bs_bs_banner
Growth and Change
Vol. 43 No. 3 (September 2012), pp. 442–461
A Creative Industry in Transition:
The Rise of Digitally Driven
Independent Music Production
BRIAN J. HRACS
ABSTRACT This paper nuances our understanding of the ongoing transition within the
North American music industry. It extends the existing analysis of the so-called “MP3 Crisis” by
exploring the ways in which digital technologies have challenged the entrenched power of the
major record labels. In particular, new insights are offered based on interviews with music industry
executives who have been active in shaping the industry’s response to illegal file sharing. The paper
also uses interview data from musicians to investigate the implications of restructuring at the
macroscale on creative talent at the microscale. As such, it documents the structures and spatial
dynamics of digitally driven independent music production in Canada for the first time.
[In 1999] Napster came into being, forever altering the architecture of the entertainment industry,
technology and the law, yet society has yet to come to terms with these changes. (Allison 2004, 7)
The introduction of MP3 files, file sharing networks such as Napster, and the
widespread practice of illegally downloading copyrighted music files constituted a
structural shock to the North American music industry. As a result, new forms of
technologically driven production and distribution are fundamentally altering the
music industry, structurally and spatially. Although several geographers (Connell
and Gibson 2003; Fox 2005; Jones 2002; Leyshon 2003; Leyshon et al. 2005; Power
and Hallencreutz 2007) have examined the development of file sharing networks
and the impact of the so-called “MP3 crisis” on record sales and the major record
labels, the implications of these changes for individual workers remain unexplored.
This paper assesses the nature of technological change and its implications for work
in the music industry. Drawing on 65 interviews1 with musicians and key informants in Toronto, it argues that by eroding the power of the major record labels,
technology is democratizing the production and distribution of music. Moreover,
Brian J. Hracs is a research fellow in the Department of Social and Economic Geography, Uppsala
University, Sweden. His e-mail address is: brian.hracs@kultgeog.uu.se. Funding for the research came
from SSHRC Major Research Collaborative Initiatives grant 412–2005-1001. The author would like to
thank Deborah Leslie, Meric Gertler, Dominic Power, Barney Warf and anonymous referees for helpful
comments, Joe Minichini for research assistance and Michelle Hopgood for graphic design assistance.
Submitted February 2011; revised September 2011; accepted September 2011.
© 2012 Wiley Periodicals, Inc
THE RISE OF INDEPENDENT MUSIC PRODUCTION 443
the paper demonstrates that technology has created a new structural and spatial
order of independent music production in which individual musicians can make and
sell music from anywhere. The paper also considers the implications of industrial
restructuring on creative talent at the microscale. Indeed, while technology provides
individual workers with unprecedented freedom, it has also radically altered the
market for recorded music. As a result, independent musicians face a dichotomy
between freedom and risk which forces them to negotiate new opportunities and
uncertainties in the digital music industry.
The paper begins by reviewing the period in which the major record labels
consolidated their power and controlled the organizational structures, employment
conditions, and spatial dynamics of the music industry. This is followed by an
analysis of how emerging technologies such as MP3s, the Internet, and file sharing
networks served to radically alter the landscape of music production and consumption. The paper demonstrates how technology has curtailed the power of
the major labels and how that power has been redistributed to a broad set of actors,
including retailers and individual musicians. The remainder of the paper outlines
the relationship between technology and independent music production and more
specifically, the employment conditions for independent musicians working in the
contemporary digital music industry.
Majors and the Consolidation of Power
In the 1950s, 1960s, and 1970s, the recorded music industry was populated by
dozens of record labels, each varying in size, location, scope, and power (Burnett
1996). During the 1980s and 1990s, several rounds of consolidation, in which
dominant labels purchased or merged with smaller labels, altered the landscape
of the industry. By 1999, the music industry was firmly controlled by five large
corporate entities or “majors.”2 These were Bertelsmann AG (headquartered in
Germany), the EMI group (Britain), Seagram/Universal (Canada), Sony (Japan),
and Time-Warner (U.S.) (Scott 2000, 114).3 Geographically, the music industry
was increasingly globalized and concentrated in Tokyo, London, and Berlin where
the majors are headquartered. In the U.S., Scott (2000) indicates that the majors,
the bulk of independent labels, supporting functions (such as music publishing,
management, legal services, recording studios), and even record manufacturing
are concentrated in three cities, Los Angeles, New York, and, to a lesser extent,
Nashville. In Canada, major and independent labels as well as the majority of the
country’s music-related services and infrastructure have traditionally clustered in
Toronto (Hracs et al. 2011). Like other cultural industries, this concentration is
driven by the benefits of agglomeration which include lower transaction and
444
GROWTH AND CHANGE, SEPTEMBER 2012
FIGURE 1. THE TRADITIONAL MODEL OF SERVICES CONTROLLED BY THE
MAJORS (ADAPTED FROM SCOTT 2000, 117).
infrastructure costs, access to pools of skilled workers and specialized services,
and the ability to monitor and learn from the competition (Florida and Jackson
2010; Porter 1990).
Structurally, the majors were vertically integrated multinationals, controlling
every aspect of the production process “in-house.” As Figure 1 demonstrates, the
majors combined the commissioning and contracting of artists with their own
recording studios. These large conglomerates possessed the technologies needed
to press and package records, and had sophisticated marketing, promotion, and
distribution networks, which operated worldwide. The major record labels also
housed a variety of specialized services, including legal services, music publishing, production, sound engineering, and management. Musicians signed to recording contracts advanced their careers on the basis of their creative abilities and were
not required to possess technical, managerial, legal, or entrepreneurial skills.
Spatially, there was a high degree of concentration of music infrastructure,
musicians, and music professionals near the major labels (Leyshon 2009). As
individual musicians lacked the financial resources and technical skills to record
independently, they were dependent on the major labels and thus tied spatially to
New York, Los Angeles, and Nashville. Under the major label model of music
THE RISE OF INDEPENDENT MUSIC PRODUCTION 445
production, individual musicians signed to recording contracts enjoyed job security. In addition, their label provided a host of financial, technical, and business
resources. However, in signing a contract, musicians relinquished much of their
autonomy. Indeed, signed musicians had to work within the confines of the
creative vision developed by their label and relinquish creative control over what
songs to record, what producer to use, what studio to record in, what artwork to
use, and how to package, promote, and distribute each album. Musicians were
required to work when and how the label wanted them to and to spend much of
their time near their major label in New York, Los Angeles, or Nashville.
By 1997, the five majors reached the height of their dominance. Between 1987
and 1997, for example, U.S. domestic sales increased by 160 percent (Scott 2000).
Sales by the majors accounted for over 90 percent of the total domestic sales in
the U.S., and between 70 percent and 80 percent of worldwide sales (Brown,
O’Connor, and Cohen 2000; Scott 2000). With total domestic sales in the U.S.
topping $12.2 billion in 1997, the recorded music sector stood on top of the
entertainment pyramid, surpassing domestic sales in the motion picture industry,
as well as DVDs, video games, and the Internet (Scott 2000).
Until 1997, the music industry also enjoyed a mutually beneficial relationship
with technology whereby the music industry evolved in lockstep with a range of
technological advances. These technological advancements, including the development of vinyl, magnetic audiotape, and compact discs, were beneficial to the
industry, with consumer electronics companies such as Sony creating new markets
for reproductive equipment and the majors being able to mine their back catalogs
selling old recordings in a range of new formats. In fact, until the development
of the MP3, the majors welcomed technological innovations as opportunities to
resell the same music over and over again with higher profits (Leyshon 2001). The
majors, for example, aggressively promoted the integration of new formats such
as the CD because they could simultaneously decrease the production cost and
increase the consumer price, which resulted in much higher profit margins
(McLeod 2005).
The Rise of Digital Technologies and the “MP3 Crisis”
As the world connected to the “information super-highway” and the music
industry came face-to-face with the MP3, the virtuous circle of growth was
radically altered. When the MP3, a software program called MPEG-1 Audio Layer
3, was developed in 1992 and introduced by the Motion Pictures Expert Group
of the International Standards Organization, its main purpose was to standardize
pictures and audio files in order to facilitate international exchanges by the
446
GROWTH AND CHANGE, SEPTEMBER 2012
television industry (Leyshon 2001). Beyond this function, the revolutionary
feature of the MP3 was its size. Requiring one-tenth the storage space per minute
of sound that CDs do, MP3s could be downloaded through even “narrow band”
Internet connections. Moreover, the standardized nature of MP3 sound files meant
that they could be downloaded without advanced or expensive equipment to any
personal computer in less than 10 min (Leyshon 2001).4
During this period of transition, before nation states and firms began imposing
legal regulations on file sharing networks and individuals, the Internet facilitated
the development of a series of “gift economies” occupied by enthusiasts who
exchanged digital commodities, including image, movie, and sound files, across
Internet relay chat networks. The best-known example of these networks is Napster,
which was developed in 1999 by Shaun Fanning, a computer science dropout.
According to Leyshon (2003), by 2000 Napster had over 500,000 people logging in
sharing copyrighted music files at any time. Moreover, by 2001 Napster had
attracted over 60 million users without any advertising (Leyshon 2003).
As the pace of exchanging copyrighted music over the Internet accelerated, the
music industry’s lack of technological foresight, strategic planning, and its inability to implement an effective response plunged the industry into an unprecedented
economic crisis. Global music industry sales fell by 5 percent in 2001 and then a
further 9 percent in 2002. For an industry that typically enjoyed year-over-year
sales growth, this reversal had serious consequences. Many leading firms
suffered, including Seagram/Universal, which recorded a staggering $12 billion
loss for the first 9 months of 2002 (Leyshon et al. 2005). In Canada, a survey
released by Statistics Canada revealed that the Canadian music recording industry
witnessed a sharp decline between 2000 and 2003, with revenues dropping by
17.7 percent (Carniol 2005). Moreover, internal research by the Canadian Recording Industry Association revealed a 40 percent decline in consumer spending after
the rise of the MP3, from $1.4 billion in 1998 to $850 million in 2004 (Carniol
2005).
In a recent article, Leyshon (2009) updates his analysis of file sharing and the
impact of the “MP3 crisis” on recording studios in the UK. Crucially, he argues
that the scale and scope of illegal downloading has accelerated rapidly in recent
years and now dwarfs the legal sale of recorded music in both physical and digital
formats. Leyshon (1311) writes,
As long ago as 2003 the top-ten peer-to-peer (P2P) download program systems that facilitate the illegal
downloading of music had themselves been downloaded more than 640 million times, and it is
estimated that 2.3 billion files are downloaded across these networks every month. . . . The availability
of so much copyrighted material on sites such as this, for which no fee is received, has created an
environment, which poses a significant threat to the musical economy.
THE RISE OF INDEPENDENT MUSIC PRODUCTION 447
To what extent was downloading the cause of this crisis? While the media
and major labels blamed file sharing almost exclusively, Leyshon et al. (2005)
argue that file sharing was merely a “tipping point.” They argue that the cause of
the downturn extended to other factors, such as changing consumer tastes and the
rise of entertainment alternatives like DVDs, video games, cell phones, and the
Internet itself, which compete for the disposable income and time individuals
spend on music. As Leyshon et al. (2005: 184) note:
There is evidence to suggest that, for a number of reasons, the ability of music to command
the disposable income of those between the ages of 14 and 24 is ebbing away rapidly. The most
simple explanation for this is that other, newer, media and consumer electronics industries have
begun to compete for this market segment, so that the amount of money young people have to spend
on music has been reduced accordingly. New passions, be it computer games, mobile (cell) phones
or even the Internet itself, have all attracted expenditure that, in many cases, was previously spent
on music.
Moreover, Grant and Wood (2004) contend that the ongoing corporate and
geographic concentration of the music industry was leading to a reliance on
formulaic artist and repertoire processes and an ongoing trend whereby the majors
were signing fewer new musical artists and focusing promotion and resources on
a declining number of top-selling artists. This resulted in a declining level of
musical creativity and diversity.
Sufficient evidence does not exist to definitively determine the cause of the
downturn, but it is clear that a confluence of factors led to the crisis, including,
but not limited to, the growth of file sharing technologies. As Leyshon notes, the
music industry “was already struggling and on the verge of crisis. Internet piracy
has legitimised the talk of a crisis of reproduction within the music industry” (2009,
1312).
Although file sharing became popular under Napster, it was not until inexpensive high-speed broadband Internet connections were available to a much wider
group of consumers that file sharing crippled CD sales. There was, therefore, a
critical window of time in which the majors could develop and execute a damage
control strategy to maintain their position of power within the market for music.
Contrary to popular opinion, the majors were aware of the threat and acted to
find a solution to the growing specter of file sharing. However, their response was
too slow and ultimately ineffective. According to an executive with Universal
Music Canada, who was working with the company’s e-commerce division in late
1999 and early 2000, Universal had a two-fold response to file sharing: to stop
illegal file sharing by engaging in litigation against Napster and Kazaa, and more
importantly, to develop and deliver a high-quality legal alternative to the market
(Interview). In theory, this plan had the potential to bring consumers back to the
448
GROWTH AND CHANGE, SEPTEMBER 2012
market, but in practice a series of technical, logistical, and strategic problems
limited the effectiveness of the plan, and instead exacerbated the crisis.
As one example, there were numerous difficulties associated with the creation of
a legal system of online music distribution. While Napster facilitated the exchange
of files of all formats and levels of quality, the majors needed to find the original
“masters” and digitize them in high-quality audio formats before they could be sold
online. This proved to be a difficult and time-consuming endeavor. Another delay
ensued when the majors considered whether or not the current record contracts with
artists allowed them to even do this. Once these hurdles were cleared, the majors had
to construct complex royalty systems. They also had to figure out how to organize
transactions. As an executive at a major label in Canada explained,
We were trying to meet with people, credit card companies and others, who would process microtransactions. They looked at transactions under a dollar and they laughed at us. Things like PayPal, that
people use all the time today, they didn’t exist then. (Interview)
Furthermore, while digital products in the U.S. were not taxable, in Canada the
systems had to accommodate the collection of federal and provincial sales tax. All
of this development took time, and although the plan was to get Universal’s online
system up and running by September 2000, it took much longer than expected.
Indeed, “Puretracks,” a Canadian online music store, did not officially open in
Canada until October 2003. The delays, however, were necessary because as
this major label executive put it, the majors could not skip steps, “We had to pay
people. Imagine if we put out our artists’ product without arrangements to pay
them? We would be as bad as Napster was” (Interview).
If the majors had delivered a legal and consumer friendly system to the market
in the first few years of transition the crisis might have been minimized. However,
the majors ended up compounding the problem with poor strategic planning and
policies that alienated and pushed customers toward the black market. This alienation came from two sources.
First, after focusing legal action on actors like Napster and Kazaa, the majors
expanded their focus to include individual consumers. By prosecuting consumers
for stealing copyrighted music, the majors pushed away the markets they hoped to
bring back with their online models of distribution.
Second, the majors had two options with regard to how consumers would buy
music, a subscription model where consumers would pay a monthly fee to essentially “rent” online music, or the pay-per-song model where consumers would buy
and “own” individual songs. Described by interview respondents as a “fateful fork
in the road,” the majors chose the subscription model. In retrospect, online music
stores using the subscription model failed because they did not mimic what was
THE RISE OF INDEPENDENT MUSIC PRODUCTION 449
in the marketplace and provide consumers with the products they demanded in a
style that they were used to. As a major label executive explained, “The thing in
our acquisitive society is that the downloaders want something, they want the
downloaded object, they want the file” (Interview). Consumers were outraged to
learn that they could not keep the music they had purchased,5 and some of the
majors, like BMG, made matters worse by introducing limitations on purchased
CDs. They created built-in programs that restricted users from copying music
from CDs to computers. The backlash against the majors paved the way for other
firms to enter the market. In particular, Apple adopted the pay-per-song model of
distribution and leveraged its online platforms, company brand name, and line of
MP3 players (iPods) to make its iTunes music store the market leader. Thus, it
is clear that technological changes presented fundamental challenges to the major
record labels and that they failed to successfully adapt to this altered landscape. It
is also clear that the crisis had implications for traditional models of retailing and
distribution, which in turn impacted the majors further.
The Postcrisis Restructuring of Music Retailing
At the height of their power, the major record labels, through a combination of
market power and vertical integration, dictated the terms of marketing and distribution to less-powerful retailers, which were dependent on the sale of recorded
music. As file sharing eroded the power of the majors and wiped out these music
retailers, new distribution channels, firms, and power relations began to emerge.
This section outlines the rise of online music distribution such as Apple’s iTunes
music store, the replacement of specialized music retailers such as Tower Records
with diversified retailing giants such as Wal-Mart, and the implications of this
shift on major labels. In particular, the paper argues that as the majors lose control
of distribution, they also lose control over the production process of music itself.
As noted, in the U.S., the vast majority of recorded music has traditionally been
distributed by the majors, which own their own distribution networks, or alternatively by independents that distribute music through the networks of the major
which owns them. The vertically integrated nature of the majors allowed them
to blend sales, marketing, and physical distribution in a strategic way to increase
profits, while being flexible to market demands (Power and Hallencreutz 2007).
Prior to the crisis, the retailers consisted of large chain stores like HMV and Tower
Records, which operated in many cities and countries, as well as an array of local
independent “record shops.” Dependent on the sale of music, the larger retailers
were completely subservient to the majors who dictated what music was to be sold
and for what price. Before the crisis, therefore, the majors held the power but in
450
GROWTH AND CHANGE, SEPTEMBER 2012
the turbulent times that followed this streamlined structure of music distribution
would be transformed and the majors would be forced to cede their power to a new
breed of retailers.
As the practice of downloading “free” music over the Internet started to
snowball, and the aforementioned market trends served to slow music sales even
further, the major labels lost billions of dollars, but the traditional retailers, who
failed to react and diversify their product offerings, bore the brunt of the crisis.
In the U.S., for example, it was reported that approximately 1,200 music retailers
closed down between 2000 and 2003 (Power and Hallencreutz 2007). Retailing
giants such as Tower Records and Warehouse Entertainment, for example, declared
bankruptcy in 2002 and 2003 and closed 160 and 120 stores, respectively (Fox
2005).
Against this backdrop of change it is useful to consider how the physical and
virtual landscape of music retailing has changed in recent years and the extent
to which market power has been redistributed. The first consequence of the crisis,
with respect to retailing, was the legal regulation and commercialization of file
sharing networks and the emergence of online music e-tailers. When the majors
finally mounted a response to the crisis, it took the form of intense legal pressure
to have file sharing networks and the practice of sharing copyrighted music vilified
in the media and declared illegal by European and North American courts.
As the most visible threat, Napster was targeted by the major labels and the
Recording Industry Association of America (RIAA) for contributing to vicarious
copyright infringement and encouraging the downloading of pirated songs and
illegal files. By 2001, Napster had lost the legal battle and its “underground”
appeal. It was ordered to remove all copyrighted material from its system.
However, other file sharing platforms such as Audio Galaxy and Kazaa
emerged to fill the void. Unlike Napster, however, the operations of these new file
sharing networks are geographically fragmented across different regulatory
spaces, making the task of legal authorities more difficult. Kazaa, for example, has
servers based in Denmark. The software is programmed in Estonia. The domain
name is registered in Australia, and the company that now owns the network,
Sharman Networks, is registered in the “no names given” Pacific tax haven of
Vanuatu (Leyshon et al. 2005). Although the RIAA continued to level legal action
against file sharing networks, the majors came to the increasing realization that
they could not beat them.
Having undertaken market research that indicated that 80 percent of Napster
users would be prepared to pay a $15 monthly fee to use the system, BMG entered
into an alliance with Napster to convert the system into a fee-based subscription
service. BMG subsequently made its entire catalog available to Napster users, who
THE RISE OF INDEPENDENT MUSIC PRODUCTION 451
could still enjoy the features and convenience of the “legalized” Napster experience (Leyshon et al. 2005). To further leverage its ability to produce music and
electronic devices that play digital music formats, Sony also decided to jump into
the online distribution game in 2004 when it launched its download service called
“Connect” (Bockstedt, Kauffman, and Riggins 2006).
Despite the number of online music distribution channels and business models
that have emerged in recent years, Apple’s iTunes online music store and its
“pay-per-song” model has become the unrivaled market leader in North America.
The iTunes music store currently offers over 18 million songs, which can be
downloaded over any Internet connection to users with computers running Macintosh or Windows operating systems. The average price per song is $.99 and once
the songs have been purchased they can be played on up to five computers, burned
to a CD, and downloaded to portable (MP3) players, without violating any copyright or piracy laws (Allison 2004, 50). Between its introduction in April 2003 and
February 2010, Apple has sold over 10 billion songs through its iTunes music store
(Luttrell 2010). Moreover, as of August 2009, Apple accounted for 25 percent of
the overall music market—both physical and digital—and 69 percent of the digital
market (Whitney 2009).
In the early 2000s, many industry executives believed that the apocalyptic
mix of blank CDs and Napster would make traditional “bricks and mortar” record
shops extinct within 12 months. In 2004, the rise of e-tailing was referred to as
having a “neutron-bomb effect” (Fox 2005). It was estimated that, in less than a
decade, online music sites such as Apple’s iTunes, BMG’s Napster, and Sony’s
Connect would empty the aisles of Virgin and HMV Mega-stores (Fox 2005). In
retrospect, these claims can be considered exaggerated. Indeed, although many
of the traditional “bricks and mortar” retailers have disappeared, they have been
replaced by a new breed of diversified, logistically advanced and financially stable
“big-box” chains such as Wal-Mart, Costco, and Best Buy.
In 2003, the RIAA reported that “bricks and mortar” stores still accounted
for 86 percent of music sales for that year (Fox 2005), although by 2009 this had
dropped to 65 percent (Whitney 2009). While the market share of music sales
for traditional record shops has declined from 71 percent in 1989 to 33 percent
in 2003, the “big-box” stores have quickly taken over (Fox 2005). With over 3,617
stores in the U.S., in 2005, and another 1,603 around the world, Wal-Mart has
become the market leader in U.S. music sales, accounting for over 20 percent of
total sales (Fox 2005). Moreover, when Musicland declared bankruptcy and sold
its 1,300 retail stores in 2001, Best Buy seized the opportunity to establish itself
as an entertainment and electronics giant, swooping in to purchase each store for
approximately $685 million (Fox 2005).
452
GROWTH AND CHANGE, SEPTEMBER 2012
The Postcrisis Redistribution of Power
As a consequence of this restructuring, the majors no longer dictate the
terms of content, pricing, and distribution, but rather take direction from the new
and more dominant players on the distribution side. e-tailers such as Apple and
Amazon and diversified chain stores such as Wal-Mart, Best Buy, and Costco now
dominate.
During the precrisis years, the size of the majors and their strong control over
the distribution process allowed them to dictate the terms of cultural production.
The majors developed marketing, placement, and pricing strategies, which were
forced upon their subsidiaries, as well as retailers (Power and Hallencreutz
2007). Put simply, the majors told the retailers what music titles to sell and at
what price, and if the majors wanted posters and music of a specific recording
artist or group to be in the front window of every North American record shop,
it was only a matter of a few phone calls. As retailing power has been consolidated into the hands of a few large chain stores, the majors are increasingly
taking their cues from the retailers. This fundamental shift has had important
consequences for the pricing structure of music and the style of music that is
being produced. The key difference between traditional and new retailers is
product diversity. Tower Records went out of business because it sold music
exclusively. Wal-Mart thrives because it receives small profit margins on thousands of consumer goods. As music has become one of a growing range of
products now being sold, “big-box” retailers frequently use music and DVDs
as loss-leader goods, meaning that they sell the goods below cost in order to
attract new customers and obtain revenue on other (typically more costly) items
(Fox 2005, 505). By selling songs for $0.99, which is often below cost, Apple
is also engaging in loss-leader pricing, sacrificing profits on the sale of music to
promote the sales of more expensive items like iPods and computers (McLeod
2005).
On the surface, the ability of online music stores, like iTunes, to offer millions
of titles seems to be counteracting the homogenization of music at “bricks
and mortar” stores, but in reality these e-tailers are contributing to the process.
Although consumers have the opportunity to search for and download music from
fringe genres, the iTunes store heavily promotes the same top 40 hit singles that are
played endlessly on the radio and found on the shelves of the “big-box” retailers
(Power and Hallencreutz 2007). Moreover, with the “pay-per-song” model, iTunes
privileges the purchase of hit singles over entire albums, which further promotes the
popularity of a narrow range of the most marketed and visible (music video) songs.
At the level of mainstream cultural production, an increasingly narrow range of
commercially viable “top 40” music is being demanded, produced, marketed, and
THE RISE OF INDEPENDENT MUSIC PRODUCTION 453
distributed. This shift has had a profound impact on the major labels and individual
musicians.
The Consequences of “Picking Winners”
In the postcrisis marketplace the majors face mounting pressure to sign popular
musical acts and manufacture hit songs. While the traditional formula involved
signing a high number of promising musical acts across a range of genres, in the
hopes that a few commercial successes would pay for the failures, major labels
have become much more risk averse and formulaic. As a result, one significant
response of the major labels to the “MP3-crisis” has been to reduce risk and focus
on “hit-makers.” In the wake of the downturn, the major labels terminated many
existing record contracts and instead focused their resources on a small number of
established and commercially viable musical acts, or “Cadillacs,” such as Bruce
Springsteen and Celine Dion (Power and Hallencreutz 2007). Moreover, there has
been a reduction in new contracts and those who are signed must be instantly
recognizable to the market. As one major label executive explains, the majors are
trying to reduce risk by looking for proven musical commodities,
In general the record company is being more careful with its money. . . . We do profit and loss
statements. You see a band you like. You compare it to other bands that are similar in some ways and
you look at what those bands have done in a similar marketplace and you track that. (Interview)
Throughout the process of restructuring, the major labels are going beyond
just picking winners to reduce costs and risk. Indeed, the major labels have scaled
back the level and comprehensiveness of the services and support they provide to
recording artists. While musicians traditionally produced and distributed demo
tapes to the majors in the hopes of getting “signed,” musicians in some cases now
have to produce and distribute several albums “independently,” before a major will
sign them. Moreover, as Grant and Wood (2004) point out, once signed, musicians
must be commercially successful or the majors “will drop” them immediately. The
major labels have become more risk averse and less concerned about developing
musical talent. As one record label executive argues,
Why should the record company go out there and find a raw talent and walk them through all the steps
in the whole process? . . . It is a much less risky proposition to take established talent or somewhat
established talent than completely raw talent. (Interview)
Leyshon (2009, 1327) argues that as major labels scale back their involvement
in discovering and developing new talent they are transitioning from being music
producers to acting as brand-led marketing companies. As a result, the risk of
talent development has been downloaded from the major labels to the artists
454
GROWTH AND CHANGE, SEPTEMBER 2012
themselves. As another record label executive indicates, even “signed” musicians
need to know how to do things themselves,
The onus is more than ever on the individual to actually do it themselves. . . . Under the old system,
you get picked up, put in a studio and you just have to be creative and express the music. But now I
am not interested in getting into business with individuals who don’t know how to do these things
themselves. (Interview)
Or as this executive at the Canadian Independent Recording Artists’ Association (CIRAA) puts it,
The majors are more interested in the finished product instead of the developmental process. . . . The
whole artist development role of the label has rapidly dwindled away. Labels are not willing to take
the same kind of risks or invest the same kind of time to develop an act, and to build an audience.
They’re looking for ready-made products. (Interview)
As the major labels withdraw from talent development and fewer individual
musicians seek or obtain recording contracts, independent music production
is becoming a more widespread alternative. While independent production has
existed as a niche alternative to the major labels for over 30 years, it is taking new
forms in the contemporary period.
Technology Makes Independent Music Production Viable
In the current period, the significance of independent music production
has increased and it is now the dominant form of employment. As this musician
explains,
In the early 1980s, being an independent musician was a choice. Some people didn’t want to work
towards a major label deal because there were restrictions and conditions attached to that. . . . Now
very few artists can still get signed to major label deals, so the majority of artists end up on the
independent side. (Interview)
In fact, according to the CIRAA, the declining number of recording contracts
has left over 95 percent of all musicians in Canada without major or independent
label affiliation, making them by definition, independent. How does contemporary
independent music production differ from its previous incarnations? According
to musicians with first-hand experience, traditional independent production was
really an ad hoc system with inherent limitations. Musicians have always been
able to create (writing and performing songs) music on their own but the recording, manufacturing, marketing, and distribution of these songs required capital
and skills beyond the grasp of most individual musicians. As this musician points
out, even basic recording and production required money and specialized music
professionals,
THE RISE OF INDEPENDENT MUSIC PRODUCTION 455
In the 1970s independent music production existed, but you had to raise at least $10,000. You still had
to go into a recording studio and hire some engineers and producers who had the technical skills. The
equipment was a lot less accessible because of the cost of it and it was very difficult to operate. You
couldn’t operate the recording equipment in his studio yourself because you needed specialized
knowledge for that. (Interview)
Moreover, at this time, short of selling these albums on street corners and after
live performances, independent musicians had no way to market and distribute
their music on their own. Distribution deals existed with major and independent
labels, but the resources and technology did not yet exist for independence in
every aspect of the process from production to distribution.
In the current period, however, this landscape has changed. The introduction
and development of digital technologies have finally given musicians the tools
to be truly independent. Recording can now be done in home studios with personal
computers, which has reduced the cost of recording so that it is accessible to
musicians with low incomes. Moreover, with professional and even consumer
software, recording, editing, mixing, and mastering digitally recorded music has
become easy enough for a much larger number of musicians to do on their own.
As this musician explains,
As digital technology developed . . . things became more affordable. $3,000 will buy you
a really good computer, software and a bunch of equipment. Technology has made recording
more affordable. More people are able to do it on their own. People became less dependent
on the label deal, or the big-money contracts. You didn’t have to sell your soul for that $20,000 to
make the record or whatever. You can actually do whatever you wanted at home by yourself.
(Interview)
In effect, digital technologies have democratized the production of music by
making traditionally expensive and specialized activities accessible to a much
wider range of musicians (Leyshon 2009; Von Hippel 2005). As this musician
argues, technology has had a “flattening effect”:
Now, anybody who owns a computer is a producer and engineer. But it wasn’t very long ago that being
a record producer was a very specialized, very high-end field of work where you had to have hundreds
of thousands of dollars invested in gear just to do the work. There still are people who do that but the
bar has been dropped so much lower in terms of who can do that. To some extent that has a real
flattening effect on what kind of money is involved in that. (Interview)
These developments have removed the two traditional barriers of cost and skill,
but new technology, specifically the Internet, has also allowed musicians for the
first time to market and distribute their music independently. Musicians can now
cheaply and easily set up websites to promote and distribute digitally recorded
music tracks in MP3 format. As this musician puts it,
456
GROWTH AND CHANGE, SEPTEMBER 2012
I think MySpace is a great music resource for musicians because it puts everything in your hands.
Within an hour you can set up everything, a profile for your band, add songs that people can listen to,
send messages and send out updates about upcoming shows. (Interview)
Furthermore, the same tracks can be licensed and distributed directly through
Apple’s iTunes online music store, which inserts independent musicians directly
into the chain of global distribution for the first time. So in terms of barriers to
entry, new digital technologies have had a tremendous flattening effect on the
industry and allowed a much higher number of musicians to enter the industry and
function as independent producers. As this musician explains,
We have two albums and if people hear us on MySpace they can go to iTunes and buy it. We got
ourselves on iTunes through a distribution deal through “Blue Pie”. They put our stuff on there and at
$10 a CD we keep 60% of it. We have sold close to 100 albums on iTunes. . .but surprisingly it is not
only people from Toronto buying but from all across the world. The majority of sales are actually
coming from Europe. (Interview)6
Technology has not only served to free musicians from the support of major
labels but has also created a new geography of music production, one in which
musicians are no longer tied to the established centers of music production in
New York, Los Angeles, and Nashville (Hracs et al. 2011). While many independent and signed musicians still choose to live and work in these cities, technology
has made it possible to produce, market, and distribute music from anywhere.7 Or
as this music producer argues,
I would agree that musicians are no longer tied as they once were to the major centres of music
production and the major labels. . . Now you can make music from anywhere, even the far north. Last
summer I was up in Moose Factory [Northern Ontario]. We did a gig out there in an aboriginal
community and we met some people that have a little studio and [are] recording music in their
basement. Because they have the Internet, they don’t have to go to a city or a major centre to record
or to distribute their music to the world. (Interview)
These examples demonstrate how technology serves to democratize the music
industry by lowering entry barriers and redistributing power. Indeed, technology
makes music production cheaper and more accessible, while also allowing musicians to venture for the first time into the realm of marketing and distribution at
the global scale. As a result, technology affords individual musicians unprecedented structural and spatial freedom. Although it is useful to identify these
processes at the macroscale, it is equally valuable to consider their implications
for the nature of work at the microscale. As the structure of contemporary independent music production is still poorly understood, the remainder of the paper
lays out the widening array of tasks—both creative and noncreative—associated
with this mode of production.
THE RISE OF INDEPENDENT MUSIC PRODUCTION 457
From Artist to Entrepreneur: Working as an Independent Musician
So far attention has been paid to how technology has restructured the music
industry and transformed independent music production from a niche market to
a mainstream model of music production. This section describes the changing
nature of work in independent music production and argues that independent
musicians are now required to perform a wider variety of tasks. This constitutes
a fundamental shift in the working lives of musicians who, under the major label
model of music production, allocated the majority of their time to performing
creative tasks such as song writing, recording, and performing. Under the independent model of music production, musicians are now responsible for noncreative tasks as well (see Figure 2). As this musician explains,
FIGURE 2. THE CREATIVE AND NONCREATIVE TASKS OF INDEPENDENT MUSIC
PRODUCTION.
458
GROWTH AND CHANGE, SEPTEMBER 2012
If you actually want to make a living as an indie musician, it is a tough go. You’ve got to pretty much
do it yourself. You have to be able to play your instruments well, write songs, but you also have to be
able to get out of the basement and perform them. . . .You also have to be a booking agent. . . .You have
to be a manager, setting up interviews and getting the word out. . . .You also have to raise money and
get financing together to do some recording, so that means grant applications, going to the bank and
putting together business plans and proposals. . . Plus there are all the technical skills that you need.
How to put together a home studio, how to get good recordings, what is involved with recording and
mixing and mastering. . . If you are going to put out an actual CD, then you need to have some kind
of artwork with that as well. Marketing is another one getting lists of media that you can approach,
radio stations and magazines, fanzines that you can send your music to for review, all that kind of stuff
and promotion. Merchandising, maybe it is just going to be T-shirts, but often it is much more than that
now, and these are all things that would be done for you by various people in big organizations if you
were signed to a label, but now you have to do all of these things yourself. . . . So musicians are now
responsible for the whole range of activities, technical, business, performance and musicianship.
(Interview)
The most obvious consequence of this shift is the redistribution of time
and energy musicians can now afford to allocate to each task. Under the major
label model, signed musicians spent the vast majority of their time seeking
inspiration and being creative, but these activities have now been curtailed out
of necessity. As the quote above illustrates, the independent musicians in my
sample are now working longer hours and devoting more time to noncreative
tasks, such as booking shows, applying for grant money,8 and promoting their
music online. Despite “working more,” however, musicians are earning less
money. In fact, the Canadian Census indicates that the real incomes of musicians in Toronto declined by 26 percent between 2001 and 2006, from $18,582
to $13,773 (Hracs et al. 2011). In this way, the working lives of the contemporary independent musicians are moving away from “artist” or “bohemian”
models of creative production to encompass a more professionalized entrepreneurial model (Hracs 2009).
This shift has broader implications for traditional understandings of artistic
employment and creativity. As Greffe (2004, 88) points out, the shift from dependent to independent production presents the need for a revised understanding
of the skills required for artistic production. As artists become entrepreneurs,
new skills are required and artistic or creative skills must be paired with those of
a legal expert, a financier, a manager, and so on. Writing more critically about
the changing experiences of independent fashion designers, McRobbie (2002)
describes these processes as despecialization and multiskilling, and argues that
the shift to more entrepreneurial modes of creativity is eroding traditional notions
of creativity. As this musician argues, “It is a full-time job but only about 10
percent actually involves music. The rest of it is the marketing and the looking for
work” (Interview).
THE RISE OF INDEPENDENT MUSIC PRODUCTION 459
Conclusion
This paper explored the changing structure of the music industry and the role
of technology in restructuring the nature of work. It demonstrated how the postcrisis restructuring of the music industry and the rise of contemporary independent production generate new opportunities and new challenges for individual
workers. Within the major label system, signed musicians handed over creative,
structural, and spatial control to the major labels in exchange for support and
security. Without record contracts, however, musicians have gained control and
flexibility but also increased risks.
On one hand, independent musicians have gained complete creative control over
the direction and content of their music and related products. They have autonomy
over the way they work, and can now produce music virtually anywhere. Technology allows musicians to enter the market and sell directly to consumers, and
although sales of recorded music have declined in an era of file sharing and MP3
players, more music is being consumed than ever before. Indeed, the restructured
music industry is full of opportunities for talented and ambitious musicians.
On the other hand, to realize these opportunities, musicians must first overcome
a new and dynamic range of barriers to success. Respondents describe the current
marketplace as the “wild west,” a place where the rules of the game have changed.
Barriers to entering the market have been significantly lowered, but that market
is fraught with uncertainty and above all competition. As one musician puts it,
“The best thing about technology is that now anyone can make music but the worst
thing is that now anyone can make music” (Interview).
NOTES
1. The research presented is taken from 51 interviews with independent musicians and 14 interviews
key informants in Toronto. These key informants are educators, producers, studio owners, managers, union representatives, government employees, and executives at major and independent record
labels. As such, these individuals provided invaluable information about the broader context
of industrial restructuring within the music industry, as well as information about important trends
within Toronto’s music scenes. Many of these individuals have experienced the “MP3 crisis” first
hand, through their positions in major labels in Canada and the U.S. Others, who have participated
in Toronto’s music scenes for 30 or 40 years, provided useful information about how technology has
changed the working lives of musicians.
2. According to Burnett (1996), most of the independent labels or “minors” that existed during this
period were either owned or controlled by one of the majors.
3. In 2004, Sony and Bertelsmann AG (BMG) entered into a 50-50 merger (Sony BMG), which means
that there are currently only four major music companies.
4. With the high-speed and relatively cheap broadband Internet connections of today, downloading the
same 3 MB song can take as little as 30 seconds.
460
GROWTH AND CHANGE, SEPTEMBER 2012
5. In recent years, consumer attitudes toward “renting” digital content have changed and subscriptions
for online music streaming, such as the Swedish-based Spotify, have increased since 2008. However,
in the early 2000s, the inexpensive and high-capacity Internet access, smart phones, and royalty
payment arrangements that underpin Spotify’s success did not exist. Moreover, because of disputes
over legal arrangements and revenue sharing with record labels, Spotify has only recently entered the
U.S. (July 2011) and is still not available in Canada.
6. For independent musicians, personally incurring risks and development costs can yield higher
economic rewards. By selling directly to consumers and removing the contractual obligation to split
revenues with managers and record labels, independent musicians retain a much higher share of the
profits. As a result, this arrangement may make it easier for some musicians to earn a sustainable
living. However, my research suggests that higher levels of competition, from other independent
musicians and entertainment alternatives, and the lack of managerial and marketing support make
it more difficult to earn a living solely from music.
7. At present, the extent to which digital technologies are actually decentralizing the production
of music remains unclear. Whereas Florida and Jackson (2010) argue that record labels and the
traditional music industry continue to cluster in the established centers, Hracs et al. (2011) consider
the factors that enable and motivate independent musicians to leave these centers.
8. In Canada, musicians can apply for government and private grants that provide funding for
recording, production, touring, radio, music videos, marketing, and promotion. The not for profit
“Foundation to Assist Canadian Talent on Records” (FACTOR), Canada’s largest funding body,
currently distributes over $14 million a year to independent musicians. Although support exists, my
research uncovered two key barriers to obtaining financial support. The first is that most independent musicians lack the skills and time required to write a winning grant application. The second
barrier stems from performance benchmarks that exclude fledgling musicians. For example, FACTOR’s “Emerging Artist Sound Recording Program” requires musicians to have sold a minimum
of 3,500 units and the “Radio Star Maker Fund” requires 10,000 units (The Foundation to Assist
Canadian Talent on Records 2011). Paradoxically, because of these benchmarks most grants are
awarded to established musicians. Research suggests that similar grants and restrictions exist for
musicians in the U.S. as well.
REFERENCES
Allison, C. 2004. The challenge and opportunities of online music: Technology measures, business
models, stakeholders impact and emerging trends. Department of Canadian Heritage: 1–115.
Available at http://dsp-psd.pwgsc.gc.ca/Collection/CH36-4-2-2004E.pdf (accessed July 2012).
Bockstedt, J., R. Kauffman, and F. Riggins. 2006. The move to artist-led on-line music distribution:
A theory-based assessment and prospects for structural changes in the digital music market.
International Journal of Electronic Commerce 10(3): 7–38.
Brown, A., J. O’Connor, and S. Cohen. 2000. Local music policies within a global music industry:
Cultural quarters in Manchester and Sheffield. Geoforum 31: 437–451.
Burnett, R. 1996. The global jukebox. London: Routledge.
Carniol, N. 2005. Music industry sings the blues. Toronto Star. Toronto. October 27.
Connell, J., and C. Gibson. 2003. Sound tracks: Popular music, identity, and place. London: Routledge.
Florida, R., and S. Jackson. 2010. Sonic city: The evolving economic geography of the music industry.
Journal of Planning Education and Research 29(3): 310–321.
THE RISE OF INDEPENDENT MUSIC PRODUCTION 461
Fox, M. 2005. Market power in music retailing: The case of Wal-Mart. Popular Music and Society
28(4): 501–519.
Grant, P., and C. Wood. 2004. Blockbusters and trade wars: Popular culture in a globalized world.
Vancouver: Douglas & McIntyre.
Greffe, X. 2004. Artistic jobs in the digital age. Journal of Arts Management, Law, and Society 34(1):
79–94.
Hracs, B.J. 2009. Beyond Bohemia: Geographies of everyday creativity for musicians in Toronto.
In Spaces of vernacular creativity: Rethinking the cultural economy, ed. T. Edensor, D. Leslie,
S. Millington, and N. Rantisi, 75–88. London, UK: Routledge.
Hracs, B.J., J.L. Grant, J. Haggett, and J. Morton. 2011. A tale of two scenes: Civic capital and retaining
musical talent in Toronto and Halifax. The Canadian Geographer 55(3): 365–382.
Jones, S. 2002. Music that moves: Popular music, distribution and network technologies. Cultural
Studies 16(2): 213–232.
Leyshon, A. 2001. Time-scale (and digital) compression: Software formats, musical networks, and the
reorganization of the music industry. Environment and Planning A 33: 49–77.
———. 2003. Scary monsters? Software formats, peer-to-peer networks, and the spectre of the gift.
Environment and Planning D, Society & Space 21: 533–558.
———. 2009. The software slump?: Digital music, the democratisation of technology, and the
decline of the recording studio sector within the musical economy. Environment and Planning A
41: 1309–1331.
Leyshon, A., P. Webb, S. French, N. Thrift, and L. Crewe. 2005. On the reproduction of the musical
economy after the internet. Media, Culture and Society 27(2): 177–209.
Luttrell, M. 2010. Never-ending iTunes sales tally hits 10 billion. TG Daily. February 24. Available
at http://www.tgdaily.com/consumer-electronics-brief/48578-never-ending-itunes-sales-tally-hits10-billion (accessed July 2012).
McLeod, K. 2005. MP3s are killing home taping: The rise of Internet distribution and its challenge to
the major music monopoly. Popular Music and Society 28(4): 521–531.
McRobbie, A. 2002. Clubs to companies: Notes on the decline of political culture in speeded up
creative worlds. Cultural Studies 16(4): 516–531.
Porter, M. 1990. The competitive advantage of nations. New York: Free Press.
Power, D., and D. Hallencreutz. 2007. Competitiveness, local productions systems and global commodity chains in the music industry: Entering the US market. Regional Studies 41(3): 377–389.
Scott, A. 2000. The cultural economy of cities. London: Sage.
The Foundation to Assist Canadian Talent on Records. 2011. Programs and guidelines. Available at
http://www.factor.ca/Programs.aspx (accessed July 2012).
Von Hippel, E. 2005. Democratizing innovation. Cambridge: MIT Press.
Whitney, L. 2009. iTunes reps 1 in every 4 songs sold in U.S. CNET News. August 18. Available at
http://news.cnet.com/8301-13579_3-10311907-37.html (accessed July 2012).
View publication stats