Market failure: Punk economics, early and late

College Literature, Spring 2001 by Thompson, Stacy

In contrast to the majors, Dischord, which MacKaye continues to coown and help manage in 2000, distributes and sells its recordings via mail order or direct sales to record stores whenever possible, although Southern Records, an independently owned distribution company,4 handles the majority of Dischord's distributing needs. In an interview in the May/June 1999 issue of Punk Planet, an independently produced punk `zine with international distribution, MacKaye brags that he and his bandmates in Fugazi "manage ourselves, we book ourselves, we do our own equipment upkeep, we do our own recording, we do our own taxes" (1999, 38). The band also controls all of its own touring, recording, production, and engineering (Fairchild 1995, 28).

Forgoing the usual commercial division of labor, Dischord avoids the vertical integration of the majors that would establish ownership of the means of production for the label. Rather than investing in its own recording, production, and distribution facilities and processing the bands on Dischord through them, MacKaye and Nelson do not place bands under contract and, consequently, cannot dictate where they record their albums. The Washington Post quotes Guy Picciotto, one of the singers and guitar players for Fugazi:

A major-label contract, by definition, makes you an employee of the record company. No matter how good a contract you negotiate, you do not have complete creative control. This is a fact of the record business. This is a fact about Dischord: It does not sign contracts with bands whose recordings it releases, and it allows them total artistic control. (Brace 1993, 24)

Frith's understanding of the recording industry concurs with and expands upon Picciotto's synopsis. He explains that the record company does not just act as the record publisher. The standard recording contract makes it clear that record companies, who are the legal owners of the finished product, the physical recording, expect to exercise the right of their ownership, controlling what music is issued, how it is produced, when it is released. Companies may decide what songs will be on a record, in what order, with what packaging; they are at liberty `to determine arrangements, accompaniments, etc.'; they can organize an act's performing schedule, as an aspect of record promotion. Companies have the final power to decide whether a song or sound is of sufficient quality to meet the artists' contractual obligations-they are thus able to prevent them from recording elsewhere. (Frith 1981, 109) Dischord forgoes all of the above privileges by refusing to claim control of its bands' products. It does not even reserve the right to cancel a record or CD release if a band does not record the sort of sound in the studio that initially attracted the label's interest in the band.

In addition to avoiding divisions of labor wherever possible, Dischord refuses to develop the "multimedia sales techniques" (Frith 1981, 150) that Frith finds the majors advancing in the mid- to late-70s. The label never nationally publicizes record releases or concerts for Dischord bands through corporate media outlets, preferring to advertise in independent `zines, through word of mouth, and over the World Wide Web. Although label employees initially silk-screened Dischord tee-shirts and hung them on clotheslines to dry behind the company's headquarters (MacKaye's mother's house) in D.C. (Connolly 1995, 165), they quickly discontinued this form of promotion and have not engaged in tee-shirt or sticker promotions since the early 80s. At most contemporary punk rock shows, the "merchandise table," at which audience members can purchase records, CDs, stickers, patches, shirts, and `zines, remains a ubiquitous fixture, but Fugazi never operates one, although Dischord does not prevent bands on its label from operating their own tables.