JAIMIE VERNON – MUSICAL VALUE VILLAGE

I’ve been slowly re-imbedding myself into the Dante’s Inferno that is the current music industry with a focus on promoting good, new music [see some of my previous blogs for my recommendations] cause, let’s face it, talking about the mistakes the labels made over the last decade is like discussing that guy at Decca Records that passed on The Beatles [his name was Dick Rowe and he made up for the faux pas by later signing the Rolling Stones].

It’s just irrelevant now. However, it’s hard to get away from the magnetic suck of this bullshit business when a 5 year old internet meme shows up again on Facebook with a quote from milk-toast country dawdler Vince Gill where he throws this cowpie onto the road to enlightenment:

“The devaluation of music and what it’s now deemed to be worth is laughable to me. My single costs 99 cents. That’s what a single cost in 1960. On my phone I can get an app for 99 cents that makes fart noises – the same price as the thing I create and speak to the world with. Some say the fart app is more important. It’s an awkward time. Creative brains are being sorely mistreated.”
Mr. Gill naively thinks (or thought) that at some point he was making art and that his platinum records were a reflection of quality and value. Ignoring the fact that a single in 1960 actually cost about $0.69 (and a full album roughly $2.50), Gill and those ill-informed industry mooks like him never acknowledge that maybe, just maybe, music has been OVER-valued for decades.

Let’s take a look at the hard numbers, shall we? Even in this depressed economic time, a major artist like Vince Gill would record an album that cost in the neighbourhood of $100k to $200k. Add at least that much in manufacturing, distribution, marketing and promotion (every dime of which is charged BACK to Gill) and you’re looking at a half-million dollar product. iTunes, who strong armed major labels into democratizing a single song back to the late ‘60s price of $0.99 and a full album to $9.99, will generate a modest sum of $3,000,000+ if it sells a paltry 300,000 album copies and 25,000 single downloads; and that’s in 2010 when streaming wasn’t even on the table.
$261,000 of that is shaved off to pay the songwriter(s) a mechanical royalty (at a rate of 10 songs x $0.087 per song  x 300,000 albums); iTunes takes $0.20 off each single download, and $2.00 off each album…that’s at least $150,000. So, $411,000 is a hard cost against the $3,000,000 generated JUST from iTunes but still leaves $2.6 million in revenue generated from the album. We haven’t accounted for the other 40 or 50 legit download sites on the Net OR the hard copy revenue generated at retail which again, using very modest sales figures in this depressed economy, could still potentially generate another $500k – which was the ORIGINAL cost of production, manufacturing and promotion & marketing. That means the album has still – worse case scenario – peaked at $2.5 million.

That’s one album. One artist. Now substitute $17.99 or $18.99 for what used to be old-school retail (which took a larger piece of the pie than iTunes’ $0.20 per download) and you start to realize that the album, had it been sold during the vinyl or bloated CD era was actually generating an obscene amount more revenue while costing LESS to produce. Somehow the inflated price of that $0.69 single in 1960 became $2.99 by 1989 when the single was not only discontinued but shot and buried in the backyard. Other than production and marketing costs now, there is no PHYSICAL single…and yet the labels justified raising the price of their new single artist releases to $1.29 on iTunes when the favoured nations price of $0.99 wasn’t making them enough pocket scratch.

But WHERE has that profit actually been going? It’s not going back to recoupe expenses – it’s instead written off at tax time and left on the ledgers of the artists as unrecouped expenses. No, that profit is going to overhead – namely: salaries and stock dividends. Guess what? The public doesn’t care what it costs YOU to run your business. The public only cares about value for THEIR money.

When Napster put a sucking chest wound into the good ship Rape The Music Fan, the market had to adjust and allowed a non-music partner like Napster to enter the market and give music a new valuation. But, the labels continue to deny and deflect holding onto that fictitious trope that illegal downloads are killing the industry. Really? YOU killed the single as a promotional tool. YOU decided to eliminate the non-piratable vinyl format forcing an entire planet to buy their music collections again in a new format. YOU worked with retailers in the late ‘90s (pre-Napster) to de-emphasize catalogue and to push new releases on the back of bait & switch product deals for established artists. It worked on the premise that you were actually promoting new artists:  buy 100,000 American Idol CDs at full wholesale cost and we’ll give you 20,000 Shania Twains for FREE…oh, and then send the American Idol discs back for a full refund.  No questions asked.

But that’s not the whole story, is it? For the first 40 years that the major label empire dominated pop culture recorded music was the ONLY game in town. The alternative was to either sit on your couch and watch the television or sit in a theatre and watch a movie. There was no other pastime other than sports events competing for our entertainment dollar and the music business even ate a chunk of that by pitting live concerts against them. The only hard copy of entertainment you could own was recorded music – there was no VHS/Beta/DVD/Blu-Rays or video games. It is why an entire generation has given so much artistic weight and dollar value to what music SHOULD cost because it dominated every aspect of our world – and a big piece of the global economy. Now, it no longer does that. Music has become the THIRD most important entertainment franchise in the world. And if you don’t believe that just look at the $1 Billion box office gross of a movie like ‘The Avengers’ (and the sequel) or the frequent pre-sales of 1 million units on anticipated video game franchises.  Music had already been devalued long before Napster gave away the recipe. It just took the music industry a decade to notice that the Titanic was sinking and there weren’t enough life boats. And instead of admitting that their arrogance led to the construction of a crappy ship, they’ve been blaming the iceberg ever since.

Major labels and indie artists now compete on the same playing field. In fact, the indies have eaten into the major label profit margins – a fictitious number created by the labels based on paying back capital investors on quarterly revenue projections that no longer reflect the reality of the music market. They’re selling widgets – whether that’s a Vince Gill song he poured his soul into…or a fart app.
Fortunately for indie artists the ability to create music and release it – at any price they choose – in a world once dominated by the major labels is cheaper and more accessible overall. The chances of success are slimmer, but the freedom to express oneself and control one’s career has never been easier. Independent music is the new frontier – devoid of the petty pretense and manufactured mentality of the major label music factory. And if an indie artist wants to use a fart app to create a rhythm loop and sell it for $0.29 or for free, they’re using their talent to create their own art.

Send your CDs for review to this NEW address: Jaimie Vernon, 4003 Ellesmere Road, Toronto, ON M1C 1J3 CANADA

=JV=

Jaimie’s column appears every Saturday

Contact us at dbawis@rogers.com

Jaimie “Captain CanCon” Vernon has been president of the on again/off-again Bullseye Records of Canada since 1985. He wrote and published Great White Noise magazine in the ‘90s, has been a musician for 33 years, and recently discovered he’s been happily married for 16 years. He is also the author of the recently released Canadian Pop Music Encyclopedia and a collection of his most popular ‘Don’t Believe A Word I Say’ columns called ‘Life’s A Canadian…BLOG’ is now available at Amazon.com  http://gwntertainment.wix.com/jaimievernon