The Irrelevance of the Nation State

7/29/2019 The Irrelevance of the Nation State

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Revue LISA/LISA e-journalLittratures, Histoire des Ides, Images, Socits du Monde Anglophone Literature, History of Ideas, Images and Societiesof the English-speaking World

Vol. II - n2 | 2004 :The United States through the Prism of American and British Popular MusicTransactions

The Record Industry in the 21st Century: TheIrrelevance of the Nation StateLIndustrie du disque lge de la transculturation

TAMSIN BRIGGS

p. 20-40

Abstract

Lobjet de cet article sera dtudier lindustrie du disque laube du 21me sicle. Jentends montrer la transformation dun marchlongtemps sous domination anglo-amricaine, pass dun stade que lon pourrait qualifier dimprialisme culturel un autre, que jedsignerai par lexpression transculturation mondiale . Nous verrons que les notions de marque et dimage rgissent la politique desocits qui ne sont plus que les rouages dun systme de conglomrats multimdia transnationaux de plus en plus difficile apprhender,et o les concepts de synergie et de promotion croise font force de loi. Les adjectifs amricain et britannique ne peuvent plussappliquer lindustrie du disque : lheure de la mondialisation, le concept dtat-nation na plus grand sens.

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Index terms

Chronological index : XXe sicle, 20th century

Thematic and geographical index : socit, tats-Unis, society, United States, histoire, history, musique, music

Ful l text

From Cultural Imperialism to Transculturation

No other technology has penetrated society so quicklywhat is more, the rate of penetration appears to be accelerating. At

the same time governments seem to be aware that their traditional cultural heritage could be threatened, but are not sure

what to do, or cannot act because of other priorities. Also, international producers of audio and visual products, partly

through losses resulting from their own inventions,1 are forced to try to sell similar products in as many different

countries as possible. A transnational form of nationless culture develops. (Wallis & Malm, Patterns... 161)

This quotation is part of the opening paragraph to Wallis & Malms essay Patterns of Change and helps to reveal the

patterns in the organisation of the record industry on a global scale. The recordand mediaindustries now see the worldin terms of large regions: North and South America, Europe, Asia (Africa is widely ignored, apart from South Africa).Countries in terms of nation states have no meaning. The head office of a Major in Europe might well be based in theUnited Kingdom, but its responsibility will be the whole of Europe, and the office could just as easily be located inHamburg, Munich, or Paris. Wallis & Malm found that the international distribution of music that has access to modernmedia is increasing at an extraordinary rate and smaller countries are finding it harder and harder for their own music tocompete with international repertoire (Wallis & Malm, Patterns 172), even remarking that now that Jamaica is able toreceive over thirty satellite television channels, there no longer is any room for Jamaican musicians on local television, eventhough music is one of the countrys biggest exports the production cost is simply too high for national television tocompete. The authors argue that we have moved awayor are moving awayfrom a pattern of cultural imperialism

towards a state oftransculture. Cultural imperialism is defined as a form of cultural dominance (such as western musics)augmented by the transfer of money and/or resources from dominated to dominating culture group (Wallis & Malm,Patterns 177). The main example related to the record industry is the transfer of profits derived from sales or copyrightcollected in subsidiaries, but there are also cases where the artists themselves move to the US in order to take advantage offinancial benefits, or in the case of Bob Marley, for instance, transfer their copyright to an American collecting society.Nevertheless, cultural imperialism still afforded room for counteractions, and spurred the birth of musician unions andnon-profit record labels in certain countries.

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Transculturation took things one step further:2


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This pattern of change is the result of the worldwide establishment of the transnational corporations in the field of culture,

the corresponding spread of technology, and the development of worldwide marketing networks for what can be termed

transnationalized culture, or transculture. Transnational music culture is the result of a combination of features from

several kinds of music. This combination is the result of a socio-economic process whereby the lowest musical common

denominator for the biggest possible market is identified by building on the changes caused by the three previously described

patterns of change [i.e., cultural exchange, cultural dominance, and cultural imperialism].2 (Wallis & Malm, Patterns...176)

First, that the local is now equated with the different not by reference to local histories or traditions but in terms of a position

in the global market-place. This is to lead policy- makers inevitably to issues of distribution and consumption. To support

local venues (whether in Norwich or Nijmegen), local distributors (whether in Scotland or Victoria) and local radio stations

(whether in Dominica or Finland) is to support not just ones own local music, but also local music in general, different

music wherever i t comes from. [] Second, [] we no longer live in a world in which the local can stand for community,

security and truth. I t describes rather the setting for our shared experience of rootlessness and migration, for the constant

movement of capital and labour, or signs and sounds. In technological terms anyway the world is becoming the local and

global: the national level no longer matters when every household has access to the global media flow, when every producer

can, in practice, directly serve the global greed for images. 3

(Frith, Popular Music 23)

This means that the different cultures involved in the transculturation process will pick up elements from transcultural

music, but also that elements of the cultures own music will be fed back into the system. Wallis & Malm argued in

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1984 that the spread of technology is accelerating the processone hardly dares to think of the integration rate theInternet, digital downloads, and file exchanges afford. One of the options might be, over a period of time, that this wouldlead to the emergence of one single form of global music. An example of a transcultural artist could be, for instance, thesinger/songwriter Manu Chao. Both his recent solo work and his previous work with the band Mano Negra containelements derived from different cultures, creating a patchwork of Spanish, Arabic, and French rock influences over a goodold American rock tempo. He also singsoften within the same songin several languages, mixing English, Spanish, andFrench, and this also contributes to making his work easily accessible to many different cultures throughout the world. Thismixture of different styles and influences where everyone can recognise their own environment has turned the Franco-Spanish singer into one of Frances highest exports in terms of record sales, and one of the few French artists in recent

years to sell records in countries su ch as the States and the United Kingdom.

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At the other end of the scale, however, there have been systematic attempts to develop local music centres, as SimonFrith also points out in his article Popular Music and the Local State (21). While on the one hand there is themulti-media marketing of new video stars like Madonna [and] the Western diffusion of world music (Frith, PopularMusic 21), small countries have been trying to sus tain their local music repertoire and production, either through statesubsidy (taking the form of information offices and help with export) or through deterrent measures (such as radio andtelevision playlist quotas). Frith also points out that such efforts against Anglo-American domination (or, as we have justseen, transculture) also exist within the United Kingdom, though supported by the local authorities and sponsored bycommercial companies such as breweries in lieu of state subsidies. Friths conclusions are two-fold:

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The relevance of the local loses its meaning in a world of strong migration and of daily global interaction of different6


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Hegemony

[it] has become synonymous with the name Sony, a name deliberately derived from the Latin word sonus meaning sound,

and recognised and pronounced in the same way throughout the world. [] When the consumer takes out their cassette

marked with the Sony Music corporate logo, recorded by artists who are signed to Sony Music Entertainment, and plays it

on their Sony Walkman, not only does the hardware meet the software. A strange tautology (sic) occurs as we listen to the

sound of Sony. (Negus 36)

cultures.

Technology has proved to be one of the record industrys main ways of gaining or maintaining market share and controlover the market. Sonys adventure with the Walkman is another fine example of how technological leadership has helped

major corporations keep one step ahead, and in this particular case turning a copyright lawyers nightmare (theaudiocassette) into an entrepreneurial dreamin other terms, megabucks. Relating the story of the invention, Negusrefers to two important aspects: first, the competition within different departments of Sony Corporation to come up with anew product and, second, the fact that it was designed with a preconceived notion of its use value (Frith, Popular Musicand the Local State 23), meaning that the applications of the product had been thoroughly thought through beforehand,contrary to previous record industry related inventions, where the applications followed the technological progress. Thesuccess of the Walkman meant that

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This cynical view of Sonys sprawling expansion is only a single exposition of what transnational corporations havebecome; by Wallis & Malms definition, the case would still belong to the sphere of cultural imperialism, of the good olddays when multinationals vertical integration only sought to control the total production flow from raw materials to

wholesale sales (Peterson & Berger 145), which they achieved through an attempt at the control of performers vialong-term exclusive contracts, and through effective control of the media and distribution channels. This in turn led to anoligopolistic concentration of the market and homogeneity in the production of popular music. Peterson and Berger agreethat as long as the market-controlling mechanisms just described continue to operate unchanged, the trend to greaterhomogeneity continues because each of the oligopolists focuses on winning the greatest share of the market (Peterson &Berger 145).

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Similarly, it has often been argued that oligopolistic concentration in the record industry has enabled record companies tomaintain artificially high prices on compact discs. The United Kingdoms Monopoly and Mergers Commissions report,TheSupply of Recorded Music, published in June 1994, looked into the pricing of CDs and finally chose to side with the recordcompanies. However, the subject is currently under examination by the European Commission (Author unknown, TimelyInquiry). Yet, the multinational system still had flaws, the main one being that the high concentration favoured burstsof creativity among independent companies. Drawing on Peterson and Berger as well as Negus, Brian Longhurst commentsthat the smallness and intimacy of such companies facilitated the production of particularly innovative sounds which

broke free from the standardized products of the dominant record companies and that it was felt that they were better able

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Running parallel to the internal reorganisation of record companies has been the forging of external links between large

corporate labels and small companies through investment arrangements, l icensing deals and joint ventures. These

connections have provided regionally based small companies with finance, arrangements for manufacture and distribution,

and the opportunity to reach markets in other terr itories; and have given large corporations access to an external source of

repertoire and enabled them to use small companies as research and development divisions [] (17).

OfferingFortune Magazine readers advice on how to market to teenage girls, reporter Nina M unk wr ites that you have topretend that theyre running thingsPretend you still have to be discovered. Pretend the girls are in charge. Being a huge

to represent the aspirations and feelings of their artists and audiences than the large corporations (34). Keith Neguss pointof view is not dissimilar, yet he sees the companies as interconnected with one another, as a web of major and minorcompanies:

According to Negus and others, the record industrys response to economic risk and commercial uncertainty ( Negus40) (i.e. Will this record sell as much as I expect it to? Will I recoup my investment in this artist?) was a strategy ofoverproduction combined with differential promotion, in which record companies attempt to cover every potential marketpossibility (Negus 40). As the antes have been upped in the nineties, record companies are no longer willing to use themud-against-the-wall techniquethrow out as much product as possible in the hope that some of it will stick (Negus40) and prefer to transfer their risk-taking to smaller entities, such as publishers, producers or indie labels, who act astalent scouts for the larger corporations. Negus provides us with two examples from the 1990s of label deals that fit theabove descriptionFood Records, funded by EMI, and Creation, renamed Elevation, funded through Warner in GreatBritain and EMI in the United States. Food retained artistic control over its signings, and enjoyed access to higher levels ofinvestment and more sophisticated marketing, distribution and promotion methods (Negus 17). The drawback to this was,however, that while EMI had first option on Food artists, they were also entitled to review and renew their arrangements

with Food every six months. However, Alan McGh ee of Elevation Records saw his arrangements with Warner and EMI ashighly beneficial for his artists (he was able to pay them higher advances) and for sales (his expectations on a current album

were multiplied by three) (Negus 17). This kind of deal between Indies and Majors is particularly common in the UnitedKingdom where the Majors control over 95 per cent of distribution, rendering it extremely difficult to bypass the Big Five.This situation contributes to a state of dependence of indie labels, as the example of Food Record indicates: the label isfinancially dependent on EMI, as well as under constant artistic scrutiny, whereas EMI is free to discontinue the deal everysix months, and to turn down records it is not interested in.

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Neither are such deals a particularly recent occurrence. George Marshall reported Chrysaliss use of a label deal in orderto entice the ska band The Special A.K.A. into a recording deal. It enabled the band to produce ten singles a year on their 2

Tone label, six of which Chrysalis would be obliged to release. But in fact, the recording contracts were signed between theband and Chrysalis, and the Specials only financial benefit from the deal was a two per cent override ( Marshall 17). Thedifference was, though, that the consumers purchasing 2 Tone singles had no idea they were in fact putting money intoChrysaliss pocket. This ploy of hiding behind other brand names is a way for the Majors to retain street credibility, and notmix contradictory artist images, or spoil that credibility with a corporate image. Naomi Klein reports comparable examplesin No Logo:

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corporation might sell on Wall Street, but as the brands soon learned on their cool hunt, indie was the pitch on Cool Street.

Many corporations were unfazed by this shift, coming outwith faux indie brands like [] Old Navys mock army surplus

(the Gap) and OK Cola(Coke). [] And in 1999, when Levis decided it was high time to recoup its lost cool, it also went indie,

launching Red Line jeans (no mention of Levis anywhere) and K-1Khakis (no mention of Levis or Dockers). (17)

Selling out or Cashing in? Where Image is All:BrandingFor thirty years, you couldnt possibly make it unless you were white, sleek, nicely spoken and phoney to your toenails

suddenly now you could be black, purple, moronic, delinquent, diseased, or almost anything on earth, and you could still

clean up.

Nik Cohn,AwopBopaLooBo pAlopBamboom, 1972. 4

The latest chapter in mainstream Americas gold rush to poverty began in 1986, when rappers Run-DMC breathed new life

into Adidas products with their hit single My Adidas, a homage to their favourite brand. [] Weve been wearing them all

our lives, Darryl McDaniels (a k a DMC) said of his Adidas shoes at the time. [] After a while, [] it occurred to [] the

president of Run-DMCs label Def J am Records, that the boys should be getting paid for the promotion they were giving to

Adidas. [] Adidas executives were skeptical about being associated with rap music []. To help change their minds,

Simmons took a couple of Adidas bigwigs to a Run-DMC show.[] At a crucial moment, while the rap group was

performing the song [My Adidas], one of the members yelled out Okay, everybody in the house, Rock your Adidas!andthree thousand pairs of sneakers shot in the air. The Adidas executives couldnt reach for their checkbooks fast enough.

(Klein 73)

But in the shadows, major corporations still own and run all the indie trademarks quoted above.12

Thirty years after Nik Cohns remark, what Greil Marcus calls rocks touch of anarchy has widely been cashed in on andco-opted by the Majors as well as household brand names. Suddenly, nothing is shocking anymore. If we take hip-hop, forinstance, it started out as the music from the ghettos. Now sportswear and sneaker brands are lining up in order to sponsor

rap bands. Naomi Klein wrote that this [aggressive mining] by the brandmasters as a source of meaning and identity []was the key to success of Nike and Tommy Hilfiger, both of which were catapulted to brand superstardom in no small partby poor kids who incorporated Nike and Hilfiger into hip-hop style at the very moment when rap was being thrust into theexpanding youth- culture limelight by MTV and Vibe(the first mass-market hip-hop magazine

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[]). She follows up with the example of Adidas:14

When top executives of influential brands realised the potential there was in co-opting youth trends, alternative cultureand street lifestyle, Adidas were no longer the only ones reaching for their chequebooks. And this was not only aboutsponsorship, but also about using word of mouth to create a buzz, adopting the underground tactics used by the youngthemselvesstreet marketing had been invented. In record companies this translated as literally [taking] the streets:

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Hiring street teams to mingle near high schools and playgrounds, No L imit Records gave out CDs and decals for acts such

as Master P. Relying primarily on his grassroots(or more properly asphalt roots) marketing, Master P hit number one on

the Billboard charts in its first complete week at retail, racking up sales of nearly 500,000 CDs. [] The lesson was not lost

on more traditional players in the music industry. Loud Records, another rap label (half-owned by BM Gs RCA label),

dispatched its street teams, armed with cassettes of Big Punishers album []. For nearly two years before the release of the

CD, they talked up the new act and gave away samples. When the album finally came out, it sold 136,000 copies in one week

and instantly went to the number five position on the Billboard 200 Chart without video playing on MTV, without major

airplay on radio, and without a word about it in Rolling Stone. (Wolf 263-4)

Clearly, the product being served makes a difference, but when you really think about it with an open mind, narcotics, an

industry which at an estimated $50 to $60 billion in annual profits rivals the entertainment industry, is a prime example ofsuccessful product distribution without the benefit of conventional advertising. (264-5)

The concept [] is simple: hold a contest in which winners get to attend an exclusive concert staged by Molson [] in a

small clubmuch smaller than the venues where one would otherwise see these megastars. And heres the clincher: keep the

name of the band secret until it steps on stage. Anticipation mounts about the concert (helped along by national ad

campaigns building up said anticipation), but the name on everyones lips isnt David Bowie, the Rolling Stones,

Soundgarden, INXS or any other bands that have played the Dates, its Molson []. No one after all, knows who is going to

play, but they know who is putting on the show. With Blind Date, Molson [has] invented a way to equate their brands with

extremely popular musicians, while still maintaining their competitive edge over the stars. (48-9)

Soon the Soda giants and big brands were picking up on these new marketing possibilities. In The EntertainmentEconomy: How Mega-media Forces are Transforming Our Lives, Michael J. Wolf explains how PepsiCos Mountain DewBrand invested over $1,000,000 in street marketing, sending out eight vans to a multi-star hip-hop tour: they were ladendown, like galleons of pop culture, with Mountain Dew samples, CDs from ten record companies, T- shirts in short everypromotional item known to western civilisation, even distributing half a million free pagers to kids who could use them tocall up their friends, but only after they read the Mountain Dew promo that popped on after powering up. [] Even moresubtly, the word had been spread throughout the subculture that Mountain Dew had the highest caffeine content of any softdrink. Despite being an entertainment consultant, Michael Wolf admits that it sounds like something out of a narcotictraffickers (sic) playbook. Rather cynically, he remarks:

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Needless to say, Mountain Dew sales rose accordingly, the bottom-line results of this non-traditional mix of hip-hopmarketing and conventional advertising [being] annual growth rates of up to 13 percent for Mountain Dew, whose saleshave eclipsed those of Dr Pepper, Sprite, and even its own mother brands lighter fare, Diet Pepsi (Wolf 264-5). Clearly,

both brands and artists find advantages in sponsorship and cross-promotion deals, as, when the advertising is handledintelligently, it is mutually beneficial, but is this an equal partnership? In the above case of Adidas and Run-DMC, I would

be tempted to answer yes. In other cases , the brands have managed to upstage the bands, as with the unavoidable sponsorof live music in Canada, with Molson Breweries. Naomi Klein reports that the beer brand was fed up of being insulted onstage by the bands they programmed, with having their brand name eclipsed by the stars, so they invented the Blind Date

Concert.

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[S]ponsorship is a far more complicated process than the buyer/seller dichotomy that existed in the previous decades and

[] to talk of who sold out or bought in has become impossibly anachronistic. In an era in which people are brands and

brands are people, what Nike and Michael J ordan do is more akin to co-branding than straight-up shilling, and while the

Spice Girls may be doing Pepsi today, they could easily launch their own Spice Cola tomorrow. (61)

The Record Companies: Corporate Branding and

Global StrategyWe dont cover hit records, we cover hit philosophies

Stan Cornyn, vice-president of Warner Brothers Records.5

Another example is that of Cline Dion, one of the worlds mega-stars. Nevertheless Avon sponsored one of her recenttours, and part of her contract stipulated that she would meet up with a selection of Avon representatives before each of herappearances. So here was a tense Cline, getting geared up for a public performance in front of a football stadium full ofpeople, tetchy to the point of irritability, having to put in an appearance and submit with a smile to endless group photos

with strings of Avon advocates, their husbands, children, grandparents Isnt th e purpose of being rich and famous to nothave to do things like that? And would Cline Dions tours (or the Rolling Stones, or other mega-stars) really not breakeven without a little help from their friends the sponsors? The relation between a star and a brand is becoming increasingly

bipolar, either mutually beneficial or mutually antagonistic. The main reason for this is that s tars themselves, evolving in

their total star environment (see also Media Synergy below) are marketing themselves as brands (as Posh Spice oncetold a reporter: We wanted to be a household brand. Like Ajax [Klein 48-9]). Klein draws her own conclusions:

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It is now easier to understand how record companies have come to promote themselves as corporations in parallel to thepromotion of the artists signed to them. Negus comments that corporate public relations is a trend in management and

business generally, where there has been an increasing concern with how a company maintains its corporate cul ture andcommunicates to the outside world (Negus 116). Elsewhere, he observes that record companies on occasion acquire orretain actswho on paper may not be commercially successful[] because they enhance a companys profile within theindustry and contribute to their ability to attract both artists, staff and investment (Negus 137). This shows how, as in otherlines of business and there is no reason for entertainment to be an exceptionWall Street analyses prevail. In fact, as thecharts derived from Herman and McChesneysThe Global Media show, most record companies, especially the Majors, areno longer stand-alone corporations, but part of a handful of much bigger and more powerful transnational corporations,

whose holdings span al l the different aspects of media in the 21st century, including broadcasting and te lecommunications.Not only have these corporations evolved to gargantuan size, but they have also engaged [in a] most visible drive forcorporate alliance and consolidation, according to William Greider (182). In his book, One World, Ready Or Not, Greidercompares these new media combines to entities as dominant as the railroad and oil trusts were in the 1890s (182). Fornot only did the companies start merging at a frenetic rate (AOL and Time Warner; PolyGram bought up by Universal, onlyto be taken over by Seagram, who in turn sold to Vivendi, etc.), but they also form a web of corporations which all interact

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Links between first tier dominant media firms and second tiers films in the global market

with one another through joint ventures, equity interests or long-term strategic alliances (Herman & M cChesney ChapterIII). The following diagram clearly shows the inextricable links between all major players of the media world, and furthershows that the six main groups control the vast majority of the media that we know.

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Source: derived from Herman & Chesney, Chapter 3.

The Virgin Megastores provide perhaps the clearest displays of this kind of brand cohesion, employing various intra-brand

synergies to leap-frog over entire stages of consumer choice. In the past, record labels, no matter how much money they

sank into promoting new artists, they were still at the mercy of record-store owners and radio- and music-video station

programmers []. No more. Virgins 122 megastores are wired up to be synergy machines, equipped with building-sized

murals ads, listening stations for customers to sample new CDs, huge video screens, deejay booths, and satellite dishes tobeam live concerts into the stores. This is par for the course in the age of the superstore, but since Virgin is also a record

label7, all of this technology can be harnessed to create a sense of breaking excitement about a new Virgin artist. Well be

featuring certain ar tists every month. That means we play them in the store, we can do live shows via satellite from another

location and we can give them store presence says Christos Garkinos, vice president of marketing for Virgin Entertainment

Group.

Think of what we can do for a developing artist. More to the point, why wait around for something as temperamental as

audience demand or radio play when by controlling all the variables you can create the illusion of a blockbuster success

before it even happens? (Klein 160)

Indeed, corporate philosophies have become a central part in a brands image. Richard Branson sees Virgin as Japanesekeiretsus, or in plain English a network of linked corporations. He explains that the idea is to build brands not aroundproducts but around reputation. The great Asian names imply quality, price, and innovation rather than a specific item. Icall these attitude brands: they do not relate directly to one productsuch as Mars bar or Coca- Colabut instead to a setof values.6 Naomi Klein demonstrates that:

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Global solutions

Corporate alliances are, of course, the antithesis of free-market dogma and the supposed liberalization of global trade. On

the one hand, multinationals preach free market competition and aggressively promote the dismantling of governments

legal controls over commerce and finance. On the other hand, the same firms are busily forging territorial compacts with

each othercollaborative mechanisms that may be used to manage trade privately, on their own terms, above and beyond

the reach of national governments. (172)

In creating a blockbuster success before it even happens, the vertically concentrated media company can in effectcontrol the tastes of the consumers due to the replicating effects of media synergy. A company present on all five continentsis able to do so globally.

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Most companies, whether involved in entertainment or not, are moving away from their core product, in fact movingaway from product altogether, as if it was something slightly dirty, and involving themselves more deeply into creating avision: in Kleins words, IBM isnt selling computers, its selling business solutions. Swatch is not about watches, it isabout the idea of time (23) and many others are involved in selling a lifestyle.

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In the introduction to his essay on the role of the American music industry in the global popular music market, SteveJones remarks that popular music is exploited as an investment with global dividends (Jones 83)by which he meansthat markets must be considered as a whole, not as separate entities. This is why it does not make any sense to consider theUK or the US record market alone, and why references to the global aspect of the industry have been necessary. Similarly, itis no longer possible to consider music alone, without linking it in to other entertainment products, or even outwardstowards unrelated lifestyle wares. Along the same line as Jones, in the conclusion ofThe Entertainment Economy, Wolfdeclares that

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entertainment icons have become the closest thing to globally shared cultural icons, backing it with the statement thatmore Hindus are probably familiar with Madonna than they are with Abraham Lincoln; his vision of the futureencompasses a better-integrated and larger global entertainment business, perhaps two or three times the size of thecurrent entertainment economy, as the masses of China, India and Latin America enlist in a burgeoning, cable- ready,on-line savvy class (even in low-income households) (291). Yet it is unlikely that it will also be run by the low-incomemasses, but much more so, that they will be huddled up in front of screens, taking in the streamline of advertising fed tothem in the guise of entertainment. It is when the effects of horizontal and vertical integration, conglomeration, andglobalisation are combined that a sense of profit potential emerges. Considering the concentration taking place in themarket in recent years, Herman and McChesney note that mergers generate automatic cost savings in large companies,

while they facilitate the launch of new businesses, as the corporations are able to draw upon existing staff and resources(Herman & McChesney 53). They are further able to exploit a whole range of opportunities derived from cross-selling,

cross-promotion, and privileged access. The combination of these two features further reinforces the conglomeratesposition and strength in the marketplace. When several of these mastodons pool their efforts, the corporate alliances, whichresult from them, go way beyond the reach of governments, as Greider explains:

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Media synergyGiant Corporation Inc owns subsidiaries in every medium. One of its magazines buys (or commissions) an article that can

be expanded into a book, whose author is widely interviewed in the company magazines on its broadcast stations. The bookis turned into a screenplay for the company movie studios, and the film is automatically booked into the companys chain of

theatres. The movie has a soundtrack that is released on the companys record label. The vocalist is turned into an instant

celebrity by cover features in the company magazines and interviews on its television stations. The recording is played on

the companys chain of Top 40 radio stations. The movie is eventually issued by the firms videocassette division and shown

on company television stations. After that, rerun rights to the movie are sold to other television stations around the world.

Nation Magazine (Quoted in Negus 4-5)

One would have suspected that these corporations would be fiercely competitive. But in fact, they have found it moreefficient to make alliances amongst themselves, thus roping off the market from newcomers. It will now be seen how eachof these companies control releases vertically.

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This new form of synergy as moguls, critics and analysts coin it, refers to a strategy of diversifying into directly relatedtechnologies and areas of entertainment and using the opportunities that this provides for extending the exposure ofspecific pieces of music and artists (Negus 5). But synergy is not only the way for transnational corporations to milk eachnew concept dry, as each individual departments contribution to the whole increases the concepts overall potential. As

Negus observes, this also means that record companies can no longer sign an artist on his/her merit or image alone, butmust integrate him/her into a global entertainment packagethe total star text. If there is one firm which has fullyunderstood the possibilities afforded by media synergy, that is Disney. Herman and McChesney report that evenunsuccessful films such asThe Hunchback of Notre Dame, which only generated $99 million in revenueat the box-office,

was expected to generate $500 million in overall profit (Herman & McChesney 54).

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This expanding vertical integration means we are losing the spaces where the non-corporate mind can flourishthosespaces are there but they are shrinking as the captains of the culture industry become more enraptured by the dream ofglobal cross-promotions.8 It is not that companies set out with a specific will not to create or promote anything radicallydifferent or unexpected, but it just seems to spill out that way because of the economics of this form of transnationalcorporation: in an atmosphere of rising competition between corporate giants, the attitude towards hit products has also

evolved. While before having a hit was a nice windfall, Wolf indicates that it has now become the defining strategicconcept in any growth plan(158). Over and above this, transnationals are not only competing for market share, but alsostruggling for utmost prominence in terms of consumer recognition, and hits are something that provide them with thiscultural context in which people see themselves.

27

What is maybe more surprising to observe is that the handful of entertainment and media moguls that dominate theworld market also form strategic al liances on specific long-term or short-term projects: Wolf mentions, for instance, Sonyand Disney joining forces to produce the movie Air Force One, even though they are usually fierce competitors at the boxoffice, whereas the entire third Chapter of Herman and McChesneysThe Global M edia is devoted to listing the top ten

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Free Market or Rigged Market?

firms assets and their direct or indirect links with one another. Maybe Rupert Murdoch has provided us with a key when hedeclared: We can join forces now, or we can kill each other and then join forces (Herman & McChesney 57). But if themedia moguls stop going at each others throats, this also means less competition, less product differentiation and a moveaway from the oligopoly structure towards that of the cartel. If such a theory is correct, then the European Commission is

well advised to be looking into the price of compact discs to consumers. We must not forget that whether a company ownsall its assets or combines them in temporary alliances with others, the goal is always the same: the widest possibledistribution for the product, the message, the brand(Wolf 147).

Yet in order to achieve this goal, corporations aim at the average, catering for the lowest common denominator and

drawing on an impoverished sense of the individual(Buxton 438). In this context, MTV is seen as an all-news bulletin forcreating brand-images, 9 and the most significant factor to shared tastes of middle-class teens, according to the New

World Teen Study, which also found that [t]eens who watch MTV Music videos are much more likely than other teens towear the teen uniform of jeans, running shoes and a denim jacket They are also much more likely to own electronics andconsume teen items such as candy, sodas, cookies and fast food. They are much more likely to use a wide range ofpersonal-care products too. From which Naomi Klein concludes, MTV International has become the most compellingglobal catalog for the modern branded life (121).

29

While Peterson & Berger indicate that the record production industry underwent cyclical concentration in the past,causing homogenisation of the product on offer, followed by consumer withdrawal which spurred new competitors to enterthe fringes of the market, the level of this concentration never descended below an 8-firm ratio (140-159), which in itself issignificant. However there is also undeniable evidence of Anglo-American dominance over the world market that has ledrecord companies to construct markets to provide a series of opportunities for British and American artists across theglobe (Negus 11). On another level, the top ten media concerns in the world include all of the major record companies(Herman & McChesney 52-53), and these companies also interact in order to maintain or develop their dominance overmarkets or to maintain or develop their respective market shares in given territories. This permanent ultra-competitivesituation also leads to competition within the same companies, as several sources within Majors have confirmed, althoughthis is not something that they are supposed to talk about. When a new title is released internationally, each territory will be

assigned a marketing budget and a sales target; it is only if they achieve this target (say, a golden album) that they will beallowed to spend additional marketing money in order to consolidate a chart position or even hope to reach a higher level ofcertification (such as a double-gold or even a platinum album). Simultaneously, a high chart position will also generateadditional radio and TV airplay in the territory and generate sales synergy. But if an important record chain orders a largequantity of records from the Majors branch in Belgium or the Netherlands, for instance, which are two countries with lowerthan average wholesale and retail margins, then the sales will be counted in their quota and they will artificially achieve aposition which they would not have been able to generate on sales alone, while it can cost the wronged branch company itstarget, and transform a potential hit for the territory into a dead duck. As one executive told me,

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The global scheme of things? They [the Major] sell X number of records. They are happy. From a UK point of view, were

spending marketing money to buy things like racking and advertising and in-store space and they [the chain store] go and

buy the records from an importer. So, they are not scratching our backs when we scratch theirs. So that is frustrating and it

is expensive to us. I t can make a substantial difference. Yes. A seventh of the number of records in the market are imports. I t

could stop you achieving a gold album or something, which would then generate more sales. I t also has an impact on the

artist, as well. Because an artist signed in the UK will earn less in royalties on a record sold in Germany than they do in the

UK. So, if a U K retailer buys all its stock from Germany, the artist will not be getting his full royalty share. I t is not just the

record company who is losing on that.

The issue revolves primarily around H-1 work permits for entertainers. In the past, the INS required applicants for H-1

work permits to make their way through a forest of paperwork and to include documentation (in the form of press clippings,

recordings, etc.) that proved the entertainers distinguished merit. The wording in the INS law has changed, however, so

that the term distinguished merit has been replaced by pre- eminence. If distinguished merit was difficult to document(the INS provided no definition of it) , at least it had a vagueness to it that allowed broad interpretation. The implication of

pre-eminence is that a performer must be popularfor all intents and purposes, a star. (84-85)

New technology is rapidly increasing the variety of media by which recordings reach the consumer and the recording

industry needs to ensure it derives income from the use of its product (e.g. by broadcasters, cable/satelli te operators, music

banks, private copying) in addition to the sale of physical carriers (e.g. singles, LPs, cassettes, CDs). (44)

In the USA, tactics have been employed by industry lobbyists to prevent the importation of foreign records that werecovered by American copyright, even if those records were no longer in print in the States. Conversely, though the American

branches of the Majors deny it, or, at least, say that they are unable to control it (distribution in the States not beingexclusive, but more of a network of wholesalers, regional distributors and one-stops), there is a constant flow of Americanparallel imports reaching the European markets, of records that have already been released by the original copyrightholders licensee, due to the attractive wholesale price of American records. The United States have also instated highlyprotectionist laws concerning public performance, which act as an additional barrier to European or African artists seekingrecognition in America. Steve Jones explains that:

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And star status s eems rather difficult to achieve in a country where you can neither perform nor get a record released. Asthe exploitation of copyright increasingly becomes a way for record companies to generate additional income, differentcountries reinforce their copyright laws, such as Japan, which has extended copyright protection [] from thirty years tofifty years, and prohibit[ed] rental of recordings for one year from their release. It is es timated that the new law may gainrecord companies up to $1 billion annually (Jones 91). The shift away from the straight-forward sale of physical productand towards the broader exploitation of copyright (such as blank tape levies as technological progress improves, orperformance rights derived from the use of music on the radio, in television programmes, films, adverts, and from the use

of music in public places) has meant that the IFPI 10 and its national counterparts such as the BPI in the United Kingdom,or RIAA in the States, are now lobbying in two specific but complementary domains: stronger copyright legislation andanti-piracy laws. As Rutten comments, the introduction of the International Standard Recording Code, or ISRC (anequivalent of the ISBNInternational Standard Book Number) has proved a powerful means of controlling the use ofrecordings as it identifies recordings, not physical products (carriers). He goes on to quote the IFPI:

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symbols on a recording. Steve Jones quotes synthesiser player and programmer Bryan Bell on what distinguishes them:The circle P copyright is for the whole record album. The musical copyright [circle C] is eight bars of whatever. The circle Pis for anything thats on there for any amount of time. Sounds included (90). It also covers typefaces, photography, layout,packaging design, etc. Needless to say that the

copyright belongs to the record company, meaning that even if a band did not object to being sampled, for instance, theirrecord company would be entitled to object.

In early 1995, Clinton claimed an important victory for the intellectual property rights of capital when the Chinese

government agreed to shut down the notorious knockoff factories that churned out millions of illicit compact discs, pirated

from the American music and film industries. J ack Valenti, president of the Motion Picture Association, promptly

announced that American companies would probably buy some of the outlaw factories and start producing CDs in China

themselves. (Greider 213)

An additional copyright issue involves the difference between the and33

Wolf argues that software[meaning] books, music, films, and computer programsis increasingly the currency inwhich the world trades and that future growth of all businesses based on this understanding of software is predicatedupon the ownership of intellectual property rights and perceives piracy as a great threat to long-term growth andshort-term stability (292). William Greider takes another stand, claiming that the periphery borrows from the center andmakes cheap copies. This widespread piracy not only ignites the outrage of established businesses and governments, but itis also a very old trait of migrating capitalism. Stolen technology and stolen markets were the foundation of Americasearliest industry (30). Greider further reasons that piracy only exists because of the high rate of CD player penetration indeveloping countries, accounting for pirated compact discs being sold so freely on the streets of Beijing or Kuala Lumpur(119), and that the main argument for fighting piracy is to enable American capital to enter these markets:

34

While the 1980s yie lded massive deregulation on all fronts, there seems nowadays to be a growing move ment towardssome form of control and regulation of market forces. Marcus Breen, stating the Australian case for making music local,

comments that the problems associated with increasingly large corporations like Sony owning both the song catalogues[] and the potential hardware for distribution of those songs are thus behind the calls for regulatory policies to cover theincreasingly interlinked, global media industries, of which the record industry is a major component (70). Whether theconstruction of a unified European market, encompassing a distinctive cultural identity and repertoire source []occurring [] across the existing cultural and national boundaries which have historically informed the way in whichrepertoire policies have developed and been organised (Negus 9) will enable the United Kingdom and its continentalcounterparts to present an enforceable means of protecting both artists and smaller businesses, only the future will tell. AsGeorgina Born points out in the Afterword to Rock and Popular Music,

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The stress [] on cultural policy echoes the main conclusions of a suggestive review of theories of international

communications by Sreberny-Mohammadi (1991), in which she calls for a move beyond the naively polarized terms of the

global/ local paradigm, and for the insertion of a third level of analysis; that of the nation-state and its potential policies

for the regulation of media and culture.(267)

I'm driven by the misfortune of other ar tists who don't have my privilege and ability. Artists who have generated billions of

dollars for the music industry die broke and uncared for by the business they made wealthy. I 'm one in a long line of artistswho have tried to break free since the (Universal/PolyGram) merger. I could end up being the music industry's worst

nightmarea smart gal with a fat bank account who is unafraid to go down in flames fighting for a principle. You show a

music industry contract to any attorney in any other business, and their jaw just hits the floor . I 'm ready to take this thing

all the way to the Supreme Court. (Author unknown Love files lawsuit)

The issue of shifting production to underdeveloped countries is the question of whether its cheaper to use people or machines.

If its located in J apan, it has to be based on machines because wages are so high. But if youre quick to invest the capital inmachines, you may lose to competition that has already seized the labor-cost advantage of globalizing production. (Greider69)

The terms of trade are usually thought of as commercial agreements, but they are also an implicit statement of moral values.

In its present terms, the global system values property over human life. When a nation like China steals the property of

capital, pirating copyrights, films or technology, other governments will take action to stop it and be willing to impose

tariffs on the offending nations trade. When human lives are stolen in dark Satanic mills, nothing happens to the

Another aspect of the regulation issue concerns not the record companies themselves, but the role to be played bybroadcasters. Wallis and Malm ask whether their primary goal should be to retain an audience, or whether it should be tomaintain a strictly public service structure, producing programmes the broadcasters think are good rather than programmesthey think will achieve high ratings (162). They further relate the issue to the nature of their mutual dependency on or

informal integration to the phonogram industry (Wallis and Malm 166), considering the latters increasing reliance onsecondary sources of income derived from broadcasting. Finally, there is evidence that the domination of the global market

by a handful of world players is not to the advantage of a large majority of artists, as these companies will prefer to focus ona small number of acts, deemed to have the potential for a truly international career. There is also the issue of artistcontracts, which still include breakage royalty deductions, halved royalties on export sales, and the recouping ofpromotional costs over which the artist has no, or little, control. Recently, a number of recording artists have begun tocampaign for artists rights, fighting for better royalty rates, health care and a pension fund for less successful acts.Courtney Love, one of the leaders of the movement together with artists of international renown such as Beck, Garbage, orSheryl Crow, was quoted in Music Week as having said:

36

Record companies playing the hard line when it comes to the rights of the recording artists they have under contract isdifficult to reconcile with their attitude towards piracy, which they often claim they are fighting in order to protect thesesame artists rights. But artists are not the only people getting harmed by the new structure of the global record industry. As

Yasunori Kirihari, Sonys general manager of corporate human resou rces put it:

37

As Greider comments, delocalisation involves valuing intellectual property higher than human life . His conclusion is that:38

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offenders since, according to the free markets sense of conscience, there is no crime. (359)

Bibliography

Works cited

Not only are industrial jobs in the West being replaced by slave-wage labour in developing countries, mediaconglomerates in the West are also increasingly relying on long-term temps and unpaid interns, who will work long hoursfor months on end, in the hope of eventually being rewarded by a paid job in the glamorous media company. Naomi Kleinquotes the story of Rick The Temp, who won the annual Be a Temp at MuchMusic contest, and was rewarded by a jobanswering phones. He became a VeeJay (Video Jockey) a year later, and having kept his nickname, his success served as adaily advertisement for the glory and glamour that awaits if you donate your labor as a gift to a major media company

(246).

39

There seems to be no way-out and the power and grasp of the media conglomerates may seem endless, yet very recentdownfalls in the media might be indicating that what the people of Sony call kudoka (a form of hollowing-out through too

big an expansion [G reider 15]) could yet make the boat capsize and give power back to the local, to the new, to the growing:Germanys Kirsh Media has just filed for bankruptcy, as has ITV Digital in the United Kingdom, and the ultimate mediacombine Vivendi has been dismantled. Most of this has more to do with the broadcasting and publishing world, than therecord industry, but still, it may be a sign of the times.

40

ANONYMOUS. Timely Inquiry Into CD Pricing: Spotlight on the Music Busine ss.The Guardian Saturday January 27, 2001. URL: Last checked 05 March 2002.

ANONYMOUS. Love Files Lawsuit against Universal. Music Week, 1 Mar 2001. Last checked 05 March 2002.

BORN, Georgina. Afterword: Music Policy, Aesthetic and Social Difference. No date (n.d.) Rock and Popular M usic: Politics, Policies,Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 266-292.

BREEN, Marcus. Making Mu sic Local. n.d. On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew.London/New York: Routledge, 2000. 66-82.

BUXTON, David. Rock Music, the Star System, and the Rise of Consumerism. (1983).On Record: Rock, Pop, and the Written Word. Eds.FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 427-440.

FRITH, Simon and GOODWIN, Andrew, Eds. On Record: Rock, Pop, and theWritten Word. London/New York: Routledge, 2000. 492pages.

FRITH, Simon. Popular Music and the Local State. n.d. Rock and Popular M usic: Politics, Policies, Institutions. Eds. BENNETT, Tony,FRITH, Simon et al. London/New York: Routledge, 2001. 14-24.

GREIDER, William. One World, Ready or Not: The Manic Logic of Global Capitalism. New York: Touchstone, 1998. 528 pages.

HERMAN, Edward S. and MCCHESNEY, Robert W.The Global Media: The New Missionaries of Corporate Capitalism. London/New

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Notes

1 The authors are referring to the audiocassette, but it could equally apply to DAT tapes and CD burners.

2 Emphasis theirs.

3 Emphasis his.

4 Quoted in Frith & Goodwin 476.

5 As quoted in Peterson & Berger 155.

6 As quoted in Klein 24.

7 The record label is V2, as Virgin Records was sold to Thorn EMI in March 1992.

8 Klein 188.

9 Elissa Moses, Wall Street Journal, 26/06/97, as quoted in Klein 120.

10 International Federation of the Phonographic Industry.

Li st of il lustrations

York: Continu um, 2001. 262 pages.

JONES, Steve. Who fought the law? The American Music Industry and the Global Popular Music Market. n.d.Rock and Popular Music:Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 83-95.

KLEIN, Naomi. No Space, No Choice, No J obs: No Logo. London: Flamingo, 2000. 490 pages.

LONGHURST, Brian. Popular M usic & Society. Cambridge/Oxford: Polity Press, 1999. 277 pages.

MARSHALL, George.The Two Tone Story. Dunoon, Scotland: S.T. Publishing, 1993. 111 pages.

NEGUS, Keith. Producing Pop: Culture and Conflict in the Popular M usic Industry. London: Edward Arnold, 1999. 175 pages.

PETERSON, Richard A. and BERGER, David G. Cycles in Symbol Production: the Case of Popular Music. (1975) On Record: Rock, Pop,and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 140-159.

RUTTEN, Paul. Popular Music: a Contested Areathe Dutch Experience. n.d. Rock and Popular Music: Politics, Policies, Institutions.Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 37-51.

WALLIS, Ro ger and MALM, Krister. From State Monopo ly to Co mmercial Oligopoly. Eu ropean Broadcasting Policies and Popular MusicOutput over the Airwaves. n.d. Rock and Popular Music: Politics, Policies, I nstitutions. Eds. BENNETT, Tony, FRITH, Simon et al.London/New York: Routledge, 2001. 156-168.

WALLIS, R oger, an d MAL M, Krister. "Patterns of C hange." (1984) On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon &GOODWIN, Andrew. London/New York: Routledge, 2000. 160-180.

WOLF, Michael J.The Entertainment Economy: How Mega-Media Forces areTransforming Our Lives. London: Penguin Books, 1999. 314pages.

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References

Electronic reference

Tamsin Briggs, The Record Industry in the 21st Century: The Irrelevance of the Nation State , Revue LISA/LISA e-journal [Online] , Vol.II - n2 | 2004 , Online since 16 November 2009, connection on 14 April 2011. URL : ht tp://lisa.revues.org/2978

About the author

Tamsin Briggs(Universit de Tours, France)

Tamsin Briggs worked in the record industry from 1991 to 2000 in several capacities and in several countries. Her research interests

include The British Record Industry in the last Quarter of the 20th Century. She works as a part-time lecturer at Franois Rabelais

University in Tours, France.

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