How the Music Industry is Cutting its Own Throat

Throughout most of the 80’s the Major Labels were all about consolidation. Top 40 was their invention. What they wanted was everything neat and divided up easily. They wanted to be able to tell people that these are the top R&B songs. These are the top country songs. These are the top mainstream songs. That’s all you can listen to because that’s all we want to sell you. They tried to minimize the number of artists and the number of albums. That maximized profits. What they hated was when there were thousands of little bands, each with a loyal small following. Consolidation was the best way to minimize costs. Once you had an album, it’s cheaper to run 5 million copies of one CD. It’s just a matter of scale. The more copies you make of a unit, the cheaper each unit is. That’s something anyone who’s ever had business cards or t-shirts printed has found out.

MTV became popular in the 80sThe plan was coming along well.

Then the record industry was struck with a one-two punch. Hip Hop and Nirvana ruined the whole thing.

First hip hop came along. Sure, it had been around since the 70’s, at least. But it was put out on its record labels. Little indie labels that the big boys only noticed when they would occasionally buy one of their producers or pick up one of their acts.

But MTV put on Yo! MTV Raps in 1988. While it had been big before, now Hip Hop blew up. Instead of sticking to their plan of releasing a million Milli Vanilli and Tiffany clones they had to change their strategy. There were a lot of rap acts suddenly making money, and the record industry wasn’t getting their cut. So they had to sign all the big rap acts, or they had to buy the indie labels that hired them.

Then Nirvana came along, with a thousand little moderate punk bands with them. The labels had to do the same thing with the white music. This mostly destroyed top 40 as a genre. Kurt Cobain called 1991 “The Year Punk Broke,” well Rap broke about the same time.

But, little by little, the recording industry did it again. They bought lots of little labels and just folded them into the more prominent company. They created their own small fake indie Labels, like Interscope. See, Nine Inch Nails had a contract with a little indie label called TVT. Something went wrong with the negotiations when a big name tried to buy them for their wonderboy, Trent Reznor. So they just had him break his contract, gave him his fake label called Nothing Records under another phony label called Interscope. They dared anyone to say anything because they knew they had the meanest lawyers in town. Interscope was just started in 1990 and released such greats as Gerardo’s Rico Suave. It was always owned and distributed by Atlantic records or a subsidiary.

They also signed a lot of indie artists from Sub Pop (name some others). They were initially offered outstanding contracts. Then later, in the mid-1990’s these contracts weren’t renewed. Michelle Shocked had her name stolen from her. The record label claimed they owned her name and wouldn’t allow her to record it for ten years. Juliana Hatfield had her contract just dropped. She found that the album she had only recorded didn’t belong to her and her label refused to release it. Even though, it was finished and already paid for. They still hold the album God’s Foot hostage. Fortunately, you can find some static-y copies on Pirate Bay. Some fans say it’s her best album ever.

Again and again, this pattern was followed. Buy or create an “indie” label. Cherry pick the musicians you want and drop the rest. It worked, and few noticed.

Popular 90s singers Christina Aguilera and Britney SpearsFinally, their plan worked. Everyone was paying them. The companies had their fingers in everybody’s pie. In the late 90’s they had managed to cut down their roster of musicians to just a few. It was mostly just Britney, Christina Aguilera, and the boy bands. It was a horrible time for music. MTV didn’t play videos anymore. Radio didn’t play anything new unless it was by one of the approved artists. The underground music scene, which had been around since the Beatniks, was underground. You didn’t hear about a band that wasn’t one of the majors.

Then downloading came along. It was nothing new. The record labels had been aware of the possibility since the 80’s. They saw it as a content delivery system, though. Their vision was that you would go to the record store, tell them what album you wanted, and instead of them having it in stock, they would download it and burn it for you. The Record Store as we knew it would just be an empty store where you could have anything you wanted.

The labels couldn’t wrap their head around it. Every metric in their system, all the accounting, was based on shipping units of CD’s, cassettes, LP’s whatever. They had split themselves up into several units. One of these was distribution. If you cut them out where would all those VP’s and Presidents of distribution go? How would they make their cut from the indie stores?