Surveying the rubble

Anyone interested in the business of music should take a look at an excellent and very thorough overview of the "fall of the record industry" on Rolling Stone's Web site. An extended version of an article that appears in the current issue of the magazine, the online feature presents some staggering hard evidence to show just how quickly and steeply the industry has declined: "In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million."

The article isn't just a lament for the record biz, though; it also pinpoints some of the factors that brought about the current situation -- mainly, the labels' failure to come to some sort of mutually beneficial agreement with file-sharing services like Napster. "They left billions and billions of dollars on the table by suing Napster -- that was the moment that the labels killed themselves," Jeff Kwatinetz, CEO of management company the Firm, is quoted as saying in regard to the industry's ill-fated early attempts to combat file sharing. "The record business had an unbelievable opportunity there. They were all using the same service. It was as if everybody was listening to the same radio station. Then Napster shut down, and all those 30 or 40 million people went to other [file-sharing services]."

What do the industry's woes mean for the future? According to the article, we may see the rise of "leaner" record companies in the mode of Starbucks' new Hear Music label. Additionally, the article suggests that licensing music for use in movies, video games and TV will increasingly become a primary source of revenue. While it's hard to muster much sympathy for the fat cats who are being forced to slim down, the sad truth is that musicians could be the ones hardest hit by the industry's downturn. The article says that as a result of the recent woes, the number of artists signed to labels has decreased "by roughly a third."

-- David Marchese