Coda

by David P. Purcell, Esq. ’91

 

Artists and the music industry are facing many complicated issues these days. Topics such as digital dissemination of music, equity in artist agreements, viability of the modern record industry model, and the existence of independent record promotion have dominated headlines in music trade magazines and are at the forefront of discussions among music professionals. While the contemporary problems that the recording industry is confronting are formidable, it is important to remember that recording and performing artists also earn a significant percentage of their income through publishing, merchandising, and touring. For these ventures too, there are new problems on the horizon.

 

Older readers may recall that three decades ago, groups such as the Who satirized artist associations with corporate goods and services with their The Who Sell Out LP. Times have changed, and today many artists actively seek licensing deals and corporate sponsorship for their musical products. Such collaborations promote an artist’s music and can generate tremendous revenue. One relevant example is Moby’s album Play, from which every track was commercially licensed. This helped to promote, market, and position Play, leading to multiplatinum sales in the United States alone. Other examples of licensing include the use of the late Nick Drake’s recording of his song “Pink Moon” to promote Volkswagens and Alana Davis’s version of the Crosby Stills and Nash song “Carry On” for the Sony.com. website.

 

Corporate sponsorship is no stranger to live music either. Ironically, the Who accepted sponsorship from Schlitz for their 1982 “farewell” tour. Fast-forward, and you’ll find stories about the Jagermeister Music Tour of modern rock and JBL’s sponsorship of the Who’s 2002 North American tour. More recently, the March 22, 2003 issue of Billboard magazine ran a cover story on Celine Dion’s $10 million deal with DaimlerChrysler and the car company’s support of her new album and her three-year engagement at Caesar’s Palace in Las Vegas. What used to be termed “selling out” no longer carries the stigma of the past. Lucrative deals struck with large corporations are viewed as shrewd business moves for the stars fortunate enough to ink them.

 

Similarly, examples of corporate sponsorship of stadiums and live-music venues in the form of “naming rights” abound. Naming-rights ventures may serve the live music industry economically by helping to defray the costs of maintaining a large facility or by underwriting jazz festivals around the world. Music fans are no longer surprised to see stadium and tour sponsorship just as sports fans are accustomed to seeing corporate sponsorship of stadiums, telecasts, and star athletes.

 

While many consumers of recorded music may feel that their access to new music is hampered by the current structure and practices of the record industry, the vibrancy of the live-music industry faces an equally serious challenge because of the consolidation of the radio and concert promotion sectors.

 

For years, the government has addressed consolidation issues through anticompetition laws that endeavor to nurture a marketplace that ensures consumer choice and promotes competition on a level playing field. Similar protections may become crucial for the success of the concert industry. With this in mind, U.S. Senator Russell Feingold of Wisconsin introduced the “Competition in Radio and Concert Industries Act,” targeting anticompetitive practices in the concert and radio industries.

 

Let me illustrate why I believe that there is a need for such legislation. Imagine a corporation that owns a radio station and a concert promotion company in the same city. Problems may arise when that corporation exerts control through its radio station to prevent other concert promoters and bands from receiving access to its airwaves in order to prevent the advertising of concerts or the playing of a particular artist’s songs. A band’s future could be in jeopardy if a national company that owns both radio stations and a concert promotion company decides to pull a band’s songs from their stations’ playlists and/or prevent advertising for their concerts booked by rival promoters. Such effects could be disastrous, and the possibility of such an occurrence is not confined to small town America. According to Senator Feingold, four companies control 80 percent of the radio market in New York.

Clear Channel Entertainment is often mentioned in discussions of consolidation and the leverage it affords a single entity. Clear Channel owns more than 1,200 radio stations in America and owns the nation’s largest concert promoter. This arrangement poses the prospect of homogenized touring and commercial radio markets, limited choices of music fans, and missed opportunities for worthy artists.

 

It is important to point out that corporate sponsorship of stadiums and live-music venues can support the needs of a local community. However, nationally controlled radio and concert promotion services have the potential for stifling the needs and cultural identities of local communities. History testifies to the importance of local culture in the evolution of music, whether it be the New Orleans sound, “cool” West Coast jazz as compared with East Coast bop, British rock music versus its American counterpart, and more recently, East Coast rap versus West Coast rap.

 

It is equally important to note that countries with small populations (relative to the population of the United States) such as Switzerland and Denmark still have culturally relevant regional songs on their charts along with those of superstars like Madonna, U2, and Bruce Springsteen. This is not meant to imply that anti-competitive concerns don’t exist in the other parts of the world. This cultural detail is important because of the interconnectivity of such facets of the music industry as concert promotion, radio play, record sales, and general advertising. This interrelation can have a significant impact on both the artist and the consumer in any regional market.

 

Those who favor the consolidation of radio and concert promotion and the leverage it provides may say that Feingold’s legislation is unnecessary because the present system helps maintain lower ticket prices. This is debatable. According to Senator Feingold, between 1996 and 2001, ticket prices rose 61 percent. Such a dramatic rise should prompt an investigation into the reasons for the increase and a look at the hardship it places on consumers and artists alike. It is perhaps not coincidental that 1996 was the year the Telecommunications Act was passed. It served to deregulate restrictions on the ownership of radio stations and do away with mandates that a certain percentage of radio stations be owned locally.

 

While many people (perhaps even some label executives) would agree that the record business is in need of an overhaul, it is important that we not overlook the health and vitality of the live music and radio sectors of the industry. The potential downside of consolidation points to the need for an open marketplace. While, in some cases, corporate support serves as a life preserver to the music industry as it temporarily flounders, in the rush to rescue various sectors of the music business let’s not forget the historic differences between corporate and artist goals. Seagulls who follow cruise ships waiting for the scraps of food tossed overboard abandon the more rigorous and instinctual endeavor of fishing for their sustenance. Before we jettison the ideals of artistic freedom and struggle that have fed American music and made it great, attention should be paid to the course of the ship we are now following.