Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age
By Steve Knopper
Simon and Schuster, 301 pages, $26
At the dawn of the Internet in the 1990’s, almost everything you’d want to read or listen to on the World Wide Web was free, and businesses that didn’t try to change consumers’ perceptions of that early on are now struggling to survive. But as Denver writer Steve Knopper reveals in Appetite for Self-Destruction, his entertaining, detailed account of how the record industry bungled its response to the rise of digital music, Napster wasn’t the record labels’ only problem. Knopper is a freelance journalist and a contributing editor for Rolling Stone, and the book is packed with interviews of record industry professionals, technology mavens, and musicians, making for a clear, multi-faceted, and good-humored portrait of the last forty years in the music business.
In Knopper’s telling, the record industry was teetering on the brink of destruction for decades, but at several key junctures something serendipitous came along to steady it. The crash of disco music in the late seventies culminated symbolically in a near riot at Comiskey Park when fans were offered White Sox tickets for 98 cents if they brought a disco record to destroy. A disco-hating rock DJ named Steve Dahl “unwittingly…rallied ten thousand fans to storm the field, climbing down the foul poles and turning the record explosion in center field into a raging bonfire.” Now that disco was no longer cool, record stores were “inundated with millions of unwanted LPs” and returned them to the labels, which led to the demise of several companies, such as Casablanca Records.
But the massive success of Michael Jackson’s Thriller in 1982 buoyed his label, Epic, and the rise of MTV created other stars, such as Duran Duran and Madonna, who shored up their labels until the invention of the CD—and the hidden price markups on that technology—flooded them with so much cash that pop group Wilson Phillips was given a $5.65 million dollar recording, touring, and promotion budget and the members of Mötley Crüe were able to gorge on briefcase-fulls of cocaine.
Knopper’s chapter on the development of the CD and the record labels’ deals surrounding the advent of this new technology show how this set a pattern that would repeat a few years later with digital music on the Internet, but with different results. There’s a pioneering engineer, Jerry Shulman, who deserves a good deal of credit for the CD’s invention but ultimately didn’t profit from it. And there’s a new technology that frightened record executives until they figured out how to exploit it. Their fear of consumers copying the music off CDs led the labels to embed piracy restrictions on discs. The labels decided to set prices for CDs in the $17 range, a huge markup from the top price of $8.98 for an LP, and because consumers didn’t have any option but to pay that price, the cash started to flow in.
Meanwhile in Germany in the late 1970s, some graduate students began working on compressing audio files for their PhD theses, and their work would ultimately result in the creation of the MP3 in 1991. Throughout the ’90s, MP3 files became more and more prevalent on the Internet, while the record labels, fat with cash from the CD boom, were too sluggish and uninformed about the technology to respond.
When 19-year-old Shawn Fanning started developing a peer-to-peer file sharing system named Napster in 1998, allowing giddy music lovers to download as many free songs as they could, the record industry responded by suing Napster and people who’d downloaded music, and didn’t come up with a good way to provide songs legally until five years later when Steve Jobs did it for them, setting up the iTunes music store in 2003. The floundering record labels agreed to Jobs’ terms, which set prices for songs at 99-cents and put copy protection on those files that meant consumers could only play them on an iPod (a few weeks ago, Apple announced that it would begin offering less-popular songs for 69 cents, newer songs for $1.29, and that it would remove anti-copying restrictions from all songs). The labels couldn’t make the kind of money from selling singles that they did from selling albums, and now many of them are moribund.
Knopper includes a telling local example of how this all came to play out for record stores:
“In 1994, Andy Schneidkraut, owner of Albums on the Hill, a twenty-year-old record store at the bottom of a staircase at the University of Colorado in Boulder, had his best year ever. He sold 1,800 copies of the Dave Matthews Band’s Under the Table and Dreaming CD to legions of college students. Life was good. But his exuberance was short-lived. By the end of the 1990s, he was lucky to sell 200 copies of any record. Why? Two words: ripping and burning. CU students began to show up on campus with their own PCs, all equipped with the CD-rewrite drives exempted by the Audio Home Recording Act. No longer did every Dave Matthews Band fan drop by Albums for a $16.99 CD. One fan would drop by for the CD and burn copies for the other fifty kids on his dorm hall.”
As for the future, Knopper writes, “…it looks like the record business is doomed. The music business, however, has a bright future.” Bands are discovering new ways to make money, accepting music fans’ desire for free or cheap songs, and generating revenue in other ways. Knopper sites the example of Chicago band OK Go, whose “goofy-dancing” video “A Million Ways” became a hit on YouTube. This led to “lucrative gigs in Moscow and South America.” The band’s manager, Jamie Kitman, said that the success of the video “resulted in a lot of income for the band, yet it’s all indirect. It’s really a perfect example of the unfolding new music economy, wherein you don’t make your money from selling records, particularly.”
Appetite for Self-Destruction shows how the Internet is accelerating change at such a rapid clip that businesses that aren’t agile enough to keep up with it are being left behind. And although Knopper is writing about the end of the music world as we know it, the conclusion of the book strikes a hopeful note, depicting bands’ creativity flourishing with the help of the Internet to connect them to far-flung fans.