Creativity and Innovation in the Music Industry

303 Pages·2012·4.004 MB·English

by  Peter Tschmuck (auth.)

Creativity and Innovation in the Music Industry
Peter Tschmuck
Creativity and Innovation
in the Music Industry
Second Edition
123
Peter Tschmuck
Universität fürMusikunddarstellende
Kunst Wien Inst.Kulturmanagement
Karlsplatz 2/2/9
1010Vienna
Austria
ISBN 978-3-642-28429-8 e-ISBN978-3-642-28430-4
DOI 10.1007/978-3-642-28430-4
SpringerHeidelbergNewYorkDordrechtLondon
LibraryofCongressControlNumber:2012932958
(cid:2)Springer-VerlagBerlinHeidelberg2012
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Preface
When my Habilitation (the tenure research document for my professorship) was
published for the first time by StudienVerlag in 2003, I did not expect that a
scientific study such as this would reach such a large readership in the German-
speaking world. However, public discussion at that time was coincidentally
focused on the structural break within the music industry, culminating in a con-
troversialdebateaboutthecausesandconsequencesofthatrevolution.WhileIdid
not intend to address the current discussion regarding the development of the
musicindustry,itnonethelessappearedtobetherighttimetopublishsuchabook.
Timing, in other words, matters!
TheunexpectedacceptanceofmybookbytheAustrianandGermanreadership
inspired me to consider publishing it in English as well. The book provides an
explanation for the emergence of innovation and creativity in the music industry
by retelling and interpreting its history, from Thomas Alva Edison’s invention of
thephonographin1877tothelatestinnovationssuchasMP3-filesandiPods.The
global nature of this history causes me to believe that this book is going to be of
interesttoaninternationalreadershipaswell.Myhopeisthatthistranslationwill
be received with the same level of warmth and generosity that the publication of
the German original enjoyed.
Preface of the Second Edition
When my book initially was published in 2006, the music industry was in the
midst of the digital revolution and it was not visible then what changes would
occur.However,after5 yearstheoverallpicturebecameclearer.Thus,Ireworked
Chap.9inordertoincludeallthedevelopmentsthatshapedthemusicindustryin
the first decade of the twenty-first century—from Napster to cloud-based music
services and even beyond. I hope that my book still finds a broad readership and
will be warmly welcomed as the first edition.
v
Acknowledgments
Althoughthebookcoveridentifiesmeasthesoleauthor,thisbookwouldnotexist
initspresentformwithoutitstranslator,MarcoAbel,whoalsoeditedtheupdated
parts of the second edition. I would like to thank him for his engaging translation
of the German original; his labor gave rebirth to my work in a faithful, yet
stylistically autonomous manner. I hope that we will have the opportunity to
collaborateonmanymoreprojectsinthefuture.IwouldalsoliketothankJennifer
Wijangco, who invested so much time in her thorough editing of the book. With
the help of her precise and reliable proofreading abilities, she put the finishing
touch on the text. Since a translation of a book is very costly, this project would
not have been possible without Springer’s financial and moral support of the
translation process. I would like to extend my sincere gratitude to Cathelijne van
Herwaarden forbelieving inthisprojectfromthestartandforpromotingit,andI
wishtothankHermaDreesforherassistanceinthepreparationofthemanuscript
of the first edition and Irene Barrios-Kezic of the second edition. In addition, I
greatly appreciate the Austrian Ministry of Education, Science, and Culture’s
generous support of the translation in order to make my book available to an
internationalreadership.Lastbutnotleast,Iwouldliketothankallmycolleagues,
students,andfriendsforhelpfulfeedbackandcommentsontheGermanversionof
the book entitled ‘‘Kreativität und Innovation in der Musikindustrie’’, which was
published by StudienVerlag and on the first edition of my book, which is now
available in this updated and revised version.
vii
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Aim and Structure of the Book . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Implications of Culture Institutions Studies . . . . . . . . . . . . . . 4
2 The Emergence of the Phonographic Industry Within
the Music Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 The Phonograph as Business Machine. . . . . . . . . . . . . . . . . . 9
2.2 ‘‘Coin-in-the-Slot’’-Machines. . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Records and Gramophones . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.4 Herr Doctor Brahms Plays the Piano. . . . . . . . . . . . . . . . . . . 23
3 The Music Industry Boom Until 1920 . . . . . . . . . . . . . . . . . . . . . 27
3.1 The Global Competition in the Phonographic Industry . . . . . . 27
3.2 The U.S.-Market Before World War I. . . . . . . . . . . . . . . . . . 31
3.3 The European Market During World War I. . . . . . . . . . . . . . 34
3.4 The Music Repertory on Record Between 1900 and 1920. . . . 35
3.4.1 Waltzes and Operas from Europe. . . . . . . . . . . . . . . 35
3.4.2 The Tin Pan Alley Monopoly . . . . . . . . . . . . . . . . . 43
4 New Technology and the Emergence of Jazz. . . . . . . . . . . . . . . . 49
4.1 The Phonographic Industry’s Business Cycle
from 1920 to 1945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 The Phonographic Industry and Broadcasting
in the U.S. and Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.3 ‘‘Race Music’’ and ‘‘Hillbilly’’. . . . . . . . . . . . . . . . . . . . . . . 59
4.4 Electrical Recording. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5 The Music Industry as Radio Industry . . . . . . . . . . . . . . . . . . . . 69
5.1 Recession and Depression on the U.S. Phonogram Market . . . 69
5.2 Market Concentration in Europe. . . . . . . . . . . . . . . . . . . . . . 71
ix
x Contents
5.3 The Dominance of Broadcasting and Sound Films
in the U.S. Music Industry. . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.4 Music as an Instrument of Ideology in Europe. . . . . . . . . . . . 79
6 The Swing Monopoly During the Years of Wartime Economy . . . 87
6.1 The Music Industry During World War II. . . . . . . . . . . . . . . 87
6.2 The Swing Monopoly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.3 Music as Propaganda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
6.4 The Intellectualization of Jazz: Bebop. . . . . . . . . . . . . . . . . . 97
7 Rock ‘n’ Roll Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
7.1 Economic Recovery and Technological Innovation. . . . . . . . . 101
7.2 The End of the U.S. Music Oligopoly. . . . . . . . . . . . . . . . . . 104
7.3 From Rhythm & Blues to Rock ‘n’ Roll. . . . . . . . . . . . . . . . 111
7.4 Music Production in Post-war Europe. . . . . . . . . . . . . . . . . . 120
8 The Recovery of the Phonographic Industry
and New Global Players. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
8.1 A Decade of Market Growth (1960–1969). . . . . . . . . . . . . . . 127
8.2 European Majors on the Advance. . . . . . . . . . . . . . . . . . . . . 129
8.3 The Recovery of the U.S. Majors Under New Leadership. . . . 132
8.4 The Produced Sound. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
9 The Era of Music Conglomerates . . . . . . . . . . . . . . . . . . . . . . . . 147
9.1 The First Merger Mania in the Recording
Industry (1965–1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
9.2 Oligopolization in the Recording Industry. . . . . . . . . . . . . . . 149
9.3 Market Domination by Market Segmentation. . . . . . . . . . . . . 150
9.4 The Commercialization of Sub-Cultures: Heavy Metal,
Punk Rock, and Disco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
10 The Digital Music Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
10.1 From Music Cassette to Compact Disc . . . . . . . . . . . . . . . . . 163
10.2 Superstar Business Versus Hip-Hop Culture?. . . . . . . . . . . . . 168
10.3 The Second Merger Mania in the Recording
Industry (1985–2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
10.4 The Digital Music Revolution . . . . . . . . . . . . . . . . . . . . . . . 182
11 Theoretical Concepts of Innovation and Creativity . . . . . . . . . . . 197
11.1 Typologies of Innovations. . . . . . . . . . . . . . . . . . . . . . . . . . 197
11.2 Innovation as a Process of Collective Action. . . . . . . . . . . . . 202
11.2.1 The Incentive-Based and Knowledge-Based
Models of Innovation . . . . . . . . . . . . . . . . . . . . . . . 202
11.2.2 Innovation as Generation of New Action Routines. . . 204
Contents xi
11.2.3 Technological Paradigms and Technological
Trajectories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
11.2.4 Absorptive Capacity and Conservative
Organizational Behavior . . . . . . . . . . . . . . . . . . . . . 209
11.3 Typologies of Creativity . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
11.4 Creativity as a Collective Action Process . . . . . . . . . . . . . . . 214
11.4.1 Systemic and Evolutionary Approaches
to Creativity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
11.4.2 Creativity as a Phenomenon of Social Action . . . . . . 219
12 Creativity and Innovation in the Music Industry. . . . . . . . . . . . . 225
12.1 Revolutions in the Twentieth Century Music Industry. . . . . . . 225
12.1.1 Characteristics of the Jazz Revolution. . . . . . . . . . . . 225
12.1.2 Characteristics of the Rock ‘n’ Roll Revolution. . . . . 227
12.1.3 The Change of Paradigms in the Music Industry . . . . 230
12.2 Cultural Paradigms and Creative Trajectories
in the Music Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
12.2.1 Cultural Paradigms in the Twentieth Century
Music Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
12.2.2 Creative Paths Within the Music Industry’s
Cultural Paradigm. . . . . . . . . . . . . . . . . . . . . . . . . . 236
12.3 An Explanation for the Change of Paradigms
in the Music Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
12.4 Diversity as a Pre-Condition for Creativity and Innovation . . . 243
13 Creativity and Innovation in the Music Industry’s
Value-Added Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
13.1 The Search for New Talents: Artist &
Repertoire Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
13.2 The Process of Music Production. . . . . . . . . . . . . . . . . . . . . 259
13.2.1 Creativity, Innovation, and the Contractual
Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
13.2.2 The Music Producer as a Creative Factor . . . . . . . . . 262
13.2.3 The Manufacture of Phonograms . . . . . . . . . . . . . . . 264
13.3 Marketing and Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . 265
13.4 The Distribution Process. . . . . . . . . . . . . . . . . . . . . . . . . . . 268
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
Chapter 1
Introduction
1.1 Aim and Structure of the Book
Thebook’stitle,CreativityandInnovationintheMusicIndustry,mightleadsome
readers to believe that I will offer the ultimate explanation for how creative and
innovative music is made. My intention, however, is not to provide a manual for
‘‘creative’’ or ‘‘innovative’’ work. Rather, I will subject ‘‘creative’’ or ‘‘innova-
tive’’ work to a precise analysis. Nevertheless, I hope the reader will not discard
thebookoutofdisappointmentandinsteadaccompaniesmeonajourneythrough
the history of the music industry during the twentieth and the early twenty first
centuryinordertoeventuallyobtainone,thoughnotthe,answertothequestionof
how novelty is created in the music industry.
I speak quite consciously of the ‘‘music industry,’’ even though for good parts
of this book I will be concerned specifically with the history of the phonographic
industry. The term ‘‘phonographic industry’’ refers to a business area in which a
large part of the creation of value is accomplished through the production and
distribution of phonograms. To solely focus on the producers of phonograms
would,however,resultinacompletelydistortedpictureoftheconnectionswithin
the industrial production of music. The production of phonograms is unthinkable
without the music publishers providing the ‘‘creative’’ raw material for the pro-
ductionofmusicintheformofcopyrights.Further,thedistributionofphonograms
is inextricably connected with the promotion of music content. In the efforts to
distribute music to the public, broadcasting plays as crucial of a role as concert
promoters,whomthephonogramcompaniesconsideradvertisersoftheirproducts.
Inthisnetworkofindustrialmusicproductionwemustalsoconsidertheroyalties-
collecting societies that regulate the compensation of musicians, as well as the
publishingandphonographiccompanies. Likewise,themusicinstrumentindustry
iscloselyrelatedtothephonographicindustry,notonlybecauseitprovidespartof
the technical equipment used for the production of music in the studio, but also
because phonograms became the most important advertising medium for its
products(i.e.,electricguitars,drums,synthesizers,etc.)eversincethebirthofrock
P.Tschmuck,CreativityandInnovationintheMusicIndustry, 1
DOI:10.1007/978-3-642-28430-4_1,(cid:2)Springer-VerlagBerlinHeidelberg2012
2 1 Introduction
music.Alltheserelationscanbemadevisibleonlywhenturningtheentiretyofthe
music industry into an object of and for scientific research.
It should thus be obvious that my use of the term ‘‘music industry’’ does not
pejorativelylabelthebigphonographicindustries,asthisissometimesthecasein
everyday language. Rather, with the term ‘‘music industry’’ I delineate a network
in which the production and distribution of music occurs in a process relying on
the division of labor and the help of the latest technologies. In such a way, the
mass consumption of music becomes possible.
This type of music production can be traced back to the end of the eighteenth
centurywhenthesystemoffeudalrulebegantodisintegrateanditsculturaloutlet,
the court, lost its social dominance due to socio-economic circumstances. Artists
and especially musicians, whose existence had been enabled by the court-system
up until that point, had to continue their work in a new context, which did not
transpirewithoutcrises inthetransitionalperiod.What todaymight appear asthe
former court musicians’ emancipation from a feudal-absolutist aristocracy con-
stitutedformanynothingshortofasocialcatastrophe.Attheendoftheeighteenth
century,thecourtlaidoffmanycomposersandmusicians,becausethearistocracy
couldnotordidnotwanttopayforexpensivecourtorchestrasanymore.Sincethe
structuresofamarketeconomywerenotyetsufficientlydeveloped,onlyafewof
the newly unemployed succeeded at building a new life. These few, however,
recognized the economic opportunities afforded by the emergence of a music
publishing industry and a public concert culture. For instance, in the 1780s
Wolfgang Amadeus Mozart managed to escape the court of the archbishop of
Salzburg, where he served as an organist, and started an independent economic
existence as a composer and musician in Vienna (Braunbehrens 1986). Likewise,
Joseph Haydn, who for the better part of his life worked as a court musician,
managed to succeed economically as a composer after the termination of the
Esterházyian ‘‘Hofkapelle’’ (Somfai 1989). Mozart andHaydn were precursorsof
a new generation of self-confident composers who generated their income in the
freemarketandnolongerneededattachmenttothecourt.LudwigvanBeethoven
is without a doubt the prime example for this new type of composer; though
surrounded by courtly benefactors, Beethoven did not depend on them for his
livelihood anymore, since as an independent artist he sold his efforts in the mar-
ketplace (Tschmuck 2001a).
However, Beethoven’s rise as a music titan was possible only because of new
production conditions. As a music composer, he now dealt with an anonymous,
largelybourgeoisaudiencethatreceivedhisworksinvariousways,asopposedto
negotiatingonlywithoneprinceorhisroyalhousehold.Themostimportantbasis
for this new form of reception was printed sheet music, which offered piano
extractsaswellasadaptationsforotherinstrumentsandsmallensembles.Alabor-
sharing, industrial production process had to replace one based on small business
structures,since musicwas nowmadeforamassaudienceratherthan forasmall
courtly circle of music lovers. Music publishers, which were small companies in
the eighteenth century, developed into industrial corporations in the nineteenth