Kot - Ripped : how the wired generation revolutionized music

In February 1999, Sheryl Crow found herself in the strange position of having won a Grammy Award for an album put out by a record label that no longer existed.

In the weeks before the Grammys, A&Mthe record label that had signed her, nurtured her career, and overseen her rise from Los Angeles studio singer to international rock star over the previous decadewas gutted and folded into the Interscope label as part of the newly formed Universal Music Group. The demise of A&M was the result of a $10.4 billion purchase of the PolyGram music companies by Seagram.

As the rest of the industry celebrated itself at the Grammys, Crow saw trouble ahead. In her acceptance speech, the singer delivered something of a eulogy for her old label. She was the only artist at the nationally televised ceremony to publicly acknowledge the huge toll exacted by the wave of consolidation that had washed over her profession.

Up until a few months before, she had been working for one of the smaller major-label companies, headed by veteran music executive Al Cafaro; now Cafaro and A&M were gone and she found herself under contract to the worlds largest record company, headed by Edgar Bronfman Jr. The immediate costs of the merger were easy to quantify: besides Cafaro, more than twenty-five hundred employees lost their jobs and 250 bands lost their deals with labels such as A&M, Geffen, Mercury, Island, and Motown.

But in the long term, the effects of consolidation would be even more profound, and usher in a decade when the twentieth-century music industry would suddenly find itself fighting for its life, undone by its single-minded pursuit of profit at the expense of the cornerstone principle that had allowed it to thrive for decades: artist development, as nurtured by savvy executives who not only knew their business but knew their music.

Now Cafaro, a music lifer, was out, and Bronfman, a longtime liquor magnate, was in. Hed soon head the biggest music corporation in the world. Bronfman was heir to the Seagram fortune and was running the family business in the nineties when he sought to diversify the companys holdings by branching out into music. As with the other moneymen taking power in the consolidation-heavy nineties, music was not central to his vision but rather a piece in a larger portfolio of products.

Cafaro was one of Crows champions; he had signed her to her first record deal in 1991 and had allowed her to rerecord her debut album because she was dissatisfied with the initial results. Cafaros faith was rewarded with a hit: Tuesday Night Music Club established Crow as an artist to be reckoned with in 1993. It went on to sell more than 4 million copies and her career flourished; her 1999 Grammy was her sixth.

Yet she wasnt in a particularly celebratory mood in the days after the 99 ceremony.

Its a frightening time as far as the music industry being an artist-nurturing industry, she said. Now everything is so numbers-oriented and new artists get one shot, maybe two, to get a hit, and thats it. They sign two-album deals now. I was signed to seven albums and I was given a chance to get on the road and hone my craft. You want artists who have a strong point of view, who have the potential to grow into something wonderful, like Jackson Browne and Joni Mitchell, who found themselves by touring and continuing to write, and their album sales slowly grew. But now artists arent getting that opportunity because theres pressure to have instant hits.

Consolidation was the eras trendiest business strategy. It caught on because it enabled companies to claim bigger market share, streamline operations by cutting overlapping positions and payroll, and explore new revenue streams. By the late nineties, Wall Street was rife with merger news, and deals that further centralized power in the record, radio, and concert industries were brokered. Power was concentrated in fewer hands than ever: the PolyGram-Universal merger left five multinational conglomerates to run the $14.6 billion-a-year record industry. Ten conglomerates accounted for 62 percent of the gross revenue in the $10.2 billion commercial-radio business, and one companySFX Entertainmentdominated the $1.5 billion concert-touring industry.