Ken Hatfield: The Economics of Music

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This same industry is surprised when people don't feel obliged to pay for what the industry itself has demeaned, diminished, and dismissed, namely, the music!
By Ken Hatfield

For the last quarter century jazz musicians have been increasingly marginalized by the shortsighted bottom line mentality that dominates the music industry. This same shortsighted approach in other industries is currently sending white-collar jobs overseas (to join the many blue-collar jobs that left over the past two decades), but that is merely another manifestation of an economic system that can't see past the next quarter's projected profit statements. This shortsightedness affects the lives of jazz musicians in largely economic terms and is frequently justified with music industry statistics citing the meager two to four percent of total music sales that jazz accounts for, as if this lamentable situation is due to some law of nature that the current record company executives and their predecessors merely inherited and had nothing to do with fostering.

These same music industry moguls are currently alarmed that many people are downloading music for free via shared files easily accessible online. When asked why those who avail themselves of these services feel it is ok not to pay for this music, these downloaders (or should I say freeloaders) insist they are sticking it to the big record companies, who in turn have been sticking it to their recording artists for years. Other shared music file devotees cite the diminishing quality the industry is providing as justification, describing CDs containing twelve lame tracks and only one "hit." Leaving aside the moral questions raised by taking the fruits of someone else's labor and giving nothing in return, it strikes me as ironic that after a quarter century of systematically minimizing the significance of the actual musical content of the product which the music industry is marketing, that this same industry is surprised when people don't feel obliged to pay for what the industry itself has demeaned, diminished, and dismissed, namely, the music! Now most of the jazz musicians I know have never lost sight of the significance of the musical content of their art because it is the primary focus of their art, and indeed it is what they are about, which is in part why they have been economically marginalized.

When looking about for models, systems, and environments in which artists have prospered, I've noticed one unavoidable liability that jazz musicians are stuck with. In consumer oriented capitalism there are basically two ways to make money: you either sell large quantities at a reduced price (McDonald's is the classic prototype of this approach), or you charge a premium for goods or services which people agree are of better quality, of higher value, or are extremely rare (e.g., dinner at Daniel, a suite at the Plaza, a painting by Vermeer). Neither of these models works well for jazz musicians, because we aren't likely to sell more units than some "pop tart," and we can't get people to pay $500 per CD, especially when free downloads are available and the average price of CDs is $15 or less.

Recordings began as promotional tools intended to generate interest in artists' live performances, and that may be what they will become again for jazz musicians. It seems to me that if we combine that approach with the business models of small publishing houses, we have a recipe for sustainable artistic and economic growth. Consider a small book publisher who cares deeply about literature. Such a publisher needs both critically acclaimed writers (like Pulitzer Prize winners) and authors whose works are popular. The former's works bring with them artistic cachet, the latter's generate cash. While artistic and financial success are not mutually exclusive, most critically acclaimed authors were initially published because someone recognized the artistic potential of their work, which, once acknowledged by awards such as the Pulitzer or Nobel Prizes, generates increased sales.

The reason I feel this is a good business model is that small publishers have been balancing economic viability and artistic excellence for a long time. They often do so by looking for new talent to develop, something that much of the music industry seems to care little about, especially where music that might "challenge" the audience is concerned. However, for small publishers to support their more artistically focused books, they must remain independent. If they become part of a larger company that has many sectors in addition to publishing, the publishing division will be forced to compete with the other sectors, and if it underperforms economically, it will be forced to "shape up," which will inevitably mean jettisoning those "Pulitzer cats who don't sell well," or refraining from publishing their kind of work in the future. This remedy only exacerbates the problem by shortsightedly employing unsustainable growth models that are inapplicable to the arts.

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