Thanks For F****** Us (Pt 1)

An open letter to the music industry

This will be a running series detailing some of the reasons that the music industry, as it’s currently set up, cannot sustain the consumer interests that technology will continue to throw at its walls. This isn’t an attempt to disprove the need for record labels and blame them for ruining creativity yadda yadda yadda. Instead I want to create a discussion about what happened to put us here and what needs to change. Part 1 is simply a quick look into the intricacies that created the music industry as we know it.

Why We’re Here —

A very brief history of the music industry

1910's

The music industry as we know it hasn’t been around for more than 120 years. There’s a long story behind it but to put it simply, Thomas Edison’s Edison Recordings, Emile Berliner’s Columbia and Victor, a company that bought audio recording patents from Berliner, went through a rough battle to win the audio recording market in the 1890's. Nearly 15 years later the medium finally became a real competitor to sheet music when in 1913 and 1914, Billboard began publishing monthly music charts and publication Talking Machine World began using label data to track the yearly top selling records. In 1917, independent record labels began popping up as the original recording patents expired. Additionally, AT&T and General Electric partnered to form the Radio Corpoeration of America (RCA), Charlie Chaplan and other celebrites launched United Artists and the first commercial radio broadcast debuted out of Westinghouse in Pittsburgh, PA. Jazz, Blues and Quartets were taking the reigns and helped propel consumer interest in recorded music.

1920–1930's

• The Grand Ol Oprey Show (a radio broadcast) shows the potential for Country music and it began to spread across the country
• RCA purchases Victor
• Columbia expands to the UK
• Edison Records goes out of business during the Stock Market Crash, in part because Edison refuses to record Jazz
• The Electric and Musical Industries (EMI) are established in 1931 opening Abbey Road in London that same year
• The American Recording Company (ARC) begins consolidating independent labels and becomes a major player after leasing Brunswich from Warner Brothers and acquiring Columbia in 1934
• Billboard begins publishing weekly top charts based on radio plays
• “Your Hit Parade” becomes a nationally syndicated show reviewing the top 10 most popular songs
• By the end of the decade, Decca is selling 34 cent records and the end of prohibition leads to thousands of bars opening across the country often with Jukeboxes inside. Recording sales explode further.
• RCA, Decca and ARC are the three label giants

1940's

• ASCAP songwriters go on strike, demanding larger royalties from broadcasters. Broadcast Music Inc. (BMI) is launched to compete with the performance royalty giant.
• MGM Records is created
• The music behind Disney’s Fantasia becomes massively popular
• AMPEX releases the first consumer facing tape recorder, originally only used for military purposes.
• Already one of the most popular artists of all time due to his Great Depression inspired lyrics, Bing Crosby helps propel the tape recorder by showing it to Les Paul who subsequently came up with the concept of over-dubbing and multi-track recording.
• Singer Johnny Mercer builds the first major west coast label in 1947 with Capitol Records

1950’s to 1990's

To speed things up lets just make some big leaps

• Epic Records, Atlantic Records and Sony Records, Warner Records, Island Records and Motown Records get their skin in the game
• Sony launches the first pocket transistor radio allowing people to carry their music with them for the first time ever
• An unbelievable amount of other record labels, large and small, are formed and subsequently purchased by the largest labels or die off
• By the end of the 1960’s, the main labels are CBS, RCA Victor, Warner Brothers, Capital-EMI, MCA and PolyGram with CBS being the largest
• The disco era begins in the 1970’s with “Love’s Theme” by Barry White
• Polygram acquires RSO which distributed some of the largest disco music including the soundtrack to Saturday Night Fever — the highest selling record to date until Michael Jackson’s Thriller was released on Epic Records in 1983
• By the end of the 1970’s the main labels are CBS, EMI, Warner, Polygram and MCA after another decade of land grabbing
• Phillips and Sony release the first compact disk in 1981 and make CD players available a year later
• Rick Rubin and Russell Simmons establish Def Jam in 1984 which is the first rap centric label. The label begins to take off with Run DMC
• From 1987–88, Sony acquires Columbia for $2 Billion, MCA acquires Motown, and Warner and Time merge.
• Sony, MCA, Warner, BMG, EMI, and Polygram are the industry leaders by the end of the 1980's
• Virgin Records, Interscope Records, Geffen Records, American Recordings and many many more labels are formed and purchased
• MP3 is approved as the ideal digital music storage system in 1992
• The World Wide Web begins taking off
• From 1996–1999, Universal Music Group is formed after Seagram purchases and transforms MCA, Interscope, Island Records, Def Jam, Geffen, Mercury and A&M into various labels and sub-labels.

2000 on

• Napster and MP3.com take a dump on the 100 years it had to taken to establish the purchase-to-own music model in a matter of months
• Labels quickly realize they needed to do some damage control on this “Internet” thing, which is rapidly spreading into households around the country
• BMG and Warner launch MusicNet
• Sony and Universal launch Pressplay
• Listen.com launch Rhapsody
• In 2003, labels take KaZaa to court for creating a service similar to napster. That same year they launch a country-wide campaign to sue companies and individuals spreading illegal copies of their music
• Feeling the increasing pressure, the labels agree to allow Steve Jobs and Apple to offer individual songs for $99 cents through the newly created iTunes Music Store
• By 2005 iTunes had surpassed Tower Records in sales
• By 2006 it had sold a billion downloads
• By 2008 it became the highest selling music outlet in America
• In the same year, Spotify is launched in Sweden
• Sony Music Entertainment, Universal, EMI and Warner are the largest labels in the world owning an unbelievable amount of market share and revenue from the recording industry

The Takeaway:

Conglomerates are inevitable in any industry where content=power

Join Us

If you want to connect with your fans, are a superfan yourself or just dig what we’re doing, come join us. Artists can get access to their dashboard by heading to app.laylo.com and clicking Let’s Go!

• A huge amount of thanks to Alex Cosper http://www.playlistresearch.com/recordindustry.htm