Income Inequality Killed The Music Business

There’s great music today, there is in every period, but why were the sixties and seventies such a fertile era, why did we get not only the Beatles and the Stones, but the entire British Invasion, the San Francisco Sound and the great acts of FM radio?

You’ve got to start in the U.K. Every famous musician of the sixties said they performed to avoid a life of drudgery, in the factory. They didn’t think it was forever, playing music, but it was a great respite from the inevitable. They struggled to succeed for as long as they could. And when the Beatles broke through, all hell broke loose.

Sure, the Beatles’ music was great. But when America saw the Fab Four on “Ed Sullivan”, suddenly everybody wanted to be them. Their performance inspired an entire country to pick up guitars, to play drums, to be just like them.

And what did they want?

The joy of playing music.

The sex.

And the money.

Today people listen to the radio and watch “American Idol”, but a whole swath of the public has no desire to imitate these performers. Because they just don’t make enough money. In other words, only those with dim futures, with few advantages, slog it out in music.

Oh, of course that’s a generalization. But if you lived through the sixties, you know that back then everybody had a band. Today you might sing karaoke, but very few have the life of a professional musician in their sights. Because not only are the odds long, when you make it, it doesn’t pay enough.

They say MTV saved the music business. One could argue quite strongly it killed it. As for the excoriated disco that killed rock… We now know that corporate rock deserved to die and that it’s disco that survives. Yes, all the beats of EDM started in disco. Disco was made by a marginalized group who lived to party every day. And punk and new wave were experimental and vital sub-genres of rock that rebelled against what came before. But everyone in the game knew you could get rich if you had a hit. Even Johnny Rotten.

Now you just can’t get that rich playing music. Which is why Bono is a partner in a venture capital firm. Can you imagine that back in the sixties, our musical heroes becoming bankers? Impossible!

So Reagan lowers the tax rates in the eighties and suddenly incomes start to diverge. And the record execs don’t want to be on the wrong side of the divide. They no longer care about music, they just want money. The acts are disposable. It devolves into formula by the nineties. And by time MTV stops playing music, at the advent of the twenty first century, after the executives have wrung all the cash out of both new acts and old, via overpriced CDs, the scene was dead.

And I don’t know when it’s going to come back.

The acts have no soul, no backbone anymore. The first thing they want to do is sell out to the Fortune 500, do endorsement deals. You see they want the money. And their handlers are imploring them to do this, because they want their commission. Everybody’s chasing an ever-shrinking piece of the pie. And anybody who is smart is staying out. What did David Geffen say last week, “I’d kill myself if I got into the music industry now.”? As for the consumer, he’s screwed incessantly. Wall Street rolled up the concert business and ticket prices went through the roof. And very few acts want to go to paperless and keep prices low, because they too want the cash, they too want to live the lifestyle of the rich and famous. They’re chasing the bankers, who make millions year in and year out. Very few musicians do, but that doesn’t mean they don’t try.

Sure, banking is boring, but tech is not. Which is why a huge swath of the youth make apps, are entrepreneurs, they want to be in control of their own destiny and make a fortune, the sky’s the limit in tech. But there’s a definite ceiling in music.

And the radio stations were rolled up, hell, Bain Capital and Thomas H. Lee Partners took Clear Channel private and squeezed out billions, despite the company being in extreme debt, and now stations have innumerable commercials and they all sound the same. And they’ll only play what’s on the major labels. Who won’t sign something left field without instant radio play, they don’t want to take that chance, there’s too much money involved.

The rich are getting richer and the musicians are being left out. And yes, piracy contributes to income deprivation, but it’s more complicated than that. Adele sold ten million albums in America and she doesn’t do any endorsements. Her music is perceived to be honest and from the heart. That’s a role model for you. But no one’s following in her footsteps. No one is taking a risk. Then again, you can’t manufacture Adele on an assembly line, you can just recognize genius and nurture it. But that’s no longer the job of the music industry.

The fact that so many are so wealthy is putting a huge dent in our cultural institutions. Sure, there were scalpers in the sixties and seventies, but no one paid ten or twenty times face value, because no one had that kind of cash. You could get a good ticket back then. It’s almost impossible today.

And the first thing a musician asks is “How do I get paid?” That’s the culture we’ve developed. Paying your dues, doing it because you love it, very few are willing to play that game for decades. Furthermore, most people didn’t make it in the sixties and seventies either. But they didn’t complain ad infinitum about not being rich, they just played bars, got drunk, got laid and eventually gave up or were satisfied being journeymen.

Our whole country is asking why it can’t be rich. What do the Republicans say, they’re the party of the rich and the soon to be rich? Not everybody can be rich. But this mentality has people perpetuating income inequality, believing that one day, when they’re wealthy, they want taxes to be low, and has the lower classes fighting for scraps, that’s what reality TV is all about.

We won’t have another heyday for music until we’re all in it together, until income gaps decline. Hell, there haven’t even been any protest songs since the economic collapse and ten years of war. No one is speaking truth, they’re just speaking money, and it hurts us all.

The Lehrer Book

This book is positively fabulous.

First and foremost it’s not an easy read, certainly not initially. You’ve got to wade through all this brain science that would turn most people off. Malcolm Gladwell is a much better writer. That’s why Gladwell is a household name and Jonah Lehrer is not. But that doesn’t make Lehrer’s book any less significant.

I guess that I’m troubled by the fact that people don’t like to work. No, let me restate that, people don’t like hard work. They don’t mind working hard, putting in the hours, but if their brain hurts, if they’re frustrated, they give up. But all the great creative work comes after a period of frustration.

So you’ve got to read this book. Once again, it’s entitled “Imagine: How Creativity Works”.

Yes, depressed people are more creative. The mentally ill are a fount of creativity. Did you read the Remnick piece about the Boss in “The New Yorker”? I highly recommend it. Because within its pages, as the news has so forcefully delineated, we find out that Bruce Springsteen is an incredibly screwed up guy from a less than perfect background. The Boss has talked ad infinitum from the stage about his father, but Remnick gets it right. How Bruce’s dad sat in the dark and controlled his son. Made him talk long enough until they got into an argument and Bruce left the house.

But the Remnick article is flawed. Because the writer is constricted by the “New Yorker” ethos. It reads like a “New Yorker” piece. It’s absent any joy or excitement, the essence of Bruce Springsteen’s music. You learn facts, but you get no emotion.

You see Remnick has been working at “The New Yorker” too long.

Turns out the young are more creative. Because they don’t know the game. They don’t know what they can’t do. You can be creative as you get older, but you must stimulate yourself by playing with younger people, having new experiences. In other words, the classic rock artists shouldn’t work with their friends, but twenty year olds. Not necessarily flavors of the week, but those who are not in awe of the legends, who don’t see what can’t be done, only possibilities.

And this is why the major labels are doomed. They can’t see solutions. Turns out those most trained in their disciplines usually can’t. It’s outsiders, oftentimes untrained, who come up with answers. We see this again and again in entertainment. Napster (a creation of teenagers) and the rest of the tech innovations have undermined the creative industries. In other words, the established institutions and players are doomed. They’re circling the wagons instead of engaging with the young ‘uns to benefit from their insight, to gain solutions.

Kind of like those nitwits in the U.K. telling Google to crack down on file traders. Hell, Google can’t keep spam out of Gmail, do you really think they can eradicate piracy? What is required is a breakthrough business solution. But the old farts agitating just want to return to a past that is never coming back.

Whether it be the autistic surfer or the loosening up of the minds at Second City, the Lehrer book is a wellspring of information. And the longer you read it, the more you get hooked.

We’re in the creative business. Without ideas, we’ve got nothing.

My instincts told me not to write this. I’ve written enough this week and I’m only a third of the way through the book. But I felt something. And it was that which I wanted to convey to you. I had to cast away my inhibitions and go with what I felt. My instincts were reinforced by this book. Hell, I said hallelujah when I learned that school saps creativity. If I’d paid attention in college, I’d be a drone.

And “Imagine: How Creativity Works” is just a stepping stone. Just a beginning. There’s more to come.

But it explains how EDM can burgeon and the major labels can miss it. Hell, it didn’t fit on Top Forty radio, they saw no way to make money. Never mind that most of the money is on the road now anyway. Furthermore, insiders have seen the electronic scene spike and fade so often they didn’t think it could be for real this time. But to Deadmau5 and the twentysomethings, it was brand new.

I could write forever, but I’m going to go back to reading the book!

Rhinofy-The First Traffic Album

It was a stiff in America. And it was different from the original U.K. release, with a lame green cover. Traffic was one of those bands most people didn’t pay attention to until they broke up.

But the musicians paid heed. Because they covered a number of the songs from the disc. People knew these famous covers before they knew the originals. Let’s uncover some of them.

1. “Smiling Phases”

The best Blood, Sweat & Tears album is the first. But the most famous is the second. To say it dominated the airwaves would be to posit it was bigger and more intense than Bieber Fever. And it was. The big hits were “You’ve Made Me So Very Happy”, “And When I Die” and “Spinning Wheel”. But the very first song after the Erik Satie intro was this.

The Traffic original hearkens back to what came before as opposed to what was yet to come. It was more akin to midsixties English singles with garage band production and imprecise background vocals than the polished production released by Blood, Sweat & Tears. Never mind the long instrumental interlude in the BS&T take.

The Traffic version was the blueprint. You’ve got to give credit to BS&T for seeing the internal nugget and expanding upon it.

2. “Coloured Rain”

And here’s where it gets interesting. This cover is by Al Kooper, from his solo debut, “I Stand Alone”, after he got kicked out of his own band, the aforementioned Blood, Sweat & Tears. The original features Stevie Winwood right up front, who quite possibly possesses the best voice in rock and roll. And he has not lost a step. Take a look at his recently posted video of “John Barleycorn (Must Die)”

But “John Barleycorn (Must Die)” came after the band reunited, when Winwood started cutting a solo album and ended up calling in his old bandmates and the result ended up being billed as Traffic.

Traffic’s original “Coloured Rain” has got some great swirling organ, but it’s simple. Kooper’s take has got everything but the kitchen sink, and that’s what makes it so great, the production, from the rainstorm in the intro to the horns to… Sure, Kooper doesn’t have the voice of Winwood, but who does?

“Coloured Rain” is still unknown by most. Start with Kooper’s rendition. He blows the song up, it looks forward as opposed to back. Miracles could now be performed in the studio, and Al utilized every trick. The track is spacy and psychedelic and bluesy all at the same time.

3. “Dear Mr. Fantasy”

This is the one song that got traction off of Traffic’s debut. Deservedly so. The guitarwork is hypnotic, Winwood’s voice is at its peak, the term “masterpiece” was created for this. And be sure to see Winwood live today, to see him work out on the outro, hitting every note from the original on his guitar, your jaw will drop. Still, at the time, Al Kooper and Mike Bloomfield’s live cover got more airplay, it was even more famous.

You see this was a live performance of “Super Session”. Not quite as good, “Live Adventures Of Michael Bloomfield & Al Kooper” sold and sold, because people just couldn’t get enough of that sound. “Super Session” was an institution, and the lemmings couldn’t pass on the follow-up.

Not to denigrate it. It’s just that the original “Super Session” was a trendsetter. A breakthrough. And the live album was just a further exploration on the theme.

Yet it possesses Mike Bloomfield’s exquisite guitarwork, a god who hit the heights with Butterfield, Dylan and Kooper, but has faded away and is not radiating. That’s one of the problems with passing early. Your legacy may unjustly fade.

Once upon a time, jam music didn’t only mean hippies, tie-dye and fringe, hell, George Harrison even included a full jam disc in the “All Things Must Pass” box. Credit Kooper for starting the trend. Proving you could jam with an east coast mentality as easily as one from San Francisco.

Be sure to hang in there for the segue into “Hey Jude”. Also, legendarily, the vocal mic cuts out at the end and the room mic is employed on the recording. It was quiet enough to get it. You see, attending the show used to be like going to church, a religious experience. We sat, didn’t stand. We perched on our posteriors and let our minds drift, set free by the music.

4. “Heaven Is In Your Mind”

Can I be sacrilegious and say that I prefer the Three Dog Night version?

This was before “Joy To The World” and “Mama Told Me (Not To Come)”, this was long before Three Dog Night was one of the biggest acts in the land, positively cringeworthy.

You see once upon a time, they were just lauded vocalists, L.A. phenoms who didn’t have much impact as you moved east. “One” got airplay elsewhere, but when “Captured Live At The Forum” was released, most people were still clueless.

Now there’s a recording of “Heaven Is In Your Mind” on the initial studio album, but I discovered the live take first. My friend Marc owned the album. It’s the first cut you hear after dropping the needle. The act explodes right after the introduction, as the audience screams and the band rocks in a way they never did on subsequent Three Dog Night productions. But the vocals are mixed right up front, there’s a joy in the performance which is infectious. You get caught up in the energy.

I’ll include the original Three Dog Night studio recording for comparison. And, of course, the Traffic original. Which has the same melody, but the track is completely different, a drug trip in the middle of the night, slowed down with heavy piano rhythm.

5. “No Face, No Name, No Number”

By time Bryan Ferry’s “Olympia” album came out, this song from Traffic’s debut was no longer an unknown rarity. The original is far superior, but a great song works no matter who records it.

And if you search on Spotify you can find a Steve Marriott cover of “Berkshire Poppies”, but just like the Ferry cover, the release came long after Traffic became part of the musical fabric.

But what’s fascinating is how before this was the case, the musicians were clued in. And decided to cover the songs of a band most people had never heard of.

Then again, this is when people wrote songs instead of beats. When we were all glued to the radio ready to be exposed to life-changing material.

Traffic went on to glory.

But at this point, in the late sixties, after the release of its debut, other acts were carrying the flag.

Peter Paterno On The Universal/EMI Divestitures

From: Peter Paterno
Subject: FW: EMI Music – UPDATE
To: Bob Lefsetz

Ah, I so love the antitrust process.  It makes so much sense.  I especially love the part where, in their infinite wisdom, the European Antitrust Commission makes the merging companies sell off artist contracts for part of the world.  So the artist can’t mount an effective worldwide campaign to sell his records and is in business with someone he doesn’t know.  This came up in the last big divestiture and I have artists yelling at me to sue because they got sold off.  I point out that the company didn’t want to sell them off, the government made them do it and you can’t sue because of what the government made them do.  Then they get frustrated and start screaming about suing again.

Your European Antitrust Commission – we know what you want better than you do.

From: Faxon, Roger
Sent: Friday, July 27, 2012 8:35 AM?
To: ________________________
Subject: EMI Music – UPDATE

There has been a huge amount of speculation surrounding EMI in the press over the last couple of weeks, as the regulatory process surrounding EMI Music’s proposed acquisition by Universal continues. I wanted to be sure that you heard the truth direct from me rather than on the industry grapevine, which is why I am writing to you all today.The intricacies of the anti-trust world are an impenetrable mystery to most of us, but obviously it’s important in any transaction of this nature that the regulators make a full review to ensure that consumers are protected from anti-competitive behaviour. UMG and each of the regulators around the world have been working closely together for many months now to achieve that. Since the market is different in each region of the world, the issues and the difficulty of resolving them also tend to be different. In a number of jurisdictions, such as Japan and New Zealand, Universal has been able to resolve the issues and has already received clearance. Now the focus is clearly on resolving the issues in the largest and most complex markets – and none is more important than Europe.As I am sure you will have read, the European Commission has raised formal objections about the effect of bringing EMI and Universal together, and the two parties have since been working to find a potential remedy. As you can imagine, there are often significant differences in view between the regulators and the company applying for approval, but in the end, the two need to find a way of bridging those differences so that the merger can go forward.

In the last few days, Universal has identified a possible set of solutions that it believes should resolve the Commission’s concerns. I emphasize the word ‘possible’ because before a resolution can be finalized the regulator will seek the input of a variety of third parties. The market testing of a proposed set of remedies is designed to help the regulator understand the implications of the proposed package, before they make a final determination. So, following the feedback from the market, there is obviously the chance that the proposed set of remedies will change before they become final.

The EU regulators will soon be putting the remedy package proposed by Universal into that market testing. Inevitably much of what is in that package will leak to the press, and that has already started to happen. As such, I wanted to make sure that you heard what is really going on directly from me.

Here is what is included in the package of proposed divestments:

– In the UK, an entity composed of the rosters and catalogues of Parlophone (excluding the Beatles, both as a group and individually), Mute, Chrysalis (excluding the Robbie Williams catalogue) and Ensign would be sold. Included in that disposal would also be the Pink Floyd catalogue and the recently concluded new deal with David Guetta, along with his catalogue. Note that these disposals only relate to exploitation of this repertoire within the EEA.

– EMI Classics and Virgin Classics would also be divested in the EEA.

– EMI’s share of the NOW brand and compilation business in the EEA would also be sold. However Universal would keep its share and participation in the Now compilation venture.

– The proposal also includes the divestment of a number of EMI’s operating businesses in Continental Europe. Those local operating companies are EMI France, EMI Belgium, EMI Czech Republic, EMI Poland, EMI Portugal, EMI Sweden and EMI Norway.

– Universal is also proposing to divest some its own businesses, principal among which are Sanctuary, Co-Op, and UMG Greece plus several European jazz labels.

– They would also commit to terminate or not to bid for a number of high-profile European licenses for major Anglo-American and domestic repertoire, namely Disney Records, Hollywood Records, Ministry of Sound, and Restos du Coeur in France.

Clearly it’s an understatement to say that there are huge implications here for EMI, our staff and most especially, our artists. You will have hundreds of questions, as do we. As this is still a proposal right now, it is difficult for us to answer any of them right now, but over the coming days and weeks, we will be working very hard to address as many of them as possible. We have a lot of time to work through how all of this is going to unfold and how it will affect each of you. So as soon as we are able, we will be working with you to achieve just that.

So what happens next? Obviously the remedy proposal needs to proceed through market testing. That testing should not take long, but a final decision by the EU College of Commissioners will not take place until the second half of September. Of course, regulatory reviews elsewhere – particularly in places such as the United States and Australia – will also need to be completed, as well as a number of practical logistics.

With all that in mind, it’s possible that with a wind behind our backs we could close the sale and EMI could pass to UMG as early as the end of September. However I think it is more realistic to plan for a close at the end of October. It is only at that point that any of the disposals could be put up for sale – and even then it will take some additional time for the sale to be completed of any businesses that are being divested. So as I say, we have some considerable time to make plans that take into account the needs of our artists, and in the meantime we will be working as hard as ever to deliver the successful outcomes that our artists so richly deserve.

All of this is a lot to digest, I know. While there is not much more that any of us can say right now, I am sure that you will want to talk to senior management here at EMI, and we will be reaching out directly to as many of you as possible over the coming days and weeks. As soon as I have any more concrete news for you, rest assured that I will contact you all right away.

Best wishes

Roger