“The Music Industry is in the process of slowly dying.”
That’s the first ten words. Here are the next ten (and more)…
Recently, Minneapolis based Electronics retailer Best Buy announced they would discontinue selling Compact Discs in their stores. Similarly, Target Corporation, also based in Minneapolis, indicated that while they would continue selling CDs and DVDs, they intended to switch over to a system called “Scan Based Trading.” Both of these are interesting developments in the retail world of music and deserve further investigation to understand the implication this will have for the music fan. Both retailers will continue to carry music in the vinyl format, so when you see a hipster, give them a BIG hug for me. Seriously.
While the “no longer will be carrying or selling” concept at Best Buy is easy enough to understand, the scan-based trading idea is relatively new to those outside the retail industry. What this means is that the retailer will no longer carry the inventory cost of maintaining the product in their store. Retail will only pay the cost of the CD at the time of sale instead of paying for it upon delivery by a wholesaler. The holding cost of the item is thereby transferred from the retailer to the manufacturer. Basically, an updated version of “selling on consignment.”
I want you to think about theft for a moment. In the past, if a retailer paid for all the products they carried and one is stolen, that is a complete loss. Consider a Snicker’s bar. The retailer is on the hook for the Snickers wholesale cost, as well as other expenses like labor, facilities, electricity, you name it. It will take the sales of well over 4+ other Snickers bars just to recoup the loss of just one shoplifted bar, and that is for a decent margin item, like 43.2%. The situation is far worse for lower margin items.
Scan base trading removes all this potential loss for the retailer. In this concept, the inventory of Compact Discs held by Target will have no value whatsoever on the Target balance sheet. Once a copy of Taylor Swift’s Reputation is sold at Target for $16.99, the CD’s wholesale cost is then recorded and paid for by a third-party representative for a share of the retail value that Target will realize upon the sale. For the retailer, the benefit is immediately notable and beneficial. Issues of theft, referred to as “shrink” in the industry, are no longer of significant importance. The ONLY thing that matters to the retailer is the sale of the item. For the manufacturer, there has to be absolute belief that the cost of any “shrink” is worth the ongoing benefit of having their physical product available in “retail world.” For the customer, it likely means a reduction of available titles. Stores and record companies will only stock and carry the items with the most immediate, sellable appeal. That is significant. While you might just find a copy of Journey’s Greatest Hits album, good luck finding Escape. That title vanishes. You will never again own a physical copy of “Mother, Father” or “Keep On Runnin’.” Hey, it seems Hipsters don’t like Escape. What are you gonna do?
It is notable that some industries using scan-based trading are also ones that many consider “dying” ones. Newspapers, in particular, are moving largely into this arena, much to their dismay. In the convenience store industry, Newspapers, along with Cigarettes, are important. These are the regular items that customers come in for every day. The difficulty for the retailer is the low profitability. While money made is small, a decision to not carry a newspaper can result in a devastating loss of customer traffic who also buy higher profit-margin items like breakfast sandwiches or coffee when they buy a copy. These are the items that actually MAKE money for the store, not the newspaper. The newspaper is just something to entice the customer through the door. At a low margin, the theft of just a single copy of a newspaper can destroy store profitability. This is if, in fact, the person who delivered the newspaper actually delivered all 50 copies of the paper that the store paid for instead of 47. Again, scan-based trading eliminates a great deal of shrink, either done by shoplifters, store employees or the independent newspaper delivery person looking to pad their own bottom line.
Naturally, the publishers of Newspapers, or record companies, would prefer not to enter into this new world. There are associated costs to producing physical copies, and scan-based trading forces them to carry the largest financial risk. Both manufacturer and retailer remain at odds, with the customers demand, or lack thereof as the only currency that matters.
Sadly, it is not just the medium of product produced by musicians currently in jeopardy; it is the set of tools used to create their work in the first place. Nashville-based Guitar manufacturer Gibson is facing imminent bankruptcy after nearly 116 years producing iconic instruments like the Les Paul, widely used by players like Jimmy Page, Billy Gibbons, Slash, and Ace Frehley.
The privately held Gibson is currently sitting with $345-Million in senior secure notes set to mature in Mid-July. They additionally face $145-Million in additional bank loans that are due immediately, unless a refinancing of the original loan can be secured. The company’s CEO is in the process of currently deciding whether to exchange the debt, pay it off using his personal company equity, or declare bankruptcy. None of these are good signs for the long-term health of the legendary manufacturer.
One of the issues for Gibson is that there are just not enough new guitar players picking up the instrument. That reduction in unit sales of new instruments increases the retails on the items that do sell. Remember, this is capitalism. There are profitability targets that must be hit and if fewer items are sold, the profitability of the ones that ARE bought must be increased to cover the unit losses. Increased retail prices can also be incurred by an upswing in expenses. It is cheaper to buy the building materials in bulk, and if you need less, the more likely you will pay more per item used for the production of the guitar. At the same time, you have to attract top craftsmen by paying employees competitive wages.
So, the music industry is most certainly changing. What does this mean for you? Well, first off, this all should be reason number one why if you listen to music, YOU NEED TO PAY FOR IT. Every time a “music fan” illegally downloads a song or album, instead of buying it, they are stealing the musician’s Snickers bar. It is easy to justify this action as “Well, Demi Lovato is SO rich and Island Records, her recording label, doesn’t really need the cash, do they?” Au contraire, mon ami. Now, Island Records may very well make money off the sale of “Sorry Not Sorry.” They may make a lot of money from it. Much like any company, some of those profits are also used for “research & development.” In music industry parlance, this is the money that is used to seek out, and support, those new upcoming, undiscovered acts that you haven’t heard of yet. You aren’t necessarily hurting only Lovato when you illegally download her track. You are ensuring the work of Elli Ingram, Catfish and the Bottlemen, Dagney and 808Ink will go unheard. You have destroyed new music at the very beginning of the river’s origin.
So, if you like a song-BUY IT. If you really like it, pick up the whole album. Buy the CD, buy the vinyl. Invest in the future of music. Tell others about the music that excites you. If it moves your soul, pick up an instrument and learn how to play it. Music is for everyone. Don’t worry that it “doesn’t sound good.” Every great musician, or song, starts somewhere. Trust me. Edward Van Halen didn’t create the classic “Van Halen Brown Sound” the first time he picked up a guitar. He sucked. He knew he sucked. He spent hours in his bedroom listening to Eric Clapton play on records by Cream. He listened and he learned. He began to understand the notes and slowly used them to create complete sentences. He breathed it and it became him. He heard music differently as a result. Every musician you have ever loved started out the same way.
Yes, the music industry is at a crossroads. If stolen, neglected, and not cared for, it will die. The past will simply be the past. Creativity and the human desire to communicate in this most emotionally direct manner will be damaged, perhaps irrevocably. It is up to each one of us, individually, and collectively, to ensure that this doesn’t happen. Neglect has caused the death of many species in the world’s past. Let’s not let this happen to the living creature that is music.
“Music is a moral law. It gives soul to the universe, wings to the mind, flight to the imagination, and charm and gaiety to live and to everything.” -Plato
“Don’t Let It End.” -Styx
Grabbing My Ears
Dua Lipa–Dua Lipa
The London singer’s debut album is a true firecracker. “New Rules” may have been the one to first attract attention for her on that side of the pond, but it is the flickering guitar intro, pounding drums and flippant attitude of “IDGAF” that nailed it for me. The synth pop album is a self-confident blast that allows room for the cheekier songs like “Blow Your Mind (Mwah)” and “Hotter Than Hell” to shine through next to the album’s edgier demeanor. She is one to keep on your radar.
Jimi Hendrix–Both Sides of the Sky
With every Legacy Recordings release of previously unreleased Hendrix material, there is the worry that somehow they have finally come to the bottom of the barrel. With Both Sides of the Sky, the seemingly inexhaustible high quality of Hendrix’s output during his brief time on the third stone from the sun is once again confirmed. Among the many highlights, Hyper-frenetic “Stepping Stone,” the instrumental “Jungle” and his cover of Muddy Waters’ “Mannish Boy” are the clear standouts. The slow blues of “Things I Used To Do” gives Hendrix the space to conduct tasteful dueling guitar leads with Johnny Winter. With Winter’s death in 2014, I can only hope these two guitar greats have continued their jam over on the other side. I look forward to having a front row seat to that.
Stormzy–Gang Signs & Prayer
Part of the “Grime” scene in British music, the ambitious debut album by the Croydon rapper is stunning, challenging and inspired. A varied album that mixes the pulsing urgency of “Return of the Rucksack” next to uplifting pieces like “Blinded by Your Grace” this recording gives an indication of where music may wind up going next. Stormzy’s heavy Cockney accent, mixed with his Ghanaian upbringing and references might be a challenge for American ears at first, but give this one some time and let it sink in. While other Grime artists like Skepta go for the throat with furious beats, Stormzy incorporates a sense of R&B into his sound that helps gain wider appeal. “100 Bags” is a heartfelt love letter to his mother that will easily make it to my list of the best songs of this past year. Given time, I am sure it will make it on your list as well.
Michael W. Smith–Go West Young Man
A little dated to be sure. Back in 1990, the Contemporary Christian singer may have crossed over to the Top 40 charts with the hit “Place In This World” but the whole album is evident of a gifted composer of tuneful melodies and playful rhythms. There may be sugar here, but absolutely no saccharin. Most “Christian Pop” music has a tendency to get mired in trite “Jesus is my Boyfriend”-type lyrics, but in the hands of someone of Smith’s caliber, mature thoughtful lyrics are artfully coupled with quality, positive music. This is something you can dance to without getting preachy, while maintaining broad appeal to both believers and non-believers alike. A skilled talent who richly deserves your attention on this early-Nineties Pop Nugget. In these challenging times, this album is real comfort-food for anyone who may just be searching to find his or her own “Place In This World.” I know I am.
Nine Inch Nails-With Teeth
There are just some times when you REALLY need to play “All The Love In The World” AS LOUD AS YOU POSSIBLY CAN. Likely one of the most intensely building “quiet” songs you will find in the NIN catalog. Helpful Hint- Be prepared for the song that comes next-“You Know Who You Are?” If your volume is maxed out, this one is going to blow you out of your chair when it starts.
Mötley Crüe -The End: Live In Los Angeles
I never knew how much I loved Mötley until they were gone. I saw all three shows the Crüe performed in the Twin Cities as part of their “All Good Things Must Die” tour. I’m glad I did. This souvenir of the very last show in Los Angeles is a great overview of what made them the premier “Sunset Strip Hard Rock Band” of the Eighties. The right mix of punk and metal with melodically tuneful songs sung with Vince Neil’s nasally whine of a voice. It is all here. This live album lays out proof that the band’s secret weapon was the phenomenal drumming power of Tommy Lee. He might be a social disaster, but he is a blistering tour de force behind a drum kit. If nothing else, you must have respect for their desire to end it all before they became a hackneyed band playing casinos with only one or two original members. That is to be admired. I, for one, am looking for the Netflix biopic “The Dirt” when it eventually surfaces.
That’s The Ticket , Just Not The Venue…
Beyoncé and Jay-Z-US Bank Stadium, August 8, 2018
Hey, the opportunity to see Queen Bey and Jay for their “On The Run 2” tour would be amazing. To hear selections from Lemonade and 4:44 side-by-side would be illuminating to say the least. However, this show is being held at the worst venue ever for music. Any subtle brilliance of these albums is likely to be overwhelmed by the craptastic sound of the steel and glass behemoth currently blemishing the Minneapolis skyline. Another great show likely ruined by location.
One Last Thing.
Take a moment and look for the TV channel “MTV Live.” While the original MTV is now nothing more than a lame assemblage of trite crap, this one is flat out brilliant. Nothing but music presented largely in a live format. I knew I was hooked when I spent over five hours on a recent Saturday night watching highlights of Glastonbury from 2017. Who needs sleep anyhow?
Next Ten Words Music Editor Daniel G. Moir is the only man in America who can simultaneously maintain a passionate appreciation for both Motley Crue and Michael W. Smith. He can be contacted at @DMoir5150.
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