THE BIGGEST MUSIC STORY OF 1998 wasn't on the charts, it was on the business pages: Seagram's $10.4 billion acquisition of Polygram, which gives the new company roughly a quarter of the $11.4 billion recording market. As a result, once-mighty labels like A&M and Geffen are on the way to losing their identities; costs are being cut, jobs slashed, and fewer ears and eyes will be on the lookout for the next big thing. "Fewer people at the controls is not a good thing for music and the artists," says one executive. "There will be even more of an emphasis on 'get me a hit now.' If you're an edgy act from Omaha that needs nurturing or a lot of time to develop, forget about it."
More than ever, it seems, the emphasis is on instant gratification, not artist development. Follow-up albums by established acts are now judged like big-budget Hollywood sequels that are to be closely tracked at the SoundScan box office. On a weekly basis, corporate bean counters and trend-hungry media wait with baited breath to see if the public will line up for Alanis II, The Smashing Pumpkins: The Next Day or Bruce Springsteen: The Earlier Years. "First-week sales definitely set the tone," says one record-company executive. "If a record doesn't open up to expectations, meetings are called and people start to rethink how much money was spent and will be spent in the future." Budgets for touring, videos and radio promotion dry up, and what may have been simply a slow start becomes an instant failure.
This, after all, was the year when industry insiders were as hungry for failures as they were for successes -- as long as the flops were someone else's. Hole and Marilyn Manson's albums were both deemed disappointments before either band had a chance to tour; the Smashing Pumpkins' Adore was considered an underperformer practically before it was released. "If I put out what is apparently a testy record," Billy Corgan told ROLLING STONE, "listen to it and then tell me you don't like it. I don't think I got that chance." Corgan is right – with radio stations using phone polls and auditorium testing of snippets of songs to instantly gauge their audience's reaction and help determine their playlists, no one gets much of a chance.
For better and for worse, we are living in a remarkable, precarious time when popular music divides and multiplies like a punch-drunk paramecium, yet the record companies that live and die by that music are consolidating in a big and -- if you work for them -- painful way. As many as 3,000 employees of the new Seagram giant may lose their jobs in the next few months, and more than a hundred bands will likely be dropped.
Any sober look at the state of music in 1998 reminds us that even in a business focused on creation, things do fall apart – labels, careers, genres – and sometimes the center cannot hold. In fact, to ponder the state of music as it faces its own Y2K quandaries is to wonder if there really is a center anymore.
Is it Method Man or Celine Dion?
Metallica or Shania Twain?
Lauryn Hill or Ricky Martin?
Beastie or Backstreet Boys?
Manson or Hanson?
Still, to hear the Record Industry Association of America's figures tell it, the sky is far from falling – it may even be getting a little higher. Despite threats from the Internet – including MP3 technology, a bootlegger's cyberdream – album sales in the first half of 1998 were up twelve percent over the same period last year, to $5.7 billion. And that was before Alanis, Garth and Jewel ushered in a solid Christmas season.
There are worries, though. "It's a scary time," says Johnny Wright, the former New Kids on the Block manager who hit big with one of this year's hottest trends, the teen pop of the Backstreet Boys and 'N Sync. Even while he's riding high, Wright sees lows in 1998's sales: "With 'N Sync, we're at 3 million sold and 4 million in the stores right now. That's great, but at the same time with New Kids, we were at, like, 11 or 12 million. People are being very conservative about what records they buy, and the record labels are being very conservative about what they put in the stores."
The RIAA itself has definitely noticed how conservative shoppers are being – particularly those between the ages of fifteen and nineteen, who are buying, on average, only seventeen records a year. Concerned that a generation is growing up with more of an interest in the Internet and video games than in record stores and CDs, the RIAA has been meeting with record labels to try to sort out plans for a $30 million ad campaign to persuade consumers to buy more music.
Last year, fifteen rock records (if you count Eric Clapton's Pilgrim) each sold more than a million copies – compared with ten soundtracks and twelve hip-hop albums (if you count the Bulworth soundtrack). And though you could argue about the merits of Matchbox 20, Third Eye Blind and Creed, you can't argue with this: In 1998 the cultural and artistic momentum was with the rappers not the rockers. And not for the first time: Barring the explosion of grunge from 1991-1994, this has been true for the last ten years.
"Hip-hop is the rock of today," says Wyclef, whose 1997 crossover smash, The Carnival, continued to make waves all through '98. "You take Rage Against the Machine – that's the epitome of hip-hop rock. The Beastie Boys are one of the founders. All of these people have merged sounds so that all the kids that go snowboarding pick up a DMX album and then pick up a Rage Against the Machine record. They value both the same way."
Still, only one of the ten biggestselling albums of the year was a hip-hop album, Will Smith's Big Willie Style, which ranked seventh, behind the Titanic soundtrack, Celine Dion's Let's Talk About Love, Backstreet Boys, Shania Twain's Come On Over, the City of Angels soundtrack and Savage Garden. In other words, behind six mainstream-pop albums with teen appeal – a description that, for that matter, fits Will Smith, as well.
"I think we're in a very pop world now, a pop cycle," says Jimmy Iovine, a co-founder of Interscope. "Even the hip-hop records that are selling the most are the ones with the biggest hit singles on them. We're living in an age when people are getting their information from massive mass media – radio, 200 TV channels. People are being doused with information, and the easiest information to put across to the masses is pop music.
"Because of their age or history, some people are concerned about a lack of a central force or direction in rock & roll," Iovine continues, "but I'm not. What's really changing in the record business – and it started changing in 1988 or 1989 – is Wall Street's impact. It has been dramatic and mostly negative because, for the most part, people whose first, second and third talent is delivering numbers on time are those who end up in control."
In other words, the bean counters rule. Certainly, if you talk to artists and managers, there's a sense that short-term, bottom-line thinking has undermined the core commitment to developing career artists and back catalogs of enduring value like that of, say, Bob Dylan, who paradoxically released one of the most celebrated "new" albums of 1998: Live 1966 – The "Royal Albert Hall" Concert.
"It's not like when we were kids growing up," says Art Alexakis of Everclear, whose So Much for the Afterglow sold steadily all year long, making Everclear one of the few rock bands that was able to build on past success. "There's not the loyalty that was there. I think the music industry has bred that loyalty out of the record-buying populace by signing one-hit wonders and next-big-things over the last twenty years and refusing to develop bands. Jesus, it's really frightening. Look at Hootie and the Blowfish – they had one of the biggest-selling records in recent history. For a rock band, there's no loyalty there. So we're starting to breed it ourselves, and it's starting to happen because we're developing ourselves. How the modern-day business affects me as an artist, creatively? Not at all. I could give a fuck."
What, then, of the poor recording artist caught up in an era when few can expect much more than their Warholian fifteen minutes? Mark McGrath, the frontman of Sugar Ray – who will soon release a strong new album slyly titled 14:59 – says, "I don't know when there was a sure time to be an artist. What people seem to forget a lot of times is, this is a business – art is the product, but it is a business. If McDonald's isn't selling food, that's bad. If record companies aren't selling records, that's obviously bad.
"I always look at music in a decade cycle. 1991 came and brought Nirvana's Nevermind, and that blew doors open," says McGrath. "It killed genres of music and started one simultaneously. I think, right now, we're looking for that. Everyone looked to electronica and Prodigy to do it, but what we're lacking is someone to come and kick down the doors, the way N.W.A did or Guns n' Roses. We're sort of stagnating in terms of having a lot of one-hit wonders and here-today-gone-tomorrows. I don't think we've seen the next big thing yet. People want these things to come so quickly – you got to take time. Rock is alive and well; you've just got to let rock marinate."
If we are in a pop cycle, as Jimmy Iovine says, and we do just have to let the rock marinate for a while, as McGrath contends, it may still be too early to count rock out. R.E.M. – who led the first alternative revolution, way back in the Eighties – are in the midst of a transitional time, with their new Up selling a modest 350,000 copies as of mid-December. In a way, they find themselves back where they started: making introspective, gorgeous and challenging music for a dedicated audience. Where the audience for that sort of music will lead us in the future is anyone's guess – no one could have predicted where devoted R.E.M. fan Kurt Cobain was going to lead us in 1991, at the height of Vanilla Ice's and Garth Brooks' popularity.
And what the music business itself will look like in the future is also anybody's guess. One thing seems certain, though: With video-game sales the fastest-growing segment of the entertainment industry and with MP3 now allowing consumers to get music off the Internet, it won't look the same as it does today.
"I think the record business is going to feel a very, very drastic change," admits Iovine, "and that's always good. We need to figure out this entire Internet thing – I think record companies are going to be aggressive about that. Musically, it's a big world, you know. There are different kinds of music sold all over the world. As a music executive, it's your responsibility to find a way to point your company, have an idea and try to get into business with the most talented people you can find. That's the whole thing."