BY KURT HANSON
Continuing its movement beyond industry trade publications and into the popular press, the issue of music industry problems garnered almost all of the top of page one and all of page two of USA Today, the nation's largest-circulation newspaper yesterday.

The five-part piece, by USA Today's Edna Gundersen, began, "No wonder pop fans are singing the blues. Radio sounds like a broken record. CD prices are heading off the charts. Labels are out of tune with the digital age. New acts fail to strike a chord with listeners.

"It's time to face the music. The $14 billion recording industry, struggling through its first sales slump in a decade, faces challenges on several fronts, not the least of which is a tarnished image in the eyes and ears of fans who feel ripped off by greedy, tone-deaf bean counters. In 2001, album sales dropped 2.8% compared with 2000, the first dip since SoundScan began tracking sales in 1991..."

The entire article is here. A summary of each of the various subtopics follows.

"A burning issue: Music piracy and downloads"
"Popular music has been upended by every technological advance from electricity and the phonograph to cassette tapes and recordable CDs. The switch from analog to digital accelerated the pace of illicit duplication and distribution, sounding the loudest alarm yet...

"The Recording Industry Association of America, on behalf of labels, is vigorously seeking to stamp out proliferating Web sites that permit free downloads of music. Users argue that peer-to-peer file-sharing, even more prevalent now than in Napster's heyday, is a legitimate means of sampling and trading music and that the industry's substitute sites are clunky, incomplete and too rigidly priced...

"The industry is counterattacking in court, a slow process, and with anti-copying devices, which consumers resent and tech heads will no doubt override. Labels have yet to tackle pirates head-on with superior Web sites, attractive subscription deals and enough free downloads to stimulate purchases.

"Enhancements, such as the bonus DVD attached to the first 2 million copies of Eminem's widely bootlegged new album, are one tack that may lure the cyber set back to stores..."

The article also points out that consumers bought 1.2 billion blank CDs in 2001, yet album sales were down a relatively meager 22 million units from the pervious year (to 762.8 million). Even if one believes that the sales decline was due to bootlegging (rather than, say, the quality of that year's released product), the numbers suggest that 98% of CDs burned are NOT activity that hurts CD sales. -- KH

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"Hey Mr. DJ, open the request line"
"Radio remains one of the most powerful marketing tools available to the recording industry, despite skyrocketing costs of gaining access to the airwaves via independent promoters. While word-of-mouth, video and Internet brush fires occasionally catapult unknowns to stardom, radio remains the most reliable and efficient means of enticing listeners to record stores. Yet many fans surfing the airwaves are far from satisfied.

"The complaint: Consolidation has made radio even more cookie-cutter bland, with narrow, unimaginative playlists. Demographic targeting and audience testing eliminate variety, stifle regionalism and foist the least objectionable music on the public...

"Radio's urgent challenge is recapturing baby boomers. As it does a better job of acknowledging younger listeners, radio does a worse job of acknowledging anyone over 35," [Airplay Monitor's Sean] Ross says. "There are no commercial classical stations in Detroit, Philadelphia or Miami anymore. The labels have learned in the past five or 10 years to reach the 35-year-old who wants to buy a Bee Gees record even if it's not on the radio. (Labels that) find a way to market to 45-year-olds who grew up on rock 'n' roll will have an advantage."

This is all largely hooey. True, radio is now largely owned by a few multi-billion-dollar corporations...but previously it was owned by a somewhat larger number of multi-hundred-million dollar corporations! The variety of formats was no wider ten years ago than it is today, and regionalism has never been significant since I've been in the industry. Internet radio offers an excellent workaround for both labels and for listeners...but it would have been just as welcome ten years ago as it is today. -- KH

"Money for nothing:
Music fans suffer from CD sticker shock"
"Until recently, the ceiling on list prices of CDs hovered at $18.98. Then Universal hiked the sticker price of Ja Rule's Pain Is Love and The Scorpion King soundtrack to $19.98. The upside of the pricing game is that some rising acts, including N.E.R.D. and Andrew W.K., are entering the playing field sporting a lower price tag...

"The complaint: Shelling out $16 to $18 is too much for a record with maybe two hits and lots of padding.. Retailers pressuring labels to reduce wholesale costs contend that selling an album under the "the magical price point" of $10 would discourage CD burning, according to Billboard...

"The RIAA reports that the average CD price fell by 40% between 1983 and 1996, while the Consumer Price Index rose nearly 60%...

"The outlook: Labels can streamline their operations, tighten budgets and adopt a more flexible approach to pricing, especially in the download realm, where an invitation to cherry-pick singles rather than gamble on whole albums might better suit cyber-savvy consumers."

That MUST be a misquote about the average price of a CD falling by 40% between 1983 and 1996. It's amazing to walk into a Borders today and see that MPAA members can somehow release a two-hour DVD disc of audio plus video plus loads of special features for a lower price than RIAA members can release a disc containing 45 minutes of audio only (that was recorded 15 years ago)! -- KH

"The thrill is gone:
Music fans find dearth of quality"
"Perhaps the most nebulous whine in fandom concerns a perceived dearth of good music. Roughly 27,000 titles are dumped into the marketplace annually, yet many consumers, particularly casual or older fans less prone to rooting out new sounds, grumble about a shortage and pine for the days of plenty.

"The complaint: Record labels sign only what they hope will sell, jumping on the latest bandwagon and flooding the market with sound-alikes...

"The defense: Stockholders demand results, so labels are pressured to keep the hits coming and to winnow flat-liners from the roster. To assure exposure, they cater to the programming needs of radio and video channels rather than risk an expensive promotional campaign for an artist who falls outside the parameters...

"The outlook: Labels have been long aware that radio promotion is corrupt and wasteful, but now there's some initiative toward change. There's a drive to devise alternate means of promoting artists through grass-roots efforts, à la "O Brother,[Where Art Thou?]" that circumvent radio and MTV.

"[Former Spin editor Alan] Light says, 'You need new machinery to get music out there, maybe the emergence of something not tied to the major labels....

"[Soundscan CEO Mike] Shalett says: 'We need to reach beyond the traditional avenues of exposure...'"

Something here doesn't make sense. Certainly many hundreds of those 27,000 titles are record company attempts at break-the-bank multi-million-sellers. (Five such high-expectation releases per week per major label would be 1,300 such releases per year.) But the balance of the 27,000 titles must be albums with more reasonable expectations -- e.g., Rosemary Clooney's jazz vocal CDs, classical CDs, bluegrass CDs, Broadway cast CDs. These CDs must be profitable or labels would learn their lesson and quit releasing them! And, gosh, what would be a great solution to the needs that Light and Shalett are describing? Can any RAIN readers think of one? -- KH

This first note is in reference to yesterday's lead story "Chicago Tribune on radio using the Web for more than just music" here...

"E-mail marketing moves the needle with ratings and revenue..."

"It will be exposed to fans and buyers..."

"Her constituents are indeed already getting paid..."

"(Webcasters) are doing the record industry a service..."