moses supposes volume 5

[Miss NWA Whoorider]

Moses Supposes

Industry information that you can actually use

October 2001

In this special issue:

-- What Happens Next?  The Business of Music after September
11th 2001.


It has taken me some time to divorce myself from my initial
reaction to
recent events in order to think clearly about what has occurred
and how it
will effect us.  There were many moments when I was tempted to
write a
missive on the ass-whooping we should be inflicting.  But it is
my job to
have something level headed to say in the area of music
business, and it is
my philosophy that in times like this sticking to our gig is
more important
than ever, if the ties that bind our country and our economy are
to withstand
this tragedy.

The first thing I must comment on is the warmth I felt as I
watched the
telethon.  I saw more passion than any Grammy Awards show in
years. It is
interesting to note what happens when artists are performing for
something
they believe in, instead of just a slot between commercials.
(no offense to
Mr. Green intended). This is a valuable lesson, and one I hope
that labels
will take note of.  Perhaps we will see more of that sentiment
in the months
to come.  I for one believe that we will.

HISTORY

The ripple effect of large global shifts of money is never good
for the
entertainment business.  Many executives love to say that
entertainment, as
an industry, is "recession proof."  But history has proved
otherwise.  The
reason for larger production in the 1930s was the fact that the
economy had
become so depressed that labor was almost free.  This brought on
the golden
age of Hollywood.  It made for cheap product that was very
accessible to the
masses.

The economic climate of the 1930s-50s has no modern paradigm. We
have never
had a global economy, where profits are dependent on
international sales,
where there is a sub-culture of non brick and mortar avenues for
sales
willing to sell items at a loss just to keep their stock active,
where labor
costs are at an all time premium, where there is no Gold
standard to back up
our money, and finally where the enemy is not centrally located
(leaving us
with no economic enfilade).  All who think they have a definite
answer to
what will happen are probably fooling themselves.  Even
high-level analysts
are scratching their heads.

But there are a few things on which we can speculate that will
probably make
good stable datums for us to use in predicting the future or our
industry
over the next six months to a year.

PROBABILITY

I would love to be able to say that the tragedy two weeks ago
will bring with
it a rise in socially conscious decision making at the A&R level
and a
benevolent attitude on behalf of labels towards artists.  But
this would be
an oversimplification.

In the past year AOL was the undisputed leader in profits among
the Big Five
for their record division, earning about 12 cents on the dollar.
Sony was in
last place losing about 4 cents on every dollar spent.

There can be little doubt that with numbers like these the
majors will be
looking for ways to make big cuts in order to prove to their
parent companies
that they can be profitable in this unstable climate. The first
strike will
likely be a fewer number of signings and fewer releases followed
by cuts in
personnel.

Fewer signings at majors means more product released by the
indies-usually.
But I think many Indies will be suffering due to an inability to
compete.  In
times of strife people turn to mass media.  Only artists with
access to this
stage will be receiving attention.  To combat this I imagine
that many
smaller labels (who cannot afford this venue) will be looking to
trade off
their better artists to majors hungry for cheap, already
packaged talent.  If
you're on an indie, it's time to look deeply into your contract
in the GRANT
OF RIGHTS section to see what happens in the event of your small
label being
swallowed by a major.

As far as the type of acts majors will look for:  I predict
signings of
bands/artists that create uplifting, positive material.
(Brittany and others
may have to restructure their acts a bit if they want to
maintain market
share.) Bare midriffs will be out, replaced by turtle-necks or
some such
maudlin, conservative attire.

It has been a cynical time over the past three years.  It has
been a time
when we were gloating in anti-American conceit.  That time is
over.

The hard edged thrash tunes that you may have noticed on your
local version
of K-Rock will likely soften radically for a few months and
yield to more
"thoughtful" music.  Many program directors are old enough to
remember the
early 70s unity among the youth and are not in the mood to
listen to the
independent promoter's rhetoric or their "suggestions" about
what to play.
Not at least 'till the beginning of next year.  This means the
delaying of
many new releases that were counting on slipping into the new
"hard rock"
format 'till after the New Year.  If you understand the
economics of most
deals on majors you know that this means disbandment to many of
these groups
(Managers and lawyers out there, you may have grounds for
severance under
these circumstances).

If you are a writer of serious tunes now is the time to dust off
some of
those compositions that were a bit too "political" for your pop
clients.
They have renewed value.  You may also want to change the old
rusted strings
on your acoustic guitar.

In the Rap/Hip Hop genre I believe that we will be seeing a
radical drop in
anti-social themes.  Many videos will be pulled from rotation on
MTV/VH-1
etc.  I suspect that many memos about reshooting/recutting
videos that are
still in production will be dealt with this week.  Production
companies will
be asked to consider low bids to take up the slack on this.
Videos and jams
with lyrics about white oppression are probably going to lose
much of their
audience now that it seems that we, collectively as a country,
have a greater
oppressor.

For companies like Arista, J Records and other labels in flux,
this "war" is
not good news.  Even though LA Reid has slashed his staff about
as trim as it
can get, let us not forget that his label is turning into La
Face II.  This
will be fine as long as his artists are willing to create more
positive
motifs in their masters.  Something that, up till now, they have
not been
known for.  This goes for Puffy and the like.  Their talents
will be
necessary to help America heal.  I believe that this will be
what is looked
for by the upper management of the Big Five (who, let us not
forget, are all
owned--except for AOL--by foreign entities).

Finally, overhead.  Starting with personnel.  A&R departments
will be
trimmed.  Promotion departments increased. Companies will look
to slash
manufacturing costs.  This means that Internet deals will take a
sharper
front seat interest.  Companies with strong Internet pipelines
(like AOL/WEA)
will likely continue to have more options for revenue streams in
the next few
years than their competitors.

To make up the difference look out for many, many, many benefit
concerts.
Look carefully at the stipulations as to how much is going to
the cause.
Promoters have  nasty way of cashing in on our sentiments.  You
may recall
the cavalcade of benefits for AIDS and other causes in the
eighties.  Much
research has shown that less than 15% actually went towards real
501c3 (non
profit) companies.

FINAL WORD

I do not want to wrestle in politics here, but one contribution
I can make to
the strategic anthems that have been so prolific on CNN (an AOL
owned
company) will be to say just this to those that are fired up to
strike a blow
for Democracy: what has kept us in a relatively peaceful mode
since World War
II is the concept of "mutually assured destruction."  Nuke us
and we're gonna
nuke you back.  But, this falls on deaf ears when dealing with
an enemy that
does not value human life as much as we do.  The cost for our
revenge may,
therefore, be high indeed.  Think this over.  Remember what
happens to those
who live in glass houses.

See you soon.

Stay well and be safe,

Moses