Music-Business Meltdown! Ultragrrrl Out of a Job!
Last week, based on nothing but our ill-informed guesswork, we predicted that the music business as we know it today had six months to live — turns out that might've been optimistic! It gives us no joy to report that on Friday, there were some pretty big layoffs at Island/Def Jam records which apparently included executives Greg Thompson, Paul Pontius, Rob Stevenson, and everyone at Sarah "Ultragrrrl" Lewitinn's emo sub-label Stolen Transmission (meaning she no longer gets to
hang out with Jay-Z and she'll have to update the address she was using to
solicit free shit in the mail). Additionally, Sony-BMG is planning on
shedding 40 to 70 "mid-level execs" before the end of this year, Lava and Roadrunner Records are
merging their promo staffs, and commenters on record-industry message board
Velvet Rope, typing in grave tones, speculate that similar "restructuring" will happen soon at Geffen and other labels under the Universal umbrella.
While it's certainly a bummer, the firings probably shouldn't come as a great surprise to anyone who's been following the increasingly terrible news about the music industry. Warner Music's stock hit an all-time low last week when they announced that quarterly profits were
down 58 percent (hilariously, the numbers still beat Wall Street expectations). And Terra Firma, the London-based private-equity firm that bought EMI's catalogs earlier this year, is already looking to
dump its investment, shortly after it "increases EMI's profits massively by cutting costs by £135 million annually and outgrowing the sluggish music market." In other words, the layoffs aren't just a cost-cutting maneuver anymore — they're the recording industry's entire business model! If the labels can't wring a profit out of Blake Lewis or the new Jay-Z record (which they can't, apparently), then they'll do it by dumping a few high-salaried executives.
And this, I found yesterday, from a press conference interview with John Rzeznik of the Goo Goo Dolls in 2002:
"It gets harder and harder these days. The music business, and radio, and that, it's all about this 'immediate impact' thing, where it's like 'Well, you know, we played the song 100 times, it ain't doin' that good, you gotta go onto the next thing.' Or there's a lot of bands now, if they don't sell a million records on their first record, they get dropped. There's not a lot of development of artists, you know, in that mass media kind of world - which I think is bad - and I think it's ultimately gonna come back to bite them all on the ass, because they will not have catalogs to draw from, and keep their labels running in lean times. Radio stations aren't developing core artists. I wish they would address those issues and maybe stick with things a little bit longer. Because that's how you wound up with a really rich rock 'n roll history like The Stones, and The Beatles, and The Who, and you know,
Van Halen, all these bands, because there was a lot more time put into each project."
Things still haven't changed. Let's do something before the business dies, and anyone who genuinely lives and breathes music is ultimately out of a passion... and a job.
(More on this later when I have the time to rant, rave, and go off on tangents...)
