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The Record Industry in the 21st Century: The Irrelevance of the Nation State

L’Industrie du disque à l’âge de la transculturation
Tamsin Briggs
p. 20-40


L’objet de cet article sera d’étudier l’industrie du disque à l’aube du 21ème siècle. J’entends montrer la transformation d’un marché longtemps sous domination anglo-américaine, passé d’un stade que l’on pourrait qualifier d’impérialisme culturel à un autre, que je désignerai par l’expression « transculturation mondiale ». Nous verrons que les notions de marque et d’image régissent la politique de sociétés qui ne sont plus que les rouages d’un système de conglomérats multimédia transnationaux de plus en plus difficile à appréhender, et où les concepts de synergie et de promotion croisée font force de loi. Les adjectifs « américain » et « britannique » ne peuvent plus s’appliquer à l’industrie du disque : à l’heure de la mondialisation, le concept d’État-nation n’a plus grand sens.

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Index chronologique :

20th century / XXe siècle
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From Cultural Imperialism to “Transculturation”

  • 1 The authors are referring to the audiocassette, but it could equally apply to DAT tapes and CD burn (...)

No other technology has penetrated society so quickly—what is more, the rate of penetration appears to be accelerating. At the same time governments seem to be aware that their traditional cultural heritage could be threatened, but are not sure what to do, or cannot act because of other priorities. Also, international producers of audio and visual products, partly through losses resulting from their own inventions,1 are forced to try to sell similar products in as many different countries as possible. A transnational form of nationless culture develops. (Wallis & Malm, “Patterns...” 161)

1This quotation is part of the opening paragraph to Wallis & Malm’s essay “Patterns of Change” and helps to reveal the patterns in the organisation of the record industry on a global scale. The record—and media—industries now see the world in terms of large “regions”: North and South America, Europe, Asia (Africa is widely ignored, apart from South Africa). Countries in terms of nation states have no meaning. The head office of a Major in Europe might well be based in the United Kingdom, but its responsibility will be the whole of Europe, and the office could just as easily be located in Hamburg, Munich, or Paris. Wallis & Malm found that “the international distribution of music that has access to modern media is increasing at an extraordinary rate” and “smaller countries are finding it harder and harder for their own music to compete with international repertoire” (Wallis & Malm, “Patterns…” 172), even remarking that now that Jamaica is able to receive over thirty satellite television channels, there no longer is any room for Jamaican musicians on local television, even though music is one of the country’s biggest exports— the production cost is simply too high for national television to compete. The authors argue that we have moved away—or are moving away—from a pattern of cultural imperialism towards a state of transculture. Cultural imperialism is defined as a form of cultural dominance (such as western music’s) “augmented by the transfer of money and/or resources from dominated to dominating culture group” (Wallis & Malm, “Patterns…” 177). The main example related to the record industry is the transfer of profits derived from sales or copyright collected in subsidiaries, but there are also cases where the artists themselves move to the US in order to take advantage of financial benefits, or in the case of Bob Marley, for instance, transfer their copyright to an American collecting society. Nevertheless, cultural imperialism still afforded room for counteractions, and spurred the birth of musician unions and non-profit record labels in certain countries.

2Transculturation took things one step further:

  • 2 Emphasis theirs.

This pattern of change is the result of the worldwide establishment of the transnational corporations in the field of culture, the corresponding spread of technology, and the development of worldwide marketing networks for what can be termed transnationalized culture, or transculture. Transnational music culture is the result of a combination of features from several kinds of music. This combination is the result of a socio-economic process whereby the lowest musical common denominator for the biggest possible market is identified by building on the changes caused by the three previously described patterns of change [i.e., cultural exchange, cultural dominance, and cultural imperialism].2 (Wallis & Malm, “Patterns...” 176)

3This means that the different cultures involved in the transculturation process will pick up elements from transcultural music, but also that elements of the cultures’ own music will be fed back into the system. Wallis & Malm argued in

41984 that the spread of technology is accelerating the process—one hardly dares to think of the integration rate the Internet, digital downloads, and file exchanges afford. One of the options might be, over a period of time, that this would lead to the emergence of one single form of global music. An example of a transcultural artist could be, for instance, the singer/songwriter Manu Chao. Both his recent solo work and his previous work with the band Mano Negra contain elements derived from different cultures, creating a patchwork of Spanish, Arabic, and French rock influences over a good old American rock tempo. He also sings—often within the same song—in several languages, mixing English, Spanish, and French, and this also contributes to making his work easily accessible to many different cultures throughout the world. This mixture of different styles and influences where everyone can recognise their own environment has turned the Franco-Spanish singer into one of France’s highest exports in terms of record sales, and one of the few French artists in recent years to sell records in countries such as the States and the United Kingdom.

5At the other end of the scale, however, there have been “systematic attempts to develop local music centres,” as Simon Frith also points out in his article “Popular Music and the Local State” (21). While on the one hand there is the “multi-media marketing of new video stars like Madonna [and] the Western diffusion of ‘world music’” (Frith, “Popular Music…” 21), small countries have been trying to sustain their local music repertoire and production, either through state subsidy (taking the form of information offices and help with export) or through deterrent measures (such as radio and television playlist quotas). Frith also points out that such efforts against “Anglo-American domination” (or, as we have just seen, transculture) also exist within the United Kingdom, though supported by the local authorities and sponsored by commercial companies such as breweries in lieu of state subsidies. Frith’s conclusions are two-fold:

  • 3 Emphasis his.

First, that the local is now equated with the different not by reference to local histories or traditions but in terms of a position in the global market-place. This is to lead policy- makers inevitably to issues of distribution and consumption. To support local venues (whether in Norwich or Nijmegen), local distributors (whether in Scotland or Victoria) and local radio stations (whether in Dominica or Finland) is to support not just one’s own local music, but also “local” music in general, “different” music wherever it comes from. […] Second, […] we no longer live in a world in which the ‘local’ can stand for community, security and truth. It describes rather the setting for our shared experience of rootlessness and migration, for the constant movement of capital and labour, or signs and sounds. In technological terms anyway the world is becoming the local and global: the national level no longer matters when every household has access to the global media flow, when every producer can, in practice, directly serve the global greed for images. 3
(Frith, “Popular Music…” 23)

6The relevance of the local loses its meaning in a world of strong migration and of daily global interaction of different cultures.


7Technology has proved to be one of the record industry’s main ways of gaining or maintaining market share and control over the market. Sony’s adventure with the Walkman is another fine example of how technological leadership has helped major corporations keep one step ahead, and in this particular case turning a copyright lawyer’s nightmare (the audiocassette) into an entrepreneurial dream—in other terms, “megabucks.” Relating the story of the invention, Negus refers to two important aspects: first, the competition within different departments of Sony Corporation to come up with a new product and, second, the fact that it was designed “with a preconceived notion of its use value” (Frith, “Popular Music and the Local State” 23), meaning that the applications of the product had been thoroughly thought through beforehand, contrary to previous record industry related inventions, where the applications followed the technological progress. The success of the Walkman meant that

[it] has become synonymous with the name Sony, a name deliberately derived from the Latin word “sonus” meaning sound, and recognised and pronounced in the same way throughout the world. […] When the consumer takes out their cassette marked with the Sony Music corporate logo, recorded by artists who are signed to Sony Music Entertainment, and plays it on their Sony Walkman, not only does the hardware meet the software. A strange tautology (sic) occurs as we listen to the sound of Sony. (Negus 36)

8This cynical view of Sony’s sprawling expansion is only a single exposition of what transnational corporations have become; by Wallis & Malm’s definition, the case would still belong to the sphere of cultural imperialism, of the “good old days” when multinationals’ vertical integration only sought to control “the total production flow from raw materials to wholesale sales” (Peterson & Berger 145), which they achieved through an attempt at the control of performers via long-term exclusive contracts, and through effective control of the media and distribution channels. This in turn led to an oligopolistic concentration of the market and homogeneity in the production of popular music. Peterson and Berger agree that “as long as the market-controlling mechanisms just described continue to operate unchanged, the trend to greater homogeneity continues because each of the oligopolists focuses on winning the greatest share of the market” (Peterson & Berger 145).

9Similarly, it has often been argued that oligopolistic concentration in the record industry has enabled record companies to maintain artificially high prices on compact discs. The United Kingdom’s Monopoly and Mergers Commission’s report, The Supply of Recorded Music, published in June 1994, looked into the pricing of CDs and finally chose to side with the record companies. However, the subject is currently under examination by the European Commission (Author unknown, “Timely Inquiry…”). Yet, the multinational system still had flaws, the main one being that the high concentration favoured “bursts of creativity” among independent companies. Drawing on Peterson and Berger as well as Negus, Brian Longhurst comments that “the smallness and intimacy of such companies facilitated the production of particularly innovative sounds which broke free from the standardized products of the dominant record companies” and that it was felt that they “were better able to represent the aspirations and feelings of their artists and audiences than the large corporations” (34). Keith Negus’s point of view is not dissimilar, yet he sees the companies as interconnected with one another, as a “web of major and minor companies”:

Running parallel to the internal reorganisation of record companies has been the forging of external links between large corporate labels and small companies through investment arrangements, licensing deals and joint ventures. These connections have provided regionally based small companies with finance, arrangements for manufacture and distribution, and the opportunity to reach markets in other territories; and have given large corporations access to an external source of repertoire and enabled them to use small companies as “research and development” divisions […] (17).

10According to Negus and others, the record industry’s response to “economic risk” and “commercial uncertainty” (Negus 40) (i.e. Will this record sell as much as I expect it to? Will I recoup my investment in this artist?) was “a strategy of overproduction combined with differential promotion, in which record companies attempt to cover every potential market possibility” (Negus 40). As the antes have been upped in the nineties, record companies are no longer willing to use the “mud-against-the-wall” technique—“throw out as much product as possible in the hope that some of it will stick” (Negus 40)— and prefer to transfer their risk-taking to smaller entities, such as publishers, producers or indie labels, who act as talent scouts for the larger corporations. Negus provides us with two examples from the 1990s of “label deals” that fit the above description—Food Records, funded by EMI, and Creation, renamed Elevation, funded through Warner in Great Britain and EMI in the United States. Food retained artistic control over its signings, and enjoyed “access to higher levels of investment and more sophisticated marketing, distribution and promotion methods” (Negus 17). The drawback to this was, however, that while EMI had first option on Food artists, they were also entitled to “review and renew their arrangements with Food every six months.” However, Alan McGhee of Elevation Records saw his arrangements with Warner and EMI as highly beneficial for his artists (he was able to pay them higher advances) and for sales (his expectations on a current album were multiplied by three) (Negus 17). This kind of deal between Indies and Majors is particularly common in the United Kingdom where the Majors control over 95 per cent of distribution, rendering it extremely difficult to bypass the Big Five. This situation contributes to a state of dependence of “indie” labels, as the example of Food Record indicates: the label is financially dependent on EMI, as well as under constant artistic scrutiny, whereas EMI is free to discontinue the deal every six months, and to turn down records it is not interested in.

11Neither are such deals a particularly recent occurrence. George Marshall reported Chrysalis’s use of a label deal in order to entice the ska band The Special A.K.A. into a recording deal. It enabled the band to produce ten singles a year on their 2 Tone label, six of which Chrysalis would be obliged to release. But in fact, the recording contracts were signed between the band and Chrysalis, and the Specials’ only financial benefit from the deal was a two per cent override (Marshall 17). The difference was, though, that the consumers purchasing 2 Tone singles had no idea they were in fact putting money into Chrysalis’s pocket. This ploy of hiding behind other brand names is a way for the Majors to retain street credibility, and not mix contradictory artist images, or spoil that credibility with a corporate image. Naomi Klein reports comparable examples in No Logo:

Offering Fortune Magazine readers advice on how to market to teenage girls, reporter Nina Munk writes that “you have to pretend that they’re running things…Pretend you still have to be discovered. Pretend the girls are in charge.” Being a huge corporation might sell on Wall Street, but as the brands soon learned on their cool hunt, “indie” was the pitch on Cool Street. Many corporations were unfazed by this shift, coming outwith faux indie brands like […] Old Navy’s mock army surplus (the Gap) and OK Cola(Coke). […] And in 1999, when Levi’s decided it was high time to recoup its lost cool, it also went indie, launching Red Line jeans (no mention of Levi’s anywhere) and K-1Khakis (no mention of Levi’s or Dockers). (17)

12But in the shadows, major corporations still own and run all the “indie” trademarks quoted above.

Selling out or Cashing in? Where Image is All: “Branding”

  • 4 Quoted in Frith & Goodwin 476.

For thirty years, you couldn’t possibly make it unless you were white, sleek, nicely spoken and phoney to your toenails—suddenly now you could be black, purple, moronic, delinquent, diseased, or almost anything on earth, and you could still clean up.
Nik Cohn, AwopBopaLooBopAlopBamboom, 1972. 4

13Thirty years after Nik Cohn’s remark, what Greil Marcus calls rock’s “touch of anarchy” has widely been cashed in on and co-opted by the Majors as well as household brand names. Suddenly, nothing is shocking anymore. If we take hip-hop, for instance, it started out as the music from the ghettos. Now sportswear and sneaker brands are lining up in order to sponsor rap bands. Naomi Klein wrote that this “[aggressive mining] by the brandmasters as a source of “meaning” and identity […] was the key to success of Nike and Tommy Hilfiger, both of which were catapulted to brand superstardom in no small part by poor kids who incorporated Nike and Hilfiger into hip-hop style at the very moment when rap was being thrust into the expanding youth- culture limelight by MTV and Vibe (the first mass-market hip-hop magazine

14[…]).” She follows up with the example of Adidas:

The latest chapter in mainstream America’s gold rush to poverty began in 1986, when rappers Run-DMC breathed new life into Adidas products with their hit single “My Adidas”, a homage to their favourite brand. […] “We’ve been wearing them all our lives,” Darryl McDaniels (a k a DMC) said of his Adidas shoes at the time. […] After a while, […] it occurred to […] the president of Run-DMC’s label Def Jam Records, that the boys should be getting paid for the promotion they were giving to Adidas. […] Adidas executives were skeptical about being associated with rap music […]. To help change their minds, Simmons took a couple of Adidas bigwigs to a Run-DMC show.[…] At a crucial moment, while the rap group was performing the song [“My Adidas”], one of the members yelled out “Okay, everybody in the house, Rock your Adidas!”—and three thousand pairs of sneakers shot in the air. The Adidas executives couldn’t reach for their checkbooks fast enough. (Klein 73)

15When top executives of influential brands realised the potential there was in co-opting youth trends, alternative culture and street lifestyle, Adidas were no longer the only ones reaching for their chequebooks. And this was not only about sponsorship, but also about using word of mouth to create a buzz, adopting the underground tactics used by the young themselves—street marketing had been invented. In record companies this translated as “literally [taking] the streets”:

Hiring “street teams” to mingle near high schools and playgrounds, No Limit Records gave out CDs and decals for acts such as Master P. Relying primarily on his grassroots(or more properly asphalt roots) marketing, Master P hit number one on the Billboard charts in its first complete week at retail, racking up sales of nearly 500,000 CDs. […] The lesson was not lost on more traditional players in the music industry. Loud Records, another rap label (half-owned by BMG’s RCA label), dispatched its street teams, armed with cassettes of Big Punisher’s album […]. For nearly two years before the release of the CD, they talked up the new act and gave away samples. When the album finally came out, it sold 136,000 copies in one week and instantly went to the number five position on the Billboard 200 Chart without video playing on MTV, without major airplay on radio, and without a word about it in Rolling Stone. (Wolf 263-4)

16Soon the Soda giants and big brands were picking up on these new marketing possibilities. In The Entertainment Economy: How Mega-media Forces are Transforming Our Lives, Michael J. Wolf explains how PepsiCo’s Mountain Dew Brand invested over $1,000,000 in street marketing, sending out eight vans to a multi-star hip-hop tour: “they were laden down, like galleons of pop culture, with Mountain Dew samples, CDs from ten record companies, T- shirts… in short every promotional item known to western civilisation,” even distributing “half a million free pagers to kids who could use them to call up their friends, but only after they read the Mountain Dew promo that popped on after powering up. […] Even more subtly, the word had been spread throughout the subculture that Mountain Dew had the highest caffeine content of any soft drink.” Despite being an entertainment consultant, Michael Wolf admits that it sounds like something “out of a narcotic traffickers (sic) playbook”. Rather cynically, he remarks:

Clearly, the product being served makes a difference, but when you really think about it with an open mind, narcotics, an industry which at an estimated $50 to $60 billion in annual profits rivals the entertainment industry, is a prime example of successful product distribution without the benefit of conventional advertising. (264-5)

17Needless to say, Mountain Dew sales rose accordingly, “the bottom-line results of this non-traditional mix of hip-hop marketing and conventional advertising [being] annual growth rates of up to 13 percent for Mountain Dew, whose sales have eclipsed those of Dr Pepper, Sprite, and even its own mother brand’s lighter fare, Diet Pepsi” (Wolf 264-5). Clearly, both brands and artists find advantages in sponsorship and cross-promotion deals, as, when the advertising is handled intelligently, it is mutually beneficial, but is this an equal partnership? In the above case of Adidas and Run-DMC, I would be tempted to answer “yes.” In other cases, the brands have managed to upstage the bands, as with the unavoidable sponsor of live music in Canada, with Molson Breweries. Naomi Klein reports that the beer brand was fed up of being insulted on stage by the bands they programmed, with having their brand name eclipsed by the stars’, so they invented the Blind Date Concert.

The concept […] is simple: hold a contest in which winners get to attend an exclusive concert staged by Molson […] in a small club—much smaller than the venues where one would otherwise see these megastars. And here’s the clincher: keep the name of the band secret until it steps on stage. Anticipation mounts about the concert (helped along by national ad campaigns building up said anticipation), but the name on everyone’s lips isn’t David Bowie, the Rolling Stones, Soundgarden, INXS or any other bands that have played the Dates, it’s Molson […]. No one after all, knows who is going to play, but they know who is putting on the show. With Blind Date, Molson [has] invented a way to equate their brands with extremely popular musicians, while still maintaining their competitive edge over the stars. (48-9)

18Another example is that of Céline Dion, one of the world’s mega-stars. Nevertheless Avon sponsored one of her recent tours, and part of her contract stipulated that she would meet up with a selection of Avon representatives before each of her appearances. So here was a tense Céline, getting geared up for a public performance in front of a football stadium full of people, tetchy to the point of irritability, having to put in an appearance and submit with a smile to endless group photos with strings of Avon advocates, their husbands, children, grandparents… Isn’t the purpose of being rich and famous to not have to do things like that? And would Céline Dion’s tours (or the Rolling Stones’, or other mega-stars’) really not break even without a little help from their friends the sponsors? The relation between a star and a brand is becoming increasingly bipolar, either mutually beneficial or mutually antagonistic. The main reason for this is that stars themselves, evolving in their “total star environment” (see also “Media Synergy” below) are marketing themselves as brands (as Posh Spice once told a reporter: “We wanted to be a ‘household brand.’ Like Ajax” [Klein 48-9]). Klein draws her own conclusions:

[S]ponsorship is a far more complicated process than the buyer/seller dichotomy that existed in the previous decades and […] to talk of who sold out or bought in has become impossibly anachronistic. In an era in which people are brands and brands are people, what Nike and Michael Jordan do is more akin to co-branding than straight-up shilling, and while the Spice Girls may be doing Pepsi today, they could easily launch their own Spice Cola tomorrow. (61)

The Record Companies: Corporate Branding and Global Strategy

  • 5 As quoted in Peterson & Berger 155.

“We don’t cover hit records, we cover hit philosophies”
Stan Cornyn, vice-president of Warner Brothers Records.5

19It is now easier to understand how record companies have come to promote themselves as corporations in parallel to the promotion of the artists signed to them. Negus comments that “corporate public relations” is a “trend in management and business generally, where there has been an increasing concern with how a company maintains its ‘corporate culture’ and communicates to the outside world” (Negus 116). Elsewhere, he observes that record companies on occasion acquire or retain “acts—who on paper may not be commercially successful—[…] because they enhance a company’s profile within the industry and contribute to their ability to attract both artists, staff and investment” (Negus 137). This shows how, as in other lines of business— and there is no reason for entertainment to be an exception—Wall Street analyses prevail. In fact, as the charts derived from Herman and McChesney’s The Global Media show, most record companies, especially the Majors, are no longer stand-alone corporations, but part of a handful of much bigger and more powerful transnational corporations, whose holdings span all the different aspects of media in the 21st century, including broadcasting and telecommunications. Not only have these corporations evolved to gargantuan size, but they have also “engaged [in a] most visible drive for corporate alliance and consolidation,” according to William Greider (182). In his book, One World, Ready Or Not, Greider compares these new “media combines” to entities “as dominant as the railroad and oil trusts were in the 1890s” (182). For not only did the companies start merging at a frenetic rate (AOL and Time Warner; PolyGram bought up by Universal, only to be taken over by Seagram, who in turn sold to Vivendi, etc.), but they also form a web of corporations which all interact with one another through “joint ventures, equity interests or long-term strategic alliances” (Herman & McChesney Chapter III). The following diagram clearly shows the inextricable links between all major players of the media world, and further shows that the six main groups control the vast majority of the media that we know.

Links between first tier dominant media firms and second tiers films in the global market

Links between first tier dominant media firms and second tiers films in the global market

Source: derived from Herman & Chesney, Chapter 3.

  • 6 As quoted in Klein 24.

20Indeed, corporate philosophies have become a central part in a brand’s image. Richard Branson sees Virgin as Japanese keiretsus, or in plain English a “network of linked corporations.” He explains that the idea is to “build brands not around products but around reputation. The great Asian names imply quality, price, and innovation rather than a specific item. I call these ‘attitude brands’: they do not relate directly to one product—such as Mars bar or Coca- Cola—but instead to a set of values.”6 Naomi Klein demonstrates that:

  • 7 The record label is V2, as Virgin Records was sold to Thorn EMI in March 1992.

The Virgin Megastores provide perhaps the clearest displays of this kind of brand cohesion, employing various intra-brand synergies to leap-frog over entire stages of consumer choice. In the past, record labels, no matter how much money they sank into promoting new artists, they were still at the mercy of record-store owners and radio- and music-video station programmers […]. No more. Virgin’s 122 megastores are wired up to be synergy machines, equipped with building-sized murals ads, listening stations for customers to sample new CDs, huge video screens, deejay booths, and satellite dishes to beam live concerts into the stores. This is par for the course in the age of the superstore, but since Virgin is also a record label7, all of this technology can be harnessed to create a sense of breaking excitement about a new Virgin artist. “We’ll be featuring certain artists every month. That means we play them in the store, we can do live shows via satellite from another location and we can give them store presence” says Christos Garkinos, vice president of marketing for Virgin Entertainment Group.
“Think of what we can do for a developing artist.” More to the point, why wait around for something as temperamental as audience demand or radio play when by controlling all the variables you can create the illusion of a blockbuster success before it even happens?
(Klein 160)

21In creating a “blockbuster success before it even happens,” the vertically concentrated media company can in effect control the tastes of the consumers due to the replicating effects of media synergy. A company present on all five continents is able to do so globally.

Global solutions

22Most companies, whether involved in entertainment or not, are moving away from their core product, in fact moving away from product altogether, as if it was something slightly dirty, and involving themselves more deeply into creating a “vision”: in Klein’s words, “IBM isn’t selling computers, it’s selling business ‘solutions’. Swatch is not about watches, it is about the idea of time” (23) and many others are involved in selling a lifestyle.

23In the introduction to his essay on the role of the American music industry in the global popular music market, Steve Jones remarks that “popular music is exploited as an investment with global dividends” (Jones 83)—by which he means that markets must be considered as a whole, not as separate entities. This is why it does not make any sense to consider the UK or the US record market alone, and why references to the global aspect of the industry have been necessary. Similarly, it is no longer possible to consider music alone, without linking it in to other entertainment products, or even outwards towards unrelated “lifestyle” wares. Along the same line as Jones, in the conclusion of The Entertainment Economy, Wolf declares that

24“entertainment icons have become the closest thing to globally shared cultural icons,” backing it with the statement that “more Hindus are probably familiar with Madonna than they are with Abraham Lincoln”; his vision of the future encompasses a “better-integrated and larger global entertainment business, perhaps two or three times the size of the current entertainment economy, as the masses of China, India and Latin America enlist in a burgeoning, cable- ready, on-line savvy class (even in low-income households)” (291). Yet it is unlikely that it will also be run by the low-income masses, but much more so, that they will be huddled up in front of screens, taking in the streamline of advertising fed to them in the guise of entertainment. “It is when the effects of horizontal and vertical integration, conglomeration, and globalisation are combined that a sense of profit potential emerges.” Considering the concentration taking place in the market in recent years, Herman and McChesney note that mergers generate automatic cost savings in large companies, while they facilitate the launch of new businesses, as the corporations are able to “draw upon existing staff and resources” (Herman & McChesney 53). They are further able to exploit a whole range of opportunities derived from “cross-selling, cross-promotion, and privileged access.” The combination of these two features further reinforces the conglomerate’s position and strength in the marketplace. When several of these mastodons pool their efforts, the corporate alliances, which result from them, go way beyond the reach of governments, as Greider explains:

Corporate alliances are, of course, the antithesis of free-market dogma and the supposed liberalization of global trade. On the one hand, multinationals preach free market competition and aggressively promote the dismantling of governments’ legal controls over commerce and finance. On the other hand, the same firms are busily forging territorial compacts with each other—collaborative mechanisms that may be used to manage trade privately, on their own terms, above and beyond the reach of national governments. (172)

25One would have suspected that these corporations would be fiercely competitive. But in fact, they have found it more efficient to make alliances amongst themselves, thus roping off the market from newcomers. It will now be seen how each of these companies control releases vertically.

Media synergy

Giant Corporation Inc owns subsidiaries in every medium. One of its magazines buys (or commissions) an article that can be expanded into a book, whose author is widely interviewed in the company magazines on its broadcast stations. The book is turned into a screenplay for the company movie studios, and the film is automatically booked into the company’s chain of theatres. The movie has a soundtrack that is released on the company’s record label. The vocalist is turned into an instant celebrity by cover features in the company magazines and interviews on its television stations. The recording is played on the company’s chain of Top 40 radio stations. The movie is eventually issued by the firm’s videocassette division and shown on company television stations. After that, rerun rights to the movie are sold to other television stations around the world.
Nation Magazine (Quoted in Negus 4-5)

26This new form of “synergy” as moguls, critics and analysts coin it, “refers to a strategy of diversifying into directly related technologies and areas of entertainment and using the opportunities that this provides for extending the exposure of specific pieces of music and artists” (Negus 5). But synergy is not only the way for transnational corporations to milk each new “concept” dry, as each individual department’s contribution to the whole increases the concept’s overall potential. As Negus observes, this also means that record companies can no longer sign an artist on his/her merit or image alone, but must integrate him/her into a global entertainment package—the “total star text.” If there is one firm which has fully understood the possibilities afforded by media synergy, that is Disney. Herman and McChesney report that even unsuccessful films such as The Hunchback of Notre Dame, which only generated $99 million in revenue at the box-office, was expected to generate $500 million in overall profit (Herman & McChesney 54).

  • 8 Klein 188.

27This expanding vertical integration means “we are losing the spaces where the non-corporate mind can flourish—those spaces are there but they are shrinking as the captains of the culture industry become more enraptured by the dream of global cross-promotions.”8 It is not that companies set out with a specific will not to create or promote anything radically different or unexpected, but it just seems to spill out that way because of the economics of this form of transnational corporation: in an atmosphere of rising competition between corporate giants, the attitude towards hit products has also evolved. While before having a hit was a “nice windfall,” Wolf indicates that it has now become the “defining strategic concept in any growth plan”(158). Over and above this, transnationals are not only competing for market share, but also struggling for utmost prominence in terms of consumer recognition, and hits are something that provide them with this “cultural context in which people see themselves.”

28What is maybe more surprising to observe is that the handful of entertainment and media moguls that dominate the world market also form strategic alliances on specific long-term or short-term projects: Wolf mentions, for instance, Sony and Disney joining forces to produce the movie Air Force One, even though they are usually fierce competitors at the box office, whereas the entire third Chapter of Herman and McChesney’s The Global Media is devoted to listing the top ten firms assets and their direct or indirect links with one another. Maybe Rupert Murdoch has provided us with a key when he declared: “We can join forces now, or we can kill each other and then join forces” (Herman & McChesney 57). But if the media moguls stop going at each other’s throats, this also means less competition, less product differentiation and a move away from the oligopoly structure towards that of the cartel. If such a theory is correct, then the European Commission is well advised to be looking into the price of compact discs to consumers. We must not forget that “whether a company owns all its assets or combines them in temporary alliances with others, the goal is always the same: the widest possible distribution for the product, the message, the brand”(Wolf 147).

  • 9 Elissa Moses, Wall Street Journal, 26/06/97, as quoted in Klein 120.

29Yet in order to achieve this goal, corporations aim at the average, catering for the lowest common denominator and drawing on “an impoverished sense of the individual”(Buxton 438). In this context, MTV is seen as an “all-news bulletin for creating brand-images,” 9 and the “most significant factor to shared tastes of middle-class teens,” according to the New World Teen Study, which also found that “[t]eens who watch MTV Music videos are much more likely than other teens to wear the teen ‘uniform’ of jeans, running shoes and a denim jacket… They are also much more likely to own electronics and consume ‘teen’ items such as candy, sodas, cookies and fast food. They are much more likely to use a wide range of personal-care products too”. From which Naomi Klein concludes, “MTV International has become the most compelling global catalog for the modern branded life” (121).

Free Market or Rigged Market?

30While Peterson & Berger indicate that the record production industry underwent cyclical concentration in the past, causing homogenisation of the product on offer, followed by consumer withdrawal which spurred new competitors to enter the fringes of the market, the level of this concentration never descended below an 8-firm ratio (140-159), which in itself is significant. However there is also undeniable evidence of Anglo-American dominance over the world market that has led record companies to construct markets “to provide a series of opportunities for British and American artists across the globe” (Negus 11). On another level, the top ten media concerns in the world include all of the major record companies (Herman & McChesney 52-53), and these companies also interact in order to maintain or develop their dominance over markets or to maintain or develop their respective market shares in given territories. This permanent ultra-competitive situation also leads to competition within the same companies, as several sources within Majors have confirmed, although this is not something that they are supposed to talk about. When a new title is released internationally, each territory will be assigned a marketing budget and a sales target; it is only if they achieve this target (say, a golden album) that they will be allowed to spend additional marketing money in order to consolidate a chart position or even hope to reach a higher level of certification (such as a double-gold or even a platinum album). Simultaneously, a high chart position will also generate additional radio and TV airplay in the territory and generate sales synergy. But if an important record chain orders a large quantity of records from the Major’s branch in Belgium or the Netherlands, for instance, which are two countries with lower than average wholesale and retail margins, then the sales will be counted in their quota and they will artificially achieve a position which they would not have been able to generate on sales alone, while it can cost the wronged branch company its target, and transform a potential hit for the territory into a dead duck. As one executive told me,

The global scheme of things? They [the Major] sell X number of records. They are happy. From a UK point of view, we’re spending marketing money to buy things like racking and advertising and in-store space and they [the chain store] go and buy the records from an importer. So, they are not scratching our backs when we scratch theirs. So that is frustrating and it is expensive to us. It can make a substantial difference. Yes. A seventh of the number of records in the market are imports. It could stop you achieving a gold album or something, which would then generate more sales. It also has an impact on the artist, as well. Because an artist signed in the UK will earn less in royalties on a record sold in Germany than they do in the UK. So, if a UK retailer buys all its stock from Germany, the artist will not be getting his full royalty share. It is not just the record company who is losing on that.

31In the USA, tactics have been employed by industry lobbyists to prevent the importation of foreign records that were covered by American copyright, even if those records were no longer in print in the States. Conversely, though the American branches of the Majors deny it, or, at least, say that they are unable to control it (distribution in the States not being exclusive, but more of a network of wholesalers, regional distributors and “one-stops”), there is a constant flow of American parallel imports reaching the European markets, of records that have already been released by the original copyright holder’s licensee, due to the attractive wholesale price of American records. The United States have also instated highly protectionist laws concerning public performance, which act as an additional barrier to European or African artists seeking recognition in America. Steve Jones explains that:

The issue revolves primarily around H-1 work permits for entertainers. In the past, the INS required applicants for H-1 work permits to make their way through a forest of paperwork and to include documentation (in the form of press clippings, recordings, etc.) that proved the entertainers’ “distinguished merit.” The wording in the INS law has changed, however, so that the term “distinguished merit” has been replaced by “pre- eminence.” If distinguished merit was difficult to document (the INS provided no definition of it), at least it had a vagueness to it that allowed broad interpretation. The implication of pre-eminence is that a performer must be popular—for all intents and purposes, a star. (84-85)

  • 10 International Federation of the Phonographic Industry.

32And star status seems rather difficult to achieve in a country where you can neither perform nor get a record released. As the exploitation of copyright increasingly becomes a way for record companies to generate additional income, different countries reinforce their copyright laws, such as Japan, which has “extended copyright protection […] from thirty years to fifty years, and prohibit[ed] rental of recordings for one year from their release. It is estimated that the new law may gain record companies up to $1 billion annually” (Jones 91). The shift away from the straight-forward sale of physical product and towards the broader exploitation of copyright (such as blank tape levies as technological progress improves, or performance rights derived from the use of music on the radio, in television programmes, films, adverts, and from the use of music in public places) has meant that the IFPI 10 and its national counterparts such as the BPI in the United Kingdom, or RIAA in the States, are now lobbying in two specific but complementary domains: stronger copyright legislation and anti-piracy laws. As Rutten comments, the introduction of the International Standard Recording Code, or ISRC (an equivalent of the ISBN—International Standard Book Number) has proved a powerful means of controlling the use of recordings as “it identifies recordings, not physical products (‘carriers’).” He goes on to quote the IFPI:

New technology is rapidly increasing the variety of media by which recordings reach the consumer and the recording industry needs to ensure it derives income from the use of its product (e.g. by broadcasters, cable/satellite operators, music banks, private copying) in addition to the sale of physical carriers (e.g. singles, LPs, cassettes, CDs). (44)

33Wolf argues that “software—[meaning] books, music, films, and computer programs—is increasingly the currency in which the world trades” and that “future growth of all businesses based on this understanding of software is predicated upon the ownership of intellectual property rights” and perceives piracy as “a great threat to long-term growth and short-term stability” (292). William Greider takes another stand, claiming that “the periphery borrows from the center and makes cheap copies. This widespread piracy not only ignites the outrage of established businesses and governments, but it is also a very old trait of migrating capitalism. Stolen technology and stolen markets were the foundation of America’s earliest industry” (30). Greider further reasons that piracy only exists because of the high rate of CD player penetration in developing countries, accounting for “pirated compact discs being sold so freely on the streets of Beijing or Kuala Lumpur” (119), and that the main argument for fighting piracy is to enable American capital to enter these markets:

In early 1995, Clinton claimed an important victory for the “intellectual property rights” of capital when the Chinese government agreed to shut down the notorious knockoff factories that churned out millions of illicit compact discs, pirated from the American music and film industries. Jack Valenti, president of the Motion Picture Association, promptly announced that American companies would probably buy some of the outlaw factories and start producing CDs in China themselves. (Greider 213)

34While the 1980s yielded massive deregulation on all fronts, there seems nowadays to be a growing movement towards some form of control and regulation of market forces. Marcus Breen, stating the Australian case for making music local, comments that “the problems associated with increasingly large corporations like Sony owning both the song catalogues […] and the potential hardware for distribution of those songs are thus behind the calls for regulatory policies to cover the increasingly interlinked, global media industries, of which the record industry is a major component” (70). Whether the construction of a unified European market, encompassing “a distinctive cultural identity and repertoire source […] occurring […] across the existing cultural and national boundaries which have historically informed the way in which repertoire policies have developed and been organised” (Negus 9) will enable the United Kingdom and its continental counterparts to present an enforceable means of protecting both artists and smaller businesses, only the future will tell. As Georgina Born points out in the “Afterword” to Rock and Popular Music,

The stress […] on cultural policy echoes the main conclusions of a suggestive review of theories of international communications by Sreberny-Mohammadi (1991), in which she calls for a move beyond the naively polarized terms of the “global/local” paradigm, and for the insertion of a third level of analysis; that of the nation-state and its potential policies for the regulation of media and culture. (267)

35Another aspect of the regulation issue concerns not the record companies themselves, but the role to be played by broadcasters. Wallis and Malm ask “whether their primary goal should be to retain an audience, or whether it should be to maintain a strictly public service structure, producing programmes the broadcasters think are good rather than programmes they think will achieve high ratings” (162). They further relate the issue to “the nature of their mutual dependency on or informal integration to the phonogram industry” (Wallis and Malm 166), considering the latter’s increasing reliance on secondary sources of income derived from broadcasting. Finally, there is evidence that the domination of the global market by a handful of world players is not to the advantage of a large majority of artists, as these companies will prefer to focus on a small number of acts, deemed to have the potential for a truly international career. There is also the issue of artist contracts, which still include breakage royalty deductions, halved royalties on export sales, and the recouping of promotional costs over which the artist has no, or little, control. Recently, a number of recording artists have begun to campaign for artist’s rights, fighting for better royalty rates, health care and a pension fund for less successful acts. Courtney Love, one of the leaders of the movement together with artists of international renown such as Beck, Garbage, or Sheryl Crow, was quoted in Music Week as having said:

I'm driven by the misfortune of other artists who don't have my privilege and ability. Artists who have generated billions of dollars for the music industry die broke and uncared for by the business they made wealthy. I'm one in a long line of artists who have tried to break free since the (Universal/PolyGram) merger. I could end up being the music industry's worst nightmare—a smart gal with a fat bank account who is unafraid to go down in flames fighting for a principle. You show a music industry contract to any attorney in any other business, and their jaw just hits the floor. I'm ready to take this thing all the way to the Supreme Court. (Author unknown “Love files lawsuit…”)

36Record companies playing the hard line when it comes to the rights of the recording artists they have under contract is difficult to reconcile with their attitude towards piracy, which they often claim they are fighting in order to protect these same artists’ rights. But artists are not the only people getting harmed by the new structure of the global record industry. As Yasunori Kirihari, Sony’s general manager of corporate human resources put it:

The issue of shifting production to underdeveloped countries is the question of whether it’s cheaper to use people or machines. If it’s located in Japan, it has to be based on machines because wages are so high. But if you’re quick to invest the capital in machines, you may lose to competition that has already seized the labor-cost advantage of globalizing production. (Greider 69)

37As Greider comments, delocalisation involves valuing intellectual property higher than human life. His conclusion is that:

The terms of trade are usually thought of as commercial agreements, but they are also an implicit statement of moral values. In its present terms, the global system values property over human life. When a nation like China steals the property of capital, pirating copyrights, films or technology, other governments will take action to stop it and be willing to impose tariffs on the offending nation’s trade. When human lives are stolen in “dark Satanic mills,” nothing happens to the offenders since, according to the free market’s sense of conscience, there is no crime. (359)

38Not only are industrial jobs in the West being replaced by slave-wage labour in developing countries, media conglomerates in the West are also increasingly relying on long-term “temps” and unpaid interns, who will work long hours for months on end, in the hope of eventually being rewarded by a paid job in the glamorous media company. Naomi Klein quotes the story of Rick The Temp, who won the annual “Be a Temp at MuchMusic” contest, and was rewarded by a job answering phones. He became a VeeJay (Video Jockey) a year later, and having kept his nickname, “his success served as a daily advertisement for the glory and glamour that awaits if you donate your labor as a gift to a major media company”(246).

39There seems to be no way-out and the power and grasp of the media conglomerates may seem endless, yet very recent downfalls in the media might be indicating that what the people of Sony call “kudoka” (a form of hollowing-out through too big an expansion [Greider 15]) could yet make the boat capsize and give power back to the local, to the new, to the growing: Germany’s Kirsh Media has just filed for bankruptcy, as has ITV Digital in the United Kingdom, and the ultimate media combine Vivendi has been dismantled. Most of this has more to do with the broadcasting and publishing world, than the record industry, but still, it may be a sign of the times.

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Works cited

ANONYMOUS. “Timely Inquiry Into CD Pricing: Spotlight on the Music Business.” The Guardian Saturday January 27, 2001. URL: <,4273,4125615,00.html> Last checked 05 March 2002.

ANONYMOUS. “Love Files Lawsuit against Universal.” Music Week, 1 Mar 2001.<> Last checked 05 March 2002.

BORN, Georgina. “Afterword: Music Policy, Aesthetic and Social Difference.” No date (n.d.) Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 266-292.

BREEN, Marcus. “Making Music Local”. n.d. On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 66-82.

BUXTON, David. “Rock Music, the Star System, and the Rise of Consumerism”. (1983). On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 427-440.

FRITH, Simon and GOODWIN, Andrew, Eds. On Record: Rock, Pop, and theWritten Word. London/New York: Routledge, 2000. 492 pages.

FRITH, Simon. “Popular Music and the Local State.” n.d. Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 14-24.

GREIDER, William. One World, Ready or Not: The Manic Logic of Global Capitalism. New York: Touchstone, 1998. 528 pages.

HERMAN, Edward S. and MCCHESNEY, Robert W. The Global Media: The New Missionaries of Corporate Capitalism. London/New York: Continuum, 2001. 262 pages.

JONES, Steve. “Who fought the law? The American Music Industry and the Global Popular Music Market.” n.d. Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 83-95.

KLEIN, Naomi. No Space, No Choice, No Jobs: No Logo. London: Flamingo, 2000. 490 pages.

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PETERSON, Richard A. and BERGER, David G. “Cycles in Symbol Production: the Case of Popular Music.” (1975) On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 140-159.

RUTTEN, Paul. “Popular Music: a Contested Area—the Dutch Experience.” n.d. Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 37-51.

WALLIS, Roger and MALM, Krister. “From State Monopoly to Commercial Oligopoly. European Broadcasting Policies and Popular Music Output over the Airwaves.” n.d. Rock and Popular Music: Politics, Policies, Institutions. Eds. BENNETT, Tony, FRITH, Simon et al. London/New York: Routledge, 2001. 156-168.

WALLIS, Roger, and MALM, Krister. "Patterns of Change." (1984) On Record: Rock, Pop, and the Written Word. Eds. FRITH, Simon & GOODWIN, Andrew. London/New York: Routledge, 2000. 160-180.

WOLF, Michael J. The Entertainment Economy: How Mega-Media Forces areTransforming Our Lives. London: Penguin Books, 1999. 314 pages.

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1 The authors are referring to the audiocassette, but it could equally apply to DAT tapes and CD burners.

2 Emphasis theirs.

3 Emphasis his.

4 Quoted in Frith & Goodwin 476.

5 As quoted in Peterson & Berger 155.

6 As quoted in Klein 24.

7 The record label is V2, as Virgin Records was sold to Thorn EMI in March 1992.

8 Klein 188.

9 Elissa Moses, Wall Street Journal, 26/06/97, as quoted in Klein 120.

10 International Federation of the Phonographic Industry.

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Table des illustrations

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Titre Links between first tier dominant media firms and second tiers films in the global market
Crédits Source: derived from Herman & Chesney, Chapter 3.
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Fichier image/png, 591 octets
Fichier image/png, 591 octets
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Tamsin Briggs, « The Record Industry in the 21st Century: The Irrelevance of the Nation State »Revue LISA/LISA e-journal, Vol. II - n°2 | 2004, 20-40.

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Tamsin Briggs, « The Record Industry in the 21st Century: The Irrelevance of the Nation State »Revue LISA/LISA e-journal [En ligne], Vol. II - n°2 | 2004, mis en ligne le 16 novembre 2009, consulté le 04 décembre 2022. URL : ; DOI :

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Tamsin Briggs

(Université de Tours, France)
Tamsin Briggs worked in the record industry from 1991 to 2000 in several capacities and in several countries. Her research interests include “The British Record Industry in the last Quarter of the 20th Century”. She works as a part-time lecturer at François Rabelais University in Tours, France.

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