The Music Industry in Crisis
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Marxism Today July 1981 19 Dave Laing The Music Industry in Crisis Music, in the form of records and cassette new or revived styles of popular music, each the general availability of recording equip- tapes, is a major part of the entertainment with a considerable following. The problems ment in two ways: counterfeiting and home industry. But the music industry, like the of the record industry are due in large part to taping. As the term suggests, counterfeiting rest of the British economy, has suffered its lack of success in capturing this new is the illegal copying and manufacture of from the effects of the current recession. audience for music, either because it hasn't records and tapes, which are then sold as if After a long period of uninterrupted growth offered them the music they want, or because they were the real thing. Counterfeiting has during the 1960s and 1970s, sales are now in the price of records is too high. become big business, and an estimated 10% decline. During 1980, the sales of long- of world sales of records and tapes are illegal playing albums had dropped back to the 1972 The attack copies. The main centres of production are in level. The attack on the British record industry's the Far East, although one illicit record pres- The profitability of the big multinational control of its home market has come from sing plant has been discovered in Britain. companies which dominate the recording three directions: cheap imports, the mass The record industry in Britain regards industry has also been hit. In 1970, the largest production of recording equipment (cassette counterfeiting as less of a threat to its interests British owned record company — EMI — recorders), and competition from a growing than home taping. This is the widespread had pre-tax profits from its music division of number of small record companies special- practice of borrowing records from friends to £16.4 million, representing 12.7% of its sales. ising in the new 'post-punk' music. copy them onto blank tapes, and therefore By 1979, however, profits had fallen to only The dumping of imported records in saving the cost of buying them. It is obviously £1.9 million, a minute 0.4% of sales. The Britain is a side-effect of membership of the difficult to calculate the amount of home response of the industry to declining sales has EEC. The 'free trade' provisions of the taping which takes place, but the record been the familiar one of redundancies and Treaty of Rome allow discs manufactured in companies' own trade association, the British mergers. EMI itself has ceased manufacture Common Market countries to be sold in Phonographic Institute (BPI) claims that its of blank tape at its Hayes factory, with the Britain. These records are usually surplus lost sales through home taping amount to loss of over 200 jobs, and the American firm stocks of albums by artists who are not as over £1 million a day. If correct, this would RCA has shut its record pressing plant in the popular in Europe as in Britain, and they equal the industry's total income per day high unemployment area of Washington, therefore can be bought by British whole- during 1980. County Durham. Meanwhile, the Decca salers at extremely cheap rates, to be sold over Home taping is in fact technically illegal company has been taken over by the Dutch- the counter at up to 20% less than copies of under the Copyright Act of 1956, unless the German multinational Polygram and EMI the same recording pressed in this country. consent of the owner of the copyright in the itself was bought by Thorn Electrical. And, One recent estimate suggested that 30% of recording is obtained. The situation is at the time of writing, Lord Grade's the British market had now been taken by broadly similar to that of the photocopying of Associated Communications Company had cheap imports from the EEC. printed material, and as difficult to control. put up for sale its record and tape subsidiary, The record industry has felt the effects of Both are instances of the exploitation of new formerly known as Pye Records. technologies by one branch of capitalist in- Although the crisis in the music industry dustry undermining both the market and the takes the form of falling sales of records, there the British Phonographic private property rights of another. Thus, the is little evidence of a drop in demand for Institute claims that its growth of the manufacturers of cheap tape music in Britain. In fact, interest in music recorders and blank cassette tapes inevitably and involvement with it has grown in the last lost sales through home means a contraction for the record and pre- five years, especially among young people. taping amount to over recorded tape companies. Ironically, some of The much-publicised arrival of punk rock in the multinationals, like EMI and Polygram, 1976-7 has been followed by a proliferation of £1 million a day are involved in both sides of the battle. 20 July 1981 Marxism Today New small companies have greatly widened the access to recording The challenge to the established record A series of newspaper and for large numbers of young musicians. A industry from new, small companies is number of them also are organised on a co- perhaps the most unexpected of the factors television revelations in the operative basis, enabling the musicians contributing to its current crisis, since, in last few years have exposed themselves to determine policy and to make common with other industries, it has steadily the remarkable degree of key decisions. In Manchester and Burnley, developed in a monopolistic direction in for example, existing musicians co-operatives recent years. The majority of recordings sold sharp practice within the set up to pool resources and to promote live throughout the world emanate from just four larger record companies concerts have branched out into the making massive companies and their local affiliates. of records. The Burnley co-op founded a Two of these multinationals are American whose lyrics are Marxist-inclined, first record label named Snotty Snail and among (CBS and WEA) and two are European (EMI recorded for the small Fast Product com- its first recordings was the amusing 'I'm In and Polygram). Each is part of a larger con- pany. Soon afterwards they were offered a Love With Margaret Thatcher' by a group glomerate operating in other industries. CBS recording contract by EMI, which they calling itself the Not Sensibles. has interests in broadcasting, publishing and accepted. To some degree, then, the role of But as well as those run on co-operative musical instruments, while WEA is part of small companies has not undermined the key lines, many of the small record companies Warner Communications with film and pub- role of the multinationals in the record have a classic 'entrepreneurial' structure, lishing interests, which in turn is owned by industry. In this respect, they have rather looking very much like the kind of small the Kinney Corporation, America's largest acted an an unofficial 'research and develop- business idolised by members of the present car park and funeral parlour chain. EMI is ment' arm of the industry, in a manner which Tory government. Stiff Records, the longest now wholly owned by Thorn, making up a is well-established within popular music. established and probably the most profitable group with radar, television and electronics Probably the most successful popular singer of all small record companies, was the brain- divisions. Finally, Polygram is owned jointly ever, Elvis Presley, began his recording child of two energetic individuals who set up by the German Siemens engineering combine career with the small Sun Records of an autocratic structure to compete directly and the Dutch Philips electrical group. Memphis. Once the Sun recordings had es- for markets with the multinationals. By the The dominance of the big four multi- tablished the novelty of his style and his last quarter of 1980 they had gained 4.7% of nationals is due primarily to the 'vertical potential, Presley's contract was bought by the market for 45 rpm single records, com- integration' of their activities in the record the multinational RCA. pared with only 10.7% for the giant EMI. But industry. That is, they operate in every even Stiff has a manufacturing and distri- aspect of the industry, in the making of the Multinationals still ascendant bution agreement with CBS, giving that original studio recording, in the manufacture Even in those cases where the new musicians multinational a percentage profit from the of the records and in their distribution to the retain full artistic control over their work by success of Stiff recording artists like Ian Dury shops. The vast majority of smaller com- remaining with the small companies, these and Madness. panies in the industry are dependent on the companies frequently rely on the multi- The character of these new record big four, and, in Britain, RCA and Pye, for nationals for the manufacture and companies (which number well over 100) either pressing discs or distribution or both. distribution of their records and tapes. The stretches from the Stiff entrepreneurial style It is in one aspect only, the making of Coventry-based 2 Tone company is one of the through the co-operatives to a new form of original recordings, that the multinationals best known and progressive of the new record recorded music adopted by some young are under serious challenge from new, labels, initiated by The Specials group whose musicians which opts out of the market smaller companies.