Music Business Information More Humid Than the Weather.
July 2006
In this issue:
Will The CD Format Survive Another Decade?
New York Club Scene Closed Forever
What an amazing month. It's hot. It's blistering. Al Gore feels just like the producers of "China Syndrome" after Three-Mile Island . But according to him my in-land home in Silverlake LA will become water-front property in a few years so hey, Global Warming can be our friend.
NEW YORK MUSIC SCENE CLOSED DOWN FOR GOOD
CBGB's Down For the Count, Says Goodbye Forever
One of the most famous (and best) clubs in music history has lost its battle to Cancer of the Rent Increase. CBGB's will close its doors for the very last time at the end of September 2006. After years of feuding with its landlord--a non-profit organization--the rent was raised from $19,000 a month to an intolerable $35,000. A spokesperson for the landlord, BRC, said raising the rent allows them to take more "e-expenses" off the top for the operators of the non-profit group; a management technique they learned from another set of "non-profit" music business entities, ASCAP and BMI.
Normally a business would try to survive by cutting its overhead, but CBGB's already doesn't pay its bands, so, "There is no real bottom line to cut," said Regie Bitman, a vagrant who frequented the club's entrance and helped some of the most famous bands in the world unload their gear in exchange for a cigarette. One source claims the building will be converted to a homeless shelter after CBGB's departs. "I'll have to move too," said Bitman, "I don't like hangin' with people who have no direction in life."
With rent this high, CBGB's, if they were to remain, would be forced to charge bands to play. "Never going to happen," said club owner Hilly Kristal, "This isn't LA."
Ironically, it was only three years ago that the street in front of CBGB's was renamed Joey Ramone Place, whose career was launched at the club. With the club gone, future generations will have to speculate on why a street populated by the homeless is named after a Punk Rocker. This is much like we already do over why nearby Washington Square, where 60% of all Downtown Manhattan dope deals go down, is named after our first president.
A recent fundraiser/contest for guessing what the CBGB's anachronism stood for was not successful in raising the capital to pay off the landlord, probably due to the fact that the answer "Country Blue-Grass Blues" is posted on about three-dozen fan-based websites.
A selling off of equipment will be the final event for the music business icon. Word on the street is that the Rock N' Roll Hall of Fame has dibs on the toilets where some of the most famous names in underground music vomited.
The club's long, colorful and prestigious history will be the subject of more documentaries than we comfortably care to tolerate.
I will probably watch them all.
CD, OR NO CD; THAT IS THE QUESTION?
Will the Amoeba Factor Allow the CD Format to Survive
Or Will iPod Turn the Industry Standard Into Roof Tile?
For about a year now I've been sitting on the side lines of this debate waiting for some meaningful contribution to hit me. This month something did.
But, before we get to my rant I need to introduce you to a writer you may already know, named Bob Lefsetz. Bob is sometimes put in the same category as me because we both have music business data bases that we write to on a regular basis and we are both music business consultants of note that are openly critical of the major labels. But in truth, that's where the similarities end.
Although I am constantly impressed with Bob's knowledge of the music both as a business and as a cultural art-form, he and I don't seem to agree about too much when it comes to the future of the music business itself. This is not intended as a criticism of him. It's just a classic example of how two intelligent people can agree on the facts but not on how they are interpreted.
Bob subscribes to the very sexy and over-hyped techno-viewpoint of a world without paper money or hard media; a world where record companies will implode -- victims of their short-sightedness; and a world where music will exist almost exclusively on hard-drive devices and be freely traded like Baseball cards.
I, on the other hand, see things less radically and with a diminished deterioration of copyrights. I also question the time-line for the technocratic wet dream of a world without labels or rights agencies as being so far in the future that it's not worth considering for a typical career that will likely last about 15 years. For me it's still about chasing the dollar offered by the big labels and their oligopic way of doing business. Bob says, "Screw the labels." I say, "Screw the labels-- but use protection."
Regardless, I am of the opinion (and I think Bob would agree with me here) that listening to only one viewpoint leads to two-dimensional conclusions. So, I subscribe to Bob's blog, called The Lefsetz Letter, and I get a kick out of it. If you don't know Bob already then it's my pleasure to introduce you to his blog which you can subscribe to and read at www.lefsetz.com. It's my secret hope that he will reciprocate and have me on his radio show sometime. (hint, hint.)
From time to time I will write Bob back about something in one of his rants. The subject has to be something I think he's making a good point about. Such is the case as the future of the CD.
So now that we have our characters and their perspectives established, here's the debate. Will CDs vanish?
FROM THE LEFSETZ LETTER JUNE 2006
(Below is an excerpt. You can read the entire letter at:
http://lefsetz.com/wordpress/index.php/archives/2006/06/27/ch-ch-ch-changes-2/ )
"Last Wednesday night, on my way to dinner at Il Sole, I drove past Tower Records. Tower Records used to be SO busy, such a cultural hotspot, that they bought an additional parking lot on the other side of Spago. But at eight o'clock this evening, there were EMPTY SPACES in the MAIN parking lot, right next to the store.
"Tower Records used to be a destination, it used to be the pulse, it used to be where music lived. Now it's a graveyard. Inhabited only by those who didn't get the memo, who are still buying CDs... the CD is in a death spiral that nobody will talk about. As they continue to try and reap the final financial rewards before the wall is hit.
"[To them] It's like Napster never happened. The concept of more people owning more music at a cheaper per song price never happened. What we have is ostriches. Ignoring the fact that most music is acquired FREE and just pointing to the Luddites who DO pay. I don't care how helpful the employees might be, it's not about FIXING brick and mortar retail, it's about ABANDONING IT!"
MY RESPONSE
Bob,
You're very right about Tower Records and what a great analogy BTW -- "Inhabited only by those who didn't get the memo, who are still buying CDs." Excellent!
But did you drive past Amoeba? Packed on a Saturday night when everybody should be necking under the Hollywood sign. Instead they're buying used CDs by the truck load. Why? What memo did they miss? Why am I in there every weekend as well. Because for about $6, I can own 14 songs at better quality than I can from iTunes.
Less than a year ago I would have been right there with you in the CDs are soon to be roof shingles thing. But now I see a renewed public need for them.
iTunes is not much better than Yahoo in terms of the concept of "renting your music." It's just that iTunes is far hipper and has the illusion of ownership. But eventually people get tired of paying for the same music over and over again as formats change, and the illusion wears off.
iPods will change too someday and the old formats won't likely work in the new machines. Or, your computer will crash-taking your collection with it. Or, in my case, I do need the full bandwidth to make me feel happy listening to music (an occupational hazard from being a former engineer) I don't have nearly enough room in an iPod to store more than few albums. But someday I will. When that day comes I'm going to be happy that I have the actual CD to re-burn at full bandwidth.
Yes, my CD collection is alive and well and for Tweeners like me I like being able to get Fleetwood Mac's Greatest hits for less than 42 cents a song at Amoeba, ($6 divided by 14 songs) -- full bandwidth and I get to keep it FOREVER.
Someday there will likely be a new iPod format that expands the range and imagery on CDs. Everyone will want that. I'll be thankful to have a collection that can not be victimized by glitches or planned obsolescence at that point. So if you're giving away any CDs because you think they'll be useless in a few years, I'm buying.
Ironically, it's because the iPod that CDs may get another 10 years of life.
Thoughts?
OBITUARIES
Billy Preston - The gifted keyboardist who recorded with both the Beatles and the Rolling Stones and scored two of his own Number One hits, died of kidney failure in Scottsdale , Arizona , at the age of 59. To me he will always be the soulful fingers behind the Fender Rhodes on "Get Back."
Ian Copland – Brother of the famous drummer Stewart Copeland (The Police) died this past month at the age of 57. He was an innovator in the booking agent industry with his company Frontier Booking International (F.B.I.). His older brother Miles was the founder of International Records Syndicate (I.R.S.), a record label whose acts included R.E.M., the Go-Gos, Black Sabbath, Oingo Boingo, Wall of Voodoo and General Public.
Syd Barrett - the Pink Floyd co-founder who dropped out of the band (and out of public view) in the late 1960s after what has been called a "mental illness," died in London . He was 60. His contributions to both Pink Floyd as a group and pop music in general are immeasurable. He wrote many of the early hits of the super group and the albums "Wish You Were Here" and "Dark Side of the Moon" were heavily inspired by the group's affection for him.
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