Jeff's (just call me Geraldo) 'Expose' On The Music Industry

a. Preface & Overview
b. Radio 'Payola' & Outrageous Promotional Costs
c. Legislation
d. Should Music Be Free?
e. Epilogue - Where Do We Go From Here?

a. Preface & Overview of the Current State of the Music Industry:

The same producer shopping us is also shopping for a new deal for a big name artist who has sold millions of albums and who is in the Top 50 selling artists in the U.S. of all-time. (Sorry, it wouldn't be appropriate to mention names.) They are having a hard time trying to get a good deal... labels are not overly interested. Why? In a nut-shell, this artist is not 'Britney Spears'. This artist is in the twilight of his/her career and would probably 'only' sell 500,000 copies, or so, of a new album. [For those who don't know, 500,000 copies is a Gold Record.] So, why would a label not be interested in that? Presently, major labels are not interested in simply making a profit. They need to make a huge profit to please their major stockholders. Something that will sell 2-5 million copies (or more).

The problem is that there are many flaws in this business "logic". For starters--- Only 5% of all artists signed to labels make a profit. So, that 5% is paying for all of the other losses. (How many businesses do you know operate on a 95% failure rate?) Plus, they are almost entirely signing "one-hit-wonders"---as opposed to artists with possible long- term potential. This short-sightedness in attempting to make a quick buck has been slowly catching up with record companies. Traditionally, 'cash cows' for labels are artists that have a back catalogue of many albums over several years (even decades).... like Billy Joel, Beatles, Zeppelin, Eagles, Pink Floyd, Springsteen, Elton, AC/DC, Genesis/Phil Collins, Stones, Van Halen, Michael Jackson, many many more. Most of these artists grew out of the '60s & '70s. Comparatively, there have been relatively few artists in the past 20 years that have established long term success---Madonna, U2, Prince, Whitney Houston, Bon Jovi, Metallica, Gloria Estefan, Garth Brooks, and a few others.... but that's it. So, by shifting the focus away from long-term songwriters/artists, the back catalogues are drying up. People aren't going to keep replacing their old Floyd albums for the 4th time with bonus tracks & remastered editions. The labels are now starting to reap what they have sown.

...And there are other factors which are making the problems even

b. Radio 'Payola' & Outrageous Promotional Costs:

Most people think payola was stopped about 40 years ago with Alan Freed. Au contraire! Now it simply occurs under many different disguises. Record companies "give" radio stations free concert tickets, free trips, cash prizes, which in turn are won by "loyal listeners". Q: Who do you think pays for all of these radio station giveaways? A: Record companies. (Which ultimately comes out of the artists' pockets.) In return, this "buys" the artists some spins of their latest single. Some of these "perks" are also given directly to program directors "under the table".

Another form is to literally buy commercial time. Four minutes of commercial time will get that new Celine Dion song played. Besides, singles are essentially just "commercials" to entice you to buy the album anyway. This is actually legal, and even a little clever - but still a little shady. But, the biggest form of this new payola is via the "independent radio promoter". This started sometime in the '70's on a small scale (often with Mob ties), but has now grown totally out of hand. Labels pay these promoters thousands of dollars to get their record(s) "pushed" to radio stations. The weekly fee to the promoter is used to "grease the wheels" of the program directors, as well as line the promoter's own pockets. When a new single is being pushed with a promoter, the radio station realizes that this is a song the record company is fully behind - so they will add the song to their rotation. But, once the weekly promotion stops for a given song (because no more pockets are being lined), the song gets immediately tossed out of rotation. It literally costs hundreds of thousands of dollars to have a Top 10, or #1 song. These things just don't magically happen. You have to pay to get your song to #1. Granted, you can't just make a really bad song #1 - people still have to be requesting & buying it. But, regardless, this greatly lowers the musical standards, and the options for the public.

Record companies could have stopped this independent radio promotion "scam" a long time ago if they would have bonded together & refused to pay. But, never underestimate the power of greed! Not wanting to be out- charted by each other, the promoter game continued - escalating to today's point of ridiculous money. They cut their own throats to the point of no return.

Did you ever wonder why you hear the same 20 songs over & over again? It's because a vast majority of radio stations across the country are now owned by 4 major corporations. Compared to 1996 when there were 1533 owners! So, cities across the country have virtually the exact same playlists. Playlists have become so narrow to "appease the advertisers" because advertisers don't want you to change the dial. So, stations must only play very well known, popular songs. (This is a catch-22 in itself... it's the chicken & the egg. It's also why it costs a ton of money to break a new song and/or new artist on radio. You don't think your favorite radio station is playing Creed for the heck of it, do you? Creed is spending a lot of money to get their music heard on the airwaves!) If you want to test this yourself, here's the fun "play at home" edition of this game: Ask your favorite local radio station to play a song by your favorite artist - it can even be as big as someone like The Beatles, Madonna, or P. Diddy - it doesn't matter. But don't pick a hit song. Pick an album track...or a past single that didn't crack the Top 30 (a minor radio hit). 90% of the time, they won't play it. Why? Because they are probably corporate owned and they're not allowed to. The advertisers don't want something played that's not instantly recognizable! [God forbid.] This means that 99% of the music out there for public consumption never even gets heard. This is the biggest 'crime' of all. Unfortunately, much of the general public assumes that if it isn't on radio, it's because it simply isn't good enough - that only the best is being 'given' to them by radio & tv. Oh, if this were only true! This is the quick path to "cultural bankruptcy".

So why does this continue? Because advertisers, record companies & radio stations regard the public as generally stupid. Heads of these corporations have even admitted to this - albeit anonymously---and with a laugh. Only the consumer can prove them wrong by hitting them where it hurts - their wallet. This has slowly started to happen with decreasing radio ratings. But, for now, they will continue to appeal to the "lowest common denominator". Now!...combine radio promotion costs with video costs. One video can cost more than the recording costs of an entire album! Video budgets can well exceed 6 figures - sometimes over a million dollars to produce. Also keep in mind, this is ultimately coming out of the pockets of the artists...(the artist doesn't see one penny in royalties until ALL costs are paid back entirely). So, when you have a heavily promoted act like N'SYNC, they usually have to sell 2-3 million albums just to break even! Think about that---you could have an album that's Triple Platinum (sold 3 million), you're world famous, and yet you haven't made a dime in royalties because you haven't made back all of the promotional costs! What makes it even harder to pay back is that the artist is paying back the label at their royalty rate - which is likely about 10% after all is said & done. So, after a million albums sold, the artist has made roughly one million dollars. Oh, but, wait!...that has to be paid back because expenses weren't fully recouped yet! So, the artist has made nothing at this point. Meanwhile, back at the ranch, the record company has probably grossed 8 million dollars on your album - more than enough to cover their costs (even though expenses are still being paid back out of the artist's pocket). An entertainment accountant figured this is actually the equivalent of paying a credit card debt at 66% interest. Something is unfair with this, no?

c. Legislation:

This business practice would be illegal in any other business. So why does it continue? Well, for one, record companies are now owned by larger, multi-national conglomerates (Time/Warner - AOL for example). The "special interests" within these corporations are too powerful - Congress will not likely change the laws to favor the musician and consumer unless there is a "public outcry" from musicians & consumers.

Yes, the consumer is also getting ripped-off in this mess! CDs cost less than cassettes to why are CD prices so high comparatively? Why have concert ticket prices gone through the roof in recent years? Because one of those same corporations that own the radio stations (Clear Channel), also owns the largest concert promotion company in the country. This is also a conflict of interest, and is now a major gripe with touring musicians - Clear Channel "strongly suggests" playing venues that they promote if you want to receive airplay on their stations. Nice, huh? Musicians are also petitioning to Congress for "radio reform". This ongoing practice of payola is not helping musicians, songwriters, record companies, or the public's right to variety and diversity. Only radio promoters, corporate owned stations, program directors and some DJs are getting rich off of this.

d. Should Music Be Free?:

The last thing that is hurting labels (and songwriters) is downloading & file sharing music for free. This is what scares labels most. Their entire industry can be had for free over the internet. So why pay for it? Well, for one - it's stealing. It's no different than shoplifting. Downloading & burning that new Sheryl Crow CD is no different than walking into a record store & just taking the CD without paying for it. (Except that you can do it in the privacy of your home without the security cameras watching.) While I have little sympathy for labels, this could seriously kill careers of songwriters & musicians. Songwriters make their living from royalties. If everyone downloads it for free, they make nothing. There has to be a middle ground somewhere.

Personally, even though I make my living as a songwriter, I don't mind free downloading & CD burning to a point. But, within reason. I think it's a great way to turn people onto new music - it's no different than cassette copies we used to make years ago. But, one would hope, that someone who is burning the CD will eventually buy it if s/he likes it. One consumer argument is: "Why should I pay $18 for a CD that has only 1-2 good songs?" Well, I couldn't agree more!! [Here's where it gets good!] This goes back to labels signing an over-abundance of 1-hit-wonders instead of signing truly great songwriters anymore. (You see how this all eventually ties together in one big circular mess?!) I'm not one to live in the past, but, isn't it peculiar how "older" artists made great ALBUMS that you could listen to from beginning to end? How many albums in the past 15 years or so can you sit through in its entirety? (Excluding "Greatest Hits" albums, of course!) I can certainly name a few - but, only a few, relatively speaking. So, from this "consumer perspective", I think it's cool if people want to download first to see if they like it. That's why we post Apple stuff - you get to hear it before you buy it. No one has come up with any answers yet - I haven't either.

One possible option is to download specific tracks you want per album, and you can also download album artwork, etc. This would drastically reduce record company overhead - promotional costs, distribution, manufacturing, etc. CDs could easily be sold for under $10, and there would still be plenty of profit to go around. This would appease the consumer (with lower CD costs), and also the artist & songwriter. (This may not totally appease labels because in this scenario, they would have a harder time "fudging" numbers of actual sales - essentially losing some of their power to rip-off the artist. But, that's a whole separate chapter I won't even get into!).

e. Epilogue - Where Do We Go From Here?:

Who knows how this will pan out? And what does this all mean for Simon Apple? Well, in all honesty, it's hard to say. Presently, we're having a rough time because of the extremely tight marketing & radio formats - we don't fit into a nice little radio/MTV package. (We're not pop enough for pop radio, we're not Christian enough for Christian radio, we're not jazz enough for jazz radio---so where do you fit if you have something slightly left or right of center?) Hopefully, if certain trends continue, and the public starts "demanding" more open radio choices (like it was in the '70s), then we may have a shot to expose our music to a larger audience. {*hint, hint*---'wink, wink, nudge, nudge'} Until then, it's a frustrating, uphill battle.

Without the backing of a label, it's nearly impossible to make a living from it - the only way to make a dedicated living from this is by increasing the numbers. Increasing our 'fan base' on a North American or global scale to where we can at least sell 50-100,000 copies per album. And this is almost impossible to do without the financial, promotional and distribution resources of at least a smaller label. Certain genres of music can be successful "independently" - typically rock bands that appeal to the high school and/or college crowd - they can build a fan base by performing in bars & clubs throughout regions of the country. (Or singer/songwriters that can tour without the extra overhead of band members.) But, since our music isn't exactly 'bar music', and because most of our audience doesn't "do" the bar scene - this is not really a viable option for us. [DOH!]

So where does this leave the Apple? For now, we're in a bit of a limbo playing the dreaded "waiting game", and also weighing some options. If we can't get a worthwhile deal, we may finance the album ourselves and then try to land a deal after the fact. But, this is a last resort considering the huge expense (which could range anywhere from $15-60,000 depending on how we decide to go about it). As much as I wanted to answer all of your collective questions, I was very hesitant to write this because I didn't want it to sound like "whining excuses" blaming the industry for our situation. On the contrary, I believe record companies should be run like any other business with bottom- line interests. The problem musicians & songwriters have with labels is the way they conduct business, and the creative decisions they make. There is nothing wrong with bubble-gum pop, one-hit-wonders - that's been here since the '50's. (This is entertainment, after all). But, when all emphasis is put on that short-term, make-a-quick-buck success---the "art" of music gets suffocated...and in the long term it is bad for bottom line business. Music is not Coke or McDonalds, and can't exactly be marketed that way entirely. Until the accountants and stockholders realize their sole emphasis on demanding huge quarterly profits will ultimately kill the long-term profits, the "art" of music will not improve or move forward.

Although, there is some very creative stuff happening in today's music - especially from the production & engineering side. Sonically, it's incredible. It's brilliant. Some of the vocalists are also very good. But, the songwriting leaves much to be desired in many cases. In past decades, artists like The Beatles, Pink Floyd, Billy Joel, ELO, Supertramp, Led Zeppelin, Steely Dan, Fleetwood Mac, Earth Wind & Fire, Tears For Fears, Genesis, Van Halen, Prince, The Eagles, Queen, many others, not only made great "sonic" records, but also wrote great songs! That's what is missing with much of today's music. There are good performing songwriters out there - it just takes a little work to find them since they are not given their fair share of airplay time. On rare occassion, a few good ones even make it onto the airwaves. (John Mayer is a recent one that comes to mind.)

Judging by the emails & comments we receive from many of you in the U.S. and various parts of the world, we feel our music would be accepted by a wider audience (which would enable us to continue financially) - it just needs to be given that opportunity and exposure. {By the way-- - We really appreciate the kind and encouraging compliments from everyone - especially those who have heard our new material. Thank you!} This may sound cliched, but, we have no illusions of grandeur, or fame & fortune... We simply love writing, recording & performing our own material. We only hope we are able to continue doing this without supporting ourselves by other (unfulfilling) musical means. At that point, the Apple becomes merely a hobby. Instead of recording & touring regularly, we'd maybe get to record an album every 4-5 years with limited gigs. Not to sound trite, but without your support, we absolutely would not be able to continue. On behalf of the band, thank you for helping us do what we love. [So!... if you can convert 10 of your friends into "CD buying Apple fans", and so on, and so on.... *sigh of contentment*... Aah, I think I even hear Louis Armstrong singing "What A Wonderful World" in the background.] ;-)

Take care, Jeff