| How Age and Stupidity Will Kill the RIAA |
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In the past, I have always blamed the unreasonable prices of CDs for the decline in sales, at least here in Australia. But when I read this, an original thought or two snuck in - something that the record companies will have to come to terms with, and that is already impacting on sales from my point of view and will have an even bigger impact in times to come. That something is the aging demographic of western society. Throughout the 60s & 70s, album sales blossomed because the baby-boomer generation were populous in numbers, had disposable income to burn, and were quite happy to spend that money on music. In the 80s, the "invention" of mass-marketing techniques through new advertising media such as MTV captured an even greater percentage of the available disposable income across all demographics - you not only had the die-hard baby boomers buying music, but the beginnings of the subsequent "MTV generation" as well. Anything that hit big in both markets, such as "Thriller" or "Bat Out Of Hell", sold through the roof. But, by the end of the decade, those two groups were growing further and further apart in tastes and willingness to part with their cash. In addition, you had new products like videocassettes eating into disposable income like never before. Throw in the impact of an economic downturn which reduced the disposable income available to be tapped, and it was inevitable that sales would decline. The 90s were a decade in limbo in a lot of ways. The music market was oversaturated with choice, independant labels eating into the market share formerly the sole domain of the big companies, and the baby boomers were less willing to part with cash. The marketing was still aimed predominantly at a youth market, but this was now a shrinking market in both population and real disposable income per head. There were more mouths competing for smaller pieces of a steadily-shrinking pie. The baby-boomers were now moving into the twilight of their working lives. Their mortgages were (mostly) paid off, and given the increased earning power that comes with seniority, this should have been a new boom for the record industry - but the music companies were so used to focussing on the youth market that they missed the opportunity for the most part. Bands like the Eagles and Fleetwood Mac and the Bee Gees who were able to bridge the gap between nostalgia and new fans did very well at times in the decade, and more than anything else, signposted what might have been. So now we are in the first decade of the 21st century. The baby boomers are beginning to retire, and the youth pitch is now aimed at a new generation, one smaller than that which was there previously. Instead of the videocassette, we have the DVD [Tin: and video games] competing with music for the consumer spending dollar. But, at the same time, economic growth has been steady, if not better, and disposable income is up across the board. This decade could go anywhere. If the right products are marketed the right way, capturing the attention (and the $$) of all three generations of music buyers, the decade could potentially eclipse even the 80s for sales - by a factor of 2-4. Are there any signs of this happening? No. If the wrong products are marketed in any reasonable shape, sales should rise slightly, a function of the increased level of disposable income. It might not quite touch the lofty sales standards of Thriller, but in comparison to the last 15-20 years, we are talking a boom of some considerable proportion. This is the natural direction that will be taken by the industry unless something happens to derail the process. That something: how about alienating a substantial portion of the potential market through record company stupidity? The internet represents a new marketing opportunity as potentially revoluitionary as MTV was when it first arrived. This is part of what should have made the second half of the 90s the massive bonanza that it should have been for the record industry - all the elements needed were there. But instead of embracing the new market, the recording industry has shown how far out of step they have become by attacking instead of embracing it. But not everyone has missed the boat. Some of the independant labels have seen the way of the wind, however belatedly, and are starting to seize the opportunities that are out there. Last year saw the first independantly recorded, produced, and distributed album in Australian history to reach #1 on the charts - and it stayed there for 4 weeks. There have been a string of #1 singles on independant labels over the last two years. One band cracked the top-40 through internet-based sales and distribution alone. If the RIAA succeeds, it should - and I think in hindsight, will - go down in history as the last, worst case of King Canute and the tide. They will have thrown the baby out with the bathwater and killed the goose before it layed even one golden egg, to mix metaphors shamelessly. For a while now, I've suggested that by the end of the decade, more clued-in independants will seize the sales high ground from the established major labels, resulting in a string of acquisitions and mergers such as those that were seen in the late 70s and early-to-mid 80s. They will have the $$ but not the back-catalog and production capacity, while the major labels will be short of $$ and have relatively idle production lines. When that happens, the RIAA's campaign against the internet will quietly fade into the background. The newly switched-on companies should be able to at least grab the tail end of what should have been two of the biggest decades in the music industry's history. What could possibly derail this rosy image of things to come? Exactly what the RIAA are trying to achieve. If they succeed in driving underground the marketing forces they should have harnessed long ago, the golden opportunity may well be lost. In seeking to protect their perogatives, they are acting in a manner that could not be better-calculated to thwart their very purpose. Like dinosaurs, they have too much invested in out-of-date techniques to adapt to a changing environment. The only question is whether we face a mass extinction, or if the smaller dinosaurs will survive to evolve into birds. A decade from now, there will be more people in retirement than there are in the workforce, in most western cultures. Retirees tend to stay at home; sales forces will have to come to them and not the other way around. The recording industry should be laying the groundwork NOW for the changed demographic to come; instead, they seem to be a decade behind the times. The time is right for a new Beatles, a new Abba, even a new Madonna - catchy melodies that are easy on the ear with beats that you can dance to and music that you can listen to, a new musical force that overwhelms and revolutionises the musical landscape overnight. You heard it here first......
Mike Bourke ----------- Please note: Mike is an Australian, so references to economic upturns may not be applicable to your locale, but the rest certainly is. Add this page to your favorite Social Bookmarking websites          Add your comment
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