Democracy of Sound (37 page)

Crisis at Home, Growth Abroad

The economic crunch of the late 1970s hit the music industry in the United States and Europe hard, ending a period of prodigious growth that had coincided with the coming of age of the postwar generation. In the United States, the dollar value of the domestic production of records and tapes grew by 112 percent between 1972 and 1977, whereas it increased about 55 percent between 1977 and 1982.
⁸
The recording industry hit a record sales high of $4.1 billion in 1978, shortly before music sales started to tank. “Some industry analysts even suggested that a recession in the general economy was good for the music industry because people would stay home more, thereby increasing the need for music,” economist Laurence Kenneth Shore observed in his 1983 study of the industry.
⁹
Europe’s domestic recording industry also enjoyed substantial growth in the 1970s, as record sales grew at an average of 11 percent per year in the European Economic Community (EEC) between 1971 and 1978. The industry was shocked to find that sales dipped in most of Europe for the first time ever in 1979, and observers worried that the decline would continue in the new decade.
¹⁰

Table 7.1
Estimates of Pirate Recordings Seized in Selected Countries, 1980–1985

Source
: Publishers Association and Federation of Phonogram and Videogram Producers Association,
International Piracy: The Threat to the British Copyright Industries
(United Kingdom AntiPiracy Group, 1986).

Growth stalled in the late 1970s and early 1980s for a variety of reasons. Recession struck, most severely in 1981, and consumers no longer tolerated the steady rise in the cost of records. The average LP cost $4.98 in 1975 and $7.98 in 1978; the phenomenal growth in sales figures during the decade partly resulted from the fact that the record industry simply charged more per unit, and until 1979, inflation-weary consumers appeared willing to pay more.
¹¹
Indeed, the increase in record prices was roughly equal to the rate of inflation between 1977 and 1982, which suggests that record companies could no longer inflate their prices as energetically as they had in the early to mid-1970s. The high price of oil increased shipping costs, which made records, like so many other products, more expensive. In May 1979
Billboard
estimated that 700 record company staff had been let go, and the cuts continued all along the chain of production.
¹²
The number of workers who made records and tapes in the United States declined by 26 percent between 1977 and 1982.
¹³

Economic conditions were not solely to blame. New media such as video-cassette recorders (VCRs) offered consumers alternative ways to spend their entertainment dollars. Industry executives worried that video arcades and home gaming systems such as Atari siphoned off the disposable income of the youth market.
¹⁴
Lastly, consumers turned to tape recorders to share copies of albums—an appealing option in the face of steadily rising prices. The RIAA began campaigning in the mid-1970s for a tax on tape recorders and blank cartridges, the proceeds of which would flow to the record industry to compensate for its hypothetical losses. This idea also took root in Europe, but in the United States the proposal never became law.
¹⁵

Given this inauspicious climate, record companies began looking abroad for growth, but the burgeoning world market soon supplied the industry’s next big headaches. US executives worried that the domestic market had reached a “saturation point” as the seemingly unstoppable growth of the early 1970s tapered off. “Just as people are unlikely to read many more newspapers next year than today,” musicologist Pekka Gronow speculated in 1983, “they perhaps already buy as many records as they need.”
¹⁶
The recording industry sought to squeeze more sales out of the domestic market by introducing new products, such as the compact disc, that might tempt consumers to re-purchase recordings they already owned on vinyl or tape. However, the “CD boom” was necessarily temporary—once consumers upgraded their record collections by purchasing their old recordings on the new format, sales leveled off once again.
¹⁷

Both the technological fixes and the turn toward the world market reflected the extent to which record companies had become part of huge, multinational corporations that sold all kinds of entertainment goods and services. Dutch electronics giant Philips, having introduced the compact cassette in 1964 and the compact disc in the early 1980s, also owned Mercury Records and other labels. Warner Communications International formed in 1981, consolidating the record companies Atlantic, Elektra, Reprise, and Warner under one corporate umbrella with toy, video game, soft drink, publishing, and television interests. The Japanese company Sony bought up CBS Records in 1987 and Columbia Pictures in 1989, becoming a purveyor of both hardware and software. The company’s Walkman, a compact cassette player designed for portability, helped revive the flagging music industry of the early 1980s by boosting sales of both players and cassettes. CBS and RCA already made 50 percent of their sales overseas in 1977, and by the 1990s, it was typical for American music publishers, record companies, and film and television producers in general to earn 50 percent of their revenues from foreign sales.
¹⁸

Table 7.2
Sales, Employment, and Investment in the US Recording Industry, 1972–1982

*
The 1982 census offered a different estimate of the value of shipments in 1977 (noted in parentheses).

Source:
US Department of Commerce,
1977 Census of Manufactures, Volume II: Industry Statistics, Part 3. SIC Major Groups 35–39
(Washington, DC: US Government Printing Office, 1978), 36D-20. US Department of Commerce,
1982 Census of Manufactures: Subject Series General Summary, Part 1. Industry, Product Class, and Geographic Area Statistics
(Washington, DC: Bureau of Census, 1982), 1–16, 1–17.

Record companies, then, paid greater attention to foreign sales in the late 1970s and early 1980s as a way to overcome the stagnation of domestic markets in the United States and Europe, a crisis which provoked the reconstitution of ailing firms in large multinational conglomerates with an increasingly global focus. Previously, labels in the United States and Britain looked at overseas profits more as a bonus than an essential source of revenue, yet record label RSO actually made more money on foreign sales of the
Saturday Night Fever
soundtrack than it did in the United States. The most records were still sold the United
States, Australia, West Germany, and other wealthy nations, but less-developed markets in countries like Brazil and Mexico were approaching the level of sales seen in Europe and the United States.
¹⁹

Record companies built up infrastructure abroad to capitalize on these new markets in the developing world. Large new pressing plants opened in Nigeria and Venezuela, where burgeoning oil profits propelled economic growth during the 1970s. As Nigeria became a bigger market for recorded music in the 1980s, it also became a hotbed of piracy and a chief target of music industry investigators. In fact, expanded access to tape recorders during the oil boom hastened so much unauthorized reproduction of foreign music and movies that multinational corporations began to abandon efforts to sell their official recordings in the Nigerian market.
²⁰

As the international market for music expanded well beyond the frontiers established by the recording industries of America and Europe, illicit recordings spread across new terrain like an advance guard for the multinational record companies. For example,
Grease
hit the market in Turkey before the film or soundtrack were officially released there.
²¹
In Saudi Arabia, substantial oil wealth and the complete lack of copyright laws made for a bustling sale in foreign movies and music, whether licit or illicit. The fact that the Saudi kingdom was impoverished in terms of cinema and television also made piracy an appealing option. Similarly, the sounds of
Saturday Night Fever
went where the Bee Gees and the label RSO could not go: across the borders of communist states such as Vietnam and North Korea.
²²

Indeed, tape recorders served the purposes of both entertainment and politics. Revolutionaries in Iran used audiocassettes to circumvent state media and disseminate their radical message to the people, and tapes of Islamic sermons subsequently became popular throughout Africa. Iranian pilgrims smuggled recordings of the Ayatollah Khomeini’s sermons and phone conversations from Iraq, where the radical leader was exiled prior to founding the Islamic Republic of Iran. Khomeini bootlegs were even reported in the Communist republics of Central Asia after the Soviet Union invaded Afghanistan. While distinct from the music market, these uses paralleled the flows of pirate product that brought American popular culture into the Islamic world. Media scholar Douglas Boyd noted that
Rambo
was popular in Syria, even though it was “hardly a U.S. client state.”
²³

The Sylvester Stallone action hit circulated behind the Iron Curtain as well, along with the films
Gorky Park
and
Moscow on the Hudson
.
²⁴
Soviet authorities condemned capitalist films for celebrating the “three s’s—sex, supermanism, and sadism,” although some intellectuals acknowledged the quality of films such as
Straw Dogs
,
Apocalypse Now
, and
The Godfather
.
²⁵
(Not surprisingly, all these works focused on the ills facing capitalist society.) Much like foreign
guest workers in the Persian Gulf took tape recorders home to South Asia, some Soviet citizens snuck VCRs and audiocassette players into their home country after traveling abroad. The bolder ones made big profits by screening Western films in their homes and copying tapes to sell for the equivalent of hundreds of dollars a piece.
²⁶

Similarly, the People’s Republic of China experienced an influx of foreign music despite its long struggle to control what the Chinese people could see, hear, and say. By the early 1980s, some of the prodigious flow of bootleg tapes from Taiwan and Hong Kong crossed into China, as the Communist government opened up “special economic zones” along the eastern coast to foreign trade. In the early 1980s, the Chinese authorities felt it necessary to issue a booklet called “How to Distinguish Decadent Songs,” which warned against music with a “quavering rhythm,” “a frenzied beat, neighing-like singing and a simple melody.” It singled out jazz, rock and roll, and disco for their perverse qualities and damaging effects, while declaring that the Chinese pop music of Hong Kong and Taiwan celebrated “deformed love in a colonial or semicolonial society.” While the government condoned the sale of Yugoslav folksongs and agitprop like “Medical Teams in Tanzania,” Chinese listeners looked for “Puff the Magic Dragon” and
The Sound of Music
. Most of these recordings were pirated, since foreign companies were not allowed to distribute such decadent material in China. Ironically, in the early 1980s, the Chinese government took the sort of proactive steps to suppress piracy that Western leaders later implored the Communist state to take in the 1990s. Customs officials in Shenzhen began confiscating cassettes, records, and videotapes smuggled in from nearby Hong Kong, while the administration of Qinghua University demanded that students turn in all foreign recordings. Officials at another school in Beijing requested that students register their records and tapes with the authorities.
²⁷