Creativity and Innovation in the Music Industry Peter Tschmuck Creativity and Innovation in the Music Industry Second Edition 123 Peter Tschmuck Universität für Musik und darstellende Kunst Wien Inst. Kulturmanagement Karlsplatz 2/2/9 1010 Vienna Austria ISBN 978-3-642-28429-8 e-ISBN 978-3-642-28430-4 DOI 10.1007/978-3-642-28430-4 Springer Heidelberg New York Dordrecht London Library of Congress Control Number: 2012932958 Ó Springer-Verlag Berlin Heidelberg 2012 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. 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While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid free paper Springer is part of Springer Science+Business Media (www.springer.com) Preface When my Habilitation (the tenure research document for my professorship) was published for the first time by StudienVerlag in 2003, I did not expect that a scientific study such as this would reach such a large readership in the German- speaking world. However, public discussion at that time was coincidentally focused on the structural break within the music industry, culminating in a con- troversial debate about the causes and consequences of that revolution. While I did not intend to address the current discussion regarding the development of the music industry, it nonetheless appeared to be the right time to publish such a book. Timing, in other words, matters! The unexpected acceptance of my book by the Austrian and German readership inspired me to consider publishing it in English as well. The book provides an explanation for the emergence of innovation and creativity in the music industry by retelling and interpreting its history, from Thomas Alva Edison’s invention of the phonograph in 1877 to the latest innovations such as MP3-files and iPods. The global nature of this history causes me to believe that this book is going to be of interest to an international readership as well. My hope is that this translation will be received with the same level of warmth and generosity that the publication of the German original enjoyed. Preface of the Second Edition When my book initially was published in 2006, the music industry was in the midst of the digital revolution and it was not visible then what changes would occur. However, after 5 years the overall picture became clearer. Thus, I reworked Chap. 9 in order to include all the developments that shaped the music industry in the first decade of the twenty-first century—from Napster to cloud-based music services and even beyond. I hope that my book still finds a broad readership and will be warmly welcomed as the first edition. v Acknowledgments Although the book cover identifies me as the sole author, this book would not exist in its present form without its translator, Marco Abel, who also edited the updated parts of the second edition. I would like to thank him for his engaging translation of the German original; his labor gave rebirth to my work in a faithful, yet stylistically autonomous manner. I hope that we will have the opportunity to collaborate on many more projects in the future. I would also like to thank Jennifer Wijangco, who invested so much time in her thorough editing of the book. With the help of her precise and reliable proofreading abilities, she put the finishing touch on the text. Since a translation of a book is very costly, this project would not have been possible without Springer’s financial and moral support of the translation process. I would like to extend my sincere gratitude to Cathelijne van Herwaarden for believing in this project from the start and for promoting it, and I wish to thank Herma Drees for her assistance in the preparation of the manuscript of the first edition and Irene Barrios-Kezic of the second edition. In addition, I greatly appreciate the Austrian Ministry of Education, Science, and Culture’s generous support of the translation in order to make my book available to an international readership. Last but not least, I would like to thank all my colleagues, students, and friends for helpful feedback and comments on the German version of the book entitled ‘‘Kreativität und Innovation in der Musikindustrie’’, which was published by StudienVerlag and on the first edition of my book, which is now available in this updated and revised version. vii Contents 1 Introduction ........................................ 1 1.1 Aim and Structure of the Book . 1 1.2 Implications of Culture Institutions Studies . 4 2 The Emergence of the Phonographic Industry Within the Music Industry ................................... 9 2.1 The Phonograph as Business Machine. 9 2.2 ‘‘Coin-in-the-Slot’’-Machines . 14 2.3 Records and Gramophones . 17 2.4 Herr Doctor Brahms Plays the Piano. 23 3 The Music Industry Boom Until 1920 ..................... 27 3.1 The Global Competition in the Phonographic Industry . 27 3.2 The U.S.-Market Before World War I. 31 3.3 The European Market During World War I . 34 3.4 The Music Repertory on Record Between 1900 and 1920 . 35 3.4.1 Waltzes and Operas from Europe . 35 3.4.2 The Tin Pan Alley Monopoly . 43 4 New Technology and the Emergence of Jazz ................ 49 4.1 The Phonographic Industry’s Business Cycle from 1920 to 1945 . 49 4.2 The Phonographic Industry and Broadcasting in the U.S. and Europe . 52 4.3 ‘‘Race Music’’ and ‘‘Hillbilly’’. 59 4.4 Electrical Recording . 62 5 The Music Industry as Radio Industry .................... 69 5.1 Recession and Depression on the U.S. Phonogram Market . 69 5.2 Market Concentration in Europe. 71 ix x Contents 5.3 The Dominance of Broadcasting and Sound Films in the U.S. Music Industry. 77 5.4 Music as an Instrument of Ideology in Europe. 79 6 The Swing Monopoly During the Years of Wartime Economy ... 87 6.1 The Music Industry During World War II . 87 6.2 The Swing Monopoly . 91 6.3 Music as Propaganda . 95 6.4 The Intellectualization of Jazz: Bebop. 97 7 Rock ‘n’ Roll Revolution .............................. 101 7.1 Economic Recovery and Technological Innovation. 101 7.2 The End of the U.S. Music Oligopoly. 104 7.3 From Rhythm & Blues to Rock ‘n’ Roll . 111 7.4 Music Production in Post-war Europe . 120 8 The Recovery of the Phonographic Industry and New Global Players ............................... 127 8.1 A Decade of Market Growth (1960–1969). 127 8.2 European Majors on the Advance. 129 8.3 The Recovery of the U.S. Majors Under New Leadership . 132 8.4 The Produced Sound. 136 9 The Era of Music Conglomerates ........................ 147 9.1 The First Merger Mania in the Recording Industry (1965–1975) . 147 9.2 Oligopolization in the Recording Industry . 149 9.3 Market Domination by Market Segmentation . 150 9.4 The Commercialization of Sub-Cultures: Heavy Metal, Punk Rock, and Disco. 155 10 The Digital Music Revolution ........................... 163 10.1 From Music Cassette to Compact Disc . 163 10.2 Superstar Business Versus Hip-Hop Culture?. 168 10.3 The Second Merger Mania in the Recording Industry (1985–2003) . 174 10.4 The Digital Music Revolution . 182 11 Theoretical Concepts of Innovation and Creativity ........... 197 11.1 Typologies of Innovations . 197 11.2 Innovation as a Process of Collective Action . 202 11.2.1 The Incentive-Based and Knowledge-Based Models of Innovation . 202 11.2.2 Innovation as Generation of New Action Routines . 204 Contents xi 11.2.3 Technological Paradigms and Technological Trajectories . 207 11.2.4 Absorptive Capacity and Conservative Organizational Behavior . 209 11.3 Typologies of Creativity . 212 11.4 Creativity as a Collective Action Process . 214 11.4.1 Systemic and Evolutionary Approaches to Creativity. 214 11.4.2 Creativity as a Phenomenon of Social Action . 219 12 Creativity and Innovation in the Music Industry ............. 225 12.1 Revolutions in the Twentieth Century Music Industry. 225 12.1.1 Characteristics of the Jazz Revolution. 225 12.1.2 Characteristics of the Rock ‘n’ Roll Revolution . 227 12.1.3 The Change of Paradigms in the Music Industry . 230 12.2 Cultural Paradigms and Creative Trajectories in the Music Industry . 233 12.2.1 Cultural Paradigms in the Twentieth Century Music Industry .