Market failure: Punk economics, early and late

College Literature, Spring 2001 by Thompson, Stacy

Current Lookout! business practices differ from the label's original ones most notably in that it now signs bands to contracts. In 1998, Livermore sold the company to Chris Appelgren, who continues to own and operate it today. Even before the sale, George Tabb, the singer for the pop-punk band Furious George, and a columnist for MaximumRockNRoll (MRR)-consistently the most widely read and influential internationally distributed punk `zine since its inception in 1982, with a current circulation of roughly 25,000-published an account of his business dealings with Lookout! in the February, 1997, issue of MRR. He and the other members of Furious George signed a contract with Lookout! to do an EP,6 and Tabb claims that he had an oral agreement with Lookout! that the label would follow the EP with an LPG and give the band a merchandise agreement as well as tour support. The label reneged on everything but the EP Lookout!'s changing policies,Tabb's public attack on the label, and the public support that Tim Yohannon, the founder and publisher of MRR, granted to Tabb's claims against Lookout! have combined to place the label in a median zone between indie and major labels, for punks.

The Failure/Success of Dischord, Fugazi, and Lookout!

My attention to Dischord, Fugazi, and Lookout! should not be read as a testimonial to the radical or subversive nature of independent (DIY) punk bands and labels. Doug Henwood, publisher of the politics and economics newsletter Left Business Observer, comments in a recent issue of Punk Planet:

In a practical sense, a lot of independent operations screw their employers and customers over as much as anybody else does.You could say that there's often something other than the logic of profit maximization at work in independent operations, but you can't be sure of that.There are lots of scum bags and frauds everywhere, including independent music labels and publishers. (Henwood 2000, 47)

Although Dischord, Fugazi, and Lookout! do not (or did not initially, in the case of Lookout!) seem to be composed of scumbags, in Henwood's sense of the word, it is the labels' and the band's failings by commercial standards and by D.LY standards that constitute punk's highlighting of the problem of establishing an independently-run sphere of exchange qualitatively different than the commercial sphere.

Punks' attempts at economic oppositionality exhibit three interrelated failings, the first two of which, when inverted, can be turned to punk "successes," while the third cannot be wholly recuperated by punks. First, Dischord and Lookout! fail in the broad terms of the commercial commodity market: the D.LY approach to production, when mobilized within punk through these labels, fails to pose any real threat to the majors in terms of market share. According to a special issue of The Nation ("The Media Nation" 1997) on the music industry, twenty years after the period that Frith addresses, a new Big Six (Time Warner, Sony, Philips Electronics, Seagram, Bertelsmann AG, and EMI) control 79 percent of the music market in terms of sales, leaving 21 percent for the "indies"8 [independent labels] ("The NArAin Naric" 1997 25-28). Janine Jaquet, a senior researcher for the Proiect on Media Ownership at Johns Hopkins University, finds that rap accounts for at least half of the indies' 21 percent, leaving non-rap indie labels with roughly the same 10 percent of the market that they owned twenty years ago. Although, according to Jaquet, no one tracks sales for the indie labels (1997, 10), The Nation lists over twenty "important" indie labels, of which only two are punk: Dischord and Crypt Records ("The Media Nation" 1997, 28).9