From: rehashedrubard@gmail.com   
      
   Chapter 1: Consolidated to Death   
      
   In February 1999, Sheryl Crow found herself in the strange position of having   
   won a Grammy Award for an album put out by a record label that no longer   
   existed.   
      
   In the weeks before the Grammys, A&M — the record label that had signed her,   
   nurtured her career, and overseen her rise from Los Angeles studio singer to   
   international rock star over the previous decade — was gutted and folded   
   into the Interscope    
   label as part of the newly formed Universal Music Group. The demise of A&M was   
   the result of a $10.4 billion purchase of the PolyGram music companies by   
   Seagram.   
      
   As the rest of the industry celebrated itself at the Grammys, Crow saw trouble   
   ahead. In her acceptance speech, the singer delivered something of a eulogy   
   for her old label. She was the only artist at the nationally televised   
   ceremony to publicly    
   acknowledge the huge toll exacted by the wave of consolidation that had washed   
   over her profession.   
      
   Up until a few months before, she had been working for one of the smaller   
   major-label companies, headed by veteran music executive Al Cafaro; now Cafaro   
   and A&M were gone and she found herself under contract to the world's largest   
   record company, headed    
   by Edgar Bronfman Jr. The immediate costs of the merger were easy to quantify:   
   besides Cafaro, more than twenty-five hundred employees lost their jobs and   
   250 bands lost their deals with labels such as A&M, Geffen, Mercury, Island,   
   and Motown.   
      
      
   But in the long term, the effects of consolidation would be even more   
   profound, and usher in a decade when the twentieth-century music industry   
   would suddenly find itself fighting for its life, undone by its single-minded   
   pursuit of profit at the expense    
   of the cornerstone principle that had allowed it to thrive for decades: artist   
   development, as nurtured by savvy executives who not only knew their business   
   but knew their music.   
      
   Now Cafaro, a music lifer, was out, and Bronfman, a longtime liquor magnate,   
   was in. He'd soon head the biggest music corporation in the world. Bronfman   
   was heir to the Seagram fortune and was running the family business in the   
   nineties when he sought to    
   diversify the company's holdings by branching out into music. As with the   
   other moneymen taking power in the consolidation-heavy nineties, music was not   
   central to his vision but rather a piece in a larger portfolio of products.   
      
   Cafaro was one of Crow's champions; he had signed her to her first record deal   
   in 1991 and had allowed her to rerecord her debut album because she was   
   dissatisfied with the initial results. Cafaro's faith was rewarded with a hit:   
   Tuesday Night Music Club    
   established Crow as an artist to be reckoned with in 1993. It went on to sell   
   more than 4 million copies and her career flourished; her 1999 Grammy was her   
   sixth.   
      
   Yet she wasn't in a particularly celebratory mood in the days after the '99   
   ceremony.   
      
   "It's a frightening time as far as the music industry being an a   
   tist-nurturing industry," she said. "Now everything is so numbers-oriented and   
   new artists get one shot, maybe two, to get a hit, and that's it. They sign   
   two-album deals now. I was signed    
   to seven albums and I was given a chance to get on the road and hone my craft.   
   You want artists who have a strong point of view, who have the potential to   
   grow into something wonderful, like Jackson Browne and Joni Mitchell, who   
   found themselves by    
   touring and continuing to write, and their album sales slowly grew. But now   
   artists aren't getting that opportunity because there's pressure to have   
   instant hits."   
      
   Consolidation was the era's trendiest business strategy. It caught on because   
   it enabled companies to claim bigger market share, streamline operations by   
   cutting overlapping positions and payroll, and explore new revenue streams. By   
   the late nineties,    
   Wall Street was rife with merger news, and deals that further centralized   
   power in the record, radio, and concert industries were brokered. Power was   
   concentrated in fewer hands than ever: the PolyGram-Universal merger left five   
   multinational    
   conglomerates to run the $14.6 billion-a-year record industry. Ten   
   conglomerates accounted for 62 percent of the gross revenue in the $10.2   
   billion commercial-radio business, and one company — SFX Entertainment —   
   dominated the $1.5 billion concert-   
   touring industry.   
      
      
   One side effect of this strategy profoundly affected consumers: the price for   
   music spiked. Compact disc prices approached a record $19, even though the   
   manufacturing cost had actually declined since the discs came into the   
   marketplace in the early    
   eighties. Tickets for major shows skyrocketed. Indirectly, an even steeper   
   price was being paid: concerts were being transformed into marketing   
   opportunities for a vast network of products.   
      
   Enter New York-based SFX, which bought more than a hundred major concert   
   venues nationwide and then began acquiring tours by major artists underwritten   
   by national advertisers. In 1999, SFX had a hand in producing 60 percent of   
   the two hundred biggest    
   revenue-generating shows; the concert industry had its biggest year ever, with   
   $1.5 billion in sales. The reason? Ticket prices had increased a whopping $10   
   a ticket, a 30 percent increase over 1998, to an average of $44.   
      
   With consolidation came pressure to produce profit. The multinationals were   
   effectively run by their shareholders, who wanted a steady flow of quarterly   
   returns to justify their investment. But in an industry supposedly devoted to   
   creating a highly    
   volatile and unpredictable product — music — this was hardly a sound   
   strategy. How to reconcile the whims of creativity with the need for producing   
   profit on a prescribed schedule?   
      
   "That's a big problem because Wall Street is looking for stability —   
   quarter-over-quarter growth — in an industry that is dependent on artists,"   
   whose creativity can't be doled out in quarterly spurts, said Michael   
   Nathanson, a New York investment    
   counselor.   
      
   His words — delivered in 1999 at the South by Southwest music conference in   
   Austin, Texas — brought silent "Amens" from a roomful of music executives,   
   many of whom must've felt like they were attending their own wake. Each of   
   their jobs was in    
   jeopardy as longtime record labels were folded inside Godzilla-sized   
   multinational corporations.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)