Country’s Shrinking Middle Class
The quote of the week belongs to Sony CEO Howard Stringer, who when asked about the success of Twitter and other social networking sites replied, “A lot of people are doing very well at making very little money. It’s not a club I’m looking to join.”
The joke may be on the Sony CEO because, know it or not, he’s a card carrying member of the country [music] club which can certainly be described these days as “making very little [much less] money.” Sales are down, margins crunched, marketing costs up, labels continue to buy their way up the radio charts and retail shelf space evaporates while most players do the same ole, same ole shuffle. Most troubling is the format’s lack of an artist middle class.
It’s easy to point to the superstar crowd—Swift, Underwood, Flatts, Sugarland, Paisley, Urban, Chesney, Strait, McGraw, Keith and maybe a few others we’ve mistakenly omitted, but what about the up and comers? Where is country’s middle class? A quick look at the Top 10 selling country albums this year names the following; Swift, Hannah Montana, Rascal Flatts, Zac Brown Brand, Keith Urban, Darius Rucker, Jason Aldean, Sugarland, Swift and Underwood. Only two of those CDs have broken the million mark this year; only three have passed the 500k goalposts, which is the start of profitability for many labels.
So yes, based upon RTD sales (release to date over 500k), we can point to a few middle class candidates, such as ZBB, Darius and Aldean named above plus toss in a pinch of Lady Antebellum and some Jamey Johnson for seasoning. That still leaves precious few to fill the spots at the top. And we invite readers to answer this one for themselves: How many of the superstars named above passed their career zeniths long ago? [Answer: lots.]
Google CEO Eric Schmidt, who, like Stringer was attending an ultra-exclusive media mogul gathering in Sun Valley, Idaho called the faltering economy “the new normal,” advising companies to “figure out how to be happy and get our lives together in this new configuration.”
One overdue prescription for country’s “new configuration” might be to get smarter about radio promotion. Entire Nashville business models are built upon the promise of airplay, factoring zero for sales risk. Few if any other business industry would accept such a deal. Sure radio exposure remains an important part of the success mix, but how many records have we seen in recent months that paid and paid to enter the Top 10 mainstream airplay charts only to reap coal in their Christmas SoundScan stockings? Marketers can judge early on if a song is going to move the sales needle using data from a myriad of available sources. Isn’t it time to get more aggressive about indexing the correlation between airplay and sales and stop the tail from wagging the dog?
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Nice piece…and oh so true!
Here’s the way I see it, right or wrong. You have to take the Taylor Swift mentality out of the picture; she’s the exception, not the rule. The bulk of her buyers are 12, 13, 14 year old girls. Sure she’s sold millions but imagine if she had happened 10 years ago. She’d be selling 10 million, not 4.
So if you take a look at where country is right now, I believe that we have a million, give or take a couple hundred thousand, hard core, record buying country music fans. But the labels’ response is to look at Taylor Swift and say, “oh look, there are 4 million country music buying fans out there.” So they take artists who were selling 500,000, 750,000 or a million (Blake Shelton, Craig Morgan, Montgomery/Gentry or maybe their newer artists fall into this as well) and decide they are going to “take them to the next level” by trying to appeal to those 4 million Taylor Swift buying fans. I can guarantee you those teenage girls don’t care a hill of beans about some 40 year old trying to appeal to them. I don’t care what you do, they are not going to go out and buy a Craig Morgan record. So now what they (the labels) have done is they have alienated those fans who will buy great country music, watered it down to the point that it doesn’t matter to anyone so radio will play it and created an artist that may be having #1 records, but are now having a hard time selling 200,000 units. Fat lot of good that’s doing us.
If my theory is right, then the labels need to start realizing that and accept that 500k – 750k is a really good number and build their models on becoming profitable at 250k units or less.
I’m not opposed to trying to expand our market. In fact we have to try. But I believe most of the labels are going about it all backwards. We should be trying to build on the base of hard core buying fans we have and not chase the elusive teen. Back in our hay day country was cool. We were able, as an industry, to ride the coattails of Garth Brooks and others for a long time. But now we’re un-cool. The teens who were buying our music back then have moved on or we’ve chased them away with non-descript music and artists. We will become cool again, but I believe it will be because we are putting out great, honest, real country music songs and artists. When we get back to doing what we do best, move and touch people in a real and honest and heartfelt way, we will find our new fans and re-ignite our old ones. I’ve said it before and I’ll say it again, the only way we ALL win in this business is when records sell. Put something real out there and we will sell records.
Your insight into country’s shrinking middle is dead on. Canada has quietly lowered it’s sales thresholds for gold and platinum status and it’s time we did the same. As for letting the tail wag the dog, don’t look for any change there until a new generation of decision makers takes control of their own destiny.
Another angle is that the radio exposure, while not producing record sales, can significantly boost ticket sales. There are other ways of measuring success from radio popularity besides Soundscan. I do agree with Mr. Schmidt that there is a new normal that needs to be accepted and planned for. Radio should be an aspect of, not an end in marketing campaigns.
Good points for sure in the big picture, but you have to accept the fact that where the middle class used to be 500,000-1,000,000 units, the “new reality” is a middle class more likely to include the 250,000 -750,000 artist and that superstar numbers are 750,000 and above.
The new or expanded middle class may include Kellie Pickler, James Otto, Julianne Hough, Trace Adkins, Montgomery Gentry, and Dierks Bentley. We can certainly discuss where the line is drawn for the new middle class, but the new middle class is to be defined with the same new economics that we are using to redefine most everything else about our business and life.
One could argue that the artists you name in the 500,000-1,000,000 are our new superstars, along with the ones that have maintained their level of sales. Should digital track sales be a new barometer? How about ringtones and ringbacks, or equally as important, ticket sales?
Just some thoughts on how to identify our superstars and true rising stars, and how they will be defined as we move to a new world of revenue streams.
To quote an old guitar playing buddy of mine: “You ain’t gonna win ’em back with the same sh*t you run ’em off with” 🙂
Well played, David. Unfortunately, this kind of technology bashing and faux elitism only contributes to the ongoing problem of reshaping the music industry paradigm, particularly here in Music City.
In my opinion, the “shrinking middle class” is evidence of an even more profound cultural shift tied to emerging trends in social networking, content distribution, fiscal conservation, consumer empowerment and the “pirate’s dilemma.” Simply put, the old business model isn’t working: the genie is out of the bottle, the cat is out of the bag and the Chattanooga Choo Choo has left the station.
As many have already commented here, I have to wonder if the issue isn’t so much that there are no “middle class artists” as much as the Music Row model simply wasn’t built to sustain itself on selling less than a million units. The silver lining is that this may actually work to the advantage of the artist/entrepreneurs who find ways to build a sustainable career beyond the confines of Music Row. Even more encouraging, we may actually find that a new breed of music industry professionals emerges: those who see beyond “radio only” and find gold at the end of the rainbow where Music City, Madison Avenue and Silicon Valley connect.
There are many forces at play here. Everyone knows we have to reset our definition of success in terms of sales and adjust our costs and strategies accordingly. Until the unlikely event we eliminate file sharing and CD burning we have to figure on the biggest percentage of our product being enjoyed without money coming back to the master owner. We might as well recognize success in the new era as different from success in the old era with a change in the gold and platinum sales levels.
Also, it wouldn’t hurt for us as a format to be a little more adventurous in the product we present to the public. So many of our current records are not much different (save slight reverb sounds) as what we were doing ten years ago. I wonder if we are boring our audience with too many records and songs that sound like 1999. How about a project like Jackson Browne’s “Running On Empty” recorded in hotel rooms, at sound check, and in a rolling bus? How about an acoustic album by one of our otherwise electrified bands? Maybe a concept album once in a while? Or maybe no album… an EP’s worth of songs around a certain idea. My all time favorite music came from projects that were like nothing I had ever heard before and I that I was absolutely compelled to have a copy for myself.
Stringer should really look into how poorly his label operation is doing. They will start throwing the deck chairs off that sinking ship soon. Warner seems to be in the same shape.
At least Capitol and Universal seem to be on the right path as far as breaking new artists, etc. It’s time for the good ol boys to call it a day.
I agree with Neal’s comment above that the middle class contains some headline level acts, like Trace, Montgomery Gentry, and Dierks. Interesting that they can headline concerts for 15,000 a night, and can’t sell a half million records. And even though they’re not selling units, they’re multi-millionaires.
It seems to me that music’s big problem began when the number of artists started to multiply geometrically. Not a day goes by when I don’t get dozens of CDs and press releases about artists I’ve never heard of. I’ve got boxes filled with them. I’m in the business, and my eyes are glazing over. Too many artists singing too many songs, and it’s all too forgetable. Someone needs to be setting both quality and quantity control, because no one is any more. It’s diluting the marketplace and no one can focus on what music is anymore.
I empathize with the public that just wants to hear a fun song, goes to the store and buys the easy thing: A record in the Top 10. Couple that with the fact that most stores only carry the Top 10 anyway, and you can see why the charts are filled with the same artists week after week.
You’re dead right with some ommissions. I’m old enough to have seen this cycle before. “Hillbilly” music gave way to the smooth urban sounds of Ray Price and Jim Reeves which led to a loss of interest on the part of the working class who bought the records. The industry swung back with Haggard, Jones, Waylon, etc… Then the industry “improved” itself again with “Countrypolitan” sounds like the Gatlin Brothers and Mandrell Sisters, only to lose its way again. The subsequent revival saw the emergence of acts like Alan Jackson and Randy Travis. Even Garth started out as a western throwback, only to lead the current movement into “pop” country. We are overdue for a correction, and for some former rock producers to go back to California to the music industry they ruined there. When country comes back it will be with the same smaller core audience that is its bedrock, and that the record labels forget when they reach for crossover hits and better quarterly earnings.
It’s hard work to establish a fan base by grassroots effort, playing small clubs from an early age and building profound relationships with listeners.
It’s hard work to take the time to practice, to become truly great.
It’s hard work to market and promote in an original, compelling way.
It’s hard work to become one of the few at the top, and even one of the few in the middle.
No one said it was going to be easy, but no one said music was going to be free, and no one said that you couldn’t do it without radio.
It is possible to start small, dream big, live within your means and enjoy a career of making great music. In fact, it’s more possible than ever to create, produce, promote and distribute your music – all by yourself. There is no major label or radio station that is interested in this kind of model, but there are millions of would be artists that are.
The consilience of all these endeavors will create the model that restructures the music business. For now, we are all surviving the transition.
Since moving to Nashville and becoming familiar with its music industry, I often find myself confused about some of the very same issues. Being involved in product and service development in other facets of the entertainment industry, I am often dumbfounded at what seems to be the obvious. What I find even more insufferable is the dismissive nature displayed by many of the key industry players. The idea that changes in the economic environment, the social effects of technology, not to mention the way an ever-changing customer base chooses to consume our goods, can be ignored while depending on old fashioned models and processes is ludicrous. Couple this with the continued reliance on a single antiquated distribution system, and it’s a veritable death sentence. Decision makers in other industries with these philosophies would not be making decisions for long.
I also find the Nashville product, and the inside perception of it, very interesting. When looking at the list of country music superstars, I notice several names that have openly been criticized by industry insiders. To say that Taylor Swift owes her success to merely a teen base, that Carrie Underwood hasn’t “paid her dues because she was on some talent show”, or to question Sugarland’s live performances with the likes of Beyonce, Adele and the B-52’s is somewhat ridiculous. Like all great brands, these artists (and their machines) have bucked the old systems, taken risks and skillfully engineered a product that connects with their consumers, well beyond the typical country music listener. Whether connections have been made through social technology, television/media appearances or just plain ole appreciation for other artists in other genres, the result is undeniable. One could even argue that the initial success of these artists was independent of radio. I would being willing to wager that many of these critics are the same decision makers scouring the country for the next watered down version of the ‘it’ teenage superstar (ala Taylor Swift) instead of something original that will resonate and connect with the consumer. The very same ones playing the same old game, by the same old rules, resulting in the same old outcome that David has so perfectly illustrated.
So what’s the answer? Change is inevitable. Other industries have embraced this notion by continually evolving their processes, models and products to ensure sustainability and consumer brand loyalty. In an industry that respects and relies so heavily on its history, I am reminded of the risk takers responsible for the initial success of the country music industry. While so many are focusing on the past (what HAS happened, and what HAS worked), there is a tremendous opportunity for a new generation of renegades to proactively embrace innovation, execute change and create brands that connect with the consumer by whatever distribution means necessary.
It’s the music, stupid!
Free Free AND FREE. Fans love something free. I’m a singer songwriter been around Nashville seriously for the last seven years And in my opionion everybody has missed what happened. My kids have old cds, they have new iPods they never carry a cd player they don’t listen to the radio unless we have it on and they happen to have there earphones out.
Now for the older listening gap of say 16 to 60 not everyone is computer savvy, but they find their music free. I’m in a campground as i’m typing this and I talk music day and night. My neighbor shows me his cd collection out of thirty cds he maybe had 5 cds with labels on them and they were like Ray Price and The statlers. People plug their phones into a computer and download a lot of there old cds. I Would say 9 out of 10 people that buy a cd at least burn 4-5 copies of it and if you think they wont give it to a friend your dead wrong. I’ve had folks buy one of my cds and then tell me they’re going to burn one for their mother. Blue collar country fans are smarter than what the music biz thinks in economic times like now. A random poll on the street to look at cd colletions in cars and homes would surprise a lot of people there’s not enough jails to arrest everybody.
As an up and coming artist I can honestly say I could care less how many songs I sell. The FREE FREE AND FREE person is exactly right. Fans want free stuff and to meet the artist. Twitter/Myspace/Facebook has saved the music industry in a lot of ways in my opinion. Artist now are being able to connect on a personal level with each fan. I just graduated college and can tell you there’s hardly anybody out there in the tech savvy world that can’t find music for free. Record labels saw this coming and did nothing about it. My mentality as an artist is to do what they did in the 70’s and that’s take it to the streets!
Artist nowadays have to make their money off ticket and merch sales. You got to promote and work your @ss off everyday. Say somebody in the category of Justin Moore, Eric Church, Jake Owen, Randy Houser, ..etc as a new artist. If they open for a headliner on Fri/Sat night, Mon-Thurs they need to be playing smaller venues and doing radio interviews as much as they can. Look at Dierks Bentley. That dude had like 300 dates one year, but that’s why he’s successful.
Record labels should also look to combine a lot of tours. Put together 5 or 6 acts for a show instead of 3. Gas prices are outrageous and the cost of everything is going out. Give your new artist 20 min shows each. Say you have a 6-star packed show. Artists 1 through 3 get 20 min each. That’s an hour and a half including the 10 min breakdown/setup. Artists 4 through 5 get 40 min. That’s another hour and a half. So, your at 3 hours then you have a 20 min intermission where all the fans can go buy food/drinks. Then the headliner get’s an hour to an hour and a half. That’s about a 4 to 5 hour show.
Well it couldn’t happen to a nicer bunch, maybe when radio wakes up and blends the Hot Country with a healthy dose of Americana, listeners will take radio seriously as a sources of entertainment. Willie, Dylan and Mellencamp sold out a 10,000 seat ball park in Allentown (market 69) last night. Not one of them get their music played on Cat Country in that market.
Yet the little 24/7 Americana station in that market (WXLV) plays their new releases on a regular bases and month by month is pulling in their listeners from Cat Country about a 1000 new listeners a quarter. Seems, if Willie can put out two CDs a year and Commercial Country continues to over look them, Commercial Country radio will not be the force it used to be soon. Maybe, some brave stations in real markets will catch on to the idea. The 10K 35-65 yr old audience that paid $65 each to see those guys in these hard times are actually the ones that just might be looking for a change in Commercial Country programming. I say once they hear a real Americana Station, they probably won’t be interested in hearing Commercial Country artists anymore.
“Most troubling is the format’s lack of an artist middle class.” – Best sound bite I’ve read / heard in a long time. Great read! Thank you!
As a 54 year old old time broadcaster, industry outsider and a long time country music fan I can say all of you folks are dead on. My grandpa used to always say “Nothing is constant but change.” How true! Reality Check… CDs are OLD technology! The money spending music folks are young and computer savvy. They don’t own a CD player. Their iPhones are cell phones, internet browsers, iPods and texting machines that are all rolled into one device. They are hooked to them 24/7. They don’t even know how to answer a telephone. At my sales oriented company we have had seminars on how we are going to deal with the next generation of employees who have little face-to-face verbal communication skills to deal with our customers on a one-to-one basis. These kids are text maniacs who communicate in a nano second on the iPhone. They live day and night on their iPhones that are always connected to MySpace, Facebook and Twitter and know what each one of their friends are up to at any given moment. So until the Nashville “Old School” industry folks figure that out you will continue to see your revenues decline. My only advice to you is CHANGE…get some young tech savvy folks in on the decision making process. Hopefully you have already done that.
Great piece, David; great comments all! It IS about the music, fundamentally, and the economy, and that too many bean-counters have been allowed to make creative decisions. But historically in a recessed economy, what holds steady or rises is low-cost entertainment. Why not so this time? Technology? Partially, but real music lovers of real music gotta have that cover. It’s a good, cheap investment for one’s self. Imagine a museum with a couple of Picassos and Matisses, and then rooms and rooms filled with knockoffs by technically-correct painters of those same styles and colors.
Jim Thomason said it right; so did Dale Bobo and especially Steve Nathan.