How Wall Street Destroyed The Music Business [View all]

[Elwood P Dowd]

http://www.positive-feedback.com/Issue76/records.htm

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But just as money attracts money, money is addictive: shareholders want to see constant growth, and a steadily improving stream of quarterly reports. They get used to it, or they get gone. And the 1996 Telecommunications Act opened all doors to all comers. Company after company was purchased, merged, long-time employees dumped, profits extracted. Competition was reduced. From the Common Cause report: Unintended Consequences and Lessons Learned - The Fallout From the Telecommunications Act of 1996: "Instead, the public got more media concentration, less diversity, and higher prices."

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The next couple decades saw a transformation into major business by many familiar changes, small and large. One of these phenomena, which ultimately affected all sorts of businesses, was the rise of the MBA, the educational stream that taught enormous numbers of uncreative thinkers that making money was an end in itself. If I were to meet someone who argued that this was the primary trigger that began our downslide, they wouldn't get an argument from me. Where money was to be made, MBAs infested it. But the gradual assumption of decision making power by MBAs in record companies was barely noticeable at first.

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There are of course sound ways to apply the shareholder approach to business; I'm not arguing against the entire system. But when either the executives or the shareholders themselves have a specifically short-term definition of interest, when the value of and for the customer that supports the profit isn't considered, then the system breaks down, and breaks the industry down with it. A business, no different than any other kind of organism, completely reliant on the health of the environment it functions in. When the business damages its own environment, it can't expect to survive in good health.

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For myself, for other musicians, I have no predictions for what the future will bring. Last summer I saw my friend Rosanne Cash give a talk and when asked about the state of music her reply was that there is no money in recording royalties for musicians anymore, only on the road. But the Great Recession has taken a toll on that too.