By the end of the 20th century, our capitalist economy had grown to revolve around three key roles. Most importantly, there was the Customer. This entity defined the needs of the marketplace and received goods and services, usually in exchange for cash. Next in importance was the Supplier. This behemoth produced the goods and services that the Customer demanded. Between these two key players was the Distributor. Also known as the middleman, this economic role was responsible for connecting Suppliers with Customers, so that the latter’s needs were met and the former made a butt-ton of money.
Back in the days when I was supposed to be a high school teacher, I found the same dynamics at play. At the mouth of the river were the students, the Customers who needed education -- whatever that means. The Suppliers, for the sake of this analogy, were the teachers, who held the keys to that education. The Distributor, unfortunately, was the public education system, a bloated bureaucracy that tried to connect the Customers with what they needed, but suffered horrible losses along the way. While most teachers and students did their best to make the system work, the public education system gobbled up resources -- including money that should have directly benefited the students -- with its politics, inefficiency and administrative “overhead.” Suppliers (underpaid teachers) and Customers (undereducated students) were both hurt in this model.
This week, I saw the same economics play out in the world of music. Let’s say that musicians are the Suppliers in this case, and music fans are the Customers. In the middle, distributing the goods and services, are the record labels. Fundamentally, record labels should connect musicians with music fans so that the latter’s needs are met and the former make a butt-ton of money. It’s no news that it rarely works that way, but the events of this week drove the point home.
Late last week, I received a notice in my mailbox that a UPS package was waiting for me at the office of my apartment complex. I get a lot of packages (usually CDs), so I didn’t think too much of it. Yesterday, I finally got around to stopping by the office to pick it up. The package had been sent UPS second-day air, from Universal Music Group in Dallas, Texas. I brought the padded envelope back to my apartment and tore it open. I was utterly chagrined at its contents.
Inside, I found a copy of the recently re-released Flobots album, Fight With Tools, along with a DVD that contains the three-minute video for “Handlebars,” and a pocket portfolio like the kind you used in middle school. Inside the portfolio was a one-sheet (basically, an album-specific hype letter), a bio of the band and a full-color slick band “manifesto.”
It’s no small story when a Denver band gets signed to a label as large as Universal. In fact, it’s cause for celebration. I hope it furthers the band’s personal and professional goals, and fulfill its mission, as described in that four-color piece: “to inspire a new generation of free-thinking individuals by transcending musical convention and mindless conformity.” That just might happen.
However, the utter waste represented by this package made me wonder how much the Flobots’ anticipated commercial success will benefit the causes it supports and contribute to the financial well-being of its members. It’s well-documented that bands typically pocket only one to three dollars of the average fifteen-dollar CD purchase price. The RIAA claims that most of the remaining twelve-fourteen dollars is eaten up by “overhead.”
Sadly, in the case of the newly-signed Flobots, part of that overhead is the package I received this week. According to the UPS website, it might have cost as much as $19 to send me this package. The “Handlebars” video is readily available online, and I already received the one-sheet and bio in an email. The CD could have been sent to me quite easily as a secure digital download for pennies, as is the practice for many smaller, budget-minded labels these days. In other words, the entire package was a waste.
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And who pays the price for that waste? Uh-huh. You and the Flobots.
Now, I don’t know the financial specifics of the Flobots’ deal with Universal, but I’m willing to bet the band isn’t getting more than three dollars for every CD sold – especially when you can get it new from Amazon for under seven dollars. If Universal sent packages like this to just 1,000 people around the world (and let’s go ahead and admit that estimate is absurdly low) that would amount to $19,000 in shipping costs alone. The first 6,300 copies of Fight With Tools that sell will just cover that cost. That might not sound like much, but consider how much more promotion Universal will have to do to raise enough awareness to sell that many CDs, and that promotion costs money too – money that will come out of your pocket and never end up in the pockets of the Flobots or the band’s favorite charities.
This is not to say that the Flobots’ deal with Universal is a bad thing. Hell, I hope the Flobots sell 63 million copies. After all, the wasteful public education isn’t, in and of itself, a bad thing either. But when profligate choices add unnecessary costs to the whole exchange between Supplier and Customer, nobody really wins. With dwindling CD sales, massive layoffs and corporate consolidation, it’s time for major labels to wake up, get creative and frugal about promotion and distribution, and start treating both musicians and music fans better.
-- Eryc Eyl