The Future of Music?

A couple of weeks ago, the New York Times Sunday Magazine had a feature-length profile of uber-producer Rick Rubin. Rubin is a young legend in the music business for his work with Beastie Boys, Johnny Cash, U2, Tom Petty, and others, and is now the co-head of Columbia Records. The crux of the article is that Sony (parent company of Columbia and numerous other labels) is counting on Rubin to save the record business. Can he?

Probably not. The major labels dug their own grave 10 years ago when they pulled out at the last minute on a deal with Napster that was on the table (the labels caved to pressure from big-box retailers who threatened not to carry CD product if they made a digital distribution deal...their brilliant belief was that this whole internet thing was just a fad). CD sales have declined precipitously ever since; they are dropping 15% annually by conservative estimates. The future is digital, be it iTunes, Rhapsody, Spiralfrog (just launched today), MySpace, Facebook, or any of the myriad other social-networking sites that have been proliferating in the last couple of years. The major labels-now down to four-spent years fighting digital piracy rather than trying to capitalize on a paradigm shift in an industry that until then ruled from the top down. Now it's a bottom-up business, and the labels are scrambling to monetize this new world. iTunes primarily benefits Apple. Ringtones, although a big business, have yet to bring the financial rewards that CD sales did in their heyday. CD sales which, by the way, were artificially inflated for years...remember paying $18.99 for a disc with two good songs on it?

Anyway, the article profiles Rubin in all his wonderful California weirdness, the guru of the studio doing as he damn well pleases professionally-meaning, he can still produce artists that aren't on the Columbia roster. If you worked for a restaurant, how would you feel about your head chef creating appetizers for the restaurant next door?

The piece also illustrates some of the other conundrums facing the major-label business. They've lost much of their access to radio, which is fractured by format and no longer just plays whatever is handed to them by the record companies. MTV is no longer a tastemaker; hell, they hardly ever play any videos. Wasn't MTV2 supposed to fill that niche? Seems like all they show are reruns of Laguna Beach. Record stores, like Tower, are gone. iTunes rules the universe, meaning that the business has become singles-driven rather than that archaic old concept known as "the album."

What's Rubin's solution? A subscription-based service in which the four major label groups all put their catalogs online together, and the consumer pays a monthly fee, around $19.99, to download as much as they want. Will it work? Who knows. What they haven't determined is how that money is split. How do the percentages work? If artist A has 400,000 downloads that month and artist B had 400, how do you compensate them?

Labels are also trying to force artists, who've been victimized by shady accounting and outright theft since the beginning of recorded music, to sign away pieces of their touring and merchandizing revenues-which make up the bulk of their income. The labels are simply making a grab for cash, to make up for all that lost CD revenue that is never coming back. What do the artists' get in return for giving up this income? Your guess is as good as mine. An advance from the label? For what? Will the label get them on the radio? Maybe. Get them in stores? What stores-the BUSINESS IS ALL ONLINE!

Rubin's other recipe for success is a word-of-mouth team, college kids who will be paid by the label to tell their friends about this band that "they just have to hear!" The problem with that model is that the very kids they are going after SEE RIGHT THROUGH THAT OVERHYPED BULLSHIT! They smell corporate sellout instantly. True word-of-mouth happens organically, not because of a strategic marketing campaign, regardless of how cleverly disguised the pig may be. That only works in politics...right, President Bush?

Anyway-it's an interesting time for this business. Rick Rubin is a brilliant producer and an innovater in many ways. But taking the Columbia job-and remember, Columbia was once the coolest label in the world, bringing us the likes of Bob Dylan and Bruce Springsteen-will be the biggest test of his career. Maybe he can reinvent the wheel from the inside. More likely, he's getting a giant pile of cash in order to perform a miracle before the whole business collapses in on itself and some kid in an MIT dorm room buys it for 10 cents on the dollar and truly does reinvent it. THAT will be the revolution.