How the Music Industry Died: Steve Knopper's Appetite for Self-Destruction

A Rolling Stone reporter charts the doomed path from Thriller to Internet-based horror

Congrats to Lil Wayne, whose Tha Carter III was the best-selling record of 2008—and the weakest-selling yearly bestseller since SoundScan started tracking these things nearly two decades ago. Couldn't crack three million. The music industry is toast, my friends. And congrats to Rolling Stone vet Steve Knopper, whose fantastic new book Appetite for Self-Destruction explains why, as it charts the dizzying highs (Thriller, the CD boom, boy bands) and brutal lows (payola, Napster hysteria, the "rootkit" debacle) of an oft-amoral biz whose legendary coke-fueled boom times now read as ancient history and/or science fiction. I rang up Steve recently to talk about it; here are some excerpts.

This book vacillates between sympathy for the music industry and outright contempt—you sincerely try to rationalize why the labels decided to start suing junior high students for illegal downloading, but you still conclude it was a horrible, horrible idea. How much pity do you have for these guys? Is this book a tragedy or a comedy?

I would make it a little bit more gray than that. I have a fondness for the record industry. Obviously, I'm a huge fan of [Fredric Dannen's 1990 music-biz tell-all] Hit Men—it's one of my favorite books ever, but I feel that that book was so tough on the music industry, it ventured several times into contemptuousness. My feeling was, I wanted to be very critical, and call a spade a spade, and say what they did wrong, but at the same time, I've covered music and the music industry for a long time, and I have a fondness for, you know, that whole sort of—this is gonna sound cynical; I don't mean it to—but that whole sort of "hookers and blow" era.

I was really getting into the chapter about the CD boom, where you've got these crazy Mafia characters, and you've got these coke addicts like Walter Yetnikoff at the head of these companies, running into offices and screaming at people. Guys who talk like this: raaaowr, raaaowr, raaaowr, like the Penguin in the Batman show. In Hit Men, I think it came across like, "These people are evil." To an extent, that's true. But my feeling was, I bet that was pretty cool, too.

You keep returning to the idea that lots of people, and I'm pretty sure I'm among them, consider a lot of the industry's troubles to be divine retribution—payback for decades of lousy artist contracts and $18.99 CDs. But given the technology, would it have made any difference if this industry had always been fair and benevolent and lovable? You and I both can find pretty much any album we like for free online in a couple of minutes—was there ever any way to stop this?

I'm trying to think of an analogy of another industry that was abused by technology that didn't do all those terrible things that the music industry did, and the only one that comes to mind is the newspaper industry. It seems like the newspaper industry wasn't as evil and stonewalling, and still may face the same inevitable just desserts because of technology. The point I make in the Napster chapter (and I'm not the first one to make this point): Had the record labels jumped into a deal with Napster when the time was right, when Napster was at its peak, I really do think that could've been a business model. Maybe it wouldn't have sent them back to 1994 levels of business, but I think they wouldn't be in the horrible position they're in today.

You're right that people embraced Napster and Kazaa and Torrents because of spite, but I actually think that was a relatively small contingent of people. I think that the people who embraced it most embraced it because, "What a cool thing. I don't have to get in my car and go to Tower Records and buy the $18 CD if I want this song. I can just get it in my home and mess around." And then you start fantasizing a little bit. What if Napster did become a real, legit thing? It would have anticipated Facebook and Friendster and MySpace. It would have been social networking. It would have allowed you to make mixtapes and trade playlists. It would have eventually gone to cell phones; it would have predated the iPhone. It could have been an incredibly powerful service—and not just because everything was free. You charge people a fair price for that, maybe that anti-music-industry contingent wouldn't have taken it, but a lot of people would have.

Did you mess around with Napster yourself at the time? Have you ever been swayed by the "music wants to be free" crowd, ever buy into the theory that this was a people's revolution to overthrow an evil, outdated industry?

No. Basically not. I did tinker around with Napster, yes. I got a lot of good, free music at the time—I guess I won't be sued anymore for that. But, basically, I thought it was theft. I still think it was piracy. I realize I'm walking a bit of a fine line in the book, because I'm not ripping on the music industry for just saying, "Oh, my God, this is piracy. We need better locks." I'm not criticizing that impetus, that notion. I'm basically saying they should've taken the next step and gone, "Oh wait, this'll revolutionize our industry."

The last chapter lists everything the music industry should do—needs to do—to survive. What percentage of that do you think will actually come to pass? How optimistic are you? What percentage of the people you interviewed will still hold the same job five years from now?

I just think that the smaller labels are going to continue to stumble, if they're not bought outright. EMI seems to be reeling right now. Warner's stock price is way down, although they've had some success. Probably, you're going to wind up with a couple hit machines: Universal, maybe Sony-BMG. You still are going to need those kinds of companies, that expertise, to find the proverbial Toni Braxton singing in the gas station, discovered by some label talent scout. But those companies are going to make less and less money, and get smaller and smaller, and get less and less influential, and I think that maybe Live Nation or Ticketmaster or my mythical Apple-EMI is going to pop up and change the model and be more nimble.

Another point I want to make is that these labels will always own some really incredible assets. EMI owns the Beatles catalog, so they're always going to be a player. You or I could own the Beatles catalog and make money. Just not make enough money to have hookers and blow.

More Q's and longer A's from this interview are available here.
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