Lesson One--FM (Maybe Some Static After All)

(The first part of this post is in reference to chapters one and two of The Future of the Music Business (second edition) by Steve Gordon).

The record industry is seeing a steady decline in sales and profits. Today, January 27th, it was announced that AGI would be closing it Jacksonville, Illinois plant. The company makes cases for compact discs, DVDs, and Blu-Rays. As people are choosing to purchase music and films in an online format, the need for their product has decreased.

Digital downloading of music is cutting into industry profits. Even legal downloads such as iTunes have an effect. Why purchase an entire recording by MGMT for $10 (online or compact disc) when you can buy just the one song you like for $1.29? Don't want to pay anything? Download the music video for the song off youtube.com and copy the music. The software to do this is easily available online-and its free. Don't want to risk a lawsuit? Borrow a copy of it from you local library and download it.

Given the current situation, what can record companies and artists do to generate revenue?

First, one needs to understand that each sound recording, such as FM (No Static at All) for example, has two copyrights. One belongs to the song's writers and is held by a publishing house who ensures that the writers are paid for the song's use. In this case the song was composed by Donald Fagen and Walter Becker. Another copyright is assigned to the recording of the song, also known as "the master." Each separate recording has its own copyright. In the case of FM (No Static at All) there are three different versions of the song performed by Steely Dan. The master's copyright for each is held by the record company, in this case MCA.

When a song is used in a movie, commercial, or is played on a satellite radio station, fees need to be paid to both the publisher and record company. However, that is not the case when the song is played on a "terrestrial" radio station. In that situation only the song's writers are paid. The artists who performed on the recording are not. So, if you write the songs that the whole world sings, you are in a position to make more money than if you sing the songs that the whole world sings. Record companies have lobbied Congress to change the law but they are facing an uphill battle given the political power of radio.

So, if revenues continue to drop, what will this mean for the future of the music industry?

At this time, there is no real answer.

In addition to the readings, I also reviewed several music websites. Some, such as the the International Society for Music Information Retrieval as geared for those that have chosen to specialize in this area but should be occasionally reviewed by anyone working in a library that houses a music collection. As someone working in a public library, I found that while the Retrospective Index to Music Periodicals 1800-1950 and the International Index to Music Periodicals are a wonderful resource to scholars, they would not have broad appeal in a public library setting and therefore would not merit the cost of subscription. The same could be said of the Naxos Music Library. Also, while it would seem that the broad based Oxford Music Online would be a good choice for a public library's subscription database collection, I have found and use another database that is free, www.allmusic.com. While it does not have some of Oxford Music Online's sections, such as the Oxford Dictionary of Music, it does have biographical and discography information for artists and songwriters, short clips of songs, as well as an overview of the variety of gentres the database covers.