Autumn of the Moguls
Page 25
But starting in the fifties, and then gaining incredible force in the sixties, rock-and-roll performers eclipsed authors as cultural stars. Rock and roll took over fiction’s job as the chronicler and romanticizer of American life (that rock and roll became much bigger than fiction relates, I’d argue, more to scalability and distribution than to relative influence), and the music business replaced the book business as the engine of popular culture.
Now, though, another reversal, of similar commercial and metaphysical magnitude, is taking place. Not, of course, that the book business is becoming rock and roll, but that the music industry is becoming, in size and profit margins and stature, like books, a pop culture afterthought, a nearly starless province, a quaint thing.
There’ll still be some big hits (Celine Dion is Stephen King), but even if you’re fairly high up on the music-business ladder, most of your time, which you’d previously spent with megastars, will be spent with mid-list stuff. Where before you’d be happy only at gold and platinum levels, soon you’ll be grateful if you have a release that sells 30,000 or 40,000 units—that will be your bread and butter. You’ll sweat every sale and dollar. Other aspects of the business will also contract—most of the perks and largesse and extravagance will dry up completely. The glamour, the influence, the youth, the hipness, the hookers, the drugs—gone. Instead, it will be a low-margin, consolidated, quaintly anachronistic business, catering to an aging clientele, without much impact on an otherwise thriving culture awash in music that only incidentally will come from the music industry.
This glum (if also quite funny) fate is surely the result of compounded management errors—know-nothingness as well as foolishness and acting-out (suing college kids). But it’s way larger too. Management solutions in the music business have, rightly, given way to a pure, no-exit kind of fatalism.
It’s all pain. It’s all breakdown. Music-business people, heretofore among the most self-satisfied and self-absorbed people of the age, are suddenly interesting, informed, even ennobled, as they become fully engaged in the subject of their own demise. Producers, musicians, marketing people, agents … they’ll talk you through what’s happened to their business—it’s part B-school case study and part Pilgrim’s Progress.
Start with radio.
Radio and rock and roll have had the most remarkable symbiotic relationship in media—the synergy that everybody has tried to re-create in media conglomerates. Radio got free content; music labels got free promotion.
Radio’s almost effortless cash flow and mom-and-pop organization (there were once 5,133 owners of U.S. radio stations), made it ripe for consolidation, which began in the mid-eighties and was mostly completed as soon as Congress removed virtually all ownership limits in 1996. A handful of companies now control nearly the entirety of U.S. radio, with Clear Channel and its more than 1,200 stations being the undisputed Death Star.
Radio, heretofore ad hoc and eccentric and local, underwent a transformation in which it became formatted, rational, and centralized. Its single imperative was to keep people from moving the dial—seamlessness became the science of radio.
The music business suddenly had to start producing music according to very stringent (if unwritten) commercial guidelines. (It could have objected or rebelled—but it rolled over instead; what’s more, in a complicated middleman strategy of music brokers and independent promoters, labels have, in effect, been forced to pay to have their boring music aired.) Format became law. Everything had to sound the way it was supposed to sound. Fungibility was king. Familiarity was the greatest virtue.
Once Sheryl Crow was an established hit, the music business was compelled to offer up an endless number of Sheryl Crow imitators. Then when the Sheryl Crow imitators became a reliable radio genre, Sheryl Crow was compelled to imitate them.
But then, just as radio playlists become closely regulated, the Internet appears.
File sharing replaced radio as the engine of music culture.
It wasn’t just that it was free music—radio offered free music. But whatever you wanted was free, whenever you wanted it. The Internet is music consumerism run amok, resulting not only in billions of dollars of lost sales but in an endless bifurcation of taste. The universe fragmented into subuniverses, and then sub-subuniverses. The music industry, which depends on large numbers of people with similar interests for its profit margins, now had to deal with an ever-growing number of fans with increasingly diverse and eccentric interests.
It is hard to think of a more profound business crisis. You’ve lost control of the means of distribution, promotion, and manufacturing. You’ve lost quality control—in some sense, there’s been a quality-control coup. You’ve lost your basic business model—what you sell has become as free as oxygen.
It’s a philosophical as well as a business crisis—which compounds the problem, because the people who run the music business are not exactly philosophers.
“They’re thugs,” says a former high-ranking music exec of my acquaintance, who is no shrinking violet himself.
Such thuggishness, when the business was about courting difficult acts, enforcing contracts, procuring drugs, and paying off everyone who needed to be paid off, may once have been a key management advantage. But it probably isn’t the main virtue you’re looking for when you’re in a state of existential crisis. Being street-smart is not the same as being smart.
In a situation of such vast uncertainty, with the breakdown of all prior business and cultural assumptions, you don’t necessarily want to have to depend upon, say, Sony music head and former Mariah Carey husband Tommy Mottola to create a new paradigm.
For a long while, the management response at the major labels had a weird combination of denial and foot stamping: putting Napster out of business—then sort-of/sort-of-not buying Napster—all the while being told by everybody who knows anything about technology that no matter what the music industry does or who it sues, music will be, inevitably, free. Duh. There is, too, a management critique—perhaps most succinctly put by Don Henley in his now-famous post-Grammy letter wherein he quoted Mel Brooks in Blazing Saddles:“Gentlemen, gentlemen! We’ve got to protect our phony baloney jobs!”—that sees record labels as generally engaged in the usual practice of ripping off anyone who can be ripped off while remaining oblivious to the fact that Rome is burning.
But for the most part, denial, and even the reflex to just keep squeezing the last dollar until there is nothing left to squeeze, is passing. (Labels have even recently awoken to the problems of dealing with the radio behemoths and are frantically, and way too late, trying to find reasons to sue the radio guys and gain back a little leverage.) Acceptance is the lastest stage: We simply don’t know what to do.
The truth is, there might not be anything much to do.
Here are the choices:
If you’re providing free entertainment, which is obviously what the music business is doing, then you have to figure out some way to sell advertising to the people who are paying attention to your free music. But nobody seems to have any idea how that might be done. Or you can provide stuff that’s free, and use the free stuff to promote something else of more value that people, you hope, will buy—now called the “legitimate alternative.” (Putting video on the CD is one of those ideas—though, of course, you can file-share video too.) Or sell the CD at a price that makes it cheap enough to compete with free (free, after all, has its own costs for the consumer).
It’s a spreadsheet solution. There will continue to be a market for selling music, however diminished—but it will have to be cheaper music. Margins will shrink even more. Accordingly, costs will have to shrink. Spending a few million to launch an act will shortly be a thing of the past. A&R guys making half a million are also history (in the future, they’ll start at $40,000 and max out at $150,000). And no more parties.
And then there is the CD theory. This theory is widely accepted—with great pride, in fact—in the music industry. It represents the ultimate music-biz hustle. Bu
t its implications are seldom played out.
The CD theory holds that the music business actually died about twenty years ago. It was revived without anyone knowing it had actually died because compact-disc technology came along and everybody had to replace what they’d bought for the twenty years prior to the advent of the CD.
The music business, this theory acknowledges, is about selling technology as much as music. From mono to stereo to Walkman. It just happens that the next stage of technological development in the music business has largely excluded the music business itself.
The further implication, though, might be the more interesting and painful one: You can’t depend on just the music.
Rock and roll is just an anomaly. While for a generation or two it created a go-go industry—the youthquake—it is unreasonable to expect that anything so transforming can remain a permanent condition. To a large degree, the music industry is, then, a fluke, a bubble. Finally the bubble burst.
But not with a pop. It’s an almost imperceptible, but highly meaningful, alteration in context. Alanis Morissette becomes Grace Paley. Bono becomes John Hersey. Fiona Apple is Joyce Carol Oates. Moby is Martin Amis.
This is not so bad.
And best of all, our children—all right, our grandchildren—won’t want to become rock stars.
Howard Stringer, interviewed by Heilemann during lunch on the subject of file sharing and the future of the music business, was a world-weary presence. He had come out of the news business and risen through the ranks of network television and found himself on top of an anomalous media empire as chairman of Sony America. Sony had been slated to take over the media world a generation or so ago, but had faltered when it realized it had paid too dearly for what it had bought, and then when the Japanese economy fell apart, and finally when it learned that all of this hardware-software-cross-platform synergy stuff was, relatively speaking, bunk.
Stringer had been, one might imagine, a voice of reason here, having to explain to the Japanese that most of these media sugarplum visions were never going to be realized. Indeed, having endured the disappointments and humiliations of being an also-ran media empire, Sony America was relatively healthy now. Except for its music woes. And even here, it was amusing to hear Stringer on the irony of the company’s reverse synergy—Sony, with its myriad listening devices, actually benefited from people stealing music.
Stringer, a cheerful ironist, was in some way a model for a post-media mogul. Although he too said it was a terrible, terrible thing that college kids everywhere were stealing all this stuff, and obviously felt compelled to play the stern father, he also, I would bet, got the joke.
16
THE BIG
EVENING
Something was going on that had not been spelled out. There was a bit of social underhandedness—and awkwardness.
The Foursquare program listed a reception at the National Museum of the American Indian, another impressive building downtown. But it turned out there were two receptions at the National Museum of the American Indian. One exclusive and one non.
This was it, of course: No matter how exclusive you got to be—here, for instance, you were at a $4,000-a-ticket conference to mix among the titans of the most important industry in the world—there was still, always, a more exclusive level to get to.
The hoi polloi among the elite had one event, the elite among the elite had another.
It was stunning to me that the elite of the elite had the gall to be so openly standoffish—and the precision to have so finely tuned the hierarchical distinctions.
It was equally stunning that the rung just below the elite of the elite did not immediately rise in open revolt.
Partly, they did not rise up because they had been tricked. They had not been told they were excluded or that there was any other event happening anywhere else.
We were all just sheep being herded out of the conference venue and toward this other venue somewhere out beyond. There were uniformed conveyers posted to guide us on the streets of New York. And there was special signage and even chalk marks along the way. It was very organized, even momentous. There was even the sense of this being worth the $4,000—or, at least, it not being a disappointment. It didn’t seem like anybody had cheaped out.
Except that I was walking with Pam Alexander, and as we talked about where we were going, and what seemed to be going on, it became increasingly clear that we were talking about different things.
First, she tried to reconcile the apparent differences. And in her reconciliation it seemed, for a moment, that she was also going where I was going (although I had my doubts). But then in her further, somewhat obsessive, pursuit of the social details, it became hard to maintain this illusion.
I had gotten a guest list. She had not.
I was expecting dinner. She was not.
I had had to confirm several times. She hadn’t even had to confirm once.
She stopped suddenly on the street. In pain. Bereft.
There was a moment, too, in which she blamed it on herself. Had she not answered an email, returned a phone call? She tried to recall something her assistant had said to her she was supposed to do.
But soon enough, and more painfully, she came to blame it on the Sisyphean struggles of life itself.
Here she was, one of the greatest event organizers of our time (well, at any rate, of the boom—and of course the boom had passed), someone who had made a literal fortune on figuring out how to penetrate to the innermost circles of the innermost conferences, a woman who would pick up Rupert Murdoch by the scruff of the neck and take him to a bar—only to now find herself excluded.
She knew the point, of course. The boom had passed and she had taken her fabulous nest egg and, well, relaxed a bit—which is a kind of suicide in the business of climbing ever higher. The price of not being excluded for a single second is eternal vigilance, and absolute graspingness, and a tireless capacity to work the phones.
And Pam had faltered.
It was a hard blow.
This wasn’t pretty at all.
Here was primal social pain.
I had to get away from her.
At first chance, I maneuvered around and caught up with Steven Levy, who had moderated a panel on the future of computing which I had skipped. Levy, laconic and dyspeptic, worked for Newsweek and was one of the great reporters of the technology business. He had been in the business before the boom and would be here after. Indeed, he wore the boom and its aftermath like a personal burden. He was not, I wouldn’t have thought, your most likely moderator.
But he was one, and I assumed the reason I’d been invited to the elite status affair was because all moderators were included.
Constrained by the social realities of having had to walk here with the spurned Pam Alexander, I suddenly relaxed with Levy, helplessly gossiping about the excluded and the included, and assuring him that we both were in this special circle.
Even as we arrived at the clearing point—young PR women behind a desk checking names and discreetly directing elite traffic one way and superelite the other way—I, unhesitatingly, pulled Levy along with me (it is, after all, always good to have a friend when you go into a strange room and an uncertain crowd), as I headed down the long superelite corridor.
But then, just as we reached the checkpoint into this other sanctum—even on the approach you could see the dark wood of a rare and exclusive interior—a team of forceful PR girls intercepted Levy and led him off, helpless.
I had erred. He might also have been a moderator. But he was not welcome or included here.
I went into the dark, ornate, lovely, something-to-do-with-Indians room.
17
THE
GUEST LIST
18
MARTHA
Unconfirmed Martha was who I most wanted to see. Even more than Case, she was the pariah of the moment. But it was not just the macabre fascination that attached to her—it was some other thing that made many of us flutter.
She was nasty and brutish to many people, but never to me. I only ever got the sudden look, the laugh, the glow, the tough-tender aside. She really was quite a dame—and a pure media thing.
I can’t begin to count how many times I’ve heard somebody say “Think of this as the Martha Stewart of…” or “The idea is to create the Martha Stewart for …” or that he or she could be “the next Martha Stewart.” (Or even the subvariation—I once knew an investment banker who was always touting his wife as a Jewish Martha.) Countless people have undoubtedly thought to themselves, I could be the Martha Stewart of…(I myself could be the Martha Stewart of media criticism.)
This came to be called, in a catchphrase of the boom (and then in a derogatory sense after the boom), being your own brand. But the Martha concept went well beyond that. The idea was embodiment. Representation. Mimesis. Perfection. I am my own worth. I am my own value. I am my own definition. I am the perfect articulation. I have become who I am.
It was about the narrative as business. Martha was marketing the back story. If you were a non-businessperson, a non-counter-of-beans, then Martha represented true commercial hope: You could start a business, a fabulously successful business, that was not about business. Your interior life could become a commercial life. It was the dream of authors everywhere—except you could be a writer without having to write. You could be your own fiction.
Martha really is an entrepreneur—unlike those business-school wannabes. She is an independent. No organization, except her own, would have tolerated her.
She was tougher than anybody else. Going back twenty years, she started to do little deals, then put bigger deals on top of the little deals—deals everywhere; it was life as a licensing scheme.