A MUSIC BIZ BAILOUT: On This Thanksgiving, Is Music A Better Bet than Stocks?

By Moses Avalon

It is of course stunningly bizarre that the general public expects the record business to live up to different standards than the rest of the US industries.

The banking and auto industry crashes make our little 30% tilt in CD sales look like a bonanza.Where are the “objective” articles (not editorials) about how mortgage-backed security fund managers and their high-tech computer-run financial models should have predicted this debacle?Where are the exposés’ impeaching the tech geeks who persuaded the automobile execs that it’s gadgets that will sell cars instead of ones that are cheaper, cleaner and look cool?

The fact is, everyone got techzonated (my word) in the US over the past 15 years.Everyone.And as recent events have shown, people who listened to the tech gurus fared no better than the ones who ignored them.But to read the LA Times, New York Times, Wired, et al, you’d think only the music business was short-sighted.Why?

Because record companies don’t buy ads in these papers; not enough to sway Senior Editors to think that that maybe–just maybe–they should take a more fair and balanced view on the Tech v. Content wars.Last week alone I read five pieces that indicted the entertainment industry for not embracing advancements.Each had an “expert” talking about how the business (our business) was run by people who “just didn’t understand how the net worked” or the effect it would have.I ask you, with all this financial collapse– who did?

“But Moses, are you saying the internet caused the banking crash or the auto crash?”

Directly? Probably not.But swift changes are not good for large economies. They cause too much transfer of wealth too quickly.Slow change allows us to grow into each adaptation.Imagine having to replace all the equipment in your studio in one day when you have clients coming tomorrow.You’d never be able to connect everything, trouble-shoot the problems, assimilate the manuals, and as a result, you’d still let the clients in and try to cover for your fumbling.

We’ve all had to do this with that new reverb, or console.Imagine having to do it with each piece of gear—all at once.Never knowing if the knob you’re turning is correct until after you’ve screwed up the signal processing. When you accidentally erased something, you’d say, “Can I have a second chance?Can I get a bail out?”

Soon, you’d be apprehensive to touch anything after the client says, “I love that,” even if they’re wrong.Every engineer and producer out there knows exactly what I’m talking about.

That, in a nutshell, using music production as an analogy, is what we are facing in the Western World due to the internet;every piece of gear is now potentially obsolete, we don’t know how to integrate the new stuff fast enough to stay ahead of the client’s standard demands. Yet the tech industry wanted the major labels to trust them sight unseen in 2001.

Banks lent money against montages for homes that inevitably would be upside down; car companies marched forward with a “USA all the way” philosophy, unable to see the cries of the public for a different kind of car. To say record companies  (most of which are not run by the caliber of MBAs you’d find in the banking industry) were stupid for not seeing the P2P iceberg on the horizon is nothing more than setting a ridiculous double standard.

In fact if you look at the actual numbers, instead of listening to disgruntled laid-off music execs you’ll see the music biz is way ahead of the curve.

And while industries like travel have been all but gutted due to internet technology, in less than ten years since Napster almost destroyed our business model, we’ve managed to change legislation to suit many (but not all) of our tech issues, create vast new revenue streams that have more than offset the 30% dip in CD sales, implanted effective job transition (meaning we trimmed the fat and re-tooled with new faces) and still manage to be a $8 Billion a year industry in the US—and growing.ASCAP and BMI both reported record years–back to back–for the last two years.So, how dumb are we?

The music biz market cap is higher than Citibank and General Motors combined!!!You don’t hear us whining for a bail out.Instead we’re trying to do things the right way; working with the law, pursuing licensing and creating new avenues for income.All the media can focus on is that out of 25,000 lawsuits filed by the RIAA (less then .001% of the people actually stealing music) a few of them were adolescents and single mothers.As if the RIAA should discriminate about who is and who is not allowed to steal our work.

Who would have thought, in this time of crisis, with the world markets and all their tech guru advice, is falling to pieces, that the music business may be the safest place to put your money?


I’m giving thanks for making the right decision some 20 years ago when I thumbed by nose at Wall Street offers. I give thanks to the music biz for being my home.

Have a Happy Thanksgiving everyone.With my blessings to you and yours.Stay true!

Moses Avalon

11 responses to “A MUSIC BIZ BAILOUT: On This Thanksgiving, Is Music A Better Bet than Stocks?”

  1. K. Obschlager says:

    aaahhhh….hard times come easy

    I’m not asking for a lot you see
    It’s just if a man ain’t got dreams
    He’s got nothing baby……But

    Times get tough it gets hard out there
    Salvation comes from the angels
    You lose a little faith
    You lose a little pride
    You got to hang on
    You got to be strong now…….

    music & entertainment……. do not die….the down and out search it out….the safest place to but your money ?…..music is vital to the human race that we are.

  2. Adam Cassidy says:

    Kudos for telling it like it is, Moses. It’s nice to know that even if I HAD pursued a career as a high salaried executive, I’d probably be broke as a musician right now just the same…

  3. Nate Savary says:

    great read- good points and insight

    keep em coming…

  4. YAY MOSES!!!

    Giving Thanks for the smog/fog clearing and seeing your words there, lighting the way to understanding this non-business of music.
    Got your book from Rich L’Hommedieu (WUSB.FM, founder of Long Island Music Hall of Fame), and am reading voraciously.

    Keep it in between the ditches, and stick on a couple of deer whistles up front for good measure.


  5. Tomas Sunmo says:

    Nice to hear something positive for a change. However, in Europe things are slightly darker, just had to give a client another 14 days to pay the latest invoice…… Small labels making good profit but suffering from bad cash flows when productions are done and paid for but no money has come in yet are suffering here since the bank’s are cutting credits meaning small well run businesses end up paying for the banks speculative adventures….

  6. Rotor says:

    Thanks for the unique and thoughtful perspective.

  7. B says:

    Funny. What have you been smoking?

    Cue the violins.

  8. Katie Smith says:

    “Who would have thought, in this time of crisis, with the world markets and all their tech guru advice, is falling to pieces, that the music business may be the safest place to put your money?”

    I think that with what is happening to our environment and world markets people lean to the fact that music will make them feel relaxed and momentarily forget about their problems and stress.It’s like their ingredient to unwind and stop to think what will be their best action at the moment.

    Katie Smith
    My Blog: http://www.allcelebritygossip.com/Kim-Kardashian/

  9. Anne Cole says:

    You have a positive view in your life. So I should say music plays on the heart.

    Anne’s blog: Anne Cole Swimwear

  10. Kate Wilson says:

    For me, ‘if music be the food of love, then play it ” music can relieve stress, can come down our emotion, and lastly give us inspiration.

    My last blog post:
    Kim About Body Issues, Butt, Cellulite

  11. Music can indeed change your heart, ignite something in you and can take you away from your stressful life…it plays a big part in a person’s mind and soul.

    Love the thoughts I’ve read from you, technology is ever changing and so is the industry…whether it’s adapting, working hand-on-hand or just plain competing with each other.

    Webmaster of All Web Directory

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