The world became a much smaller place in the last ten years. For the first time in history, humankind became truly interconnected through technology. During the noughties, the information superhighway became a cast-iron reality, mobile phones now outnumber people and cheap flights have enabled most to travel and explore. The history books will record a period of great technological advancement, set within a climate of fear. Terrorism struck at the hearts of the global community, turning the world into a smaller, frightened place.
The same historical tomes will also recall a period of extraordinary upheaval for the music business. No industry on the planet took more punishment in the past ten years than the recorded music sector. The world keeps spinning, but many fewer CDs continue to do so. Technology brought music to the masses like never before. Music now comes at you through video games, and TV commercials. But it was technology – and the unprepared nature of the music industry – which nearly stopped the music in its tracks.
For a while there, the record industry and its music retail partners were staring into the abyss. The live music sector, however, found itself staring at a goldmine. And performance rights income is a gem. The lessons learned from the past decade will absolutely shape the future of music.
Napster, Apple and the digital revolution
Napster changed the world. Shawn Fanning’s peer-to-peer file-sharing software was the Genie. Once let out of the bottle, that Genie could never be put back in. Only the music industry didn’t quite figure that out until very late in the game. Possibly too late.
Napster’s iconic cyber-cat logo arrived on desktops around the world at the turn of the Millennium. Early Napster users were part of a “cult,” its members quietly going about their shady business. When the music industry clocked onto Napster and how its users were disseminating music files across the wires, the response was brutal. Unable – or unwilling — to learn from Napster and turn its network into a legitimate business model, the music giants cut it down in the courts. In 2001, Napster was ordered to pay out tens of millions to the recording giants. By the time Napster was acquired the following year by digital media firm Roxio and its brand revived as a “legitimate” business (Napster is now owned by US retailer Best Buy), music fans had moved on. With the head of Napster seared away, many new—and more sophisticated – P2P technologies would sprout up in its stead. Legislation simply couldn’t keep up. In 2009, the industry had a chief new adversary in The Pirate Bay, a Swedish bittorrent tracker.
The Genie was well and truly out of its bottle. P2P software was enabling ordinary music fans around the globe to create their own mischief. Again, the music industry responded with a heavy hand. The majors trialled the widely derided – and short-lived — procedure of installing copyright-protection on its CDs. Then there was litigation. Led by the Recording Industry Association of America, recorded music industry bodies entered an unpopular and bloody crusade with individual file-sharers. In 2003, the music industry had launched waves of litigation aimed at its own fans. The media had a field day, as the industry sued single mothers, children, and even dead people. The industry created its own PR nightmare. By Christmas 2008, the music industry had abandoned mass lawsuits. By that time, the RIAA alone had filed 35,000 lawsuits.
Enter the cavalry. The white knight came from an almost obvious source — the hardware world. In 2003, Steve Jobs’ Apple Computers launched its iTunes Music Store in the United States. Soon after, the online music store arrived in Europe and elsewhere. iTunes quickly proved to be an easy-to-use music download destination, and ultimately an attractive alternative to “free”. And the iTunes jukebox made a perfect virtual home for consumers’ CD collections. The future, it seemed, had finally arrived.
A handful of years earlier, Napster had operated as a cult on the fringes of the music scene. Jobs set about building his own music industry-approved cult. Members were easy to spot – they all had white headphones dangling from their ears. For all the play and hype of the iTunes music service, Jobs had overseen the creation of perhaps the single most sought-after gadget in history, the iPod. In the 1980s, Sony Corp’s Walkman allowed music fans to take their tunes on the road. Apple Computer’s invention in the noughties allowed consumers to carry their entire music collection – and later photos albums and even movies — in their pocket. Sony Corp. missed the boat, big time.
Where the music industry would applaud the small change it stood to gain from each download sale, Apple Computer raked in hundreds of dollars for each iPod unit sold. By the end of the decade, Apple had sold more than 220 million iPods and more than 6 billion downloads. Jobs, the cunning businessman, has never been accused of being a philanthropist to the music industry. Still, the iTunes model proved that web surfers would pay for music, and by the end of the decade consumers had the choice of more than 300 legitimate digital music offerings. Apple trumped the pack again in 2007 with the launch of its iPhone, a compact multi-media workstation that united the iPod with an Internet-wired 3G handset. The future of music, declared Apple, was mobile.
A myriad of digital music products tested the market during the noughties, few with resounding success. By the end of the decade, Australians had yet to embrace music-to-mobile downloads quite like tech-savvy markets such as Japan and South Korea, but the signs would suggest a range of digital music offerings could find a niche. Nokia’s Comes With Music prototype – a mobile which literally comes with a library comprising millions of licensed tunes – enjoyed a solid start following its 2009 launch in Australia, but the jury is still out on ad-generated music services.
With the rogue element of downloading and CD-burning still a hot issue, industry prognosticators can’t agree on a timescale for a return to growth — the point when digital music sales would make up for the fall in CD sales. By decade’s end, the first signs of light could be seen on the horizon. Australia led the way in the first half of 2009, generated slight growth – just 0.4% — after another strong period of digital music sales outpaced the decline in physical sound carriers. Whether it was a false dawn, only time will tell.
Majors: And then there were four.
Piracy is a wrench, and nowhere has the pain of file-sharing and CD-burning been felt quite like within halls of the major music companies. The majors account for an estimated 90% share of global record sales, according to international labels trade body the IFPI. In 2000, the global recorded business was coming off a peak, but managed to generate $36.9 billion in sales. By 2008, the same business was worth just $18.4 billion. In an effort to survive lean times, the majors slashed their rosters and workforce through the noughties, and pursued cost-savings through mergers. Six majors became five in 1998 when Universal Music Group merged with Polygram. Five became four when Sony and BMG amalgamated in 2004. Were it not for the bitter opposition of the independent label community and resistance from regulatory watchdogs, the bulk of the global record industry would now lie in the hands of just three majors companies. Many predict the next decade will see further consolidation.
For the majors, the harsh reality of survival in the noughties boiled down to evolution or extinction. Universal Music Group, the world’s market leading recording company, made the shrewdest gamble when it bought bankrupted independent British music Sanctuary Group and its so-called “360-degree” business empire in 2007 for £44.5 million ($80 million). In one manoeuvre, UMG gained a grip on the merchandise and live music sector through Sanctuary’s merch arm Bravado and its artist management and live agency businesses.
UMG’s audacious acquisition set the tone for other recording giants to follow, as its rivals scrambled to establish footholds in the cash-rich live sector. By the end of the decade, the term “record company” was on the verge of extinction. Moving forward, the record companies of the future would be known as “music companies.”
Before the noughties, DIY was a catchphrase which best described the activities of Bunnings regulars. Do-It-Yourself has since become the catch-cry of independent musicians the world over, intent on making a mark with the tools at hand. At its most meagre, the DIY equipment of choice is now the laptop, 3G mobile handset and broadband Internet connection. In theory, the Internet has created an egalitarian society, one that links artists by means of a direct channel to music fans. Extracting money from those fans remains the most challenging part. To date, genuine DIY success stories are few and far between. Britain’s Enter Shikari became a martyr in 2007 when the nu-rave newcomers entered the Official UK Albums chart at No. 4 with Take It To The Skies, released through its own imprint, Ambush Reality.
The most thrilling DIY tales have been those where the artist created the buzz, and a record company took it to the next level. No-one utterly nailed it quite like the Arctic Monkeys. The alternative rock outfit from northern England’s former steel city Sheffield spread the word by the stage, and by the net. The band distributed CD-Rs of their demos as they gigged their way across the country. Fans did all the rest and a record company feeding-frenzy ensued. When Domino Records released the band’s debut Whatever People Say I Am, That’s What I’m Not in January 2007, fans gobbled up 363,735 copies – 108,000 on day-one alone — making it the-then best-selling debut in UK history.
But it was an established band, Radiohead, which gave the now-digitized music community its road to Damascus moment. Out of contract after moving on from an illustrious career with EMI, the British critics’ darlings gave DIY new meaning with the release of their seventh studio album In Rainbows. In 2007, Radiohead invited fans to download the album and pay whatever they felt was fair and just. In exchange for their charity, Radiohead collected particulars from each downloader. A fair swap, many would say. Radiohead knew exactly who their fans were, and they could now target their communications. Fans received an instant classic for free, or thereabouts. Hundreds of thousands of fans who downloaded In Rainbows, we later learned, paid on average about £5 ($9) for the album. Radiohead also made a small fortune selling an estimated 100,000 boxed sets. The experiment had more surprises to come. In Rainbows became an international best seller when it later received a conventional international release.
The “pay what you want” album experiment has been tried and tested by a handful of established bands, Nine Inch Nails among them. But it remains something of a one-trick pony. No newcomer has become a superstar off the back of a similar scheme. However, DIY is not about making millions. In Rainbows showed the artist community that music lovers could be enticed into swapping valuable contact details in exchange for a download. Artists could in fact take control while giving away their content. And for that, In Rainbows changed the landscape of DIY forever.
The comeback trail
The noughties will be remembered as much for the new wave of superstars as for the unlikely return of former giants. With royalties from record sales dwindling, legends from the past buried the hatchet in their droves and hit the road for one final pay check. As every year passed, another batch of greats would reform. The term “sell-out” just didn’t seem to apply anymore. And that’s because literally everyone was doing it, from every era imaginable.
The Police, the Spice Girls, Van Halen (with David Lee Roth on vocals), Genesis, Cream, Take That, New Kids on the Block, the Sex Pistols and countless others hit the comeback trail in the noughties. Some utterly unthinkable reunions occurred in that time. Pink Floyd reformed briefly to play Bob Geldof’s extraordinary Live 8 event at Hyde Park in mid-2005, and Led Zeppelin did the unimaginable when the rock titans paid homage to the late Atlantic Records founder Ahmet Ertegun with a one-off reunion at London’s O2 in November 2007. It seems only the Beatles, Abba and the Smiths didn’t get together for one last pay check during the noughties.
Some acts just never went away. The Rolling Stones, U2 and Madonna embarked on tours in the noughties, which set the bar at new heights. However, not all comebacks were meant to be. Under the guise of Guns N’ Roses, Axl Rose finally released in November 2008 what was billed as his grand opus, Chinese Democracy. His fans had waited 15 years for a new GNR album. Apparently not enough of them stuck it out. The album stiffed.
Concerts are the new black
At some time during the noughties, the record industry and live sector crossed paths. And something strange happened. Where once tours were the vehicle to promote albums, the flipside has become the norm. Artists nowadays see albums as a vehicle to promote their live shows. The value is now extracted from the concert ticket, where the CD has become the promotional tool. Again, Napster played its part in this role reversal. At the dawn of P2P, artists a few rungs down the foodchain realized file-sharing platforms could help lift their wares into the public consciousness, if only their tunes could compete with all the noise. Music can be copied, tracks can be stolen. It’s not so easy to purloin a concert.
No tour in history came any bigger than the Rolling Stones’ A Bigger Bang tour. Mick Jagger and his evergreen cohorts hit the road in August 2005 for a mammoth two-year, 147-date trek, which scooped more than US$558 million, according to giant promoter Live Nation. The Rolling Stones, it seems, never gather moss. One memorable free concert on Rio de Janeiro’s Copacabana Beach drew an estimated 2 million spectators.
Madonna later set her own record. The pop veteran’s 85-date Sticky & Sweet tour spent more than a year on the road. When the show ground to a halt in September 2009, box office receipts stood at US$408 million, good enough for No. 2 on the list of all-time highest grossing tours – and easily the best by a solo artist or a female performer. Records, as they say, are meant to be broken. Expect a bigger bang from live music in the decade to come.
The noughties ushered in its share of new headliners, stadium-fillers and best-sellers. Coldplay, Kanye West, Arctic Monkeys and Amy Winehouse were all anonymous prior to the year 2000. Now each is a bona-fide big wheel.
The revolving door swung both ways. Two elite members of music royalty departed in the noughties. The world lost a Beatle, George Harrison, who succumbed to lung cancer in November 2001. And the King of Pop, Michael Jackson, passed away in 2009 when his heart stopped from a sedation overdose. Jackson left this world in a blaze of controversy not unlike that which had ruled his entire adult life.
Other music figures who met their maker in the noughties include Ray Charles, Barry White, Johnny Cash and James Brown. Closer to home, obituaries went out for Crowded House drummer Paul Hester, and Paul Turner, longtime chairman of ARIA and the first chairman of what is now Warner Music Australia.
Some things in life and music never change. In 2000, one of the year’s best seller’s was the Beatles “1” compilation, selling more than 31 million units. In 2009, EMI remastered and released the Beatles catalogue. Demand was both spectacular and predicable. Just three months after the September reissue, more than 17 million units have sold worldwide. The Beatles’ catalogue remains the highest-profile holdout on the iTunes music store and other digital download services. As the world matured and moved out of the noughties, the Beatles are still one of the hottest acts on the planet.
Events Which Shaped The World In The Noughties
The iPod: If you didn’t own an iPod in the noughties, you weren’t there. The iPod brand became as ubiquitous as McDonald’s and Coca-Cola, and everyone was plugged in – from the US President down. Music on the go took on new meaning when Apple Computer fused its iPod with a mobile phone to create its iPhone. It was history in the making.
Michael Jackson Dies: In 2009, Michael Jackson joined Elvis and John Lennon as music’s most important figures that died well before their time. Jackson’s time came on June 25th when he was administered a sedative overdose. A fortnight later, Jackson was to have embarked on a 50-date comeback residency at London’s O2 Arena.
DRM: When Sony BMG slipped hidden, insecure “spyware” software on its CDs in 2005, the music industry’s battle against piracy had plumbed new depths. Consumers were furious, and rightly so. The copy-protection debate rumbled on. By 2009, the DRM debate was dead.
Live 8: This time Bob Geldof didn’t want to feed the world. He wanted to connect it. The greatest artists on the planet took the stage on July 2nd, 2005, for a live music extravaganza like never before. Unlike Live Aid in 1985, the Internet carried the broadcast to hundreds of millions around the world. Ten concerts later, world leaders had pledged to double the aid to Africa.