The Record Industry in the 21st Century

7/29/2019 The Record Industry in the 21st Century

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The Record Industry in the 21st Century: The Irrelevance of the Nation State L’Industrie du disque à l’âge de la transculturation Tamsin Briggs p. 20-40

Abstract | Index | Outline | Text | Bibliography | Notes | Illustrations | References | About the author

Abstract

L’objet de cet article sera d’étudier l’industrie du disque à l’aube du 21ème siècle. J’entends montrer latransformation d’un marché longtemps sous domination anglo-américaine, passé d’un stade que l’on pourraitqualifier d’impérialisme culturel à un autre, que je désignerai par l’expression « transculturation mondiale ».Nous verrons que les notions de marque et d’image régissent la politique de sociétés qui ne sont plus que lesrouages d’un système de conglomérats multimédia transnationaux de plus en plus difficile à appréhender, et oùles concepts de synergie et de promotion croisée font force de loi. Les adjectifs « américain » et « britannique »ne peuvent plus s’appliquer à l’industrie du disque : à l’heure de la mondialisation, le concept d’État-nation n’aplus grand sens.

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Index terms

Chronological index :XXe siècle, 20th century Thematic and geographical index :société, États-Unis, society, United States,histoire, history, musique, music Top of page

Outline

From Cultural Imperialism to “Transculturation” Hegemony Selling out or Cashing in? Where Image is All: “Branding” The Record Companies: Corporate Branding and Global Strategy Global solutions Media synergy Free Market or Rigged Market?

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From Cultural Imperialism to “Transculturation” The authors are referring to the audiocassette, but it could equally apply to DAT tapes and CD burn(...)

No other technology has penetrated society so quickly —what is more, the rate of penetration appears to be accelerating. At the same time governments seem to beaware that their traditional cultural heritage could be threatened, but are not sure

what to do, or cannot act because of other priorities. Also, international producers of audio and visual products, partly through losses resulting from their own

inventions ,1are forced to try to sell similar products in as many different countries as possible. A transnational form of nationless culture develops. (Wallis & Malm,

“Patterns...” 161)

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1This quotation is part of the opening paragraph to Wallis & Malm‟s essay “Patterns of Change” and helps to reveal the patterns in the organisation of the record industry on a global scale. Therecord—and media—industries now see the world in terms of large “regions”: North and SouthAmerica, Europe, Asia (Africa is widely ignored, apart from South Africa). Countries in terms of nation states have no meaning. The head office of a Major in Europe might well be based in theUnited Kingdom, but its responsibility will be the whole of Europe, and the office could just aseasily be located in Hamburg, Munich, or Paris. Wallis & Malm found that “the international

distribution of music that has access to modern media is increasing at an extraordinary rate” and “smaller countries are finding it harder and harder for their own music to compete withinternational repertoire” (Wallis & Malm, “Patterns…” 172), even remarking that now thatJamaica is able to receive over thirty satellite television channels, there no longer is any roomfor Jamaican musicians on local television, even though music is one of the country‟s biggestexports— the production cost is simply too high for national television to compete. The authorsargue that we have moved away—or are moving away—from a pattern of cultural

imperialism towards a state of transculture. Cultural imperialism is defined as a form of culturaldominance (such as western music‟s) “augmented by the transfer of money and/or resourcesfrom dominated to dominating culture group” (Wallis & Malm, “Patterns…” 177). The mainexample related to the record industry is the transfer of profits derived from sales or copyrightcollected in subsidiaries, but there are also cases where the artists themselves move to the USin order to take advantage of financial benefits, or in the case of Bob Marley, for instance,transfer their copyright to an American collecting society. Nevertheless, cultural imperialism still

afforded room for counteractions, and spurred the birth of musician unions and non-profit recordlabels in certain countries.

2Transculturation took things one step further:

Emphasis theirs.

This pattern of change is the result of the worldwide establishment of the transnational corporations inthe field of culture, the corresponding spread of technology, and the development of worldwidemarketing networks for what can be termed transnationalized culture, or transculture. Transnational music culture is the result of a combination of features from several kinds of music. This combinationis the result of a socio-economic process whereby the lowest musical common denominator for thebiggest possible market is identified by building on the changes caused by the three previously

described patterns of change [i.e., cultural exchange, cultural dominance, and cultural imperialism].2 (Wallis & Malm, “Patterns...” 176)

3This means that the different cultures involved in the transculturation process will pick upelements from transcultural music, but also that elements of the cultures‟ own music will be fedback into the system. Wallis & Malm argued in

41984 that the spread of technology is accelerating the process—one hardly dares to think of theintegration rate the Internet, digital downloads, and file exchanges afford. One of the optionsmight be, over a period of time, that this would lead to the emergence of one single form of global music. An example of a transcultural artist could be, for instance, the singer/songwriterManu Chao. Both his recent solo work and his previous work with the band Mano Negra containelements derived from different cultures, creating a patchwork of Spanish, Arabic, and Frenchrock influences over a good old American rock tempo. He also sings—often within the same

song—in several languages, mixing English, Spanish, and French, and this also contributes tomaking his work easily accessible to many different cultures throughout the world. This mixtureof different styles and influences where everyone can recognise their own environment hasturned the Franco-Spanish singer into one of France‟s highest exports in terms of record sales,and one of the few French artists in recent years to sell records in countries such as the Statesand the United Kingdom.

5At the other end of the scale, however, there have been “systematic attempts to develop localmusic centres,” as Simon Frith also points out in his article “Popular Music and the Local State” (21). While on the one hand there is the “multi-media marketing of new video stars like







Madonna [and] the Western diffusion of „world music‟” (Frith, “Popular Music…” 21), smallcountries have been trying to sustain their local music repertoire and production, either throughstate subsidy (taking the form of information offices and help with export) or through deterrentmeasures (such as radio and television playlist quotas). Frith also points out that such effortsagainst “Anglo-American domination” (or, as we have just seen, transculture) also exist withinthe United Kingdom, though supported by the local authorities and sponsored by commercialcompanies such as breweries in lieu of state subsidies. Frith‟s conclusions are two-fold:

Emphasis his.

First, that the local is now equated with the different not by reference to local histories or traditionsbut in terms of a position in the global market-place. This is to lead policy- makers inevitably to issuesof distribution and consumption. To support local venues (whether in Norwich or Nijmegen), local distributors (whether in Scotland or Victoria) and local radio stations (whether in Dominica or Finland)is to support not just one‟s own local music, but also “local” music in general, “different” music wherever it comes from. […] Second, […] we no longer live in a world in which the „local‟ can stand for

community, security and truth. It describes rather the setting for our shared experience of rootlessness and migration, for the constant movement of capital and labour, or signs and sounds. Intechnological terms anyway the world is becoming the local and global: the national level no longer matters when every household has access to the global media flow, when every producer can, in practice, directly serve the global greed for images. 3 (Frith, “Popular Music…” 23)

6The relevance of the local loses its meaning in a world of strong migration and of daily globalinteraction of different cultures.

Hegemony

7Technology has proved to be one of the record industry‟s main ways of gaining or maintainingmarket share and control over the market. Sony‟s adventure with the Walkman is another fineexample of how technological leadership has helped major corporations keep one step ahead,and in this particular case turning a copyright lawyer‟s nightmare (the audiocassette) into anentrepreneurial dream—in other terms, “megabucks.” Relating the story of the invention, Negus

refers to two important aspects: first, the competition within different departments of SonyCorporation to come up with a new product and, second, the fact that it was desi gned “with apreconceived notion of its use value” (Frith, “Popular Music and the Local State” 23), meaningthat the applications of the product had been thoroughly thought through beforehand, contraryto previous record industry related inventions, where the applications followed the technologicalprogress. The success of the Walkman meant that

[it] has become synonymous with the name Sony, a name deliberately derived from the Latin word “sonus” meaning sound, and recognised and pronounced in the same way throughout the world. […]

When the consumer takes out their cassette marked with the Sony Music corporate logo, recorded by artists who are signed to Sony Music Entertainment, and plays it on their Sony Walkman, not only does the hardware meet the software. A strange tautology (sic) occurs as we listen to the sound of Sony. (Negus 36)

8This cynical view of Sony‟s sprawling expansion is only a single exposition of what transnationalcorporations have become; by Wallis & Malm‟s definition, the case would stil l belong to thesphere of cultural imperialism, of the “good old days” when multinationals‟ vertical integrationonly sought to control “the total production flow from raw materials to wholesale sales” (Peterson & Berger 145), which they achieved through an attempt at the control of performersvia long-term exclusive contracts, and through effective control of the media and distributionchannels. This in turn led to an oligopolistic concentration of the market and homogeneity in theproduction of popular music. Peterson and Berger agree that “as long as the market -controllingmechanisms just described continue to operate unchanged, the trend to greater homogeneity










continues because each of the oligopolists focuses on winning the greatest share of the market” (Peterson & Berger 145).

9Similarly, it has often been argued that oligopolistic concentration in the record industry hasenabled record companies to maintain artificially high prices on compact discs. The UnitedKingdom‟s Monopoly and Mergers Commission‟ s report, The Supply of Recorded Music , publishedin June 1994, looked into the pricing of CDs and finally chose to side with the record companies.

However, the subject is currently under examination by the European Commission (Authorunknown, “Timely Inquiry…”). Yet, the multinational system still had flaws, the main one beingthat the high concentration favoured “bursts of creativity” among independent companies.Drawing on Peterson and Berger as well as Negus, Brian Longhurst comments that “thesmallness and intimacy of such companies facilitated the production of particularly innovativesounds which broke free from the standardized products of the dominant record companies” andthat it was felt that they “were better able to represent the aspirations and feelings of theirartists and audiences than the large corporations” (34). Keith Negus‟s point of view is notdissimilar, yet he sees the companies as interconnected with one another, as a “web of majorand minor companies”:

Running parallel to the internal reorganisation of record companies has been the forging of external links between large corporate labels and small companies through investment arrangements, licensingdeals and joint ventures. These connections have provided regionally based small companies with

finance, arrangements for manufacture and distribution, and the opportunity to reach markets in other territories; and have given large corporations access to an external source of repertoire and enabled them to use small companies as “research and development” divisions […](17).

10According to Negus and others, the record industry‟s response to “economic risk” and “commercial uncertainty” (Negus 40) (i.e. Will this record sell as much as I expect it to? Will Irecoup my investment in this artist?) was “a strategy of overproduction combined withdifferential promotion, in which record companies attempt to cover every potential marketpossibility” (Negus 40). As the antes have been upped in the nineties, record companies are nolonger willing to use the “mud-against-the-wall” technique—“throw out as much product aspossible in the hope that some of it will stick” (Negus 40)— and prefer to transfer their risk-taking to smaller entities, such as publishers, producers or indie labels, who act as talent scoutsfor the larger corporations. Negus provides us with two examples from the 1990s of “label deals” that fit the above description—Food Records, funded by EMI, and Creation, renamed Elevation,

funded through Warner in Great Britain and EMI in the United States. Food retained artisticcontrol over its signings, and enjoyed “access to higher levels of investment and moresophisticated marketing, distribution and promotion methods” (Negus 17). The drawback to thiswas, however, that while EMI had first option on Food artists, they were also entitled to “reviewand renew their arrangements with Food every six months.” However, Alan McGhee of ElevationRecords saw his arrangements with Warner and EMI as highly beneficial for his artists (he wasable to pay them higher advances) and for sales (his expectations on a current album weremultiplied by three) (Negus 17). This kind of deal between Indies and Majors is particularlycommon in the United Kingdom where the Majors control over 95 per cent of distribution,rendering it extremely difficult to bypass the Big Five. This situation contributes to a state of dependence of “indie” labels, as the example of Food Record indicates: the label is financiallydependent on EMI, as well as under constant artistic scrutiny, whereas EMI is free to discontinuethe deal every six months, and to turn down records it is not interested in.

11Neither are such deals a particularly recent occurrence. George Marshall reported Chrysalis‟suse of a label deal in order to entice the ska band The Special A.K.A. into a recording deal. Itenabled the band to produce ten singles a year on their 2 Tone label, six of which Chrysaliswould be obliged to release. But in fact, the recording contracts were signed between the bandand Chrysalis, and the Specials‟ only financial benefit from the deal was a two per cent override(Marshall 17). The difference was, though, that the consumers purchasing 2 Tone singles had noidea they were in fact putting money into Chrysalis‟s pocket. This ploy of hiding behind otherbrand names is a way for the Majors to retain street credibility, and not mix contradictory artistimages, or spoil that credibility with a corporate image. Naomi Klein reports comparableexamples in No Logo:



Offering Fortune Magazine readers advice on how to market to teenage girls, reporter Nina Munk writes that “you have to pretend that they‟re running things…Pretend you still have to be discovered.Pretend the girls are in charge.” Being a huge corporation might sell on Wall Street, but as the brandssoon learned on their cool hunt, “indie” was the pitch on Cool Street. Many corporations were unfazed by this shift, coming outwith faux indie brands like […] Old Navy‟s mock army surplus (the Gap) and OK Cola(Coke). […] And in 1999, when Levi‟s decided it was high time to recoup its lost cool, it alsowent indie, launching Red Line jeans (no mention of Levi‟s anywhere) and K -1Khakis (no mention of

Levi‟s or Dockers). ( 17)

12But in the shadows, major corporations still own and run all the “indie” trademarks quotedabove.

Selling out or Cashing in? Where Image is All: “Branding” Quoted in Frith & Goodwin 476.

For thirty years, you couldn‟t possibly make it unless you were white, sleek, nicely spoken and phoney to your toenails—suddenly now you could be black, purple, moronic, delinquent, diseased, or almost anything on earth, and you could still clean up.Nik Cohn, AwopBopaLooBopAlopBamboom , 1972. 4

13Thirty years after Nik Cohn‟s remark, what Greil Marcus calls rock‟s “touch of anarchy” haswidely been cashed in on and co-opted by the Majors as well as household brand names.Suddenly, nothing is shocking anymore. If we take hip-hop, for instance, it started out as themusic from the ghettos. Now sportswear and sneaker brands are lining up in order to sponsorrap bands. Naomi Klein wrote that this “[aggressive mining] by the brandmasters as a source of “meaning” and identity […] was the key to success of Nike and Tommy Hilfiger, both of whichwere catapulted to brand superstardom in no small part by poor kids who incorporated Nike andHilfiger into hip-hop style at the very moment when rap was being thrust into the expandingyouth- culture limelight by MTV and Vibe (the first mass-market hip-hop magazine

14[…]).” She follows up with the example of Adidas:

The latest chapter in mainstream America‟s gold rush to poverty began in 1986, when rappers Run -

DMC breathed new life into Adidas products with their hit single “My Adidas”, a homage to their favourite brand. […] “We‟ve been wearing them all our lives,” Darryl McDaniels (a k a DMC) said of his Adidas shoes at the time. […] After a while, […] it occurred to […] the president of Run-DMC‟s label

Def Jam Records, that the boys should be getting paid for the promotion they were giving to Adidas.[…] Adidas executives were skeptical about being associated with rap music […]. To help change their

minds, Simmons took a couple of Adidas bigwigs to a Run-DMC show.[…] At a crucial moment, whilethe rap group was performing the song [“My Adidas”], one of the members yelled out “Okay,everybody in the house, Rock your Adidas!”—and three thousand pairs of sneakers shot in the air. The Adidas executives couldn‟t reach for their checkbooks fast enough. (Klein 73)

15When top executives of influential brands realised the potential there was in co-opting youthtrends, alternative culture and street lifestyle, Adidas were no longer the only ones reaching fortheir chequebooks. And this was not only about sponsorship, but also about using word of mouthto create a buzz, adopting the underground tactics used by the young themselves —street

marketing had been invented. In record companies this translated as “literally [taking] thestreets”:

Hiring “street teams” to mingle near high schools and playgrounds, No Limit Records gave out CDs

and decals for acts such as Master P. Relying primarily on his grassroots(or more properly asphalt roots) marketing, Master P hit number one on the Billboard charts in its first complete week at retail,racking up sales of nearly 500,000 CDs. […] The lesson was not lost on more traditional players in the

music industry. Loud Records, another rap label (half-owned by BMG‟s RC A label), dispatched itsstreet teams, armed with cassettes of Big Punisher‟s album […]. For nearly two years before the

release of the CD, they talked up the new act and gave away samples. When the album finally came










out, it sold 136,000 copies in one week and instantly went to the number five position on the Billboard 200 Chart without video playing on MTV, without major airplay on radio, and without a word about it in Rolling Stone. (Wolf 263-4)

16Soon the Soda giants and big brands were picking up on these new marketing possibilities.In The Entertainment Economy: How Mega-media Forces are Transforming Our Lives, Michael J.Wolf explains how PepsiCo‟s Mountain Dew Brand invested over $1,000,000 in street marketing,

sending out eight vans to a multi-star hip-hop tour: “they were laden down, like galleons of popculture, with Mountain Dew samples, CDs from ten record companies, T- shirts… in short everypromotional item known to western civilisation,” even distributing “half a million free pagers tokids who could use them to call up their friends, but only after they read the Mountain Dewpromo that popped on after powering up. […] Even more subtly, the word had been spreadthroughout the subculture that Mountain Dew had the highest caffeine content of any soft drink.” Despite being an entertainment consultant, Michael Wolf admits that it sounds like something “out of a narcotic traffickers (sic ) playbook”. Rather cynically, he remarks:

Clearly, the product being served makes a difference, but when you really think about it with an openmind, narcotics, an industry which at an estimated $50 to $60 billion in annual profits rivals theentertainment industry, is a prime example of successful product distribution without the benefit of conventional advertising. (264-5)

17Needless to say, Mountain Dew sales rose accordingly, “the bottom-line results of this non-traditional mix of hip-hop marketing and conventional advertising [being] annual growth rates of up to 13 percent for Mountain Dew, whose sales have eclipsed those of Dr Pepper, Sprite, andeven its own mother brand‟s lighter fare, Diet Pepsi” (Wolf 264 -5). Clearly, both brands andartists find advantages in sponsorship and cross-promotion deals, as, when the advertising ishandled intelligently, it is mutually beneficial, but is this an equal partnership? In the above caseof Adidas and Run-DMC, I would be tempted to answer “yes.” In other cases, the brands havemanaged to upstage the bands, as with the unavoidable sponsor of live music in Canada, withMolson Breweries. Naomi Klein reports that the beer brand was fed up of being insulted on stageby the bands they programmed, with having their brand name eclipsed by the stars‟, so theyinvented the Blind Date Concert.

The concept […] is simple: hold a contest in which winners get to attend an exclusive concert staged by Molson […] in a small club—much smaller than the venues where one would otherwise see thesemegastars. And here‟s the clincher: keep the name of the band secret until it steps on stage.

Anticipation mounts about the concert (helped along by national ad campaigns building up said anticipation), but the name on everyone‟s lips isn‟t David Bowie, the Rolling Stones, Soundgarden,INXS or any other bands that have played the Dates, it‟s Molson […]. N o one after all, knows who isgoing to play, but they know who is putting on the show. With Blind Date, Molson [has] invented away to equate their brands with extremely popular musicians, while still maintaining their competitiveedge over the stars. (48-9)

18Another example is that of Céline Dion, one of the world‟s mega -stars. Nevertheless Avonsponsored one of her recent tours, and part of her contract stipulated that she would meet upwith a selection of Avon representatives before each of her appearances. So here was a tenseCéline, getting geared up for a public performance in front of a football stadium full of people,tetchy to the point of irritability, having to put in an appearance and submit with a smile toendless group photos with strings of Avon advocates, their husbands, children, grandparents…

Isn‟t the purpose of being rich and famous to not have to do things like that? And would CélineDion‟s tours (or the Rolling Stones‟, or other mega-stars‟) really not break even without a littlehelp from their friends the sponsors? The relation between a star and a brand is becomingincreasingly bipolar, either mutually beneficial or mutually antagonistic. The main reason for thisis that stars themselves, evolving in their “total star environment” (see also “Media Synergy” below) are marketing themselves as brands (as Posh Spice once told a reporter: “We wanted tobe a „household brand.‟ Like Ajax” [Klein 48-9]). Klein draws her own conclusions:

[S]ponsorship is a far more complicated process than the buyer/seller dichotomy that existed in the previous decades and […] to talk of who sold out or bought in has become impossibly anachronistic. In



an era in which people are brands and brands are people, what Nike and Michael Jordan do is moreakin to co-branding than straight-up shilling, and while the Spice Girls may be doing Pepsi today, they could easily launch their own Spice Cola tomorrow. (61)

The Record Companies: Corporate Branding and GlobalStrategy

As quoted in Peterson & Berger 155.

“We don‟t cover hit records, we cover hit philosophies” Stan Cornyn, vice-president of Warner Brothers Records.5

19It is now easier to understand how record companies have come to promote themselves ascorporations in parallel to the promotion of the artists signed to them. Negus comments that “corporate public relations” is a “trend in management and business generally, where there hasbeen an increasing concern with how a company maintains its „corporate culture‟ andcommunicates to the outside world” (Negus 116). Elsewhere, he observes that record companieson occasion acquire or retain “acts—who on paper may not be commercially successful—[…]because they enhance a company‟s profile within the industry and contribute to their ability toattract both artists, staff and investment” (Negus 137). This shows how, as in other lines of

business— and there is no reason for entertainment to be an exception—Wall Street analysesprevail. In fact, as the charts derived from Herman and McChesney‟s The Global Media show,most record companies, especially the Majors, are no longer stand-alone corporations, but partof a handful of much bigger and more powerful transnational corporations, whose holdings spanall the different aspects of media in the 21st century, including broadcasting andtelecommunications. Not only have these corporations evolved to gargantuan size, but they havealso “engaged [in a] most visible drive for corporate alliance and consolidation,” according toWilliam Greider (182). In his book, One World, Ready Or Not , Greider compares these new “media combines” to entities “as dominant as the railroad and oil trusts were in the 1890s” (182). For not only did the companies start merging at a frenetic rate (AOL and Time Warner;PolyGram bought up by Universal, only to be taken over by Seagram, who in turn sold toVivendi, etc.), but they also form a web of corporations which all interact with one anotherthrough “joint ventures, equity interests or long-term strategic alliances” (Herman & McChesneyChapter III). The following diagram clearly shows the inextricable links between all majorplayers of the media world, and further shows that the six main groups control the vast majorityof the media that we know.












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Source: derived from Herman & Chesney, Chapter 3.Links between first tier dominant media firms and second tiers films in the global market

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As quoted in Klein 24.

20Indeed, corporate philosophies have become a central part in a brand‟s image. Richard

Branson sees Virgin as Japanese keiretsus, or in plain English a “network of linked corporations.” He explains that the idea is to “build brands not around products but around reputation. Thegreat Asian names imply quality, price, and innovation rather than a specific item. I call these „attitude brands‟: they do not relate directly to one product—such as Mars bar or Coca- Cola—but instead to a set of values.” 6 Naomi Klein demonstrates that:

The record label is V2, as Virgin Records was sold to Thorn EMI in March 1992.

The Virgin Megastores provide perhaps the clearest displays of this kind of brand cohesion, employingvarious intra-brand synergies to leap-frog over entire stages of consumer choice. In the past, record labels, no matter how much money they sank into promoting new artists, they were still at the mercy of record-store owners and radio- and music-video station programmers […]. No more. Virgin‟s 122megastores are wired up to be synergy machines, equipped with building-sized murals ads, listening

stations for customers to sample new CDs, huge video screens, deejay booths, and satellite dishes tobeam live concerts into the stores. This is par for the course in the age of the superstore, but sinceVirgin is also a record label 7 , all of this technology can be harnessed to create a sense of breakingexcitement about a new Virgin artist. “We‟ll be featuring certain artists every month. That means we play them in the store, we can do live shows via satellite from another location and we can give themstore presence” says Christos Garkinos, vice president of marketing for Virgin Entertainment Group. “Think of what we can do for a developing artist.” More to the point, why wait around for something as temperamental as audience demand or radio play when by controlling all the variables you can createthe illusion of a blockbuster success before it even happens? (Klein 160)


















21In creating a “blockbuster success before it even happens,” the vertically concentrated mediacompany can in effect control the tastes of the consumers due to the replicating effects of mediasynergy. A company present on all five continents is able to do so globally.

Global solutions

22Most companies, whether involved in entertainment or not, are moving away from their coreproduct, in fact moving away from product altogether, as if it was something slightly dirty, andinvolving themselves more deeply into creating a “vision”: in Klein‟s words, “IBM isn‟t sellingcomputers, it‟s selling business „solutions‟. Swatch is not about watches, it is about the idea of time” (23) and many others are involved in selling a lifestyle.

23In the introduction to his essay on the role of the American music industry in the globalpopular music market, Steve Jones remarks that “popular music is exploited as an investmentwith global dividends” (Jones 83)—by which he means that markets must be considered as awhole, not as separate entities. This is why it does not make any sense to consider the UK or theUS record market alone, and why references to the global aspect of the industry have beennecessary. Similarly, it is no longer possible to consider music alone, without linking it in toother entertainment products, or even outwards towards unrelated “lifestyle” wares. Along thesame line as Jones, in the conclusion of The Entertainment Economy , Wolf declares that

24 “entertainment icons have become the closest thing to globally shared cultural icons,” backingit with the statement that “more Hindus are probably familiar with Madonna than they are withAbraham Lincoln”; his vision of the future encompasses a “better -integrated and larger globalentertainment business, perhaps two or three times the size of the current entertainmenteconomy, as the masses of China, India and Latin America enlist in a burgeoning, cable- ready,on-line savvy class (even in low-income households)” (291). Yet it is unlikely that it will also berun by the low-income masses, but much more so, that they will be huddled up in front of screens, taking in the streamline of advertising fed to them in the guise of entertainment. “It iswhen the effects of horizontal and vertical integration, conglomeration, and globalisation arecombined that a sense of profit potential emerges.” Considering the concentration taking placein the market in recent years, Herman and McChesney note that mergers generate automaticcost savings in large companies, while they facilitate the launch of new businesses, as the

corporations are able to “draw upon existing staff and resources” (Herman & McChesney 53).They are further able to exploit a whole range of opportunities derived from “cross -selling, cross-promotion, and privileged access.” The combination of these two features further reinforces theconglomerate‟s position and strength in the marketplace. When several of these mastodons pooltheir efforts, the corporate alliances, which result from them, go way beyond the reach of governments, as Greider explains:

Corporate alliances are, of course, the antithesis of free-market dogma and the supposed liberalizationof global trade. On the one hand, multinationals preach free market competition and aggressively promote the dismantling of governments‟ l egal controls over commerce and finance. On the other hand, the same firms are busily forging territorial compacts with each other —collaborativemechanisms that may be used to manage trade privately, on their own terms, above and beyond thereach of national governments. (172)

25One would have suspected that these corporations would be fiercely competitive. But in fact,they have found it more efficient to make alliances amongst themselves, thus roping off themarket from newcomers. It will now be seen how each of these companies control releasesvertically.

Media synergy

Giant Corporation Inc owns subsidiaries in every medium. One of its magazines buys (or commissions)an article that can be expanded into a book, whose author is widely interviewed in the company








magazines on its broadcast stations. The book is turned into a screenplay for the company moviestudios, and the film is automatically booked into the company‟s chain of theatres. The movie has asoundtrack that is released on the company‟s record label. The vocalist is turned into an instant

celebrity by cover features in the company magazines and interviews on its television stations. Therecording is played on the company‟s chain of Top 40 radio stations. The movie is eventually issued by the firm‟s videocassette division and shown on company television stations. After that, rerun rights to

the movie are sold to other television stations around the world.

Nation Magazine (Quoted in Negus 4-5)

26This new form of “synergy” as moguls, critics and analysts coin it, “refers to a strategy of diversifying into directly related technologies and areas of entertainment and using theopportunities that this provides for extending the exposure of specific pieces of music andartists” (Negus 5). But synergy is not only the way for transnational corporations to milk eachnew “concept” dry, as each individual department‟s contribution to the whole increases theconcept‟s overall potential. As Negus observes, this also means that record companies can nolonger sign an artist on his/her merit or image alone, but must integrate him/her into a globalentertainment package—the “total star text.” If there is one firm which has fully understood thepossibilities afforded by media synergy, that is Disney. Herman and McChesney report that evenunsuccessful films such as The Hunchback of Notre Dame, which only generated $99 millioninrevenue at the box-office, was expected to generate $500 million in overall profit (Herman & McChesney 54).

Klein 188.

27This expanding vertical integration means “we are losing the spaces where the non-corporatemind can flourish—those spaces are there but they are shrinking as the captains of the cultureindustry become more enraptured by the dream of global cross-promotions.” 8 It is not thatcompanies set out with a specific will not to create or promote anything radically different orunexpected, but it just seems to spill out that way because of the economics of this form of transnational corporation: in an atmosphere of rising competition between corporate giants, theattitude towards hit products has also evolved. While before having a hit was a “nice windfall,” Wolf indicates that it has now become the “defining strategic concept in any growth plan”(158).Over and above this, transnationals are not only competing for market share, but also strugglingfor utmost prominence in terms of consumer recognition, and hits are something that provide

them with this “cultural context in which people see themselves.” 28What is maybe more surprising to observe is that the handful of entertainment and mediamoguls that dominate the world market also form strategic alliances on specific long-term orshort-term projects: Wolf mentions, for instance, Sony and Disney joining forces to produce themovie Air Force One, even though they are usually fierce competitors at the box office, whereasthe entire third Chapter of Herman and McChesney‟s The Global Media is devoted to listing thetop ten firms assets and their direct or indirect links with one another. Maybe Rupert Murdochhas provided us with a key when he declared: “We can join forces now, or we can kill each otherand then join forces” (Herman & McChesney 57). But if the media moguls stop going at eachother‟s throats, this also means less competition, less product differentiation and a move awayfrom the oligopoly structure towards that of the cartel. If such a theory is correct, then theEuropean Commission is well advised to be looking into the price of compact discs to consumers.We must not forget that “whether a company owns all its assets or combines them in temporary

alliances with others, the goal is always the same: the widest possible distribution for theproduct, the message, the brand”(Wolf 147).

Elissa Moses, Wall Street Journal , 26/06/97, as quoted in Klein 120.

29Yet in order to achieve this goal, corporations aim at the average, catering for the lowestcommon denominator and drawing on “an impoverished sense of the individual”(Buxton 438). Inthis context, MTV is seen as an “all-news bulletin for creating brand-images,” 9 and the “mostsignificant factor to shared tastes of middle-class teens,” according to the New World TeenStudy, which also found that “[t]eens who watch MTV Music videos are much more likely than











other teens to wear the teen „uniform‟ of jeans, running shoes and a denim jacket… They arealso much more likely to own electronics and consume „teen‟ items such as candy, sodas,cookies and fast food. They are much more likely to use a wide range of personal-care productstoo”. From which Naomi Klein concludes, “MTV International has become the most compellingglobal catalog for the modern branded life” (121).

Free Market or Rigged Market?

30While Peterson & Berger indicate that the record production industry underwent cyclicalconcentration in the past, causing homogenisation of the product on offer, followed by consumerwithdrawal which spurred new competitors to enter the fringes of the market, the level of thisconcentration never descended below an 8-firm ratio (140-159), which in itself is significant.However there is also undeniable evidence of Anglo-American dominance over the world marketthat has led record companies to construct markets “to provide a series of opportunities forBritish and American artists across the globe” (Negus 11). On anothe r level, the top ten mediaconcerns in the world include all of the major record companies (Herman & McChesney 52-53),and these companies also interact in order to maintain or develop their dominance over marketsor to maintain or develop their respective market shares in given territories. This permanentultra-competitive situation also leads to competition within the same companies, as severalsources within Majors have confirmed, although this is not something that they are supposed totalk about. When a new title is released internationally, each territory will be assigned amarketing budget and a sales target; it is only if they achieve this target (say, a golden album)that they will be allowed to spend additional marketing money in order to consolidate a chartposition or even hope to reach a higher level of certification (such as a double-gold or even aplatinum album). Simultaneously, a high chart position will also generate additional radio and TVairplay in the territory and generate sales synergy. But if an important record chain orders alarge quantity of records from the Major‟s branch in Belgium or the Netherlands, for instance,which are two countries with lower than average wholesale and retail margins, then the saleswill be counted in their quota and they will artificially achieve a position which they would nothave been able to generate on sales alone, while it can cost the wronged branch company itstarget, and transform a potential hit for the territory into a dead duck. As one executive told me,

The global scheme of things? They [the Major] sell X number of records. They are happy. From a UK point of view, we‟re spending marketing money to buy things like racking and advertising and in-storespace and they [the chain store] go and buy the records from an importer. So, they are not scratchingour backs when we scratch theirs. So that is frustrating and it is expensive to us. It can make asubstantial difference. Yes. A seventh of the number of records in the market are imports. It could stop you achieving a gold album or something, which would then generate more sales. It also has animpact on the artist, as well. Because an artist signed in the UK will earn less in royalties on a record sold in Germany than they do in the UK. So, if a UK retailer buys all its stock from Germany, the artist will not be getting his full royalty share. It is not just the record company who is losing on that.

31In the USA, tactics have been employed by industry lobbyists to prevent the importation of foreign records that were covered by American copyright, even if those records were no longerin print in the States. Conversely, though the American branches of the Majors deny it, or, atleast, say that they are unable to control it (distribution in the States not being exclusive, butmore of a network of wholesalers, regional distributors and “one -stops”), there is a constant flowof American parallel imports reaching the European markets, of records that have already beenreleased by the original copyright holder‟s licensee, due to the attractive wholesale price of American records. The United States have also instated highly protectionist laws concerningpublic performance, which act as an additional barrier to European or African artists seekingrecognition in America. Steve Jones explains that:

The issue revolves primarily around H-1 work permits for entertainers. In the past, the INS required applicants for H-1 work permits to make their way through a forest of paperwork and to includedocumentation (in the f orm of press clippings, recordings, etc.) that proved the entertainers‟ “distinguished merit.” The wording in the INS law has changed, however, so that the term“distinguished merit” has been replaced by “pre- eminence.” If distinguished merit was difficul t to






document (the INS provided no definition of it), at least it had a vagueness to it that allowed broad interpretation. The implication of pre-eminence is that a performer must be popular —for all intentsand purposes, a star. (84-85)

0 International Federation of the Phonographic Industry.

32And star status seems rather difficult to achieve in a country where you can neither performnor get a record released. As the exploitation of copyright increasingly becomes a way for recordcompanies to generate additional income, different countries reinforce their copyright laws, suchas Japan, which has “extended copyright protection […] from thirty years to fifty years, andprohibit[ed] rental of recordings for one year from their release. It is estimated that the new lawmay gain record companies up to $1 billion annually” (Jones 91). The shift away from thestraight-forward sale of physical product and towards the broader exploitation of copyright (suchas blank tape levies as technological progress improves, or performance rights derived from theuse of music on the radio, in television programmes, films, adverts, and from the use of music inpublic places) has meant that the IFPI 10 and its national counterparts such as the BPI in theUnited Kingdom, or RIAA in the States, are now lobbying in two specific but complementarydomains: stronger copyright legislation and anti-piracy laws. As Rutten comments, theintroduction of the International Standard Recording Code, or ISRC (an equivalent of the ISBN—International Standard Book Number) has proved a powerful means of controlling the use of

recordings as “it identifies recordings, not physical products („carriers‟).” He goes on to quote theIFPI:

New technology is rapidly increasing the variety of media by which recordings reach the consumer and the recording industry needs to ensure it derives income from the use of its product (e.g. by broadcasters, cable/satellite operators, music banks, private copying) in addition to the sale of physical carriers (e.g. singles, LPs, cassettes, CDs). (44)

An additional copyright issue involves the difference between the © and

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symbols on a recording. Steve Jones quotes synthesiser player and programmer Bryan Bell onwhat distinguishes them: “The circle P copyright is for the whole record album. The musicalcopyright [circle C] is eight bars of whatever. The circle P is for anything that‟s on there for anyamount of time. Sounds included” (90). It also covers typefaces, photography, layout, packagingdesign, etc. Needless to say that the

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copyright belongs to the record company, meaning that even if a band did not object to beingsampled, for instance, their record company would be entitled to object.

33Wolf argues that “software—[meaning] books, music, films, and computer programs—isincreasingly the currency in which the world trades” and that “future growth of all businessesbased on this understanding of software is predicated upon the ownership of intellectualproperty rights” and perceives piracy as “a great threat to long -term growth and short-termstability” (292). William Greider takes another stand, claiming that “the periphery borrows from

the center and makes cheap copies. This widespread piracy not only ignites the outrage of established businesses and governments, but it is also a very old trait of migrating capitalism.Stolen technology and stolen markets were the foundation of America‟s earliest industry” (30).Greider further reasons that piracy only exists because of the high rate of CD player penetrationin developing countries, accounting for “pirated compact discs being sold so freely on the streetsof Beijing or Kuala Lumpur” (119), and that the main argument for fighting piracy is to enableAmerican capital to enter these markets:

In early 1995, Clinton claimed an important victory for the “intellectual property rights” of capital

when the Chinese government agreed to shut down the notorious knockoff factories that churned out























millions of illicit compact discs, pirated from the American music and film industries. Jack Valenti, president of the Motion Picture Association, promptly announced that American companies would probably buy some of the outlaw factories and start producing CDs in China themselves. (Greider 213)

34While the 1980s yielded massive deregulation on all fronts, there seems nowadays to be agrowing movement towards some form of control and regulation of market forces. Marcus Breen,stating the Australian case for making music local, comments that “the problems associated with

increasingly large corporations like Sony owning both the song catalogues […] and the potentialhardware for distribution of those songs are thus behind the calls for regulatory policies to coverthe increasingly interlinked, global media industries, of which the record industry is a majorcomponent” (70). Whether the construction of a unified European market, encompassing “adistinctive cultural identity and repertoire source […] occurring […] across the existing culturaland national boundaries which have historically informed the way in which repertoire policieshave developed and been organised” (Negus 9) will enable the United Kingdom and itscontinental counterparts to present an enforceable means of protecting both artists and smallerbusinesses, only the future will tell. As Georgina Born points out in the “Afterword” to Rock and

Popular Music ,

The stress […] on cultural pol icy echoes the main conclusions of a suggestive review of theories of international communications by Sreberny-Mohammadi (1991), in which she calls for a move beyond the naively polarized terms of the “global/local” paradigm, and for the insertion of a thi rd level of

analysis; that of the nation-state and its potential policies for the regulation of media and culture. (267)

35Another aspect of the regulation issue concerns not the record companies themselves, but therole to be played by broadcasters. Wallis and Malm ask “whether their primary goal should be toretain an audience, or whether it should be to maintain a strictly public service structure,producing programmes the broadcasters think are good rather than programmes they think willachieve high ratings” (162). They further relate the issue to “the nature of their mutualdependency on or informal integration to the phonogram industry” (Wallis and Malm 166),considering the latter‟s increasing reliance on secondary sources of income derived frombroadcasting. Finally, there is evidence that the domination of the global market by a handful of world players is not to the advantage of a large majority of artists, as these companies willprefer to focus on a small number of acts, deemed to have the potential for a truly internationalcareer. There is also the issue of artist contracts, which still include breakage royalty deductions,

halved royalties on export sales, and the recouping of promotional costs over which the artisthas no, or little, control. Recently, a number of recording artists have begun to campaign forartist‟s rights, fighting for better royalty rates, health care and a pension fund for less successfulacts. Courtney Love, one of the leaders of the movement together with artists of internationalrenown such as Beck, Garbage, or Sheryl Crow, was quoted in Music Week as having said:

I'm driven by the misfortune of other artists who don't have my privilege and ability. Artists who havegenerated billions of dollars for the music industry die broke and uncared for by the business they made wealthy. I'm one in a long line of artists who have tried to break free since the(Universal/PolyGram) merger. I could end up being the music industry's worst nightmare—a smart gal with a fat bank account who is unafraid to go down in flames fighting for a principle. You show a music industry contract to any attorney in any other business, and their jaw just hits the floor. I'm ready totake this thing all the way to the Supreme Court. (Author unknown “Love files lawsuit…”)

36Record companies playing the hard line when it comes to the rights of the recording artiststhey have under contract is difficult to reconcile with their attitude towards piracy, which theyoften claim they are fighting in order to protect these same artists‟ rights. But artists are not theonly people getting harmed by the new structure of the global record industry. As YasunoriKirihari, Sony‟s general manager of corporate human resources put it:

The issue of shifting production to underd eveloped countries is the question of whether it‟s cheaper touse people or machines. If it‟s located in Japan, it has to be based on machines because wages are sohigh. But if you‟re quick to invest the capital in machines, you may lose to competition that hasalready seized the labor-cost advantage of globalizing production.(Greider 69)



37As Greider comments, delocalisation involves valuing intellectual property higher than humanlife. His conclusion is that:

The terms of trade are usually thought of as commercial agreements, but they are also an implicit statement of moral values. In its present terms, the global system values property over human life.When a nation like China steals the property of capital, pirating copyrights, films or technology, other governments will take action to stop it and be willing to impose tariffs on the offending nation‟s trade.

When human lives are stolen in “dark Satanic mills,” nothing happens to the offenders since,according to the free market‟s sense of conscience, there is no crime. (359)

38Not only are industrial jobs in the West being replaced by slave-wage labour in developingcountries, media conglomerates in the West are also increasingly relying on long-term “temps” and unpaid interns, who will work long hours for months on end, in the hope of eventually beingrewarded by a paid job in the glamorous media company. Naomi Klein quotes the story of RickThe Temp, who won the annual “Be a Temp at MuchMusic” contest, and was rewarded by a jobanswering phones. He became a VeeJay (Video Jockey) a year later, and having kept hisnickname, “his success served as a daily advertisement for the glory and glamour that awaits if you donate your labor as a gift to a major media company”(246).

39There seems to be no way-out and the power and grasp of the media conglomerates mayseem endless, yet very recent downfalls in the media might be indicating that what the people of Sony call “kudoka” (a form of hollowing-out through too big an expansion [Greider 15]) couldyet make the boat capsize and give power back to the local, to the new, to the growing:Germany‟s Kirsh Media has just filed for bankruptcy, as has ITV Digital in the United Kingdom,and the ultimate media combine Vivendi has been dismantled. Most of this has more to do withthe broadcasting and publishing world, than the record industry, but still, it may be a sign of thetimes.

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Bibliography

Works cited

ANONYMOUS. “Timely Inquiry Into CD Pricing: Spotlight on the Music Business.” TheGuardian Saturday January 27, 2001. URL:<http://www.guardian.co.uk/Archive/Article/0,4273,4125615,00.html> Last checked 05 March2002.

ANONYMOUS. “Love Files Lawsuit against Universal.” Music Week , 1 Mar2001.<http://www.dotmusic.com/artists/Hole/news/March2001/news18357.asp> Last checked05 March 2002.

BORN, Georgina. “Afterword: Music Policy, Aesthetic and Social Difference.” No date (n.d.) Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al.London/New York: Routledge, 2001. 266-292.

BREEN, Marcus. “Making Music Local”. n.d. On Record: Rock, Pop, and the Written Word . Eds.FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 66-82.

BUXTON, David. “Rock Music, the Star System, and the Rise of Consumerism”. (1983). OnRecord: Rock, Pop, and the Written Word . Eds. FRITH, Simon & GOODWIN, Andrew.London/New York: Routledge, 2000. 427-440.

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Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge,2001. 14-24.

GREIDER, William. One World, Ready or Not: The Manic Logic of Global Capitalism . New York:Touchstone, 1998. 528 pages.

HERMAN, Edward S. and MCCHESNEY, Robert W. The Global Media: The New Missionaries of Corporate Capitalism. London/New York: Continuum, 2001. 262 pages.

JONES, Steve. “Who fought the law? The American Music Industry and the Global Popular MusicMarket.” n.d. Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony,FRITH, Simon et al. London/New York: Routledge, 2001. 83-95.

KLEIN, Naomi. No Space, No Choice, No Jobs: No Logo. London: Flamingo, 2000. 490 pages.

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NEGUS, Keith. Producing Pop: Culture and Conflict in the Popular Music Industry . London:Edward Arnold, 1999. 175 pages.

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RUTTEN, Paul. “Popular Music: a Contested Area—the Dutch Experience.” n.d.Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/NewYork: Routledge, 2001. 37-51.

WALLIS, Roger and MALM, Krister. “From State Monopoly to Commercial Oligopoly. EuropeanBroadcasting Policies and Popular Music Output over the Airwaves.” n.d. Rock and Popular Music:Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York:

Routledge, 2001. 156-168.

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WOLF, Michael J. The Entertainment Economy: How Mega-Media Forces areTransforming Our Lives. London: Penguin Books, 1999. 314 pages.

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Notes

1 The authors are referring to the audiocassette, but it could equally apply to DAT tapes and CDburners.

2 Emphasis theirs.

3 Emphasis his.



http://lisa.revues.org/2978#bodyftn1












4 Quoted in Frith & Goodwin 476.

5 As quoted in Peterson & Berger 155.

6 As quoted in Klein 24.

7 The record label is V2, as Virgin Records was sold to Thorn EMI in March 1992.

8 Klein 188.

9 Elissa Moses, Wall Street Journal , 26/06/97, as quoted in Klein 120.

10 International Federation of the Phonographic Industry.Top of page

List of illustrations

Credits Source: derived from Herman & Chesney, Chapter 3.

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Title Links between first tier dominant media firms and second tiers films in the global

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References

Electronic referenceTamsin Briggs, « The Record Industry in the 21st Century: The Irrelevance of the NationState », Revue LISA/LISA e-journal [Online], Vol. II - n°2 | 2004, Online since 16 November 2009,connection on 30 August 2012. URL : http://lisa.revues.org/2978 ; DOI : 10.4000/lisa.2978

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About the author

Tamsin Briggs (Université de Tours, France)Tamsin Briggs worked in the record industry from 1991 to 2000 in several capacities and in severalcountries. Her research interests include “The British Record Industry in the last Quarter of the 20thCentury”. She works as a part-time lecturer at François Rabelais University in Tours, France.

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The Record Industry in the 21st Century