The loonie is tumbling. The financial sector is stumbling. And the job market is crumbling. But hey, look on the bright side: At least you don't work in the music business.
You don't have to run a hedge fund on Bay Street to know it's been another tough year for record labels.
So far, 2008 CD sales are down a reported 16.6% from 2007 -- just the latest in an eight-year decline of more than 36%. And while online and digital sales are rising -- from a projected $4 billion this year to $7.5 billion in 2011 -- that's not enough to offset the losses.
But before you play Taps for the music industry, remember what Dylan said: "There's no success like failure, and failure's no success at all."
OK, we don't know what the hell he meant either. But we know this: Although the biz still faces monumental challenges, it seems to be learning from the hard lessons lately. Instead of just doing more of what doesn't work, the labels are slowly evolving with consumer tastes and technological advances.
And since it has been 12 months since we recommended six ways to fix the business in our four-part series "Music at the Crossroads," we thought it was high time to grade the labels on how well they've implemented our suggestions.
1) Prescription: Subscription
What was said in 2007:
Now that people can go online and listen to almost any song ever recorded, the only way for you to compete is to open the vaults and put everything -- and we mean EVERYTHING -- online. Offer a menu of tiered subscriptions: Cheap packages for folks who just want to listen, higher prices for those who want to download hits and catalog tracks and premium packages for fans who want front-of-the-line access to new titles and archived rarities. Build it right -- and price it fairly -- and they will come.
What's changed:
The majors haven't quite got this far. But they are embracing the digital world and making more music available online and via cellphone. You've seen that TV ad with the young couple who age into seniors while the dude reads all the songs he can access with his phone plan. While we're still behind the Europeans and Asians in this regard, expect to see more music-based cell plans in the near future. Meanwhile, iTunes is still the big dog for online sales, but a new U.S.-only service called Lala is taking them on by offering songs for 10 cents.
The catch? You can't download them; you store them online and listen through your browser. It might not sound convenient today, but as technology progresses, online music storage and retrieval could become the norm. And all the journalists now lamenting the death of the CD will be lamenting the death of the MP3.
Grade: B
2) Do You Wanna Go Faster?
What was said in 2007:
This one is a no-brainer: When Superstar X's CD leaks on a Monday, make it available for legal download on Tuesday. Stop slavishly adhering to the "official" release date and promo campaign; just get the damn thing out there so people who want it can buy it instead of having to steal it. And give those early-bird shoppers a free copy of the CD on the release date, along with a voucher for another free download, so they are rewarded for doing the right thing. Loyalty comes at a price.
What's changed:
If there's one area where the labels get it, this is it. Granted, they still aren't moving at the speed of light. But the dinosaurs are reacting faster. Case in point: After The Hold Steady's latest CD leaked six weeks early this summer, the label started streaming it in full on the band's MySpace page so fans could hear it legally. And they added three bonus cuts to the disc to encourage buyers.
The labels have also become far more flexible and cagey with release dates -- CDs now come out on Friday, Monday and Sunday instead of just Tuesdays, and the usual three-month PR campaign often gets turfed in favour of sneak attacks designed to generate excitement and challenge pirates.
It doesn't always work -- despite being announced just a week before its release, The Raconteurs' CD still leaked after iTunes accidentally put it on sale too early. But it's a big step in the right direction.
Grade: B+
3) Art or Commodity: Pick a Side
What was said in 2007:
You want people to start respecting music? Quit devaluing your own product. Stop releasing greatest-hits discs by teen-pop singers who have released only three CDs. Stop putting out endless cheap best-of collections with one new song on them. And stop big-box stores from selling them for next to nothing and driving real music stores out of business.
What's changed:
Not much, sadly. With a few exceptions -- notably archival labels such as Rhino and Shout! Factory -- the majors still opt for the quick cash-in. And giant retailers still account for about half of all CD sales, along with an increasing number of exclusive deals for some major releases. But given the state of the economy, we can't really fault anybody for that right now.
Grade: D
4) Kill Your Idols
What was said in 2007:
Seriously, the whole Idol thing? Stop it already. It's a desperate, shortsighted tactic that taints the entire industry and devalues music.
This is especially true in Canada, where the Idol-Juno Awards-CTV triad appears to be a ridiculously incestuous conflict of interest.
What's changed:
Zilch. Idol winners, losers, also-rans and wannabes all seem to score record deals, even though the vast majority tank and are never heard from again (two words:
Ryan Malcolm). The latest CanIdol album had a release date even before the winner (whoever that is) was declared. That pretty much says it all. Bottom line: They won't stop putting out this junk until you stop buying it. So stop already; after all, you've got Demi Lovato, Hannah Montana and the Jonas Brothers to satisfy your teen-pop needs.
Grade: F
5) You Can't Beat Them -- So Join Them
What was said in 2007:
You can give all the lawyers all the money and time in the world -- they're never going to eradicate online piracy. So why not fight fire with freebies? Set up your own online Torrent sites, stuff them with classic tracks, bonus cuts, rarities, live recordings, remixes, tunes from new bands and other cool stuff. Then let fans download and trade them for free.
What's changed:
The Canadian industry's legal battle hasn't advanced much; Bill C-61, which would have tightened loopholes that essentially make file-sharing legal in this country, died on the order paper when the federal election was called. Doubtless, some new form of legislation will be introduced, though Torrent sites will always be with us.
And even if the majors aren't getting into that game, they have embraced other technological platforms. Many retailers now sell cards that allow buyers to download specific albums -- along with bonus tunes, videos and other exclusive content. Video games such as Rock Band and Guitar Hero have come out of nowhere to become massive revenue streams -- Aerosmith reportedly earned more from their Guitar Hero title than they did from their last two albums.
Music on thumb-sized flashdrives and microSD cards -- fingernail-size memory chips that fit into a cell -- are also becoming more common as the industry tries to accommodate every potential buyer.
Grade: C+
6) Stop Sucking
What was said in 2007:
Ask kids who their favourite acts are right now. Then throw away those lists and ask for their favourite acts of all time. Virtually everyone will mention Led Zep, The Stones, The Beatles, AC/DC, Nirvana, The Who or Black Sabbath. Why? Because those bands made great music. Great music is timeless. What you make is product. People don't want product; they want great music. So stop investing in every flash-in-the-pan trend and start investing in the next immortal band.
What's changed:
Not much -- trends still top the charts. But there are exceptions that prove great music and classic bands can hold their own. Kid Rock and AC/DC have boycotted iTunes without suffering financially. And Radiohead -- who let fans name their own price to download 2007's In Rainbows -- recently claimed they made more money from those online sales than they did from their 2003 major-label CD Hail to the Thief. (Toss in the revenue from iTunes, physical CD sales and 100,000 copies of a deluxe $80 box set version, and it sounds as though In Rainbows snagged a pot of gold.) And with new albums from Jay-Z, 50 Cent, Eminem, Britney Spears, Fall Out Boy and even -- believe it or not -- Guns N' Roses due before year's end, the industry is hoping for a green Christmas.
The lesson: If you make good music, they really will come.
Grade: C
