everyday life & health
Technological Advances Changing Houston Music Scene
By Matt Piccirillo
Oct 18, 2005, 17:28

The music industry in Houston and worldwide have been affected by more than 2.2 million music site subscribers who have adapted to peer-to-peer file sharing or P2P on the Internet.

Before Napster made its way on the Internet, record labels were booming. For example, chart compilers say they recorded sales of hundreds of thousands for a song topping the charts in the '80s and ‘90s. Last year was the worst sales year for a song reaching number one; it was just over 23,000.

In the past, artists were eager to sign up with a label and considered it the best way to advertise their music.

“I started the label because at the time, there was all this really good local music,” said creator of Fleece Records, an independent label in Houston, Kurt Brennan. "The point of the label was not really to turn these bands onto people in Houston.”

Brennan says the bands already had their local chance to gain fame on their own. He saw an opportunity overseas. About one-half of his sales were overseas.

His business strategy fit into the independents.

“Say there is another small label similar to what you do in like in Italy, and a lot of times we could usually trade stuff,” said Brennan.

Brennan operates Fleece Records from Sound Exchange, a music store he co-owns off Richmond Avenue. He offered an artist or band the option to put its music on vinyl or CD. Brennan preferred vinyl, but artists and bands usually wanted CDs.

“It is easier to sell because the people who buy vinyl are the real hardcore music fans,” said Brennan.

Brennan says in the 10 years he has ran the label, 2000 and 2001 were his best years. The recession in the United States didn’t affect his company because he was distributing to foreign countries like Finland and Italy.

Fleece Records had its greatest success on the Billboard Charts in 1997 when Ash Castles on the Ghost Coast went Indy Gold. The CD sold more than 1,000 copies. Brennan says selling was much easier in 1997 than it is now. After 1997, his sales figures started to go downhill.

Brennan has lost the fire or inspiration to continue adding new bands to his label. He says technological advances have something to do with it, but it’s mostly about recognizing changing times.

“By this time next year, I won’t be putting out anything new after that,” said Brennan. “It is much easier for bands to do it themselves, where 10 years ago it wasn’t.”

Local record stores and businesses are also feeling the effects of technological advances too.

Sales associates of Soundwaves on Montrose Blvd. say they still have regular customers that come in each Tuesday, the new CD release day. But they fear that eventually customers will get their music on the Internet.

The International Federation of the Phonographic Industry reports that more than 180 million songs have been downloaded legally in the first half of 2005. However, worldwide music sales fell nearly two percent in those six months.

Sales Associate Austin Havican noticed a decline in record sales of independent titles compared to blockbuster songs from major labels.

“We have to send the extras back because we didn’t sell as many as [the independent record labels] anticipated,” said Havican

Soundwaves allows potential consumers to listen to CDs before they buy. They have more than 20 CD players located throughout the store with each player loaded with five albums.

“If they’re putting out a good product, people will buy it, said Sales Associate Derek Mayo. “The song has to lure them in. Then, [the albums] usually will [sell].”

Nationally, the five major recording companies: Universal Music Group, Warner Brothers Music, Sony Music Entertainment,BMG Entertainment and EMI have suffered due to P2P file sharing. The five big companies lost money or barely broke even when sales of CDs fell more than 5 percent to less than 34 Billion Dollars in 2001, 8 percent in 2002. The music industry heard the same tune in 2003 when sales dropped nearly 15 percent. In 2004, sales of physical formats declined more than one percent in value to less than 34 billion dollars.

Sales of constant currency fell by more than five-percent in EMI’s 20005 annual report.

“I don’t have any sympathy for them at all. They just did not adapt to changing times," said Brennan.

He says the labels took a different direction in the last ten years.

“The CEO’s were people who were in the music,” said Brennan. “Their background was the music industry and now all the CEO's background is business.”

Brennan complains that the top five recording companies are no longer concerned with the music they put out.

“They’re not making decisions based on anything but making massive amounts of money. Then they panic when they don’t, and people get fired, laid off and make all these big changes," said Brennan.

Universal Music Group Chairman and CEO Doug Morris confirms that the largest record company has laid off more than 800 employees from its worldwide work force of more than 12,000 since October 2003.

More than 200 million songs were downloaded in the U.S., U.K., France and Germany, the four major music markets. The industry’s auditing agency, UK Charts Company, says more than 250,000 singles are bought through music download services every week worldwide.

The music industry said download sales exceeded physical single sales in the final week of 2004 by 30,000.
The final week of 2004 saw the best week for download sales yet, with more than 312,000 sold compared to 282,000 physical singles.

If industry-wide predictions turn out to be true, many Houston-area record labels and music stores will probably end on a bad note.

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