Chapter 6 Music

Migration

One of the major cultural influences on the popular music industry over the past century is migration. In 1910, 89 percent of Black Americans still lived in the South, most of them in rural farming areas.Richard Weingroff, “Highway History: The Road to Civil Rights: The Black Migration,” U.S. Department of Transportation Federal Highway Administration, April 7, 2011, http://www.fhwa.dot.gov/highwayhistory/road/s10.cfm. Three years later, a series of disastrous events devastated the cotton industry. World cotton prices plummeted, a boll weevil beetle infestation destroyed large areas of crops, and in 1915, flooding destroyed many of the houses and crops of farmers along the Mississippi River. Already suffering from the restrictive “Jim Crow” laws that segregated schools, restaurants, hotels, and hospitals, Black sharecroppers began to look to the North for a more prosperous lifestyle. Northern states were enjoying an economic boom as a result of an increased demand for industrial goods because of the war in Europe. They were also in need of labor because the war had slowed the rate of foreign immigration to Northern cities. Between 1915 and 1920, as many as 1 million Black individuals moved to Northern cities in search of jobs, closely followed by another million throughout the following decade.“Racial Tensions in Omaha: African American Migration” Nebraskastudies.org, June 25, 2010, http://www.nebraskastudies.org/0700/stories/0701_0131.html. The mass exodus of Black farmers from the South became known as the Great MigrationThe mass exodus of rural Southern Black individuals to urban Northern cities in the United States during the first half of the 20th century., and by 1960, 75 percent of all Black Americans lived in cities.“The Great Migration,” Emerging Minds, January 31, 2005, http://emergingminds.org/The-Great-Migration.html. The Great Migration had a huge impact on political, economic, and cultural life in the North, and popular music reflected this cultural change.

Some of the Black individuals who moved to Northern cities came from the Mississippi DeltaRegion in northwest Mississippi, home of the Delta blues style of music., home of the blues. The most popular destination was Chicago. Delta-born pianist Eddie Boyd later told Living Blues magazine, “I thought of coming to Chicago where I could get away from some of that racism and where I would have an opportunity to, well, do something with my talent…. It wasn’t peaches and cream, man, but it was a hell of a lot better than down there where I was born.”Szatmary, Rockin’ in Time, 4. At first, the migrants brought their style of country blues to the city. Characterized by the guitar and the harmonica, the Delta blues was identified by its rhythmic structure and strong vocals. Migrant musicians were heavily influenced by Delta blues musicians such as Charley Patton and legendary guitarist Robert Johnson. However, as the urban setting began to influence the migrants’ style, they started to record a hybrid of blues, vaudeville, and swing, including the boogie-woogie and rolling-bass piano. Mississippi-born guitarist Muddy Waters, who moved to Chicago in the early 1940s, revolutionized the blues by combining his Delta roots with an electric guitar and amplifier. He did so partly out of necessity, since he could barely make himself heard in crowded Chicago clubs with an acoustic guitar.“Chicago Blues Guitar Story,” ChicagoBluesGuitar.com, http://www.chicagobluesguitar.com. Waters’s style was peppier and more buoyant than the sullen country blues. His plugged-in electric blues became the hallmark of the Chicago bluesElectrified style of blues created in Chicago when migrant bluesmen from the South combined elements of Delta blues and urban blues. style, influencing countless other musicians and creating the underpinnings of rock and roll. Other migrant bluesmen helped to create regional variations of the blues all around the country, including John Lee Hooker in Detroit, Michigan, and T-Bone Walker in Los Angeles, California.

Youth Culture

Prior to 1945, most music was created with adults in mind, and teenage musical tastes were barely a consideration. Young adults had few freedoms—most males were expected to join the military or get a job to support their fledgling families, while most females were expected to marry young and have children. Few young adults attended college, and personal freedom was limited. Following World War II, this situation changed drastically. A booming economy helped create an American middle class, which created an opening for a youth consumer culture. Unsavory memories of the war discouraged some parents from forcing their children into the military, and many emphasized enjoying life and having a good time. As a result, teenagers found they had a lot more freedom. This new liberalized culture allowed teenagers to make decisions for themselves, and, for the first time, many had the financial means to do so. Whereas many adults enjoyed the traditional sounds of Tin Pan Alley, teens were beginning to listen to rhythm and blues songs played by radio disc jockeys such as Alan Freed. Increased racial integration within the younger generation made them more accepting of Black musicians and their music, which was considered “cool,” and provided a welcome escape from the daunting political and social tension caused by Cold War anxieties. The wide availability of radios, juke boxes, and 45 rpm records exposed this new style of rock and roll music to a broad teenage audience.

Once teenagers had the buying power to influence record sales, record companies began to notice. Between 1950 and 1959, record sales in the United States skyrocketed from $189 million to nearly $600 million.Szatmary, Rockin’ in Time, 57. The 45 rpm vinyl records that were introduced in the late 1940s were an affordable option for teens with allowances. Dick Clark, a radio presenter in Philadelphia, soon tuned in to the new teenage tastes. Sensing an opportunity to tap in to a potentially lucrative market, he acquired enough advertising support to turn local hit music telecast Bandstand into a national television phenomenon.

The result was the launch of American Bandstand in 1957, a music TV show that featured a group of teenagers dancing to current hit records. The show’s popularity prompted record producersThe person in charge of the overall recording process, from contracting session musicians to overseeing the budget. A producer is usually a talented musician with knowledge of the technical processes in the recording studio. to create a legion of rock and roll acts specifically designed to appeal to a teenage audience, including Fabian and Frankie Avalon.William Grimes, “Bob Marcucci, 81, Backer of Fabian and Frankie Avalon,” New York Times, March 18, 2011, http://query.nytimes.com/gst/fullpage.html?res=9A01EEDA1E3EF93BA25750C0A9679D8B63. During its almost 40-year run, American Bandstand was a prominent influence on teenage fashions and musical tastes and, in turn, reflected the contemporary youth culture.

Racial Integration

Following the Great Migration, racial tensions increased in Northern cities. Whereas many Northerners had previously been unconcerned with the issue of race relations in the South, they found themselves confronted with the very real issue of having to compete for jobs with Black migrant workers. Black workers found themselves pushed into undesirable neighborhoods, often living in crowded, unsanitary slums where they were charged exorbitant rates by unscrupulous landlords. During the 1940s, racial tensions boiled over into race riots, most notably in Detroit. The city’s 1943 riot caused the deaths of 34 people, 25 of whom were Black.Brenda J. Gilcrest, “Detroit’s 1943 Race Riot, 50 Years Ago Today, Still Seems Too Near,” Detroit Free Press, June 20, 1993.

Frustrated with inequalities in the legal system that distinguished Black and White individuals, members of the civil rights movementThe 1950s and 1960s political movement that pushed to end racial segregation and gain equal rights for Black Americans. pushed for racial equality. In 1948, an executive order granted by President Harry Truman integrated the military. The move toward equality gained further momentum in 1954, with the U.S. Supreme Court decision to end segregationThe post–Civil War separation of Black and White individuals. Segregation was maintained by “Jim Crow” laws, which forbade interracial marriage and forced business owners and public institutions to keep their Black and White clientele separated. in public schools in the landmark case Brown v. Board of Education. The civil rights movement escalated throughout the late 1950s and early 1960s, aided by highly publicized events such as Rosa Parks’s refusal to give up her seat on a bus to a White passenger in Montgomery, Alabama, in 1955. In 1964, Congress passed the most sweeping civil rights legislation since the Civil War, forbidding discrimination in public places and authorizing financial aid to enable school desegregation.

Although racist attitudes did not change overnight, the cultural changes brought on by the civil rights movement laid the groundwork for the creation of an integrated society. The Motown sound developed by Berry Gordy Jr. in the 1960s both reflected and furthered this change. Gordy believed that by coaching talented but unpolished Black artists, he could make them acceptable to mainstream culture. He hired a professional to head an in-house finishing school, teaching his acts how to move gracefully, speak politely, and use proper posture.“Berry Gordy Jr.,” Michigan Rock and Roll Legends,” http://www.michiganrockandrolllegends.com/Default.aspx?name=BERRYGORDY. Gordy’s commercial success with gospel-based pop acts such as the Supremes, the Temptations, the Four Tops, and Martha and the Vandellas reflected the extent of racial integration in the mainstream music industry. Gordy’s most successful act, the Supremes, achieved 12 No. 1 singles on the Billboard Hot 100 chart.

Race

As the music of Chuck Berry and Little Richard gained popularity among White teens in the United States during the 1950s, most of the new rock acts were signed to independent labels, and larger companies such as RCA were losing their share of the market.

To capitalize on the public’s enthusiasm for rock and roll and to prevent the loss of further potential profits, big record companies signed White artists to cover the songs of Black artists. The songs were often censored for the mainstream market by the removal of any lyrics that referenced sex, alcohol, or drugs. Pat Boone was the most successful cover artist of the era, releasing songs originally sung by artists such as Fats Domino, the El Dorados, Little Richard, and Big Joe Turner. Releasing a cover of a Black performer’s song by a White performer was known as hijackingThe practice of releasing a cover version of a song by a White artist on the heels of a hit by a Black performer. a hit, and this practice usually left black artists signed to independent labels broke. Because large companies such as RCA could widely promote and distribute their records—six of Boone’s recordings reached the No. 1 spot on the Billboard chart—their records frequently outsold the original versions. Many White artists and producers would also take writing credit for the songs they covered and would buy the rights to songs from Black writers without giving them royaltiesMoney received by songwriters and publishers every time one of their songs is played on a radio station, television show, film soundtrack, or other for-profit arena. Performance royalties are tracked by performing rights organizations, which collect fees on the publisher’s behalf. or songwriting credit. This practice fueled racism within the music industry. Independent record producer Danny Kessler of Okeh Records said, “The odds for a black record to crack through were slim. If the black record began to happen, the chances were that a white artist would cover—and the big stations would play the white records…. There was a color line, and it wasn’t easy to cross.”Szatmary, Rockin’ in Time, 26.

Although cover artists profited from the work of Black R&B singers, occasionally they also helped to promote the original recordings. Many teenagers who heard covers on mainstream radio stations sought out the original artists’ versions, increasing sales and prompting Little Richard to refer to Pat Boone as “the man who made me a millionaire.”Dan Crane, “Cover Me: Introducing the Instant Tribute,” New York Times, March 27, 2005, http://www.nytimes.com/2005/03/27/arts/music/27cran.html. Benefiting from covers also worked both ways. In 1962, soul singer Ray Charles covered Don Gibson’s hit “I Just Can’t Stop Loving You,” which became a hit on country and western charts and furthered mainstream acceptance of Black musicians. Other Black artists to cover hits by White performers included Otis Redding, who performed the Rolling Stones hit “Satisfaction,” and Jimi Hendrix, who covered Bob Dylan’s “All Along the Watchtower.”

Morality

When Elvis Presley burst onto the rock and roll scene in the mid-1950s, many conservative parents of teenagers all over the United States were horrified. With his gyrating hips and sexually suggestive body movements, Presley was viewed as a threat to the moral well-being of young women. Television critics denounced his performances as vulgar, and on a 1956 appearance on the Ed Sullivan Show, cameras filmed him only from the waist up. One critic for the New York Daily News wrote that popular music “has reached its lowest depths in the ‘grunt and groin’ antics of one Elvis Presley.”Dan Collins, “How Big Was the King?” CBS News, August 7, 2002, http://www.cbsnews.com/stories/2002/08/07/entertainment/main517851.shtml. Despite the critics’ opinions, Presley immediately gained a fan base among teenage audiences, particularly adolescent girls, who frequently broke into hysterics at his concerts. Rather than tone down his act, Presley defended his movements as manifestations of the music’s rhythm and beat and continued to gyrate on stage. Liberated from the constraints imposed by morality watchdogs, Presley set a precedent for future rock and roll performers and marked a major transition in popular culture.

In addition to decrying raunchy onstage performances by rock and roll artists, moralists in the conservative Eisenhower era objected to the sexually suggestive lyrics found in original rock and roll songs. Big Joe Turner’s version of “Shake, Rattle, and Roll” used sexual phrases and referred to the bedroom, while Little Richard’s original version of “Tutti Frutti” contained the phrase “tutti frutti, loose booty.”Dennis Hall and Susan G. Hall, American Icons: An Encyclopedia of the People, Places, and Things That Have Shaped Our Culture Volume 1 (Greenwood, 2006), 134. Although many of these lyrics were sanitized for mainstream White audiences when they were rereleased as cover versions, the idea that rock and roll was a threat to morality had been firmly implanted in many people’s minds.

Ironically, many of the controversial key figures in the rock and roll era came from extremely religious backgrounds. Presley was a member of the evangelical First Assembly of God Church, where he acquired his love of gospel music.“Elvis Presley,” History-of-rock.com, http://www.history-of-rock.com/elvis_presley.htm. Similarly, Ray Charles soaked up gospel influences from his local Baptist church.“Ray Charles,” Hollywood Walk of Fame, http://www.walkoffame.com/ray-charles. Jerry Lee Lewis came from a strict Christian background and often struggled to reconcile his religious beliefs with the moral implications of the music he created. During a recording session in 1957, Lewis argued with manager Sam Phillips that the hit song “Great Balls of Fire” was too “sinful” for him to record.“Jerry Lee Lewis Records ‘Great Balls of Fire’ in Memphis, Tennessee,” History.com: This Day in History: October 8, 1957, http://www.history.com/this-day-in-history/jerry-lee-lewis-records-quotgreat-balls-of-firequot-in-memphis-tennessee. The religious backgrounds of the rock and roll pioneers both influenced and challenged moral norms. When Ray Charles recorded “I Got a Woman” in 1955, he reworded the gospel tune “Jesus Is All the World to Me,” drawing criticism that the song was sacrilegious. Despite the objections, Charles’s style caught on with other musicians, and his experimentation with merging gospel and R&B resulted in the birth of soul music.

Gender

While Presley was revolutionizing people’s notions of sexual freedom and expression, other performers were changing cultural norms regarding gender identity. Dressed in flamboyant clothing with a pompadour hairstyle and makeup, Little Richard was an exotic, androgynous performer who blurred traditional gender boundaries and shocked 1950s audiences with his blatant campiness. Between his wild onstage antics, bisexual tendencies, and love of post-concert orgies, the self-proclaimed “King and Queen of Rock and Roll” challenged many social conventions of the time.Peter Buckley, The Rough Guide to Rock (Rough Guides, 2003), 603–604. Little Richard’s flamboyant, gender-bending appearance was so outrageous that it was not taken seriously during the 1950s—he was considered an entertainer whose androgynous look bore no relevance to the real world. However, Richard paved the way for future entertainers to shift cultural perceptions of gender. Later musicians such as David Bowie, Prince, and Boy George adopted his outrageous style, frequently appearing on stage wearing glittery costumes and heavy makeup. The popularity of these 1970s and 1980s pop idols, along with other gender-bending performers such as Annie Lennox and Michael Jackson, helped make androgyny more acceptable in mainstream society.

Sony Music Entertainment

In 2004, Japanese-owned Sony Music Entertainment (part of Sony) and German-owned BMG Entertainment (part of Bertelsmann) merged to create Sony BMG. The joint venture was a bid to overcome weak retail sales, online file sharing, and fierce competition from rival forms of media.Reuters, “Sony, BMG Agree on Music Merger,” CNN World Business, November 7, 2003, http://edition.cnn.com/2003/BUSINESS/11/06/sony.bmg.reut/. Independent music companies opposed the merger in Europe, arguing that it created a market imbalance, but the European Commission upheld its decision to allow the consolidation. In 2008, Sony bought out BMG’s 50 percent stake for $1.2 billion.David Kaplan, “Sony Buys Bertelsmann’s 50 Percent Stake In Sony BMG for $1.2 Billion,” PaidContent.org: The Economics of Digital Content, http://paidcontent.org/article/419-sony-buys-back-bertelsmanns-50-percent-stake-in-sony-bmg-company-rename/. The company now has full ownership of the second-largest record label in the world. Subsidiary labels owned by Sony include Arista, Columbia, Epic, Jive, RCA, and Zomba, and the company represents numerous artists, including Alicia Keys, Ke$ha, and Sade.

EMI Group

The EMI Group is a British company, most famous for introducing the Beatles to the world through its Parlaphone subsidiary. Originally formed in 1931, through a merger of the UK Columbia Gramophone Company and the Gramophone Company, the money-losing company was taken over in 2007 by private equity firm Terra Firma Capital Partners Ltd. for $6.5 billion.Anne-Sylvaine Chassany, “Terra Firma Sues Citi over EMI Takeover,” Bloomberg Businessweek, December 18, 2009, http://www.businessweek.com/globalbiz/content/dec2009/gb20091218_584654.htm. In an attempt to return the company to profit following the deal, Terra Firma head Guy Hands began slashing costs, eliminating more than 1,000 jobs in the process.Julia Finch, Owen Gibson, and Alex Needham, “Radiohead Quit, Robbie Williams on Strike—and Now 1,000 Jobs Cut,” Guardian (London), January 12, 2008, http://www.guardian.co.uk/media/2008/jan/12/robbiewilliams.emi. Following the takeover, several high-profile artists quit the label, including Radiohead, who described the new management structure as “a confused bull in a china shop.”Ibid. As of 2010, the struggling company, which represents artists such as Coldplay, Lily Allen, and Pink Floyd, faces being taken over by its bankers after failing to secure a deal to sell its North American distribution rights to one of the other major labels.Associated Press, “Music Group EMI Facing Bank Takeover After Talks Fall Apart,” Los Angeles Daily News, April 2, 2010, http://www.dailynews.com/business/ci_14805128.

Warner Music Group

Originally launched as Warner Bros. Records in 1958, the Warner Music Group gained momentum during the 1960s and 1970s with the purchase of several important new labels, including Elektra and Atlantic. Like the other major labels, the company began to suffer from declining sales due to the advent of free online music swapping. In 2004, Time Warner decided to abandon its record label and offloaded its music division to an investor group so that it could focus on more profitable areas, such as Time Warner Cable. The $2.6 billion deal included more than 800 artists, including Linkin Park, Metallica, and Kid Rock, as well as the group’s publishing arm, Warner/Chapell Music, which owned more than a million copyrights.David Vise, “Time Warner Sells Music Unit to Bronfman for $2.6B,” Washington Post, November 24, 2003, http://www.washingtonpost.com/ac2/wp-dyn/A9806-2003Nov24.

After a brief period of independence, Warner Music Group went public in 2005, making the company the only stand-alone music company to be publically traded in the United States. To prepare for its public offering, the company made around $250 million in cuts through layoffs and consolidation.Jeff Leeds, “A Band Makes Its Case Against Record Label,” New York Times, May 9, 2005, http://www.nytimes.com/2005/05/09/arts/music/09linkin.html. The move caused concern among the label’s artists that investors’ interests would take priority over performers’ interests and prompted rock-rap group Linkin Park to demand an early release from its contract with Warner. Guitarist Brad Delson characterized the company as “bad news,” adding, “We don’t want to be around to see what happens.”Ibid. The band eventually worked out a lucrative new deal with the company. As of 2010, Warner Music Group is considering the possibility of purchasing EMI should the struggling company fail to meet its debt repayments.Jonathan Sibun, “KKR and Warner Music Talk Over Break-Up Bid for EMI,” Telegraph (London), March 14, 2010, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7443456/KKR-and-Warner-Music-talk-over-break-up-bid-for-EMI.html.

Universal Music Group

The largest of the Big Four record labels, Universal Music Group established itself as an industry giant in 1998, with the merger of PolyGram and Universal. Both companies already owned numerous subsidiaries, and the merger of the two entertainment conglomerates created the largest music company in the world. Wholly owned by French international media firm Vivendi since 2006, the company has gone on to acquire BMG Music Publishing and Univision Music Group, among smaller labels. Its acquisition of U.K. labels Sanctuary Music Group and V2 in 2007 drew criticisms from the independent sector that the recording giant was heading toward a monopoly.Adam Sherwin, “Indies Accuse Universal of Gaining Monopoly” Times (London), October 1, 2007, http://business.timesonline.co.uk/tol/business/industry_sectors/media/article2563208.ece. The Association of Independent Music claimed that the deals would “further marginalize a vibrant independent sector, serving to stifle competition and narrow consumer choice.”Ibid. Despite the objections, both deals went ahead.

Universal Music Group’s catalog of artists includes U2, Amy Winehouse, Lady Gaga, Taylor Swift, and the Black Eyed Peas. Despite its powerful status, the company has suffered from declining sales of physical products along with the rest of the music industry. As of 2010, UMG plans to lure customers back to purchasing physical CDs by lowering prices to under $10 (the average price of a digitally purchased album).Anna Swindle, “Universal Music Group Plans to Lower CD Prices,” Paste, March 23, 2010, http://www.pastemagazine.com/articles/2010/03/post-69.html.

Indie Origins

Independent labels have played a small but significant role in the music industry for as long as there has been a market. When patents held on sound recording technologies entered the public market in the 1920s, opportunities arose for small recording companies to enter the business. To avoid competing with larger firms such as RCA and Edison, the new independent companies focused on neglected areas of the music industry, such as folk, gospel, and rural blues. When the major labels decided during World War II to abandon then-unprofitable music recorded by Black artists, the independent labels quickly rushed in to fill the void, enjoying a boom during the rock and roll era when R&B music soared in popularity. Between 1955 and 1959, the U.S. market share of the major companies had dropped from 78 percent to 44 percent, while the market share of independent companies rose from 22 percent to 56 percent.“Rock and Roll Timeline,” The History of Rock ’n’ Roll, October 15, 2009, http://www.history-of-rock.com/rock_and_roll_timeline.htm. Sun Records played a particularly important role in the development of both rock and roll and country music by releasing records by Elvis Presley, Jerry Lee Lewis, Johnny Cash, and Roy Orbison.

During the 1970s punk era, indie labels profited from the antimainstream, anticorporate attitude of many punk rock bands, which disassociated themselves from the major labels. The indie-rock movement grew throughout the 1980s and 1990s, with labels such as Sub Pop, I.R.S., and Epitaph and epitomized by the music of the Smiths, the Stone Roses, R.E.M., and the Jesus and Mary Chain. This movement was known as “college rock,” which would later become alternative rock. However, as alternative rock grew in popularity, grunge bands such as Nirvana, Soundgarden, and Pearl Jam broke into the mainstream. This attracted the attention of major record labels, which began to look at the music with a commercially oriented approach. Many artists found themselves faced with a dilemma: stay true to their indie roots or “sell out” to a major record label in the hope of financial gain.

Advantages of Indie Labels

Although they frequently lose their talent to industry heavyweights, indie labels hold several advantages over major record companies. They are generally smaller, enabling them to respond to changing popular musical tastes more quickly than can large companies with more cumbersome processes and procedures in place. This enables them to pick up on emerging trends and bring them to market quickly. Although unable to compete with the distribution and promotion power of the major labels, indie labels can focus on niche markets, tapping into regional trends. For example, hip-hop’s initial commercial successes in the late 1970s and early 1980s came through small independent labels such as Tommy Boy and Sugar Hill. Realizing that record executives would find the raw street version of hip-hop unworkable, the labels came up with the idea of using house bands to play with emcees to improve the commercial viability of the genre. An early example of this process was Sugarhill Gang’s “Rapper’s Delight,” which was a worldwide hit.Rhome Anderson, “Hip to Hip-Hop,” Washington Post, February 19, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/02/16/AR2006021602077.html.

The nature of the independent production process may also prove advantageous. A shorter path from creation of the music to distribution and promotion makes it easier to maintain the artist’s original vision. For this reason, many artists prefer to work with independent labels, believing the final product to be more authentic. This argument is also used by some fans of independent labels, who trust companies that only produce one brand of music to adhere to a consistent sound and musical style.

Vanity Labels

A popular trend among major record labels is to allow high-profile recording artists to front their own indie labels with the financial backing of the larger company. Frequently referred to as vanity labelsSpin-off indie labels financially backed by one of the major record companies and headed by high-profile artists to create a “label within a label.”, these are spin-offs of the parent company that enable artists to run “a label within a label” and release music by other performers that they admire. Examples include Madonna’s Maverick, Trent Reznor’s Nothing, and Michael Jackson’s MJJ. Allowing an artist to create a vanity label benefits a major record label in several ways: It encourages artists to remain with the parent company for longer than they may have otherwise done, it reduces the amount of promotional effort required by the label because fans are likely to be attracted to new music based on the recommendation of favorite artists, and it increases the likelihood that bands in niche genres will become big moneymakers for the company.

However, vanity label projects often prove risky and unsuccessful because the label provides all of the money while the proven artist is responsible for developing new acts, and recent losses in the music industry have caused major labels to cut funding for artist-run ventures. For example, Mariah Carey’s label, Crave, ended up dissolving less than a year after it opened. In 2004, Universal Records President Monte Lipman commented, “Back in the day, when the industry was a lot healthier, it was ‘OK, here’s $2–$3million. Go start your label and let us know when you’re ready to start your first act.’ Those days are absolutely over.”Associated Press, “Record Cos. Wary of Vanity Label Deals,” Jacksonville (FL) First Coast News, June 28, 2004, http://www.firstcoastnews.com/news/strange/news-article.aspx?storyid=20660.

The Post-Napster Universe: Gnutella and Kazaa

Napster’s initial success resulted in a wave of similar sites emerging throughout 2000. The creators of these new services recognized that Napster’s legal problems were the result of maintaining a central file server. By keeping a list of all the users on the network, Napster was able to control its users’ activities by blocking illegal downloads. When the court ordered the service to halt illegal downloading, the absence of a central database destroyed the entire Napster network.

To avoid a similar fate, new peer-to-peer (P2P) systems adopted two different approaches. The Gnutella networkA peer-to-peer system without a centralized database. The Gnutella network includes clients such as LimeWire, BearShare, and WinMX. Because it does not have a central network, the Gnutella network would be difficult to close down., which serves clients such as LimeWire, BearShare, and WinMX, avoided maintaining a central database. Instead, it dispersed information about file locations across computer “nodes” around the world. Users were able to find each other, but the service could disclaim the ability to prevent copyright infringements. The lack of a centralized server and multiple client base meant that, unlike Napster, it would be impossible to shut down the entire Gnutella network through a simple court order. Courts would need to block all Gnutella network traffic at the Internet service provider (ISP) level of the Internet, a far trickier prospect than simply shutting down a central database.

In addition to a lack of a central database, some P2P providers set up in offshore locations to take advantage of less-restrictive copyright laws and weaker enforcement. Kazaa was initially based in the Pacific island nation of Vanuata and operated out of Australia. However, the company’s offshore location did not protect it from copyright infringement laws. After a series of legal wrangles, Kazaa was ordered to modify its software in Australia in 2005 and agreed to pay $100 million in damages to the record industry. In 2006, the site became a legal music download service.BBC News, “Kazaa Site Becomes Legal Service,” July 27, 2006, http://news.bbc.co.uk/2/hi/science/nature/5220406.stm.

Not content with pursuing providers of illegal music downloads, the RIAA also took legal action against the users of sites such as LimeWire and Kazaa. In 2003, the recording industry sued 261 American music fans for illegally sharing songs on P2P networks.David Kravets, “File Sharing Lawsuits at a Crossroads, After 5 Years of RIAA Litigation,” Wired, September 4, 2008, http://www.wired.com/threatlevel/2008/09/proving-file-sh/. Although fines under U.S. copyright law can rise to up to $150,000 per illegally downloaded track, most of the cases were settled for much less. As of 2008, the RIAA had sued or threatened to sue more than 30,000 individuals for copyright infringement.Ibid.

The Advent of Digital Music Stores

With the closure of the Napster program and the crackdown on illegal downloading, a void in the music distribution market opened and was almost immediately filled by fee-based online music providers. This void helped to resurrect one company many feared was declining. Apple launched iTunesA free computer application, first launched for the Mac computer in 2001 and later expanded to include PCs, that converts audio CDs into digital music files, organizes digital music collections, and plays Internet radio.—a free application for the Mac computer that converted audio CDs into digital music files, organized digital music collections, and played Internet radio—and the iPodA portable MP3 player, launched by Apple in 2001, that is compatible with iTunes software. The iPod is the best-selling brand of MP3 player on the market.—a portable media player compatible with the iTunes software—in 2001, and both products have dominated the market ever since. In 2003, the company signed deals with all of the major record labels and launched the iTunes Store, a virtual store that enabled people to buy and download digital music on demand. Initially featuring 200,000 songs at a cost of $0.99 each to download, the store quickly revolutionized the digital music industry. Within a week, iTunes Store customers purchased 1 million songs.Apple, “iPod + iTunes Timeline,” Apple Press Info, http://www.apple.com/pr/products/ipodhistory/. Six months later, Apple convinced the record labels to expand the service to Microsoft Windows operating system users, and by the following year, the iTunes Store had gone international. Within 5 years of its launch, the iTunes Store was the top music seller in the United States, and in February 2010, Apple celebrated its 10 billionth download.Martyn Williams, “Timeline: iTunes Store at 10 Billion,” Computerworld, February 24, 2010, http://www.computerworld.com/s/article/9162018/Timeline_iTunes_Store_at_10_billion.

Several companies have attempted to cash in on the success of iTunes, with varying results. In 2007, Internet giant Amazon.com launched the Amazon MP3 digital music download store that initially offered more than 2 million songs priced between $0.89 and $0.99.Adam Richardson, “Quick Take on Amazon’s MP3 Download Store,” Matter/Anti-Matter (blog), October 3, 2007, http://news.cnet.com/8301-13641_3-9790970-44.html. Amazon’s major selling point was its lack of digital rights management (DRM)A collection of systems used to protect the copyrights of electronic media. Apple used DRM software to limit music purchased on iTunes so that it could only be played on Apple products. It removed these restrictions in 2009. software, which enabled music downloads to be played on any hardware device. In contrast, songs downloaded through the iTunes appliance program could only be played on Apple products. Apple removed these restrictions in 2009 after negotiating an agreement with the major record labels. Despite its efforts to topple Apple from the top spot in the digital music arena, the Amazon MP3 service only commanded 8 percent of the digital music market in 2009, compared with Apple’s 69 percent of the market.NPD Group, “Digital Music Increases Share of Overall Music Sales Volume in the U.S.,” news release, August 18, 2009, http://www.npd.com/press/releases/press_090818.html. Napster has also stayed in the game by releasing a new design plan in 2009 after being purchased by Best Buy. The plan requires users to pay a fee to access all the music in its catalog. This plan has kept Napster in business; however, the company only had 1 percent to 2 percent of the market share at the beginning of 2010.Seth Weintraub, “Android Helps Amazon Triple Online Music Marketshare,” Fortune, CNN Money, May 26, 2010, http://tech.fortune.cnn.com/2010/05/26/android-helps-amazon-triple-music-marketshare/. Other online music stores are operated by Wal-Mart, Rhapsody, and Yahoo! Music.

The Impact of Digital Music Technology

Once digital music technology was introduced to the world, its domination of the music industry was almost instantaneous. MP3 players have several key advantages over CD players. They are smaller and more portable, eliminating the necessity of lugging around bulky CD carrying cases. Whereas CDs can only hold a relatively small amount of data, MP3 players are able to compress thousands of songs onto a single device (this lack of packaging and manufacturing has caused disputes between artists and labels over royalties, which will be discussed later on). The lack of moving parts means MP3 players can be taken jogging or cycling without the risk of a song skipping every time the user hits a bumpy patch of road. Users are also no longer obligated to buy entire albums; instead, they can pick and choose their favorite songs from a catalog of online music.

Of the many brands of MP3 player currently available on the market, Apple’s iPod has been the dominant force in the digital music industry since its launch in 2001 (see Figure 6.15). Apple CEO Steve Jobs attributes the success of his product to its simple design. In a 2005 interview he said, “One of the biggest insights we have was that we decided not to try to manage your music library on the iPod, but to manage it in iTunes. Other companies tried to do everything on the device itself and made it so complicated that it was useless.”Steven Levy, “Q&A: Jobs on iPod’s Cultural Impact,” Newsweek, October 15, 2006, http://www.msnbc.msn.com/id/15262121/site/newsweek/print/1/displaymode/1098/. The iPod has also reaped the benefits of a successful marketing campaign and constant reinvention of its original format. Customers now have the choice of several different iPod models according to their need for storage space and desire for additional services such as Internet access and video-playing capability.

Utilizing the Internet: A New Level of Indie

Over the past few years, the Internet has begun to level the proverbial playing field between major and independent record labels. Exemplifying how smaller indie labels are able to latch on to trends more quickly than the Big Four, indies have embraced new technology, including blogging, online video sites, and online social networking sites, as a means of promoting their music, while the major labels have fallen behind the curve. With social networking sites enabling artists to communicate directly with their fans, the need for extensive financial backing or an industry middleman is all but eliminated. Now, artists can upload their music onto a social networking site for free and generate record sales purely through word of mouth.

Although a few indie artists have become household names entirely through the buzz generated on social networking sites, many others find that they need some guidance. The direct-to-fanBusiness model used by independent artists and labels to market and distribute their music directly to fans, bypassing major record labels. New Internet technology has made it possible for artists to use the direct-to-fan model successfully. It has been embraced by high-profile bands such as Radiohead and Nine Inch Nails. business model has created opportunities for web-based companies such as Nimbit and ReverbNation, which provide software that enables independent artists and record labels to market their music online, keep track of sales, create demand for their music, and communicate with fans. The companies offer social networking applications that enable fans to purchase music directly from the artists rather than being redirected to a third-party website. Other advantages for bands include automatic updates to fans across a variety of networking sites, digital distribution through the iTunes appliance program and other stores, and real-time sales updates.

Many established artists have also embraced the direct-to-fan business model. In 2007, Nine Inch Nails frontman Trent Reznor announced that the band was splitting from its contractual obligations to Universal Music Group to distribute its next albums independently. Well known for his vocal distaste of major record labels and their profiteering, Reznor encouraged fans in Australia to steal his album Year Zero because he believed it was priced too highly there.“Trent Reznor Blasts Label,” SPIN, May 15, 2007, http://www.spin.com/articles/trent-reznor-blasts-label. Commenting on the state of the music industry in a 2007 interview he said, “I’ve got a battle where I’m trying to put out quality material that matters and I’ve got fans that feel it’s their right to steal it and I’ve got a company that’s so bureaucratic and clumsy and ignorant and behind the times they don’t know what to do, so they rip the people off.”Neala Johnson, “Q & A with Trent Reznor of Nine Inch Nails,” Herald Sun (Melbourne), May 17, 2007, http://www.heraldsun.com.au/entertainment/music/q-a-with-trent-reznor-of-nine-inch-nails/story-e6frf9hf-1111113550202. Following the band’s split with Universal, they released studio album The Slip as a free digital download in 2008. Reznor stated, “This one’s on me,” on his website, thanking fans for their loyalty. The album was downloaded 1.4 million times within the first 6 weeks of its release.F. Daniel Kent, “The Upward Spiral of Trent Reznor,” Dishmag, April 2011, http://dishmag.com/issue120/music-film/13777/the-upward-spiral-of-trent-reznor/. A similar technique used by tech-savvy alternative band Radiohead reaped even higher rewards in 2007, when its retail release of In Rainbows entered the album chart at No. 1 even though the digital version had been offered online at a price of the customer’s choosing several months earlier (see Chapter 11 "The Internet and Social Media" for more information about Radiohead’s In Rainbows release).Lars Brandle, “‘In Rainbows’ Looms for U.K. No. 1,” Billboard, January 2, 2008, http://www.billboard.com/news/in-rainbows-looms-for-u-k-no-1-1003690356.story#/news/in-rainbows-looms-for-u-k-no-1-1003690356.story. The web-based direct release model allows bands such as Radiohead and Nine Inch Nails to obtain vital information about their fan bases—including e-mail addresses—that they can use for future promotions. Whether or not the practice proves to be a passing fad, the traditional music industry model is shifting as new technology makes it easier for artists to communicate directly with their fans.