This is an essay i have
written which
highlights the background and
surrounding issues that inspired me to start my project.
Is Domination By Major Labels In Music Over
In my dissertation I will argue that explosive growth over the past ten years in the use of computers and the Internet by musicians and music consumers has brought a radically new dimension to music production. It has weakened control over the music industry by small, financially powerful, groups who have long been in control. In support, I will describe how creative use of new technologies has opened doors for musicians to reach audiences independently, fundamentally eroding domination by the owners and controllers of established labels. I will also look at a parallel development of equal significance – the broadening of consumer choice - and its potential to overturn the power-balance in the music industry market place.
Through case studies and other evidence, I aim to show how both artists and consumers have taken control into their own hands. And to provide a framework within which to asses this dynamic relationship between industry bosses and traditionally subordinate groups – artists, industry employees and the masses who buy music - I will draw on aspects of sociological theories about power through ownership and control. In addition, to understand how music industry might attempt to fight back challenges, I will, look briefly at economic theories of corporate growth. However, my main focus will be on describing developments within the music industry and a discussion about its status and future direction. This will include an outline of the decline of market dominance by a few major labels and the emergence of a fragmented market in which many artists both own and control their “products”. As significantly, I will provide evidence to show that well informed and often, well-equipped consumers are also beginning to exercise real power. I will pose the fundamental question - can
pre-eminent labels survive these upheavals? In conclusion I will explain why I think major labels are in now in fatal decline and say what I think this means for the future of music.
Background
The music industry as we know it, first emerged towards the end of World War one. At this time, technology which reduced the cost of recording and manufacturing was developed and mass production of equipment was introduced to factories. Before this, sheet music dominated sales because actual music recordings and playback equipment were too expensive for most people. As the market grew, so did the many companies and labels which organised and financed the release of the music.
During the 1980s, five labels emerged to dominate the market. These so called Major Labels were; Universal,
EMI,
BMG, Warner and Sony. They bought up most of the hundreds of smaller labels that had existed and came to control over 81% of the music industry (estimated to be worth $40 billion annually ).
Domination and Control
Traditional Leftists held that it was relationships to the forces of production which divided society into dominant and subordinate groups. Later critics of this overarching view sought to explain more precisely how a small number of people (know as Elites) came to monopolise power. Subsequent theories varied. For example,
Gaetoano Mosca, (1941) considered that these groups earned their positions through personal qualities. In the context of the music industry, this would imply that those in financial control succeeded because of exceptional abilities - merit. Seen in this light, artists could be regarded as among those who lack and need the skills of management - their talent being secondary to the skill of management to bring it to an audience.
Later theorists, (e.g. C. Wright Mills & Floyd Hunter) argued that it was simply in the nature of hierarchical organisations that a minority should monopolise power. The relationship between managers and the managed is expressed more as a practical division. But despite disagreements, most theorists agreed on one important aspect - an egalitarian relationship was impossible. There would always be a dominant minority. Even attempts to introduce more democracy would merely result in the replacement of one dominant group by another. The reason given for this was that small influential groups (whether in governments or corporations such as
EMI) were generally organised, united and cohesive while those outside this core of decision makers were largely unorganised, fragmented and unable to work together in unity.
My criticism of this theory is that there is no evidence that musicians are inherently
un-cohesive. Rather, to the extent that they have co-operated with major labels, they have done so largely because production and distribution costs have been prohibitive. For this reason I question the view that it is inevitable that if different people play different roles making music and bringing it to the public, a dominant group of managers will necessarily dominate. Further, as I will discuss later, the lines between making and distributing music are now blurred and the notion of the division of labour, underpinning the theories is, at best, less well-defined.
However, I think that the case put by
Mosca that “the power of the minority is irresistible against individuals in the majority” does have some merit if its more subtle aspects are considered.
Mosca says that even in so-called democratic organisations, decisions reflect the wishes of management because it is they who set the agenda. Thus, music consumers and artists may feel that they have choice, but in reality, they accept the options decided by those in control and are in this sense, passive. Nevertheless, I agree that this might have been an appropriate description of how things were within the industry until fairly recently, but, the agenda is changing.
Looking at recent evidence, there are some cases, which uphold aspects of these ideas about power. For example, the most recent annual report of
PPL (Phonographic Performance LTD), a company that collects and distributes royalties resulting from radio and live performance for many record labels, shows that every single one of the top 20 earning artists are signed to one of 5 major labels. This illustrates how power is concentrated in the hands of a dominant minority and how domination resulted in others being excluded.
Turning to another aspect, it is the case that jobs became increasingly specialised. The number and diversity of occupational groups has grown and professional associations and trades unions have emerged to articulate the interests of different groups. For example, United Scenic Artists represents sound designers in theatre , and the Professional Recording Association looks after engineers. This, to some extent, undermines the idea of people working within the music industry simply being controlled and manipulated. Those working within the industry could previously have been seen by as relatively powerless. But interest groups which have now formed and compete for power just don’t fit the image of passive and obedient workers.
In short, even before the digital revolution, control by management was far from total.
But, in my view there is a greater threat to the established music industry from the way new technologies are being used - i.e. the home computers and the Internet – than through the partial dispersal of power brought about through occupational and specialist groups gaining influence. Recent developments have allowed musicians to retain control over their music at all levels, from the equipment needed to make it, to the means of physically producing the format in which it is to be released, to the distribution of the finished product. As a result, the status
quo is changing - both in the way music is produced and in the way it is consumed.
Even as recently as 15 years ago, access to production and recording facilities was limited to those who were either very rich or very lucky. But now, the prevalence of affordable electrical gear has allowed a far greater number of people to try their hand at making music. It is estimated that 57% of UK households are connected to the Internet with an even higher number having computers not connected. This development is far more significant than simply demonstrating the proliferation of a new hobby. Not everyone has musical talent nor the even the wish to produce music. But the means are there for those who do and they can proceed - irrespective of social status or serious financial backing - without involving the labels. In my opinion, this signals a serious dent in domination by major labels.
Another important change has been the increase in non-traditional academic areas throughout the educational system. Courses directly related to music such as Music Technology and Digital Music as well as Business and Mixed Media, have allowed people to gain knowledge, previously the preserve of small numbers of people. Again, this is empowering.
The current upheaval within the television industry is an interesting parallel. As widely reported on 28
th Nov. 2006 on news channels ranging from the BBC to SKY, the sudden move of Michael Grade, from the BBC to
ITV is described as a desperate attempt to rescue the channel. It was said (BBC News Night 28.11.06 ) that the source of
ITV’s problems was “rising competition not only from digital TV firms but, significantly, from new sources such as
youtube.com but also, from individuals making their own broadcasts - sometimes with little more than a mobile phone camera”. Audiences for these informal film items are growing and this is thought to indicate, not just a blip, but a trend. This is a clear illustration, in a related field, of how the power in major organisations can be undermined in unexpected ways.
Can the Established companies fight back?
Like Michael Grade who declares that he intends to “turn
ITV’s fortunes around”, the major music labels are unlikely to capitulate to competition without strong resistance. A brief look at economic text books (e.g. Business Strategy - Campbell,
Stonehouse & Houston ) shows that fending off competitors is par for the course in business planning. The text book uses an analogy with living things to describe the life cycle of products. Based on this theory, all products have a finite life - long or short - and it is management’s job to assess life-expectation. This life-cycle concept, is divided into stages (introduction, growth, maturity & decline - as shown in the graph below). It is used to analyse and predict competitive conditions and identify key marketing issues for management.
It is accepted that new competitors may enter the market and challenge market leaders. Whole new market segments may develop and become established and “pioneers” will have to decide how to respond. This is recognised as being particularly risky when sales are targeted at a mass consumer market (as in the case of music). My argument, however, is that independent artists and underground labels - using new production and distribution techniques, are not simply upstarts vying with the “pioneers” i.e. the major labels. Rather, they are a new concept altogether. The labels are misreading the situation by treating them as minor late-comers, upstarts in the market - smaller, less professional versions of themselves -who can be dealt with. They see their market position as undermined only at the edges by independents, which are either dismissed as insignificant or repressed (e.g. bought up). But I doubt that the new ways of making and producing music are just a temporary drift away from the mainstream. The labels still control the established product. But, in my view, independent artists/labels are “pioneers” in the first stages of an entirely new product.
Until recently, labels were able to fight off competition by offering different products - e.g. tapes in place of records,
CDs in place of tapes etc., altering prices of C.D.s and so on. In addition, labels held a trump card. Major artists were under contract, thus reducing price-elasticity in the market and giving big labels monopoly control on supply of music. Now, however, labels have to cope with consumers who can get their products for nothing (albeit illegally) and at the same time, an increasing number of artists are choosing to by-pass major labels. The digital revolution is not just a poor cousin to the labels, it is a new concept.
As
Stonehouse recognises, “it is hard to forecast the future and in particular, to forecast turning points” . But the industry must confront the hard, strategic issues presented by the new way that music is produced, distributed and consumed. Looking at the situation, it seems likely that major labels may have run their course. Simply restyling their products, finding new consumers or using increasingly draconian measures to try to prevent illegal downloading will not be enough to extend their product life-cycle and avoid decline.
Copyright law and Music
It is at both ends of the music process (Production and Consumption), the established industry is being eroded. Consumers are looking for new ways of accessing music, and where there is no easy way of directly accessing music from the artist, many are illegally downloading it.
Power theorists say that copyright law, like other laws, protects the interests of the establishment. Unsurprisingly then, label managers use copyright law to protect their interests. It is illegal to freely download copyrighted tracks. However, a recent survey (October 2006) reported by the BBC’s Click online , showed that 55% of adults of all ages said they had downloaded music. Further, many did not even know that it was illegal. The reporter estimated that if only under 25s had been asked, the percentage would have been much higher. In fact, there is evidence that groups of young people have never bought music and would not consider paying corporations for it. If this is correct, the major labels cannot compete with free products – They have to make a profit whereas artists don’t necessarily have this constraint. Production is taking place in an environment where producers and consumers do not fit into traditional economists models of behaviour.
As this illegal practice is now so widespread, the law is considered by many consumers and openly by some lawyers, to be outmoded and unenforceable. Nevertheless, the industry is calling for it to be strengthened as it tries to claw back its dominance. But, even if downloading could be more closely policed, it is not illegal to copy music from one piece of hardware to another – e.g. from a C.D player to an i-pod. This makes the distinction between legal and illegal copying a grey area for the law.
Recent Developments in the Music Industry
Many musicians now want to be successful but do not necessarily want to be corporate. For lots of artists, success is now about finding ways for their music to be heard, without it being controlled by other people. In the future, I believe more people will succeed this way than through traditional routes as most people can now access the basic equipment. Every computer, in almost every house has, potentially, enough machinery to create and mix music
Case Study 1
My first case study focuses on my own experiences of making and releasing music without submitting control to outside influences.
When I first started making music, I realised the chances of successfully releasing underground music through any of the established channels was unrealistic and undesirable as most existing labels etc are really there only to make money and they do this at the expense of all other aspects of the music. I therefore, started thinking about and looking into other ways of achieving what I wanted. It was important to me to retain ownership and control of my music as much as possible throughout, whilst still allowing people to listen to and play it.
Firstly, in order to make the music, I had to acquire the necessary equipment. I already had a computer, otherwise this could have been obtained for nearly nothing (as I hope to prove in my practical project). Most computers come with a sound card of some sort, which will suffice to get audio out. I next acquired software, of which there is a great range available, both free or to buy. Many options are available, some based on the free Linux operating system such as Ardour or Wired are totally free and feature open source coding which means anyone can theoretically edit the programming. Although not as well known as their more widespread counterparts such as Logic or Pro Tools, these free bits of software feature many of the same functions. Other free software is available such as Buzz Machines , which operates on windows systems or Audacity , which works on Mac.
After actually making the music there are a number of options. The first, and most obvious, is to approach an established label and see if the will either buy the music or sign you as an artist. Both options have many negative aspects. If you sell the music, you loose all control over how it is used and get only a one off payment no matter how much the music could make. If you sign as an artist, you may retain a percentage interest in your works, but you are still allowing other people to profit off your labour.
For these reasons, some friends and I decided to start our own record label and to release our music ourselves. This helped us stay in control of our output at all stages.
We got our music professionally mastered by someone who was prepared to open his studio and work after hours at a reduced rate as we were an underground label without access to large amounts of funding. This done, we spoke directly to a manufacturer who was able to quote us a reasonable amount as we were cutting out middlemen who would have otherwise taken a cut for themselves.
After production, we needed to get the records into places where people might actually buy them. For the first couple of records we decided to do this ourselves, and went round shops leaving records on a sale or return basis. This however, turned out to be a bad idea as we found it very difficult to firstly, get round to enough outlets and secondly, to later collect the money owed. We also lacked the overseas contacts to really reach a big enough market.
For these reasons we decided to work with a distributor who specialises in underground music. Although this was in part eroding our control, it allowed us to reach people that we could not before.
My experiences demonstrate that it is totally possible to produce and release music without interference of the corporate music industry. By doing so, the artist is breaking up the power and control of the established elites and reclaiming music for everyone.
Resources such as
myspace.com (although arguably also a corporately owned enterprise) and
soundclick.com, are being used by musicians all over the world to reach audiences directly. There are also numerous online music hubs such as
dubplate.net that serve the needs of specific genres of music and act as both a shop for artists to sell from and as a sort of community meeting place.
It is these small communities of artists and listeners that are the future of music. Numerous scenes are emerging that have little outside funding yet manage to support themselves and grow under their own terms. These communities do not now need to be centred around any physical place but can exist via the internet. It is now as easy to access the music in a remote location as in a big city. Often, these online bonds become quite strong and people travel long distances to meet up after getting to know each other via chat rooms, forums and emails.
Lots of underground artists are quickly seeing the advantages of having an easy way to distribute their music and get an immediate feedback. Increasingly, the dialogue between musician and listener is leading to a much closer relationship and feeling of loyalty between artists and audience.
With the increase of freely available downloads (as described), some consumers are no longer prepared to pay for music they feel little personal connection with. However, they are often prepared to pay for non-mainstream music, which they relate and want to support. Also, consumers will buy products e.g. vinyl, which can’t be downloaded. It is quite possible that only artists who have real support will survive because of their loyal fan-base. There is arguably little or no bond between the big companies and consumers so they see no reason to pay for music – even if it means the big companies go under. This, however, goes against everything the mass media with its promotions and the cult of the celebrity is telling us to think.
Thus, the mainstream will lose its consumer base. This is why labels are anxious to shut down competition from alternative sources. Amusingly, the Cub Scouts of America have recently introduced a new badge awarded for anti-internet piracy activities, a clear sign of the fear companies feel . Only non-traditional artists can command loyalty and make enough to live on.
The re-emergence of underground pirate radio has also played a role in providing outlets for music not in the mainstream categories. Large audiences and fan bases are being built up by unsigned artists on these stations who have been quick to harness both traditional fm broadcast combined with internet streams.
Recently, some of the major legal radio stations such as Radio 1 have been trying to emulate the success of Pirates by copying their style and poaching DJs. This has been only partly successful as a lot of the freedom and energy is lost in the legal broadcasting. There are DJs who rate working for pirate stations as better than working for formal channels. For example, I spoke to DJ Scratcha who told me that he quit his well-paid job on BBC 1Xtra in order to return to playing for free on the Pirate station Rinse FM. He said he felt he was not connecting with the people he wanted to on 1Xtra and, therefore, thought it best for him and the music he represents to return to the underground scene.
Case study 2
A type of music called Grime emerged in London out of the dieing UK garage scene in around 2000/1. The scene is very independent and has little funding from outside sources and very few artists have chosen to, or been asked to work with big labels.
At the heart the Grime scene are young producers who work for the most part in their bedrooms on computers with free or cracked software making music that they enjoy. Grime is an angry and aggressive sounding type of electronic music and is fairly MC based. It has a close association with another type of music called Dubstep, which is mainly instrumental and generally has higher production values.
When UK Garage largely died - mostly due to an overwhelming amount of negative media attention leading to a lack of funding - only a few dedicated fans remained. These fans (made up of DJs, Producers, and listeners) were mainly based around London and were mostly into the darker more underground variations of the music, producers such as EL-B and Zed Bias were popular. As time passed, two hubs of activity emerged. Croydon’s Big Apple Records served as a base for Dubstep and the estates in Bow in East London as Grime’s centre.
Grime especially, is fiercely independent. Almost all the major artists are not signed to a label, preferring to remain free to release their own material.
A prime example of this attitude is the father of the Grime scene, Wiley. Wiley, an MC and Producer from East London achieved early commercial success as a member of Pay As You Go Cartel, a UK Garage act. However, when Garage ended and they were dropped from their label, he continued to pursue music. He and several other ex members of Pay As You Go formed the Roll Deep Crew as a new vehicle to release music. After achieving widespread recognition through Pirate radio shows and underground raves, as well as selling thousands of white label records, they were approached by many labels eager to sign them.
Eventually they did agree to sign a deal with Relentless Records. Despite selling over 60,00 units of their album, In At The Deep End, they split with Relentless due to disagreements over musical style. The label wanted them to produce more commercially acceptable music where as they wanted to maintain their uncompromising underground aesthetic. Wily himself also signed a personal deal with XL Records which he soon walked out of. Another member of Roll Deep was quoted as saying “He feels the only person who knows how to support and market him properly, is himself” Since then, Wiley has released four albums, numerous 12inch singles and several mix tapes by himself (mostly from the boot of his car) which have sold remarkably well and have had a much better fan reaction than the releases on big labels.
Other artists have been quick to see what has happened to their peers who have worked with the established music industry and have stayed away from outside labels and management.
One peculiarity of the grime scene is, unlike other DIY movements such as Punk, its seeming obsession with gaining material wealth. It is possibly this business mindset belonging to the young media savvy musicians that has helped to keep it independent. Many of these artists are well aware of the pitfalls of giving away creative and monetary control and are capable of organising by themselves how to best further their own interests. The scene has built its own industry comprised of radio, internet sites, DVDs, record shops and club nights which has little interaction with the music industry in general.
One particular DVD called The Industry is a guide for young and aspiring artists detailing in a step-by-step manner how to get started. It features interviews with many well-known artists, studio technicians and industry figures who all offer their advice. Importantly, the DVD also has a large section on whether or not to sign a deal with a major label. After much debate, it comes to the conclusion that big companies should be avoided and an aspiring artist can release their own music fairly successfully.
The musical genre and culture called Grime is an example of a new and fresh scene that is self-sufficient and is conscious of remaining independent.
It survives because of the ingenuity of the people involved who are constantly innovating and working outside the box to find new ways to promote their music and associated products. It is, however, just one example out of a huge number of other scenes that exist in this way.
As can be seen, opportunities are now opening up - mostly in cutting edge music (not so much with more conventional pop music). This has been driven partly by an ideological shift but mainly for basic, pragmatic reasons. Artists know that there is nothing a label can do which they can’t do themselves – even if a bit of co-operation from others is needed from time to time.
In order to get a range of opinions - including a defence of labels, I interviewed Toby McColl , a management trainee with the label One Little Indian and Sarah , who is part of the underground music scene. Toby, commenting on the fact that a major label, Universal, singed a deal with My Space said: “The underground scene may be authentic means of getting going, but the industry fights back – they buy up the new outlets. For example MySpace.com caught on and was then bought up. It is only as long as different outlets are not big enough to be a threat that they are tolerated by the industry”.
In response Sarah replied, that many underground artists refuse to sell out. They help each other out and have different goals. They just want to make good music – not necessarily a lot of money. She posed the question: “How come mainstream is trying to copy pirate stations”.
Toby’s defence was that it was the mainstream producers who decide what got played – whether mainstream or not. He said that as long as pirate stations are not legal, they are not going to hurt the main labels. Mainstream copies the successful elements of non-mainstream. The cream were taken into mainstream e.g. Lethal Bizal, Dizzy Rascal etc. saying “any urban act that makes it big, signs up”. In Toby’s view , the majority are still into Radio 1 music and the cult of celebrity is too well established to change what artists are satisfied with – i.e. a big enough audience to survive on. He concluded that the mainstream was not undermined a number of people succeeding “at the edge”.
But in reply Sarah said “How do you judge success – just by sales and money or by popularity”. She pointed out that Lethal B had signed up to a label but regretted it. Giving the example of Drum and Base, Sarah said it was produced by small labels and played throughout the world and was a major success. The days of everyone buying just a few big sounds promoted by major labels was over and there was now a wider range of taste. Underground, she explained, was not a style in itself. It’s not just a case of being financed by big labels, the goals of underground artists are different – they do not aim to be huge stars. They can still be pretty big e.g. Sway
I think that the strongest point made by Sarah was that the Mainstream industry could not really cope with this completely new attitude to music. It is very significant that a whole generation of people have never had to buy music – they download it for free. This is what the industry can’t compete with. It is not just that artists are satisfied with smaller profits and want more control over the kind of music they make, consumers have changed. They do not buy music. The go to shows and buy mix tapes or CDs to support artists – consumers sometimes behave altruistically and buy music to support an artist. This goes against capitalist consumer behaviour. Only if music returns to being exclusively available through major labels, will consumers switch back to the old way of accessing music.
Form these interviews and looking at other sources it is seems to me that the Internet has helped to disseminate knowledge and resources to a larger demographic.
Knowingly or not, large numbers of people are now using technology to bypass and break up the established power structures within the music industry. Whole genres of music based on the resources available to young, inexperienced and often poor musicians have sprung up where it is the norm to create their music without any backing from the traditional sources. Increasingly, people are using their ingenuity to bypass the established paths and rules to making music. Although all these points are important, it would be naive to think that the Major Labels are dead already, or that they will release their tight grip without a fight. Reworking the way in which music is made and listened to is a long and complicated process that has only started.
Conclusion
My projection for the future is that simply finding new products, re-branding, re-pricing or strengthening copyright law etc. will not save the labels. The way music is made that has altered too much to go back. Musicians are connecting directly to audiences without the intervention of labels. Thus, their role is undermined. Even artists who were big money earners, are going independent. Prince, for example, turned his back on Warner Bros. in favour of signing specific deals for albums or releasing tracks for himself.
Further, the power of labels to have main say in which music is promoted and heard is also changing. As exemplified by the creation of Sheena Easton back in the 1980s and since then the Spice Girls and more recently a variety of X Factor/Pop Idol stars, the labels could pluck people from obscurity and fabricate an image of success which the public would accept. In collaboration with the media and its cult of the celebrity, this formula has worked well and in this sense, the labels have been able to manipulate public taste in music. But the digital revolution does not simply result in even more clone boy/girl bands, it means that a much wider range of music styles now comes before the public. What is more, who becomes a celebrity is no longer just in the hands of the established media. For example the artist Wiley, who I talked about in my case study, does not receive conventional media coverage but is widely known among young people and has even been called a Ghetto Celebrity .
In addition, it is no longer essential to be geographically located with close access to main cities where the music moguls are based to get your music heard. For musicians in the Outer Hebrides to remote parts of the developing world, the Internet provides a means for their individual creations to be produced and made available. And it is through putting a much wider range of musical genres, sounds and instruments before the public that taste itself is being broadened and cultivated. Aesthetic maturity depends on public exposure to new sounds, which only then, have the potential to become part of music currency.
Returning to the question I posed at the beginning of my dissertation – can small groups of powerful managers continue to dominate the music industry – the answer is no. The industry is now fragmented and with this – the freedom for music industry moguls to define and control taste (retain hegemonic control) has been dissipated. In addition, to the extent that those who dominated the industry were likely to be drawn from a privileged and moneyed social group, this too is in the past. Anyone with talent and application can reach an audience.
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These are disasters for the environment 
