When we last left the music business, it was desperately trying to get its groove back. Flashback to March 1997: Austin’s annual industry hoedown, South by Southwest, a usually joyous affair, seems muted this time around due to recent layoffs and a sense that all is not well. CD sales are plummeting. There is, as it turns out, no ‘next Nirvana.’ All hopes attach to the Fugees, who pack an outdoor barbecuejoint with 1000 curiosity seekers despite a looming Texas thunderstorm.
But in spite of the buzz elicited from the lightning bolts and Lauryn Hill’s star turn, the downward vicissitudes of the biz kept coming. Conventions like SXSW and New York’s CMJ Music Marathon began to acquire the feel of a frivolous exercise: 1000 bands over four nights in 50 clubs, and so on—but no breakout artists. Then came this year’s consolidation of two major record companies, Universal and PolyGram, and a wave of layoffs and roster trimmings. Sure, there’s Britney, the Backstreet Boys, and Ricky, but history’s painfully clear on the question of bubble-gum pop acts’ longevity.
So what’s a record industry in a funk to do? One option is to gaze into a crystal ball and hope for a clue. A potentially more attractive alternative: Connect the dot-coms.
On the Internet, the term “MP3” is the second most searched-for term after “sex,” a statistical tidbit that’s been trotted out glibly in tech publications. MP3 first began blinking on the music biz radar late last year after a convention of a different sort—a gathering of about 500 music-loving techies in Los Angeles called Webnoize—sent the message that the downloadable file format was all the rage among college students and software engineers.
To record executives, this smelled like a positive bit of test marketing, but with a major flaw: MP3s were being copied from CDs, meaning that a certain cash cow was in danger of being tipped. The Recording Industry Association of America, the biz’s trade group, sprung to action, shutting down illegal MP3 sites, bringing a suit against the maker of the first portable MP3 player, and leering down on the tech world’s activities like an owl on his perch.
Then the attitude shifted. In July, the music industry sent an elite troop of visionary execs like BMG’s Strauss Zelnick and Palm Pictures’ Chris Blackwell to Times Square for Plug. In (catchy tag phrase: “The Future of Music”) to suss out what the tech folk had up their digital sleeves. The two-day barrage of speeches and panels sent a message that the tech world had catalyzed an intriguing change—especially where growing the multi-billion dollar market was concerned—but one the music industry still had reason to fear.
As the engines fired up for Webnoize ’99 (catchy tag phrase: “The Future of Music is Here”), that fear had all but dissipated. In the days leading up to the three-day conference (held last week in L.A.), two of the industry’s heaviest hitters—teammates Doug Morris and Jimmy Iovine of Universal/Interscope—acknowledged that the digital music space is the next big thing. They announced that they’re laying the groundwork for the first major-label-supported online A&R site to scout talent via download: Jimmy & Doug’s Farm Club.
The notion that this is some sort of bush league became instantly laughable when Microsoft’s Anthony Bay stood to deliver Webnoize’s opening address to a ballroom packed with 1500 attendees (whose companies paid $900 a head to send them). “Digital music is clearly everywhere and going mainstream,” Bay announced to the unified crowd.
A whir of deals and announcements timed to coincide with Webnoize lend credence to Bay’s proclamation. MTV unveiled a snappy new Web site and interactive game show; Microsoft flaunted partnerships with EMI and Sony; Silicon Valley digital download site EMusic.com bought New York?based music site CDuctive.com; the online venture ChangeMusic.com merged with CMJ, throwing a lavish party complete with sushi chef and a live set by Built to Spill.
Why does everyone want in? Over 20 million computer users have downloaded software to play digital music on their desktops, be it RealNetworks’ Real Jukebox or the MusicMatch Jukebox (which now comes bundled with the latest version of Microsoft’s Windows 98). These applications can play near CD-quality music through speakers attached to the computer, and they’re being designed for compatibility with portable players that reduce the size of the Walkman by half. The prospect of digital-jukebox car and home stereos isn’t far off.
The software, hardware, and Internet companies have the personnel to mind the technical end of things, and a trend at Webnoize hints that they’ve hit on the other area that needed covering—the artistic side. Music industry vets from executives to publicists to the artists themselves wandered the halls at Webnoize, many now happily and lucratively installed in jobs at dot-com companies.
Dave Allen of EMusic.com took a route to his job that would have seemed unfathomable a few years ago. The bassist for the influential British post-punk band Gang of Four in the ’70s and ’80s, Allen went on to start his own record label, World Domination, which folded last year. He parlayed his experience into a job in the new media department at the indie record company Koch, then jumped to EMusic a few months back. “Online music companies need people like me,” he says. “I was at a point where I was ready.”
For others, the thrill of working on a killer app doesn’t quite match the ragged glory of strumming a guitar turned to full volume, though there’s the obvious financial benefit. “There’s no better thing in the world for me than to be a musician,” admits Steve Mack, a RealNetworks executive producer who spent the late ’80s and first half of the ’90s playing in the bands That Petrol Emotion and Anodyne. “But it doesn’t pay the rent.”
Other musicians at Webnoize weren’t so willing to make the leap from the right brain to the left, but they’re equally concerned about getting paid. Amid all the talk of Internet radio, copyright protection, digital downloading, and business models, artists on one panel expressed concerns about the music industry’s sudden willingness to spring ahead to Internet time.
The controversial rapper and actor Ice T has become a fixture at these tech-music conventions since he signed with the online record label Atomic Pop earlier this year. Artists like Ice T see a big advantage to working with online labels rather than traditional ones—they typically offer a bigger cut on sales. At Webnoize, he compared the rapid convergence of the music and tech industries to a spacecraft that may lift off without him or any of his fellow musicians on board.
Ice T counsels his peers that the familiar dream of becoming a hit major-label artist is a fading, possibly outdated hope. “My artist friends are still saying, ‘Ah, I wanna get me a record deal,’ ” he says. “But I’m like, ‘They’re building a spaceship!’ “