Question of the Day - THE ECONOMY - JUNE 16, 2009

TheHolodigm.com

THE ECONOMY

W. Dugoni asks:

With the economy in such a rut, is there anything the big record companies can do to help jump start our country? Or are they in too deep a hole themselves? Also, if the economy does pick up, do you think it will help the big record companies survive or are they just a dying breed with all the music piracy in today's world?

Hartmann responds:

Within months of the election of Herbert Hoover as the thirty first president of the United States, the Wall street crash of 1929 gave birth to The Great Depression. Hoover, a prohibitionist was the first American President to use the term "trickle down economics." The concept proved no more successful for him than it did for Ronald Reagan or the Bush family. Of course they all got rich, but the destruction of the U.S. economy that resulted from their deregulation and taxation failures has devestated our middle class. It has disrupted the global economy and driven virtually every country into some form of recession. The record industry is already in a depression.

The decline of the postmodern record business preceded these events and has only been tangentially effected by them. It was a severe lack of vision, by its leaders, that caused the recording industry to crash and burn. The precipitating event was the rejection of Napster by the big four record labels a decade ago. Failure to grasp the significance of peer-to-peer file sharing technology, and the decision to file law suits against their customers, sealed the eventual fate of the major companies. In a universal act of defiance music fans decided to take the music for free.

The once mighty giants of music now reside in empty buildings and service a waning industry. There is some wheel spinning as the survivors struggle to hold on to their pay checks. There is even some A&R activity and an occasional signing. But, the albums that reach the top of the charts don't sell much product. The brick and mortar stores have evaporated and the purchased download sales, although significant, represent only a small fraction of the music actually "taken."

There is a prevailing mind set, among the digital generation, that considers anything that reaches the Internet public property and free for the taking. Although dissertations on the morality of music piracy often evoke sympathy, the situation is not likely to change. As the old song goes, "How can you keep the boy down on the farm now that he has seen Paree?" The concept of free music is a truly delicious predicament for the iPod fraternity. While they wrestle with their collective conscience the fans will continue to explore the extant music library on the Internet.

The economic recovery, we all crave, is probably a long way off. It is more likely that things will get worse before they get better. The power elite, who have more than they need, will not feel the heat from the crash. Sure they will take in less, but it won't change their lives, in the same way that the economic failure is crushing the middle class into poverty. The top one percent will lobby to rebuild the economy on the same old foundation and insure another crash just like Hoover did.

Without fundamental change in the systems and protocols history will just continue to repeat itself and all the stimulation dollars will only benefit the rich. The people comprising the ninety-nine percent who are suffering will become embittered and stealing music will be the least of their concerns. It may even be perceived as a form of justice. This will contribute to the record industry's eventual demise. By the time the economy reverses itself it will be too late to save the record business. For all intents and purposes the century old record industry is finished. It can't help the overall economy and it cannot save itself. Purchasing music is no longer a necessity.

This does not mean that the music itself is doomed to share a similar fate. The music business goes back to when pounded on logs in caves and other guys took chickens at the door. It has endured a myriad of changes, provoked by advances in technology, for thousands of years. For most of that time the personal appearance of live attractions has been the primary activity.
Songwriters, singers and bands will continue to create music and fans will always be searching for the next big thing. Inevitably, inspired entrepreneurs will devise new mechanics and exploit the proven principals of entertainment.

There will be a new "superstar" and fame and forune will accrue. The economics of music will be influended by the state of the national and global recovery. However, once the music business hits bottom there will be no place for it to go but up. The fan base is the electorate and if they get their way, as was the case with Herbert Hoover, there will be no second term for the postmodern record industry.