To quote the sages of AC/DC, rock 'n' roll ain't noise pollution. And now it ain't that good a business, either.
In 2006 the mainstream rock act that reliably sells platinum, or 1 million copies, is an endangered species. Subtract those established in eras just past, such as U2 and Green Day, and the population shrinks further. This is a relief to savvy listeners -- thousands of independent-label flowers now bloom -- but it's hell on major record labels, which still need massive sales from franchise bands. Rockers favor albums over singles (famously, Led Zeppelin never released Stairway to Heaven as a single), and albums reap bigger profits for their labels. While rock helped build the big labels' superstructure in the 1960s and 1970s, now chunks are falling off that facade.
In recent weeks, New York and Philadelphia each lost their sole radio station devoted to "modern rock," the format most likely to play new rock bands for a mass audience, and Phoenix lost one of its two. This follows a year in which some seemingly sure-thing rock releases, specifically from Audioslave and the White Stripes, notched less than half their previous CDs' unit sales. These bands are hardly finished, but they show how achieving and maintaining rock superstardom is a different beast today.
ONCE IT WAS ALL MUCH EASIER. There was a simple symbiosis among rock radio, record labels, and the arena-concert circuit. In the 1970s their interplay enabled the emergence of a new class of megastar band like Led Zeppelin. But of nearly equal importance to the music business, it also gave rise to a cadre of second- and third-tier rock bands that, despite critics' complete derision, sold zillions of records. These days the names Grand Funk Railroad and Foghat are primarily punchlines, but in the '70s they scored a total of 17 gold or platinum albums. They were also big concert draws, stoking massive fan bases at the sleazy, smoky arena shows that were sort of spiritual, sort of Satanic. (N.B.: Grand Funk's records are better than you think.)
This type of band no longer exists and neither do the conditions that fostered their ascent. Rock radio is increasingly a victim of fragmenting demographics. The sole genre posting sales gains last year, according to Nielsen SoundScan, was Latin. Arena rock shows that once promised spectacle for less than a sawbuck have bloated into elite affairs resembling closed corporate events. Average ticket price for a show on the Rolling Stones' 2005 tour: $134. It's no surprise, then, that the arena-concert business has shifted decisively toward greatest-hits revues by graybeards such as the Stones and the Eagles.
Today's key entry points for music consumers are iTunes (AAPL) and ringtones. The former favors singles over albums and thus further unbundles rockers' preferred medium, and the latter is peculiarly inhospitable. None of the top 10 ringtone downloads of 2005 came from rock acts. Hip-hop now owns the artist-as-icon phenomenon. Rock hasn't minted a star with the pop-cultural legs of 50 Cent or Eminem in this century.
There are benefits to the splintering of musical hegemony. Broader access to music, be it from online recommendation engines or satellite radio, gives consumers many more choices than they had in the old days. One big story of 2005 was the wildfire success of Clap Your Hands Say Yeah, which parlayed blog buzz into selling something like 50,000 copies of a self-released CD and an appearance on Late Night with Conan O'Brien.
Some newish rock bands have established themselves as franchises reminiscent of another era. (Coldplay leaves the cognoscenti, ah, cold, but its sales make Capitol Records happy.) Still, the big business plays for today's bands are complex revenue-sharing deals that monetize everything down to T-shirt sales, as Korn did in pacts with EMI Group PLC and concert promoter Live Nation Inc. (LYV) Once it was much easier. And so somewhere the thinning bangs of a music exec hang limp as he quietly sobs at his desk, overwhelmed by a sudden nostalgia. Who'd have thunk he'd miss Grand Funk this much?
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine