Ladies and gentlemen: you are witnessing the death of Rock 'n' Roll.
Consider this the obituary: from 2004 to 2008 album sales fell from 667 million to 428 million units, according to Neilsen SoundScan. That's a 35% decline in just four years.
Last year the Virgin Megastore chain closed the last of its two Manhattan music stores. With this announcement, Virgin is following in the footsteps of the venerable Tower Records, which shuttered its stores and declared bankruptcy in 2006 after amassing $200 million in debt. The Virgin stores were the last big-box music retail shops left in New York.
And don't look for the iPod to save the music business. While digital downloads have been on the rise, they haven't come close to making up for the decline in CD sales. Even after digital downloads are accounted for, total music sales declined more than 20% in the U.S. over the last four years. In 2008, the world's four major recording companies: EMI, Sony, Universal, and Warner, posted record losses. Worst of all was EMI, which bled $1.2 billion.
The International Federation of the Phonographic Industry claims that 40 billion songs were downloaded illegally in 2008, and that 95% of all downloads were procured illegally, resulting in billions of losses. People haven't stopped listening to music; they've simply stopped paying for it. As a college student, I saw this firsthand.
Surveys indicate that more than half the nation's college students frequently download music illegally.
My generation's attitude toward piracy is not likely to change. After all, anti-corporate rebellion is a time-honored Rock 'n' Roll tradition. It's relatively easy to steal music if you imagine that you are merely stealing from 'The Man' -- some limo-riding fat cat, snorting coke off his Rolex, sipping Dom Pérignon.
By now, many people are familiar with the financial woes of the music industry. What isn't well understood, however, is how the economic misfortunes of the music business are transforming popular music itself, as we know it.
In the past, record companies often spent years and, in some cases, millions of dollars to develop each new artist. It took Bruce Springsteen eight years and five albums to achieve his first top ten radio hit.
Today, on the other hand, if a band's first album is not a hit, more often than not, that band is dropped from the label. No second chances. Most artists never turn a profit. According to Andy Karp, a top executive at Warner Music, "There are a lot of great classic bands that would have trouble getting a record deal now, like the Doors or others who didn't have their first hit record until their second or third album."
Labels are signing fewer artists overall. Mitch Bainwol, chairman of the Recording Industry Association of America estimates that the number of bands being signed to new labels has declined by a third. Who knows how many great artists have remained undiscovered as a result?
The digital revolution was supposed to empower musicians. On my own MySpace page, I can upload my own band's music to the web in a matter of minutes, and sell it to anyone in the world with an internet connection. Theoretically, it has never been easier to be heard. Yet hundreds of thousands of other musicians are competing for attention online. Winning new fans and staying connected to them requires tremendous marketing sophistication.
Without support from a record label, musicians must master the intricacies of search engine optimization, social networking, email blasts, and twittering -- not to mention traditional tasks like booking shows. Not surprisingly, many musicians lack such skills.
Can you, even for a moment, imagine Janis Joplin pouring over HTML manuals, or Jimi Hendrix spending hours each day spamming potential fans on MySpace? Not likely. Had those two tried to make it in today's marketplace, we may never have even heard of them.
And what if internet piracy had existed in the 1960s? No Dylan? No Beatles? Would Bono be working today as a longshoreman?
National Academy of Recording Arts and Sciences President Neil Portnow made a plea last night during the Grammy Awards, essentially arguing that people should pay for music in order to support all the unknown artists out there who are trying to "make it."
In other words, it may not hurt Beyoncé or AC/DC if you download their music. They are, after all, astonishingly wealthy. But it does hurt the record labels, which, in turn, cannot afford to sign, develop and promote as many new artists. Consequently, our music is becoming less diverse. In the long run, music lovers themselves are deprived.
Today, fewer artists are being offered record deals; and new artists are being set aside if they fail to achieve quick success. As a result, the music of an entire generation is being muffled. Many of today's would-be Dylans and Springsteens remain lost in obscurity. We will never hear their songs.
Fans of my generation are killing the very thing they love. Despite the self-promotional tools of the digital age, artists today rarely achieve large-scale success without the promotional power of a major label. Yet, increasingly, record labels are unable to develop and market deserving talent.
And that is the real tragedy of the illegal downloading epidemic -- we don't even know what we're missing.