In the jazz industry, there are perhaps fifty individuals who control a business in a state of disarray. They are major record label executives, big-time promoters, managers, venue owners, etc.

I don’t think these men are evil, in fact most are well intentioned. They like jazz, and of course they like being wealthy. No, they’re not villains, just misguided nitwits with egos aflame and pocketbooks that seek lining.

More and more, the folks who decide who gets booked and who give the thumbs up or down to who gets signed and what gets recorded, utilize demographic research, most notably from SoundScan.

In case you’re don’t know the company, SoundScan is a computerized system for tracking music sales at medium- to large-sized retail outlets. Pre-SoundScan, the most authoritative charts for record sales were the Billboard charts, which were compiled from the subjective reports of bribable radio programmers and store managers. Now SoundScan has the franchise, and the fate of many musician lies in the numbers it generates.

The problem is that unless a record label subscribes to the SoundScan service, it’s sales don’t register in its weekly charts. Another issue is that the fact that mom-and-pop stores, or jazz specialty shops, don’t report to SoundScan, and neither does Amazon. Accordingly SoundScan takes a cross section of sales from stores and certain stores in certain markets are weighed more heavily.

So if an up and coming artist approaches a major label and has several releases on an independent label like Criss Cross, an executive will look at SoundScan and say, you don’t sell. We can't sign you. That’s because Criss Cross isn’t part of the "family." The SoundScan charts can also be laid to blame for an artist being dropped by a label.

Wait, it gets worse.

SoundScan recently did a presentation for a major label about the state of the jazz record industry. It reported that there are only 50,000 serious jazz CD buyers in the US. They defined the serious buyer as a consumer who buys 3 to 4 CDs a month. The probable scenario here is that the jazz execs at the label will take this research back to the home office of their conglomerate and sensing a bleak future, the higher-ups will cut back the jazz budget.

What puzzles me is that overall sales for jazz CDs aren’t really down, it’s just that there’s such a glut of product in the marketplace that the numbers individual CDs generate aren’t particularly staggering,

So why does an outfit like SoundScan view Jazz with such a narrow vision. I sense that has to do with the present configuration of the entertainment industry itself.

Of course, in the overall scope of things, the jazz impresarios and executives are small potatoes. They’re minor league compared to the likes of a Michael Ovitz or David Geffen or Steven Spielberg.

Enter the internet and the possibility of change. MP3 was the trojan horse. Pop groups aplenty are starting to promote their music utilizing MP3, sometimes without label authorization. These renegades aren't hangers-on but acts that generate big numbers.

An article in Sunday’s New York Times, titled "A Chance To Break The Pop Stranglehold," reports on the unhappiness with so many artists and their slave/master relationship with record labels. "This dissatisfaction," reported Neil Strauss, "stems less from the fact that the companies are owned by multinational conglomerates than from the belief that the labels are simply too big, numbers-driven and inefficient. Artists who could be much farther along in their creative work get bogged down in the bureaucracy."

Bart Bull, the husband and manager of pop singer/ songwriter Michelle Shocked said that "there's no contract you can sign in modern life that resembles a recording contract; they're absolutely unconscionable. You take those 48 pages of a typical contract and hold it in front of anyone familiar with other types of business contracts, and they think it's insane."

Mr. Strauss continues: "Today, we are at an important moment in music history. Thanks in part to the rise of the Internet and music-business consolidation, a window has opened, one in which making this sacrifice of artistic freedom for commercial success may no longer be necessary."

Interestingly, he also explains that "most major labels have added what's called a new technology deduction clause to the contracts they offer bands. What it does is subtract 15 percent to 25 percent of the royalty rate of 12 percent to 13 percent that a new band receives for each record sold. The labels maintain that the clause is necessary because of the costs of Internet-related technology. This rationale seems strange because the distribution of music on the Internet is supposed to save record labels money in CD manufacturing, packaging and shipping costs."

At the same they’re charging musicians for their own feeble utilization of the Net, the labels are gathering like mafia chieftains at a "sit-down," scheming to take control of the coming digital distribution of music revolution.

Fat chance.

Next time: Is piracy really the issue?

Just another case of better living through market research.

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