Did Streaming Kill The Recording Industry? (Or the MP3 Is The New Business Card)

First of all, the record business is not dead. It’s different. But hey, the world is different, thanks in part to the Internet. It may look burned to a crisp from the outside, but, like a toasted campfire marshmallow, there’s good stuff hidden just beneath the surface.

With respect to music and artistry, truly committed recording artists, i.e. those who have a sense of purpose more profound than making (or copping) a fashion statement, will continue to record and release great music, with or without financial reward. They cannot help it, because they are driven artists to the core. These artists are releasing some of the best music I’ve heard over the course of my 35 year career in the biz. I mix a lot of indie records these days, and I can sincerely say that I rarely have an intolerable day at work. Frankly, most days are exciting, fun and enjoyable. I can’t say the same about the years when my work was mostly for major labels.

So, if the overall quality of the music—at least that which crosses my desk—is higher, why are we concerned about the record business? Because many artists and composers are not being paid fairly for their work, which can eventually cause enough financial stress to incentivize creators to stop creating new art. Just this week Rob Chiarelli and I met with Robert Fink, the Chair of UCLA’s Music Industry program, and had an interesting discussion related to this. Rob recounted speaking at another university, where his audience was half middle-aged faculty and half 20-something students. When he asked how many people believed that consumption of recorded music should be free, 80% of the crowd raised their hands. Fink then rhetorically posed the question, “Should the musicians who perform on records be paid for their services?” We assume that any reasonable person would emphatically declare, “Of course!”

Needless to say, the math simply doesn’t add up. But there is indeed great new music from new artists waiting to be discovered, so music lovers will continue to have a steady flow of new content to consume, right?

Frankly, I don’t know. I hope so, but, given the free-for-all nature of the Internet, it is much more difficult to actually find and discover the “great” new recording artists.

A byproduct of the manifestation of the much heralded promise of a level playing field (on which every artist would have an equal shot at success) was the loss of many major label “curators” who actively sought and developed talent while sticking to acts who were in line with their own, often peculiar, personal tastes. Like them or not, A&R personnel served a vital function with respect to growing the record business. A&R folks during the glory days of AOR (Album Oriented Rock) signed acts who they actually liked and believed in, often based on intangibles like emotional resonance and…wait for it…hunches. For the most part, they stuck to what they knew and loved.

The more recent trend has been to sign acts based on quantifiable numeric milestones, which may include indie sales, streams, downloads and other tangibles that fit neatly onto a spreadsheet or P&L. Hit a magic number, get a record deal—regardless of your new label’s passion for your product…oops, I meant music. I suppose that attitude makes sense on one level, but it doesn’t account for the emotional factor. Think about it: a Steely Dan fan might not get Jay Z any more than a 30 Seconds To Mars fan would feel John Denver or Ethel Merman. Every new artist needs a champion at the label. I’ve seen A&R folks go to the mat for their beloved artists when poor sales numbers did not reflect the intangible emotional resonance that accompanied an act. On the other side of the coin, it would be tough to champion a band that was the equivalent of a disposable paper cup to a label where there is an imbalance of artistic v. bottom line concerns—especially if you don’t even relate to the band’s music!

For a new major label artist, the pressure is on to have an immediate hit. Indie artists, however, can take longer, even years, to score, provided the funding well doesn’t run dry. Circling back to the title of this article, both major and indie artists are getting the shaft with respect to payouts for streaming, but there is more to the story. Labels are making money, even if digital piracy is ubiquitous. Artists and writers? Let’s just say that they better love music enough to create it even if they don’t get paid to do so…because they probably won’t. Streaming, along with downloading and theft, has cut into the revenue formerly produced by physical (CD) sales. This is clearly bad news for indies on the rise because they need every penny they can get, right?

Here’s where you get to lambast me. As much as I personally want to get paid fairly for my intellectual property, I personally want people to stream my music.

The record business is the new Wild West, a semi charted frontier that will see new ventures open for business as each town along the trail to the promised land establishes itself. Opportunities will present themselves in response to the demands of the people. We artists may stubbornly believe that we’ll continue to earn a living based on our record sales, but the times are a-changin’. There are plenty of revenue streams in the record business, but for new indie artists and non marquee major label artists, royalties from streaming and sales of downloads simply will not keep the raft afloat.

One partial solution is to identify and nurture SuperFans. From this subset of fans, you may (if you are lucky) find your own twelve apostles who will spread your gospel far and wide. In my case, I engage them with special content (like my blog or the master classes and seminars that I do in the Los Angeles area) to develop a genuine rapport. I also empower them by giving them mp3s to stream and or share, because the mp3 is my new business card.

A business card is designed to say, “Hey, check out me! Look what I can do for you!” They are to be given away, not sold. Try to imagine this conversation:

You: “Do you have a card?

Service provider: “Of course! Here you go…”

You: “Terrific! May I have another five for my friends?”

Service provider: “Sure! Thanks for spreading the word. That’ll be $5, please.”

You: [Crickets.]

The way I see it, the service provider just blew an opportunity. For a recording artist service provider, this would have been a big deal because it can be hard enough to get one person to listen to your music, let alone six! With so many options available to the listener, the artist must find a way to stand out from the background noise. In this case, there were six prospects (including you and potentially a coveted SuperFan) who were prequalified by you, because you already knew that their tastes in music intersected with this particular artist’s work. Plus you lend credibility to the referral by virtue of simply making the referral to your trusted friends.

The reality is that good new music almost immediately gets ripped and uploaded to YouTube the day it is released. Even Prince wasn’t able to control that reality. So my attitude is to focus on the opportunity rather than the injustice.

As an example, my 2015 album Marchesano is available via the usual delivery portals like iTunes, Bandcamp, and CD Baby. Bandcamp offers the option to unlock the limited number of free streams before the customer (read: potential fan) is required to either purchase the music or to listen to something else—which implies going someplace else. In the virtual marketplace, I never want to oust a customer from the shop–he/she places absolutely no burden on my resources. It’s not like I have my staff attending to this person, so I have nothing to lose. Let’s assume that this customer is in fact a cheap bastard who intends to stream my album a million times without ever paying for it. That’s great! I made the music for people to enjoy, plus El Cheapo may want to stream my music for friends (maybe even a future SuperFan) who are willing to support recording artists by buying their music and merchandise. I will never penalize anybody who wants my music to be part of the soundtrack to their lives.

Check this out: I have no control over iTunes’ pricing and presentation of Marchesano, but I can customize the presentation on Bandcamp. It has definitely and quantifiably made a positive difference. My artistic vision was to present the songs in the context of a concept album that chronicles a journey along a spiritual path. Therefore, I wanted to sell, or stream, the entire album. Bandcamp allowed me to refrain from selling individual songs, so I set the price at “$15 or more” for the entire thematically connected album. (iTunes forces the price to $0.99 per song, and, as a further insult, does not include the PDF booklet, which is integral to my vision of the artistic presentation.) My customers on Bandcamp pay “more” nearly 50% of the time. For some unknown reason, $22 is a popular price, and some folks have paid $50 for a download! I shit you not.

My personal, unique Bandcamp experience tells me that some music lovers are willing to support artists whose music resonates with them. Not everybody bases their purchasing decisions solely on price, so there is no real need to perpetuate the race to the bottom by fixing prices at roughly a buck per song while the cost of living continues to increase as wages stay the same for middle-class Americans.

The upshot of all this is that streaming is not inherently bad. It helps me develop a fan base at a grass roots level, and provides an easy way for new listeners to decide for themselves whether or not they want to take the next step, which can lead to any number of profit centers for me. Even if somebody steals an mp3, they will have the opportunity to purchase high definition wav files, a physical CD, licensing, my services as a producer/mixer/guitarist, or the fashionably questionable T-shirts I hope to foist on the world. Add to that humble list the revenue from live show ticket sales and merchandise for touring artists, whose fans want to take home a memento of a special evening shared with good friends and good music. Long story short, the record biz is a different beast than it was ten years ago, but there is plenty of opportunity for smart industrious types who see it for what it is, not for what it was.

As a parting thought, publisher/manager Jan Seedman offers some wisdom: “Musicians and those in the industry appreciate music fans who actually buy the music. This covers more than one area: 1) These fans don’t get enough credit for helping to support the music industry. They have become an elite group. 2) By acknowledging these fans, you are subtly sending a message to others that maybe non-paying fans should get on board and get off of “music welfare.” 3) It’s an opportunity to introduce the idea of Music Supporter/Fan Appreciation Day (or whatever you want to call it). Like Record Store Day, it’s an opportunity to acknowledge real music fans/supporters, even for one day. For MS/FAD, maybe suggest when a customer purchases music at full price on that day, he/she gets something else thrown in as a way of saying thanks.”

Simultaneously Blown Away, Humbled and Inspired

I do not remember exactly how I met David Baerwald. He was one half of the duo David + David, whose sole album yielded the hit “Welcome to the Boomtown.” Even though the 1986 release went Platinum, I did not pay much attention to it at the time because my bandwidth was full with my obsession for Peter Gabriel’s So, Crowded House’s eponymous debut (featuring “Don’t Dream It’s Over“), and Nik Kershaw’s Radio Musicola. Nonetheless, seven years later, David, whose album Triage had just been released, was sitting across from me, jamming on the sofa in my living room. I was mesmerized by the gorgeous Knopfler-esque riffs he coaxed from my Taylor 812c acoustic guitar, even though his performance was punctuated by the sound of flying lawnmowers—which were in reality propeller driven small planes on approach vectors, just about to land across the street at Clover Field, aka Santa Monica Municipal Airport.

David generously offered to network with me, probably because I had recently cowritten a couple songs with John Lang, who wrote the #1 hits “Kyrie” and “Broken Wings” for his cousin’s band, Mr. Mister. Lang, a brilliant lyricist who was understandably tough to impress, admired Baerwald’s lyrics and his singing. A few sprinkles of Lang’s credibility landed on me by association—plus I had recently produced my first major label hit for Irving Azoff’s fledgling Giant (Warner) Records—so the door of opportunity to the Big Leagues was flung wide open for the first time in my young career. This was terrific…until David asked me to play guitar.

Wait, what? If I’m a pro, that’s a chance to shine, right? Yes, but it’s also a sure-fire way to blow the all-important first impression if your chops are rusty. In 1993 I was infrequently playing guitar, and when I did pick up the instrument, I played ensemble parts that worked in the the context of a recording, but made no sense without the support of a full band arrangement. As an example, try to imagine how the guitar parts from “Broken Wings” (during the third verse at 3:14) or Scritti Politti’s “Perfect Way” would sound without the bass line to define the song’s harmonic structure, or without the drums to let you know where the downbeat is. My point is that “earcandy” parts (which were pretty much all that I played at the time) were simply unable to tell the story of a song by themselves. And they certainly would not impress my guest of honor, Mr. Baerwald, without a point of reference to show him how nicely and precisely they would fit into an arrangement.

So I instead decided to show David a complex solo acoustic guitar piece that I began composing the day before. The melody was hauntingly beautiful, and the jazzy chords were of the “expensive” variety whose pedigree might be from the epic Miles Davis and Gil Evans collaboration, Porgy and Bess. The bass line was simple enough, but the sound in my head required the listener to hear all three layers of harmonic content: melody, chords and bass. Therefore, I had to play all three at the same time, on one guitar…and I couldn’t do it. To describe the attempted recital as a “train wreck” would be far too kind. David, who by contrast is a real player’s player, let me off easy, stating that he understood where I was going with the tune, and he wished me luck in developing it.

Despite the fact that I blew it, David invited me to his loft behind Hal’s Restaurant (Cafe?) on Abbot Kinney in Venice, just a short walk from the infamous Radio Tokyo Studios where I became a recording engineer back in, coincidentally, 1986. David’s loft was super cool, with a vibe that begged you to get the creative juices flowing. Downstairs was home to a fully equipped recording studio, while upstairs housed various artifacts that may or may not have been related to certain CIA exploits that may or may not have involved David’s father, a political scientist.

David played me recordings of a new, as yet unreleased, project that he was “playing around with” on Tuesday nights with his friends Bill Bottrell, David Ricketts, Dan Schwartz, Brian MacLeod and Kevin Gilbert. They were writing songs with a background vocalist who did some work with Michael Jackson. As David was humbly asking me what I thought of the songs, I was amazed by the work! The recording technique was exemplary, with sonic detail and clarity so crisply defined that I could close my eyes and see the spaces between the instrumentalists! The players were all spot-on, but the virtuosity never overshadowed the organic soul of the songs, which told stories ranging from leaving Las Vegas to having fun on Santa Monica Boulevard, three short miles away from where we sat listening. And that singer! She had a compelling delivery that brought the words to life. I was simultaneously blown away by the sound, humbled by the virtuosity and inspired to elevate my game. I already had a Top 5 MTV hit with Too Much Joy’s cover of LL Cool J’s “That’s A Lie!” and I made some seminal SubPop records for Hole, L7 and Reverend Horton Heat, plus I was having one of my flavor-of-the-month moments in the A&R community, but my records couldn’t hold a candle to David’s side project. His recordings were marvelous and impressive on so many different levels, but remarkably they remained free of pretense. They sounded timeless, they sounded easy, and they sounded live. At that moment, I became determined to become a lifelong student of the craft of making honest records that would serve the songs, not the ephemeral trends.

Sometime thereafter, I drove onto the lot at A&M Records for a meeting with A&R VP Teresa Ensenat to pitch Brian Charles’ Boston based, Beatles-inspired band, Sidewalk Gallery. I recall three things from the meeting:

1) The pitch was successful, so Brian and I would soon be recording at the historic studio where we would eventually meet Crowded House and Rusty Anderson, who would turn me on to Matchless guitar amps long before hitting the road with Paul McCartney.

2) There were several guitar cases in Teresa’s office stenciled withe the name of Steve Earle. I pointed as if to ask, “What’s the story behind them?” Teresa volunteered, “I was married to Satan.” I changed the subject to the gorgeous SoCal weather.

3) I asked Teresa about the giant painting on the side of the recording studio. The fresh faced new artist, Sheryl Crow, was a priority for the label, and I should listen and let Theresa know my thoughts. She handed me a promo copy of Tuesday Night Music Club, which I spun in the car on my way to my session. I instantly recognized the euphonic gloriousness that mesmerized me at David Baerwald’s loft. “Leaving Las Vegas”, “Run Baby Run” and “All I Wanna Do Is Have Some Fun” were so memorable that I was able to sing along with the catchy hooks weeks after initially hearing them. I was happy to know that David was likely to enjoy another well deserved hit.

Less than two years later, I was head of A&R and staff Producer at Jac Holzman’s Warner Music Discovery label, which was on the front line of the WEA distribution hierarchy. Jac, who was Time Warner’s CTO if I recall correctly, had autonomy with respect to signing and prioritizing artists. He did not have to go through layers of middlemen like subsidiary labels did. For example, Madonna’s imprint Maverick had to answer to Reprise, who in turn had to answer to Warner Bros. As one moved higher up the totem pole, each entity took a slice of revenue and creative control of its subsidiaries, who sometimes had to fight hard to sign acts they loved. Because Jac was on equal footing with WEA’s big three (effectively big four, or anecdotally WEAD, at the time) I had the freedom and support to sign quality talent in whom I believed. At SXSW (South By Southwest) festival, I walked into a nearly empty club on Austin’s Sixth Street to hang out with a couple guys I met earlier in the day, mastering engineer Dave McNair and entertainment attorney Wofford Denius.

In that empty room, over the course of 45 minutes, my mind was once again blown, I was artistically humbled, and I was creatively inspired. A tall handsome lad, clad in gas station attendant coveralls, work boots and a Fender bass, sang his ass off while fronting a crack band of pros who were equally comfortable performing tender ballads or bombastic, odd time signature, Prog Rock opuses. His gorgeous ballad “Tea For One” was a heart-wrenching story of a shy guy who finally gets the courage to ask out the object of his desire a day too late, to find her in the embrace of a new lover. Another song, “Certifiable #1 Smash”, was appropriately titled because it indeed sounded like one during that live performance. I introduced myself to the artist, Kevin Gilbert, and offered him and his manager a record deal on the spot. Kevin handed me a CD of Thud, which I promptly marked with a Sharpie to indicate the three potential hits. My wife and I cherish that CD 22 years later for its excellent artistry, as well as the fact that it is a memento given to me shortly before Kevin tragically died far too young.

It wasn’t until I returned to Los Angeles that I connected the dots and realized that Kevin was already an accomplished musical force of nature. He was the vocalist of Toy Matinee, whose two hits “Last Plane Out” and “The Ballad Of Jenny Ledge” always compelled me to crank up the volume whenever I heard them being spun (physical LPs and CDs, unlike mp3s, actually spun under a turnable stylus or CD laser back in the day) on FM radio. Further, he was also an integral part of David’s mind blowing Tuesday Night Music Club project!

By the time I met Kevin Gilbert, I had learned from my earlier experiences with David Baerwald. I learned that no matter how talented I already was, or who I was destined to become, there was always somebody more accomplished or talented. That knowledge allowed me to be realistic about how I might best serve, and integrate with, top-shelf artists and projects. The life lessons for me were to be open to awesomeness and serendipity, and to appropriately behave in environments conducive to success. In hindsight, the Gilbert working relationship got off on the right foot because I offered to serve in such a way that I could confidently deliver the goods at the highest level. By contrast, I ultimately never worked with Baerwald because I showed him my weak link instead of my true strength. It’s cool, though, because that’s how you learn—and in my case the lessons stuck.