…'Bout Your G-G-Generation

American Demographics, Sept 1, 2003

Byline: Matthew Grimm

To the graduating class of 2003 (or so): The future is you. You emerge into the great marketplace of the world empowered by technology you know by rote, as no other generation has before you. Where your parents sat back and accepted the programming of mass media and allowed mass marketers to patronize them, you have utilized the tools of your time to reshape the culture. You are the first 20-year cohort to realize the democratic potential of our burgeoning common treasury of digital information.

And for this you will be prosecuted to the fullest extent of the law.

We of generations past went into the cultural churn of our college years with much the same hunger for the new, the different, the raw passion that is the fervent engine of the music of the American streets. We did it in times when "new" could be accessed, tasted, heard. Today's 21-year-old has been disadvantaged in that respect, growing up in a marketplace from which "raw" has been eugenically excised, a marketplace nearly paved flat by gross consolidation and an insidious thing called the Telecommunications Act of 1996.

Facing down a cabal of companies that dictate the "hip" and the "hot" of the music business, droves of young people, who would otherwise be the industry's "core market," have resorted to creating their own advantages. How? They weaned themselves of the passive role of receiver of radio and MTV transmissions, and of an ancien r?gime music industry that remained inert, unresponsive and corrupt. So, as digital music formatting merged with personal technology, our intrepid young consumers relished developing a new system that actively, and deftly, preyed upon the shortcomings of the old.

Little wonder that the Recording Industry Association of America has embarked on a blustery legal crusade against freebooting slackers and their practice of "file sharing." Little irony that the RIAA and its media partner industries - radio and, well, Viacom - find themselves fighting a sweep of history largely of their own making.

More ironic, perhaps, Gen Y finds itself inadvertently dismantling music business empires Baby Boomer parents helped to build. What one generational cohort giveth, another can taketh away. Strategy executives in other industry sectors would do well to note: The music business may serve as a bellwether of Gen Y activism. This cohort has shown that it will be merciless in its response to reactionary business behavior, and that it has some remarkably well-developed weaponry to carry out its campaigns to get what it wants in the marketplace.

Let's look a little closer at the case in point. The RIAA blames file sharing - the online swapping of electronic song files - for the free fall of record sales in recent years. CD sales have plummeted by 20 percent since 1999, including an 11 percent drop last year alone. To be sure, this has happened as the technology revolution enabled such online file-swapping services as the now-defunct Napster and the newer Grokster and Kazaa. Kazaa's peer-to-peer ("P2P") song-swapping software has been downloaded 200 million times, and Grokster estimates that 4.5 million consumers are using its services at any given moment. After a court ruling required Verizon's ISP unit to reveal the names of suspected music pirates, the RIAA announced in June that it would start suing file sharers. In July, it issued upwards of 900 subpoenas, forcing more ISPs to turn over customers' account information.

Record companies, however, are woefully mistaken. Lacking vision beyond their own profit lines, they fail to see that the revolution in music delivery occurred in reaction to the industry's mismanagement, not to mention its complicity in force-feeding the public a flavorless diet of sonic pabulum. Since the Telecom Act deregulating radio ownership was passed in '96, Clear Channel Entertainment and Viacom are now drawing 42 percent of listeners and control 45 percent of industry revenues, according to an exhaustive 2002 study by the Washington, D.C.-based Future of Music Coalition (FMC). As their empires have billowed, the two corporations have slashed staffs, eliminated stations' repertoire initiative (once the local arbiter of what new music got heard) and homogenized programming. The FMC report points out, for example, that four executives control the programming of Clear Channel's eight Washington, D.C., radio stations. "Format oligopolies and format homogeneity are part of the very same phenomenon," the report states. "Bottom-line pressures push radio parent companies to employ fewer and fewer people to do the same job, resulting in fewer gatekeepers and different playlist formats featuring many of the same songs."

What's more, the five major record labels have proven willing bedmates. They dole out $100 million a year to corporate radio through third-party record promoters - "pay-for-play" - their expenditures basically dictating what records make the playlists. Further, corporate radio's rigid formatting system now becomes a sterilizing A&R guidepost for the labels - e.g., if they're going to dump millions into a major release, they're going to do it with relative sound-alike acts, the Backsync Kids and Celine Aguileras of the world, to hedge their bets on airplay. Song overlap from format to format has also become prevalent. In its audit of Billboard's charts, the FMC found that, of 430 total slots in the "Top" charts that determine playlists across 11 radio formats, only 253 songs filled them.