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 , and an estimated 10% decline. During 1980, the sales of long- of world sales of records and tapes are illegal playing 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 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 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 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. , the longest now wholly owned by Thorn, making up a is well-established within popular music. established and probably the most profitable group with , 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 engineering combine career with the small Sun Records of an autocratic structure to compete directly and the Dutch 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 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 and in their distribution to the retain full artistic control over their work by success of Stiff recording artists like 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 -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 group whose musicians which opts out of the market smaller companies. These firms have in the multiracial musical approach has been very system altogether. These performers distri- last few years given an opportunity to popular. But manufacture and distribution of bute their recorded work by transcribing it virtually all the new artists in popular music is handled by a medium-sized free of charge or very cheaply onto blank to have achieved success. In comparison, the establishment company, Chrysalis, which in cassette tapes sent in by listeners. large companies have been unable or un- turn has a contract with the giant Polygram to willing to sign many of the newer musicians have its discs pressed and delivered to the and to market their work. However, shops. RESPONSES TO THE CRISIS although they have been outflanked by the It is important, therefore, not to overesti- Apart from cutbacks and mergers which new, small companies in the discovery of mate the impact of the new companies on the accept their reduced position in the market, original music, the multinationals have in overall control of the record industry the major record companies have responded some cases bought up the contracts of the exercised by the multinationals. Nevertheless to the crisis in the industry in three main 'new wave' musicians once their recordings there are now two independently operated ways: an attempt to 'tax' home taping, the released by the small companies had begun to national distribution systems for records resort to various methods of controlling the sell. Thus, the Leeds-based Gang Of Four, from small companies, and these companies market which are illicit if not illegal, and Marxism Today July 1981 21 investment in video technology which many record industry are hoping that, as in the obligation along the lines of the French law hope will produce a consumer boom in the past, a technological innovation will stimu- on distribution of periodicals. Under this entertainment industries. late new business and profits. The intro- scheme, all publishers have the legal right for Having rejected the option of a full duction of stereo recording in the 1950s their magazines or newspapers to be on implementation of the law against home- entailed a vigorous growth not only in record display in any town or village they request. taping (which on their figures might involve sales but in the 'hardware' of new stereo- Newsagents are obliged by law to stock publi- taking up to a million people to court), the grams and other playing systems. Now, the cations on this basis. The result is that left- industry next put its faith in research into an expectation is that as video players and wing journals are available almost electronic signal which would produce inter- recorders go into mass production and fall in everywhere in France, without any censor- ference on tape copies of commercially sold price, a new mass market will open up to ship or refusals from the major chains of recordings. But this has proved impractical, eclipse the faltering disc market. At present, newsagents or wholesalers. not least because in principle any such signal however, video is generally seen as a visual The Campaign For Press Freedom has could be 'unscrambled' by another electronic equivalent to the tape recorder, a machine to already begun to agitate for a similar system device. Once again, the logic of new tech- to be introduced in this country, and its nologies contradicts the forms of private extension to recorded music would make property upon which the record companies offers an unprecedented available a much wider range of music in are based. Finally, the companies have opportunity for the many smaller towns. In this sense, the music settled on a solution borrowed from West industry is one where socialists should be . Instead of stamping out home dominance of the encouraging greater and more fair com- taping, they are proposing to tax it by the multinationals to be petition, so that all types of music can get an imposition of a levy on each tape recorded or undermined opportunity to reach a wide listenership. blank tape (or both) sold. The monies so Some proper public supervision of, and raised would be returned by the government make recordings from television rather than sanctions against, unfair practices in the to the copyright holders in the music for playing original, pre-recorded videotapes. record industry would be another aspect of industry: the composers, performers, music While this emphasis remains, the growth of this policy. publishers and record companies. At pres- video use will produce another and greater ent, the industry is lobbying the government problem of home-taping. The position of musicians to introduce such a levy. Finally, a socialist strategy for the music SOCIALIST STRATEGY FOR industry should strengthen the position of Manipulation THE RECORD INDUSTRY musicians in relation to the other organisa- The fight to hold onto a share of a declining tions in the industry, notably the record record market has led to an intensification of In the past, the Left has tended to ignore the companies and music publishers. It needs to various practices designed to manipulate the organisation of music in Britain, even when be remembered that in the home taping sales pattern of records and tapes. These engaged in vigorous debate about its content. controversy, many musicians at present find primarily revolve around the pivotal role of Similarly, the music industry has never themselves lined up with the record the best-selling lists of single records pub- figured in either policy discussions on the arts companies, asking for extra remuneration for lished weekly by the BBC and the British or on industry in general. But the current their work. The dilemma such a strategy Market Research Bureau. Most pro- crisis shows that there is need to prepare would need to resolve is the clash between the grammers and record shop managers use policies given that the initial principle of any working musician's right to a proper wage these lists as a guide to what to broadcast or socialist strategy should be to maximise the through royalties from the copies of his work what to order. Since they are compiled from a opportunities and the participation of both sold, and the need to make music fully access- small sample of record shops and this list is musicians and audiences, while working to ible throughout the community. One generally available within the record limit the control of the multinationals over alternative to the industry's levy system industry, it has been possible for un- musical communication as a whole. might be a variation on the Public Lending scrupulous record company representatives In this perspective, the traditional solution Right system of payment to authors for books to organise selective purchases of records to of public ownership of existing firms through borrowed from public libraries: a sum of get them a place in the Top 50 lists, or even to nationalisation may well create more prob- money provided by the government to be persuade record shop assistants to falsify the lems than it solves. In common with other distributed annually primarily to composers returns upon which the best-selling lists are media and culture industries, music, as and performers, in a manner similar to the based. currently organised, suffers from a lack of sharing out of fees received from the BBC and A series of newspaper and television access to significant audiences for a large commercial radio stations for the right to revelations in the last few years has exposed number of performers, who consequently broadcast music. the remarkable degree of sharp practice suffer from chronically low pay. For recorded During the boom years of the record within the larger record companies: this is music, this raises the issue of the control of industry, any radical alternatives for its one area in which the small labels do not have both manufacturing and distribution by the organisation inevitably seemed Utopian. But the resources to compete. As a result, the big companies. In particular, the provision of the present structural crisis affecting all the trade association, the BPI, has made feeble publicly owned record pressing facilities large, established companies offers an un- attempts to police its members, but since one available to small record labels and individual precedented opportunity for the dominance of those accused of involvement in illicit musicians would be a valuable innovation. of the multinationals to be undermined, and practices has been its own former chairman, Similarly, some assistance in combating the for a strengthening of the position of the this is rather like asking Rupert Murdoch to distribution monopoly of the multinationals, multiplicity of smaller record labels which run the Press Council. is necessary, either in financial assistance to will enable the widest possible range of music Finally, many individuals within the alternative distributors or in some statutory to receive a hearing.