What happened to the record business?? - Gearspace.com
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What happened to the record business??
Old 19th January 2013
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🎧 5 years
What happened to the record business??

The Business of Music

“Rock is dead,” “The music business is in decline,” “The glory years are over.”
I’m sure many of you have heard one or all of these phrases in relation to the music business. The future of the music business is not really in question; it will continue in some form or another, but it is changing more quickly than some would like. Here are some ideas about why people are concerned.

Making a record is a risk. Record companies take risks when they pay to rent a studio, hire a producer, hire an engineer, rent additional equipment (if needed,) and support the living needs of the artist or band while recording the album. After that comes promotion, touring, videos, and other related costs. So, while we all want our favorite artists to succeed (or remain unknown to the masses so as not to ‘sell out’) how are all of these costs handled? Furthermore, when everything is paid for are there any profits?

Record companies want profit, they don’t care who the artist is as long as they create profits. The most vacuous, ignorant, soulless fool of an artist will be promoted to death as long as they create profits for the record company. Other artists, ones who might have more integrity and soul, while not topping the charts, will also receive attention from a record company, just not as much. This was the model that has fueled the recording industry for about 50 years. Sometimes the great amounts of money brought in by the highly successful artists have helped to fund the albums the lesser-known artists. In the end the record company wants every artist they pay to make a record succeed. But, unfortunately, most of their artists can’t even cover the costs of making a record through album sales, so the record company relies on the profits generated by their hit artists. With this model, a record company can continue on and keep everybody happy despite the financial loss of recording the unknown artist. It would seem as though very little in this model has changed from the listener’s perspective, so why is everybody concerned about the future of the business?

One answer to this question can be stated with one word: DITIGAL.

Digital audio is the conversion of acoustic energy in to binary via some sort of computing device. Prior to this, all modern records were made using analog recording equipment. Analog is the conversion of acoustic energy to electrical energy. That process was transferred to a magnetic medium for storage or in most cases recorded to tape via a super high-end tape machine. These are overly simplified descriptions of the analog and digital recording processes, but the differences in these two mediums is the vital component in the ‘decline’ of the music business.

An analog recording can be copied from one medium to another via “bouncing.” You can bounce from one tape to another or copy a record to tape etc, but that process creates what is called a ‘generation’ loss in quality. If a person bought a cassette, 8 track, or record and you wanted a copy it, your copy would not sound as good as the original. That’s a “generation” loss. If your friend wanted a copy of your copy, it would be a second ‘generation’ loss. The quality diminishes from copy to copy. No matter how high in quality your copying equipment was, it would never sound quite as good as the original.

This meant that most listeners would go out and buy the originally released product because, if they liked the artist, they wanted the best possible recording they could get. The record companies knew this and rested peacefully at night despite a thriving business of offering blank tapes to consumers for recording music. This all changed with digital.

The fantasy that most of us keep is that a successful artist, one with sold out tour dates, lots of merchandising, and great music, record after record, is wealthy. This is true. Everybody in the industry loves a success, but those at the top are just that, the top.

In the 80s I got a survey that was sent out to producer/engineers with extreme sales histories asking what would be our opinion as to what the minimum quality of digital
Media should be. The response was almost universally that it should be 20HZ to 20kHz
With a maximum distortion of about 0.2%, These were the commonly accepted standards at the time (although most of our favorite tube gear had distortion levels way
above that but still sounded great. The problem was that in order to digitize a signal with a top frequency of 20kHz a filter needed to be introduced that cut off ALL frequencies above 20kHz (known as a ‘Brick Wall Filter’). By the very nature of the physics of a filter there would then be a high level of distortion at about 2/3 of that top frequency which is about 14kHz – a very audible frequency range. Also the sampling rate would have to be more than double that top frequency which is where the 44.1 k sampling rate still used on all CDs was born.
The problem is that the ear determines spectral placement of things by minute differences as to when the signal arrives to the left & right ear and 44.1 k was NO WHERE NEAR the specs of the human ear for discriminating time variances and thus almost all reverb effects were lost or diminished. Another term for this is a psychoacoustic effect. Anyone that has worked in analog as well as digital knows that when adding reverbs, delays or panning, a much more extreme quantity is necessary in digital to even be heard. Enough of that though.
The real problem was WHY did the record labels even want to change time tested formats such as vinyl and tape for this new digital format?? The answer was greed!!

The record companies were suffering huge losses on returns of defective vinyl records and the thought was that these digital CDs would all be perfect. Less returns would have to be endured. But more importantly – they would be”impossible” to copy! One
record company executive was heard to say “why – you would need a laser in your equipment to be able to make a copy!” Well – less than 3 years later (with the advent of solid state lasers) everyone who bought a computer had a CD writer which would with some software make PERFECT copies of any CD. Also the greed factor went even further – it was decided that the $8- $10 record could be sold for a list price of $15 to $20 in CD format. Not only that, but the means of production and packaging were cheaper too.
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