They Can't Kill Rock & Roll but They're Trying

Twenty-five years from now, who will be inducted into the Rock and Roll Hall of Fame? Paul McCartney, Bruce Springsteen and Billy Joel, the 1999 inductees, built their careers over missteps and time. Paul McCartney became a star in a band whose first several releases failed in North America. Today, the Beatles would not be able to buy an American record contract. Springsteen's first two albums flopped, with sales of less than 200,000 between them. Then he refused his record company's demand to go to Nashville and record with a different band. These days, that would sink him for being a prima donna. After his first album, Joel went to California to play piano in a cocktail lounge. He managed to find another record contract a year later. Today, he'd be marked "No Sales." Those were hardly glory days, but at least the music business of the Sixties and Seventies paid more than lip service to the idea that talent takes development. Today, the music industry snatches artists as young as 14 or 15, has them generate a hit or two, then tosses them aside when their sales falter. Who needs to foster a bunch of superstars who, get paid for their work and often take their time making it? And who knows how to sell a performer without teen appeal anyhow?

Changes are coming. Internet delivery systems such as MP3 files make it possible for musicians to market their work without any record label distribution. Devices that allow you to download CD-quality music off the Internet already exist; they're portable and not terribly expensive. When these devices become commonplace, you can bid most of the $12 billion music industry—retailers, distributors, underassistant West Coast promotion men and their bosses in executive suites—a sweet goodbye.

"Record companies as we know them will soon be gone," Keith Richards said recently. "There are too many other ways to distribute music, and once those are established there will be no place for record companies and their pigeonholes. They can take that as a threat if they like. It will be a big change. But as an artist I love change. Who needs 'em?"

Radio, once the voice of a culture (if not a community), is now a jumble of sounds tailored to specific demographics. Listenership is at a 15-year low. Record stores offer a dark circle of marketing hell, where a bewildering array of choices is presided over by a sales force that knows nothing about music. At MTV, one-hit wonders are selected, hailed and forgotten as teen appeal takes its predictable toll in turnover. Switch to VH1, and Celine–Shania–Mariah will numb you. Concerts have become little more than lighting effects and gimmicks—the foreplay of marketers who want us to go directly to the T-shirts, hats and jackets at concession stands.

All this amounts to the homicide of popular music. With the exception of hip-hop—whose demise has been predicted as often and as futilely as rock and roll's ever was—Billboard's album sales charts look the way they did four decades ago, before Elvis. Veteran rockers show up once in a while, along with an insurgent band here and a clever solo performer there. But their tenure is as brief as the one-hit wonders, only sadder.

"We have cannibalized ourselves," says Kenny Laguna, a veteran songwriter, producer and artist-manager who's now head of Blackheart Records. "When I felt awareness of industry or cultural doldrums before, I could always prognosticate the solution," says Atlantic Records executive Tim Sommer, who signed on Hootie and the Blowfish, among others. "Nirvana had to happen after the Eighties, and most of us saw it coming. But I have no idea what's going to save rock and roll now."

The recent crisis among the big five record companies supposedly stemmed from dubious investments in talent. That crisis has ebbed, but hasn't disappeared. Focusing on just the problems of the five (recently six)—Sony, Seagram, Time Warner, BMG and EMI—doesn't tell the tale. Despite a huge increase in the number of albums released during the past four years, sales are stagnant. Without the impetus of CDs, which in the late Eighties and early Nineties prompted boomers to repurchase entire Sixties and Seventies collections, sales might have been flat for longer than that. Debt affects the decision-making process at each stage. Over the past decade, the major record labels have bought up most of the smaller labels, often overpaying for elusive market share: Virgin Records, whose artist roster consisted of Janet Jackson, the Rolling Stones and not much else, went for $1 billion dollars.

Now the big labels have begun to eat one another: The $10 billion purchase of Polygram by MCA/Seagram's won't be the last such deal. Mergers and acquisitions siphon off money that once was used to promote, market and otherwise support developing talent. Since the deals are fueled by borrowed money, there's intense pressure for quick results. The labels don't have time to work a new artist for two or three records before bringing home a big, long-lasting score. They don't even have time to work on new superstar releases for more than a couple of weeks: If a superstar's music meets resistance from radio programmers, you can kiss that album's commercial prospects goodbye, even if the maker received an advance that would make Michael Jordan blush.

Radio programmers are under the same pressure. Records used to be played because relatively independent disc jockeys and radio stations were swayed by a combination of promo man sweet talk, listener response and outright payola. But a wave of mergers spurred by changes in FCC rules about station ownership means that in any given city there may be 20 radio stations but only two or three owners. The owner in Boston either tells the stations in Tulsa and Tacoma what to play, or tells them to stop playing music altogether to avoid competing with more profitable stations elsewhere. Although playing records may be the cheapest way to program a station and may create a heritage of listeners, music may not be the most immediately profitable format. The Wall Street Journal reports that some FM stations are leaving music for the kind of talk that now dominate AM. Talkers who play any music at all have power. "In the Sixties, to break an artist, you knew what you had to do," says Universal executive Steve Leeds, whose music credentials go back to Murray the K. "You went to Ed Sullivan. Today, the only thing that approaches Ed Sullivan is Howard Stern." On his daily show each week, Stern plays about as much music as Sullivan did.

Texas venture capitalist Tom Hicks wields even more clout than Stern. He has exploited the government's new ownership laws to generate more profit than ever from the broadcasting license. His Chancellor Media Corp. is a network that rules markets across the country.

Stations used to battle one another to capture audiences, wrestling over exclusive releases and artist interviews. Segmenting, however, is the rule today. Audiences are narrowly defined by gender or age, and the playlists reflect this niche marketing. With playlists so refined, Chancellor and CBS make sure that those who don't want all Alanis all the time or the Titanic theme in titanic doses will stay away in droves. Hip-hop, which tends to draw diverse listeners—most of whom don't have money to spend on sports cars—is anathema to this kind of radio. As a result, fewer bands and singers and fewer kinds of music are heard.

In the unlikely event that a record gets made and played, there are fewer places that sell it. The country has only three specialty music chains, and I think chances are good that two of the three superstore multimedia chains—Tower, HMV, Virgin—won't make it far into the 21st century. Unable to match Best Buy's loss-leader price strategy, most mom-and-pop record stores that traditionally served small communities and special markets, have been driven out of business. But despite the deck being stacked in their favor with lower prices for volume purchases and advertising supplements from the labels, many chains have gone bankrupt, too. Back in the day, artists got around lack of record company support and radio airplay by hitting the road. But a dozen or more of the country's top concert-promoting firms, including Bill Graham Presents in San Francisco and Don Law Co. in Boston, have been merged into a single company, SFX. To control the nation's important summertime markets, SFX has to use its remaining cash to buy exclusive rights to superstar tours—guaranteed sellouts such as Jimmy Buffett or the Rolling Stones. What that means is ever higher ticket prices and fewer opportunities for midlevel and baby bands.

"In the good old days, I didn't need MTV or contemporary-hit radio. All I needed was a great performing act," says legendary booking agent Frank Barsalona, whose Premier Talent Agency virtually invented the live rock business, building superstars such as the Who, Van Halen and U2. "Today you can have a great performing act, but it doesn't mean a thing if you haven't got MTV and contemporary-hit radio. And there are 14 levels to go through before you get on the radio."

In the past, acts released albums in coordination with extensive concert tours; radio stations focused on albums, not just hits; and bands sold millions in specialty stores before the chains ever became aware of them. When acts such as Springsteen or Rod Stewart then caught on over top 40 radio and at Kmart—usually three to five albums into their careers—superstars were born. Steady touring and the development of recording skills also meant the performers had achieved an artistic identity and a marketable image that gave them a chance to last.

Now the pace has quickened, so musicians looking for a big score have to make it fast or not at all. One reason is music video. Each video costs in the neighborhood of $250,000 to produce. Pop music's tremendous profitability stems in part from how cheap it is to make a hit. A typical superstar album costs, in actual production, perhaps half of what it costs to make a video for just one of its tracks. Video sucks up the money that once went for tour support, which helped an act develop a sustaining presence. Almost always, the artist goes in debt to the record company for the costs of video and promotion. That money gets paid back out of record royalties. (P.M. Dawn's first album sold more than 500,000 copies without earning any royalties.) Acts that depend on video appeal have a short half-life: Try to name a prominent MTV performer from five or six years ago who's still around.

Big record companies need to do tonnage, which usually means selling immediate hits to young people. A band such as R.E.M. needs marketing and promotional attention over a longer period to find the bulk of its audience. Almost every performer who has had a long career is in bad shape commercially. One record executive told me his company did a study of all the bidding-war acts—that is, the veteran performers who finished their contracts and went shopping for new ones. All of them, he claimed, had lost money. So why do labels keep making those deals? Record companies want R.E.M. or U2 on their rosters to help attract younger bands. U2's 1997 album Pop flopped about as badly as a superstar album can—because the industry was expecting big sales—which means it sold over 5 million copies worldwide but not enough to earn back advances. Nevertheless, late last year, U2 signed a new contract for a $50 million guarantee with Polygram that apparently didn't want to look vulnerable on the verge of its purchase by Seagram. In 1996, R.E.M. signed an $80 million contract with Warner Bros. and then watched each of its next two albums sell half of what its previous one had. This kind of story can be repeated with Bruce Springsteen, David Bowie, the Rolling Stones or George Michael.

It's possible that this is artist-driven. Maybe we're just waiting until the next Beatles or Elvis Presley or Louis Armstrong comes along. But it's been a long time since such a galvanizing artist has appeared. Kurt Cobain has been dead five years.

And then there's the possibility that the next big thing has already given up. The savior we crave has either gotten lost in the jumble of music industry politics, or has decided to keep the day job and just go on making music for neighbors and whoever finds the Web site.

The exception among the superstar deals is Madonna. Since re-signing with Warner Bros. several years ago for a reported $30 million to $40 million, she has managed to keep her sales high. More important, she has developed her Maverick label into a vehicle for new acts such as Alanis Morissette, Candlebox and Prodigy.

Morissette is an interesting test case for whether a long-lived contemporary star is still possible. Jagged Little Pill, her debut album, sold more than 16 million copies. She has made some of the more notable videos in recent MTV history. She also toured extensively, expanding her audience beyond her initial teen base. Maybe executives will remember that there is something better than an instant hit.

There are other exceptions. Pearl Jam spit the bit on superstardom, canceled tours, refused to make videos and then went back to playing live and recording on a smaller scale. They're still a platinum act, but they've built something that may last for the long haul. Prince declared that his deal with Warner Bros. was slavery, then turned his back on big labels altogether and started independently marketing his albums—with a focus on the Internet. Phish, Dave Matthews, Korn and Ani DiFranco have all prospered with a decentralized approach that emphasizes live shows and generally ignores radio play. These acts, and musicians such as Bob Dylan and Neil Young, work steadily and hard and release records often enough to keep their names out there. Record companies are well aware of the alternatives. "If you play the game, the machine will chew you up, burn you and spit you out," says Universal's Leeds. "Or you can just chug along and have a long career, but never have that huge success. It's going to be hard to find superstars with careers that span decades."

Record companies regard the Internet with a mixture of worship and fear. Its promise is prerecorded music delivery without the expense of warehousing, shipping and sacrificing half the money to retailers. Its threat is to make music just another kind of information swap. The biz has been a lot more aggressive in defending its current turf than in pursuing Internet opportunities. Palm-sized devices for playing music that download wherever you go, not just at your computer station, are already on the market. There is no history of the courts preventing such a technology from reaching consumers—influential movie companies couldn't stop the VCR.

Thousands of Web sites offer MP3s, (concluded on page 159)Can't Kill Rock(continued from page 118) most without anybody's permission. The industry thinks this is illegal. Some artists agree, others (Pearl Jam's Stone Gossard, for instance) don't. In an effort to join them before being beaten, the industry and the executives of the five major labels said they will work with tech companies to prepare a standard for delivery of music over the Internet by the end of this year.

But if Keith Richards is right, will it matter if the record companies become extinct? If the labels can declare artists expendable, regardless of talent, why shouldn't the public be able to declare the labels expendable, regardless of how music has been circulated for the past century? The fact is, the most passionate musicmakers have operated in ways business can barely detect. Rap acts and rock bands alike are born on the street, folksingers still have their network of clubs and coffeehouses, and best of all, this music circulates on mix tapes as often as on official record and tape releases. In entire cultures of music—rap, techno and just about every kind of hard-core dance music—the deejays who play the records are more important than the musicians and singers who make them. Who needs a concert promoter if you're staging a rave for 5000 people—probably a bigger audience than Buddy Holly ever saw in his life—somewhere off in the woods? CDs sound just as good if they're made in somebody's basement or garage and pressed for a company whose headquarters is an apartment house in Philadelphia, not a skyscraper in Manhattan.

In short, there's going to be music. There was music for millennia before there were record companies. Musicians will find a way to get paid. They always have, back to the troubadours. Given current record company economics, musicmakers might be paid better in a world without the business.

If what you want is music, there is great stuff out there in every style, from jazz to heavy metal. Some of it is old, but an amazing amount of it is new and exciting. To find it, you have to want something other than a little noise to accompany you while you're stuck in traffic, and you have to do a little work. Finding it requires some of the grit and rebellion that said rock and roll would never die.

If you're not willing to go that far, it's OK. The record business is the business of instant gratification. It'll have a new version of the Spice Girls any day now.

"Nirvana had to happen after the Eighties. But I have no idea what's going to saverock and roll now"