deficit of goodwill from consumers would be an understatement. But the boneheaded decisions just kept coming.
The first involved the introduction of digital recording. In 1987, Sony introduced Digital Audio Tape, or DAT. The record labels lost their minds. They had long railed against the very idea of blank tape, insisting that it allowed people to pirate their products. In fact, the famous PMRC hearings about obscene lyrics were nothing but a smokescreen to get a tax passed on blank tape, which is paid back to the labels to recoup such losses.
(You’re still paying that tax, by the way. When recordable CDs became a thing, they updated the law in 1998.)
If analog cassettes, with all their audible defects, were bad, digital recording was deemed even worse. If consumers could make flawless copies of a CD, then all sorts of pandemonium could break loose. Of course, that couldn’t be allowed. In early negotiations, engineers from Sony found the format being hamstrung by demands for some sort of anti-piracy measure, which would have to be developed on Sony’s dime. The format would go on to see use in recording studios, but nothing was ever marketed to the general public.
The irony was that the labels would support two more digital formats in the years to come. Phillips introduced the Digital Compact Cassette and Sony marketed the MiniDisc. Both allowed for digital recording, but the copy-protection routines made it difficult. Of course, that aspect was downplayed by the industry, who instead marketed pre-recorded media with the intention of replacing the Compact Disc.
You can guess how well this went over with the consumers, who were still feeling resentful over the forced migration to CDs only a few years before. DCC and MiniDisc had some success as niche formats, but they were doomed from the start. The lesson was clear: you can innovate, but it better be on their terms.
But things got even worse. An Arizona company called Ticketmaster became more influential, and by the end of the 1980s, they had a near monopoly on concert ticket sales. Their “service fees,” which were once a minor annoyance, ballooned to the point that they sometimes doubled the price of tickets. Coupled with a relative lack of compelling headliners, this led to a marked decline in concert attendance in the 1990s.
A vicious circle came into shape. Artists were the most affected, since the majority of their revenue comes from ticket sales, but the labels also needed live shows to promote the artists they screwed on revenue. The result? A spike in CD prices. By 1994, the average retail price for a CD was $17, the same as a pair of movie tickets or a new-release video. People had other things to spend their money on.
At the same time, the industry phased out the single, which may have been their biggest mistake. If I wanted to buy a song I liked, it was bound to a CD, which was inevitably bloated with filler material. People who might have spent $2 on a lark didn’t love that song enough to blow $17 on it.
So, yeah. That was the situation in the 1990s: overpriced products, unaffordable live shows, and a virtual moratorium on new technology. Something was going to break.