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SXSW 2009, day two: Indie labels, keynoter Quincy Jones & more

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The second day of panels at SXSW started for me with a session called "Indie Labels Keep the Faith" featuring representatives from two of Chicago's best: Nan Warshaw, co-owner of Bloodshot Records, and Howard Greynolds, formerly one of the overseers at Touch and Go.

Warshaw said Bloodshot has seven full-time and three part-time employees. Touch and Go, long one of the most respected indie labels in America, recently scaled back from 23 employees to three, Greynolds said, and he was one of those let go.

Though Warshaw, Greynolds and other panelists from Rounder, Wildflower, Barsuk and Kill Rock Stars tried to paint as positive a picture as possible about the work these indies have done and continue to do, one couldn't help but leave the session thinking that the prognosis is dire indeed, with five thousand record stores having closed their doors in the last few years, the CD doomed to extinction within the next few years and the new music industry shaping up to include tiny labels that sell fewer than 5,000 records on vinyl or as a downloads at one end of the spectrum and a handful of majors that sell more than 50,000 albums at the other--eliminating the middle ground where the best indie labels traditionally have thrived.

"We're going to see everything change and every [indie label] becoming a fraction of themselves," Greynolds said. Added Warshaw: "In addition to the world economic collapse that's happening globally, we're going to see indie labels... in free fall."

Ironically, as the business of selling recorded music becomes ever more dire, more records are being made than ever: Panel chairman Ken Irwin of Rounder said the number of albums released each year has climbed from 35,000 a few years ago to 85,000 now. "There are more pieces of sand than at any point in time, and the struggle for all of us is to get that piece of sand recognized on that huge beach," he said.

Some of the panelists suggested that one future for indie labels may be signing artists to the sort of "360 deals" being roundly criticized at the superstar level (U2 has one with Live Nation), whereby a label gets a cut of every penny an artist earns, from recordings to touring and T-shirt sales. All of the panelists agreed that artists need to realize the difficulties their labels face, and to work with the companies in discouraging--or at least not encouraging--illegal downloads and Internet leaks.

Moments after walking out of the panel, I overheard a classic example of an artist expecting miracles from a frazzled manager or label rep. "Calm down. Calm down," the exec was saying on the phone to what was clearly an artist upset that on the second day of SXSW, he has not yet become a superstar. "Nothing happens instantly--not even a microwave. You even have to wait for that!"

In light of the seismic changes in the industry, the selection of Quincy Jones as the keynote speaker was an odd choice: Among other things, the Chicago-born 76-year-old is famous as a former bebop player, arranger for Frank Sinatra, producer of Michael Jackson's "Thriller" and owner of 27 Grammys (out of a record 79 nominations). In short, Jones is pretty much the personification of the old-school music industry, representing a platinum standard for success that clearly will never exist again.


Jones' talk was rambling, unfocused, occasionally amusing but more often annoying for the fact that he really had no wisdom to impart to the capacity crowd of aspiring musicians, essentially just bragging about a career that has spanned 78 r.p.m. records to digital downloads. He boasted about his reputation as "the Ghetto Gump"--so named for his ability to so often show up at the right place at the right time next to the right famous personality--and he tried to back that up by dropping an unrelenting series of his "homies'" names, ranging from Christopher Cross, Willie Nelson and George Burns to "Bobby" DeNiro, Colin Powell and P. Diddy.

Because he spent his earliest years, until about age 8, on the South Side, which he called "the biggest black ghetto in America" and home to the country's baddest gangsters, Jones was being drawn to a life of crime himself until he discovered the piano one night while breaking into an armory/community center. (That was at age 11, by which point his family had moved to Washington state.) He never quite explained how his innate musical talents blossomed and led him to become such a massive success, but he did offer one piece of advice.

"Never forget that we are terminals and instruments of a higher power," Jones said. "If you don't forget that, than you will create for the rest of your life."

Um, thanks, Q. And how exactly did you and Michael decide to invite Vincent Price to do that voiceover on "Thriller"? I guess we'll never know.

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Responding in the form of a quotation from Q's keynote:

"Let’s talk about the state of the music business. Some folks are walking around like things are okay. Ladies and gentlemen, you especially know they’re not okay. We’re down $22-billion in record sales in less than a decade, with the highest estimates claiming bit-torrent alone moves billions of downloads per week. We have an entire generation that doesn’t know people ever paid for music. It’s detrimental to young artists & producers because the current popular mode of consumption is not being monetized by the industry. We owe it to the future generation of musicians & the industry that surrounds them to figure out how to facilitate their careers.

Just for the record, binary numbers started in Egypt in 3500 B.C. In making the transition to digital CD’s and DVD’s, we handed consumers smoking guns. Let’s face it – they’re masters. We didn’t have that problem with Thriller. People would have to buy 3 copies because their vinyl would wear out and they couldn’t copy it.

There are advantages & disadvantages to the convenience of digital, but we’ve basically invented ourselves out of the business by not figuring out ways to monetize the new technologies. Record companies, in their complacency, stood by as this was all happening.

Napster was the turning point. It wasn’t just about p-to-p, but about full access. I’ve known Napster’s creator Sean Fanning since he was 18. He didn’t make a dime on Napster – he was just humping around. He’s grown up now & just sold his company, which started Acoustic Fingerprint and is on the side of the artists. He asked me to be a member of his board. His company identifies the first 10 notes of any melody.

I started at the bottom, so I know what you struggling new artists and new acts here are going through. I also experienced the biggest-selling album in the history of music, so I know what that’s like, too. But we ain’t there anymore.

If Lil’ Wayne is on the front page of the paper for selling a million-three, you know we’re in trouble... and that’s not a diss on Lil’ Wayne. He’s the man and won this year’s Grammy for Best Album.

The passion for music is higher than ever. But the distribution is going down, down, down. And the genie is never going back in the bottle. Trust me –

We’ve tried all the things like iTunes and iPods... but believe me, we’re still iScrewed.

We also can’t afford to make enemies out of the consumer while we try to keep them connected to the creators of music. We may even have to give music away to get to new revenue streams. If television can be supported by advertising, why can’t music?

The bottom line is, we need a new way of thinking. I’m wide open to talk with anybody afterwards about where we’re going in the future – because we need all the minds we can have to figure out how to save this precious business... and one of the greatest art forms on the planet."

-- Quincy Jones
2009 SXSW Keynote

With all due respect Jim, if you gave a keynote, you'd probably talk about the lessons you'd learned along the way by telling the stories of how you got to where you are. When you're Quincy Jones, those stories include Colin Powell, "Bobby" DeNiro, and Willie Nelson.

I think you'll find a fairly simple explanation of "how [things] got this way" in the quotation I gave above ("There are advantages & disadvantages to the convenience of digital, but we’ve basically invented ourselves out of the business by not figuring out ways to monetize the new technologies.")

And I think you'll find a non-presumptuous suggestion of "how they can be fixed" in the quotation as well ("We may even have to give music away to get to new revenue streams. If television can be supported by advertising, why can’t music?").

But of course, Quincy is modest enough to admit that he doesn't have all the answers ("I’m wide open to talk with anybody afterwards about where we’re going in the future – because we need all the minds we can have to figure out how to save this precious business... and one of the greatest art forms on the planet.)"

And if you really, truly don't think Q dropped any knowledge during that speech, I'll transcribe it for you so you can re-read it. I'm almost certain you'd change your mind.

Have a good weekend, Adam

Mr Derogatis,
I read your article in friday March 20, 2009 Chicago Suntimes
and all I can say is that your description of Qunicy Jones 's
address at the South by Southwest Music Media Conference was
a "hatchett job" just like the one you performed on Eric Claptons
albumn "Pilgrim" which I personally liked...

I don't know if you realize that Quincy Jones has had a drinking problem
for a while now, and has had a problem speaking since a brain stroke
some years ago....

Oh and by the way if you were a fan of Quincy Jones like I am you would know
that he got his start as a trumpeter with the great Dizzy Gillespie, formed
his own group "the Jones Boys" and got his nation wide recognition by
being the music composer of films by the great Sydney Lumet and has scored
30 or more movie scores!

I'm sure you might think that Quincy's words were incoherent to you so
why did you take the time to do the Hatchet job on one of Musics greats???
You know you would have done a better article by focusing on young Tom
Schraeder who's "officially unsanctioned" you seem to enjoy more than
the words of Quincy Jones...and who could've use the free publicity!

Finally I am writing you because I rarely enjoy your articles and this hatchett job
on Quincy Jones was totally unnecessary and shows that you have a poor
appreciation for men like Qunicy Jones and Eric Clapton who I have the utmost
respect for...

I won't bother reading you articles anymore because you seem to be more interested
in getting headlines than you are informing the public....

James C. Hightower

Read your article today, as usual, but just a sage word of wisdom for you that someone imparted
on me many a year ago, Quincy's 'been where you're going', regardless of how much sense it didn't make to you.

I realize you've really matured through the years, but read it again, maybe it will sink in,
maybe not.

Good luck


Huh, at least that beats being known as the "Fat Rat" by the music industry.


I just returned from six days in Austin and have to admit to being somewhat baffled by the sentiments conveyed in Mr. Jones' keynote and myriad other speeches made over $14 martinis at the Driskill Hotel bar.

When the media rush to print their countless doom-and-gloom sendups, there seems to be a tendency to forget the opinions of one major part of the equation.....the actual artist. I manage a few developing bands and was down there with one of my clients named Joe Pug. Both he and I left Austin with the feeling that the music industry has never been in a stronger position. Joe self released his first EP last May and by August had gotten to a point where he was able to quit his job and pursue music full time. He has a rapidly growing national profile, major summer festivals and tours booked, and glowing reviews in national media. This was all done with no record label, no PR agent, no radio promotion company, and a very small budget. I'm still a believer that the infrastructure of a record label is a necessity but with hard work, a smart business model and tools like iTunes and eMusic to work with....we have been able to hold out on signing a record deal as our position strengthens. If you've got truly great songs...and i think this part is often overlooked among the self-congratulatory industry babble....there has truly never been a better time to be a musician.

At SXSW we met with a tech company called Topspin Media that is creating one of the most impressive direct-to-fan sales and marketing platforms I've ever seen. The gravity of what they are doing was apparent in the parade of big-name managers coming through the loft they rented to demo their system. (note to labels: a bare loft with two couches and a few tables, off the main fat-dollar receptions at the Four Seasons) This was just one of many examples of smart, innovative young people rushing in to fill the void left by the fading major label model.

So I can't help but smirk a bit when Quincy say things like "...we need all the minds we can have to figure out how to save this precious business... and one of the greatest art forms on the planet." The art form of music is doing just fine. It's Quincy's business that is in need of saving, because it has gorged itself so heavily in the times of plenty that it is too bloated and lethargic to adjust to a new reality. People like Ian Rodgers and Steve Patch at Topspin and artists like Joe Pug who are willing to work harder, smarter and more efficiently will populate the industry of the future, and I, for one, think that the art form Quincy mourns is better off for it.

A wise man once said....the kids are alright.

you spelt your URL wrong, for those who wanna check him out it is i like it tho, his voice quality is extremely rich, he's unique.

Don: I can say with confidence that Quincy agrees with everything you're saying -- the passion for music and the ability to go at it alone is stronger than it's ever been. That said, the engineers, producers, session coordinators, arrangers, and others that have lost their jobs not because they do not have a core skill but because record labels have not figured out ways to monetize new technologies, would not agree with your analysis. Yes, smart people (like Quincy) are thriving in the current environment, but when the industry goes from $44 Billion to $20 Billion in less than a decade, a lot of people who have perfectly valid skills and have worked their whole lives to attain them are going to lose their livelihoods. For the producer of the best-selling album of all time to come out and admit that it might be time to start giving music away and turning to an advertiser-supported model-- that's a pretty big statement to me. And albeit people like Jim will classify Q as the "personification of the old-school music industry" -- I'd say that's forward thinking. Jim has no clue what digital initiatives Q is working on, but he obviously presumes that none of them are worthwhile.

PS -- for those of you that weren't there, make your own analysis of whether Q had any "wisdom to impart to the capacity crowd:"

I still tend to disagree with call considering initiatives like those forward thinking you'd have to be positing them 5 years ago. And my mind a very large part of the equation is the utter lack of ability to control costs. Massive producer fees, $2000/day studios, 2 month recording sessions, overpriced photo shoots, massive executive salaries.....these are just unnecessary and unsustainable in the current climate (and are largely unnecessary in any climate). If any of the majors could turn around and restructure their businesses to be lean, agile companies dedicated to developing artists I think the world would applaud. But I also think the likelihood of that happening is near zero, and as the next generation of the industry asserts themselves they will continue to siphon off the best talent, hastening the old guard's demise.

Primarily, though, my quarrel is the insistence of Quincy (and, to be fair....countless others) to confuse the "record industry" with the "music industry". Neither Quincy Jones or anyone else has an inalienable right to get rich in perpetuity simply because they did in the past. Those that deliver a product that the public finds valuable in an efficient, well presented manner will be handsomely rewarded as they are in every industry. If the times have changed in a way that deems that recorded music isn't one of those products...I find it hard to shed a tear for those who have tied their companies to that product. I'm far more interested in watching the new ideas being put out there to increase other revenue streams while creating entire new ones. I would be just as interested if it were Quincy putting those ideas out there as anyone else, but as it stands it's hard to look at the tardy efforts by the majors as anything more than the equivalent of the Zune.

Don -- Of course they're still forward thinking! Name me a single advertiser-supported DOWNLOAD (not streaming) service that is profitable...? If the University of Chicago is correct, Bit Torrent does as many downloads per week as iTunes has done in its entire existence. None of those downloads are being monetized because the majors refuse to license Bit Torrent! For this reason alone -- it DOES matter whether it's Quincy Jones or "anyone else" "putting the ideas out there" -- because Quincy happens to have a voice in the old guard music industry -- he's someone who's established himself. Therefore, if you or I say it, nobody listens. But if Quincy says it, maybe the majors will actually listen... then maybe all those engineers, janitors, coordinators, etc. that do good work won't have to lose their jobs!

Quincy DEFINITELY doesn't confuse the music industry with the record industry. Did you hear the entire section of his speech about the Rolling Stones making more than half-a-billion on "A Bigger Bang" (their last tour) in Q's speech? He recognizes that certain areas of the music industry are thriving. He's talking about saving the record business-- the music business is just fine.

I agree with everything else you're saying. The efforts of the majors right now are equivalent to that of the Zune -- you're right on!!! But somebody's going to create a company that actually guides artists through the current technological landscape -- and you know what? Quincy definitely doesn't think that anyone deserves to "get rich" in the ways that people used to. I promise he's much more concerned about the creative people losing their jobs, the amount of money that is in the arts world in general (think Sec. of the Arts), the quality of our music moving forward, and music education in schools! Quincy was challenging the major labels in his keynote -- not sticking up for them!!!!

Have a good weekend...

Definitely not Mr. Jones' paid publicist, that would fall into the hands of Rogers and Cowan. But I'm proud that you're making that assumption... I do work for Mr. Jones in BizDev, but have nothing to do with his publicity.

I happened to disagree with your original analysis and cared enough to point out what I saw as inconsistencies between your article's analysis and Q's actual speech. My job is not affected whatsoever by whether or not I respond to a post on your blog Mr. DeRogatis -- voicing my opinion does not help my career in any way, nor am I paid to do this as I believe you're presuming.

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This page contains a single entry by Jim DeRogatis published on March 19, 2009 12:28 PM.

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