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Labels and musicians not dying by digital music
Posted March 13, 2006

Stephanie Duarte
Arts Editor

In today’s information age – when anything and everything can be Googled on the Internet – musicians are among those who have encountered both the benefits and challenges of this high tech phenomenon. 

While some may view the growth of online music as detrimental to the music world, musicians and experts see the changes as a new opportunity for growth.

Michael Ryan, a professional musician and guitar teacher at the University of La Verne, said he now makes additional income every month “without doing a thing.”

Every time one of his songs is downloaded online or played on a radio station, Ryan sees this profit in his bank account.  He also derives money from selling his CDs online. 

One of his CDs, “Romance,” has caught particular attention in the online world.  Because of its title, users can search for romantic music and find his CD.  For a time, he was also paying for online advertising, so web surfers would encounter his CD while looking for romantic music.  This process makes it easy for listeners to find the music they need, and it gives Ryan the global exposure he might never have without the Internet. 

Ryan did not need a label to make his music available on the Internet.  He has access to online music stores such as iTunes, Rhapsody and others through an online service, CDBaby.com, designed specifically to help artists like Ryan. 

Derek Silvers, president and programmer of CD Baby, said the main difference between his service and a label is that CD Baby does not own the artists’ music.

“Not many people know this,” Silvers said, “but when an artist signs a record deal, it’s like giving a child up for adoption.  Their music is not theirs anymore.  It now belongs to the record label.  If the artist wants a copy of their own CD, they have to buy it from the label.”

Control issues are the main frustration when working with labels.

“They usually have full control of your music and what they will release,” Ryan said in an e-mail.  “This becomes very frustrating to the artists if the label decides not to spend much on promotions. Or the artists wants to explore new styles and the label does let them.”

When researching the signing process, Ryan found a label that offered him a decent deal on the condition that he would record five CDs full of cover-songs first.  Ryan only wanted to record his original music, so he denied the offer and eventually decided to form his own independent label, Villa Loba Music.

The process of putting one’s music online is somewhat complicated.  For Ryan, it’s much easier to go through a service like CD Baby that does not charge him any more than the $25 membership fee to post his music.  CD Baby keeps nine percent of the profits after the online distribution services take their share.

With services like CD Baby, virtually anyone can expose music to the World Wide Web. 

Bill Werde, senior news editor of Billboard magazine, said this increase in music choice is a new obstacle for the consumer and the record industry.

“It’s more important than ever for the middle men to provide filters,” Werde said.  “One filter being the media, or music magazines like the Rolling Stones.  Other filters are the labels, whether major or Indie.”

Werde said that media such as music magazines let the music consumer know which albums are available and which are worth hearing. 

In the past, labels have been the sole gatekeepers of the music industry.  Making or breaking an artist’s career was the ability to get signed by a label, who would then record the artist, produce the CDs, distribute the music, promote the artist, and finally take a large portion of the profits.  Promotions include everything from commercials to paying radio stations to play the artist’s songs. 

The ease of online music distribution and the growth of the online music industry may push labels to a less prominent role in the future, but most think differently.

In addition to artists, labels are also taking advantage of the cost-efficient benefits of online shopping and distributing, according to a report by Patrick Burkhart published in Popular Music and Society in October.  Labels save money by selling music online because the distribution process is entirely electronic.  There is no risk of product damage, and the music is always available and never over-stocked. 

These savings are especially important to labels in light of the staggering  in-store sales since the breakout of illegal downloading.  More than ever, consumers are going online to buy their music.  Nielsen SoundScan reported that in 2001 Internet album sales, tangible albums sold on e-commerce sites such as Amazon, totaled 16.6 million.  Last year, these sales increased to 24.7 million, an increase of 46.2 percent.

“It seems like so many things like buying books, videos and music- most people are doing online now,” said Mike Laponis, ULV communications professor and adviser to KULV radio station.

Laponis added that for many years he had rarely gone into music stores.

“But with online music stores, and I happen to use iTunes, I’ve bought way more because of the convenience factor and its affordability,” Laponis said. 

Online music stores charging around 99 cents for a song have reintroduced the idea of the single. 

“Downloading single songs are for the people who aren’t serious fans,” said Taylor Kingsbury, former floor manager of Rhino Records in Claremont and ULV alumnus.  “They don’t care about the rest of the CD, they just want the one song that they like.  It’s an impulse buy.”

And, indeed, 99 cents seems to be a magic phrase.  From 2004, the number of single tracks downloaded online increased 150 percent.

“I think it’s a bargain to get a song that someone’s written and someone’s performed,” Laponis said.  “And it’s available to me for only 99 cents.  Legally.”

The 99 cents craze was not exactly what the music industry had hoped for.

“They resisted for a long time, but they couldn’t get away with not having online music (distribution) as a music source,” said Brian Garrity, business editor for Billboard magazine.  “They needed a competitive solution to illegal downloading.”

With sites like iTunes, consumers are not forced to buy a whole CD. 

“The biggest fear of the record companies is that everyone is buying the 99 cent downloads,” Garrity said.

Now, online retailers are starting to promote packages.  Free digital cover art or the CD’s lyrics are popular incentives for downloading an entire CD. 

Still, the negative effects of online music through legal and illegal downloading cannot be ignored.  Lately, and especially since the 1998 Napster case, the music industry has seen a sharp decline in record stores such as the Wherehouse, Sam Goody, Suncoast Motion Picture Company and other retailers.  Some stores have become mainly online retailers.  Many reasons contribute to the fall of record stores, but mainly, the stores are not creating enough revenue to remain open. 

As of February, Musicland Holding Corp., which owns online and retail music stores such as Sam Goody and Suncoast, announced the closing of 341 stores as part of its voluntary chapter 11 bankruptcy procedure.  Affected stores that were not meeting their sales goals included the Sam Goody store in Pasadena and the Suncoast stores in West Covina and Montclair. 

Music retailers such as Best Buy and Wal-Mart have other products to make up lost revenue, which allow them to stay open with fairly reasonable prices for consumers.  Stores like Sam Goody and Suncoast face more challenges because they mostly operate in malls and pay higher operating fees. 

CD sales at stores like Wal-Mart, Target and Best Buy are not the best for the health of the entire music industry because of the limited music selection.

Werde said that when customers go to these retail stores to only purchase the blockbuster CDs, they are not finding the other lesser-known CDs due to the store’s limited selection.

Kingsbury believes this is not the only reason music-only retailers are not surviving.

“They’re not good record stores,” Kingsbury said of stores that sell more than just music.  “Stores like Rhino and Amoeba are staffed by people who know the music.  I can ask anyone in there about the most obscure album and there will be someone in that store that probably loves the CD and has it in their personal collection.”

Kingsbury said that record stores do not make a great deal of money and their workers do not get paid nearly what they deserve for the amount of knowledge they posses about the music.

“They’re there because they love the art,” he said.

Despite the quality of music stores such as Rhino Records and Amoeba, these stores, too, have not escaped the falling music sales of recent years.  The biggest local upset lately was when Rhino Records in Westwood announced its closure in January. 

Despite many music retail stores going out of business, music fans and experts remain optimistic for the growth of the music industry and labels.  As in the past, every time technology advances, the industry changes. 

“Way too many people think that online music industry is growing faster than it really is,” Werde said.  “The reality is that only 50- 60 percent of Americans have broadband connections, which means that about only half even have the opportunity to download.” 

Kingsbury referenced the outbreak of CDs in the 1990s. 

“Everyone thought the LP (record) was going to go away, but it didn’t,” Kingsbury said.

Kingsbury said that he knows many music-lovers, including himself, who would rather buy an LP than a CD.  Music, before the digital era, was only available on the analog format.  Many argue that the LP is still the best way to hear music because of its warmer quality.

“And the artwork is obviously more striking on an LP jacket (than a smaller CD jacket),” Kingsbury added.  “At my house I have maybe 1500 CDs, but I also have 1000 vinyls.  It’s unique.”

Artists today, such as Beck, are still releasing albums on vinyl.  DJs still rely on this format for spinning and mixing discs.

“You will see an increases in choices,” Garrity said.  “CDs won’t dominate like they used to.  In the mid 90s, there were a variety of formats: tapes, LPs, CDs.  We’re going back in that direction.”

Increases in online music selection and the rapid growth of technology will continue to keep the music industry on its toes.

“They are going to need to recook all their business models so they can maintain the size of the music industry and ultimately grow from there,” Garrity said.

Stephanie Duarte can be reached at duartes@ulv.edu