Music in Recession
Can the Christian music industry survive the economic storm?
Mark Geil
Tuesday, June 2, 2009
Consider the proverbial straw that broke the camel's back. Now, think of the Christian music industry as the camel. As the economy continues to falter, might the straw be upon us even now?
An extraordinary number of things have worked against the Christian music in recent years, even before the recession—starting with illegal downloads. (Yes, even Christians steal music.) There was some relief when Christian music found its way into stores like Target and Wal-Mart, but sales didn't increase much, and Christian bookstores were hurt. Radio found a formula and a target audience, but record labels, feeling the pinch and afraid to take risks, focused so much on that target that music became homogenized. Now radio is pinched as well.
The camel's knees are starting to buckle. But is the recession enough to break the entire industry?
John W. Styll
"The money is just drying up," says John W. Styll, president of the Gospel Music Association. "And it's not being replaced."
EMI-CMG's John J. Thompson is more blunt: "In the last four years, the sky has fallen. The industry is not what it was, and will never be what it was."
New recording artist Stephanie Smith says she has to work an extra job because "it pays the rent. Music doesn't. I have a college degree and I have a record deal, and I work at Starbucks. That's my bread and butter. It's just not how I envisioned it."
"I know a few songwriters who are struggling enough that they're on the verge of calling it quits, which is tragic to me, kingdom-wise," laments veteran indie artist Andrew Peterson. "God has gifted these people to shine this light, and the state of the economy right now isn't allowing them to do that. That kills me."
Many Christian bookstores have closed their doors. Many at radio stations and record companies have lost their jobs. Trade show attendance is way down at gatherings like the recent GMA Week in Nashville, where Styll estimated that registration was down 25 percent, but others thought it was much worse than that; some observers said it seemed like a "ghost town" compared the typical bustle of a GMA Week.
Still, while some of the industry's "camels" have broken, the industry itself is still standing. But it's already a very different industry in many ways from even a couple years ago, and it may never look the same.
Bad news all around
Economic struggles have impacted every aspect of the industry:
Artists live a far less glamorous and opulent than most people think. "Once a quarter, I get a royalty check for like $200," laughs Peterson. "You don't make your living off of that, and you never know how much it's going to be from one quarter to the next." Artist income comes mainly from touring and from merchandise sales at those concerts. Lately, fewer people are attending concerts, meaning lower merch sales. Also, church giving is down, so honoraria for artists are smaller. And for a full band on tour, "the economics are totally different," says Rush of Fools' Wes Willis. "With a solo artist, it's one person or maybe a spouse, but in a band it's not one or two people, it's eight or ten, with spouses and families. The effects are multiplied because the income is divided."
Downhere's Jason Germain
Downhere's Jason Germain agrees. "It is much tougher to keep a band afloat than a solo artist. The economic stuff has hit us, but we've tried to stay close to the ground. We don't have a ton of overhead. We never bought ourselves a bus; we haven't done some things that other people think of as necessary. We wanted to be flexible enough to not hamstring ourselves." Nathan Clark George has taken minimization of overhead to an extreme—by living with his family in an RV and by playing smaller churches that can't afford big-name acts. "When they know they can't pay you, thankfulness is way up, because they know you're sacrificing, just like they are. People have been very generous. They have handed me a ham, or they've given me broken guitars, since I've blogged about how I like to fix old guitars."
Touring and festivals are also feeling the pinch, and some are cutting way back on their gigs. Festival producer Van Hohe dramatically scaled down his schedule, paring back from 23 dates to three last fall. Churches that host festivals are often faced with a choice between maintaining a regular schedule with lesser-known acts, or holding out for headliners. "There's a real impact on how much a church is able to afford," Hohe says. "Most are saying, 'Let's wait,' as opposed to, 'Let's make this less of an event.' They want the quality, not the quantity." Still, Hohe expects that touring might be the most resilient sector of the industry. "It doesn't matter what happens with the music business. You cannot download the live experience. We still have that to offer. There may be fewer shows, but people will come."
Meanwhile, smaller acts have actually benefited from the economic woes. Mitch Parks of After Edmund notes that upcoming bands are "less expensive" and are thus "getting more chances to fill bigger roles, play bigger tours and more dates." Smaller crowds may also mean stronger connections with an audience that prefers a niche.
Record sales are crumbling, even though music consumption is up 30 percent since 2004. But album sales—the physical product, like CDs—are "about half of what they were 10 years ago," says the GMA's Styll. "That is a function of people stealing music." But it's more than that. Copying CDs is a major issue, along with the ubiquity of music on the Internet, through satellite TV and radio, and on portable devices. "It's like All-You-Can-Eat music," says Styll. "People today don't feel the need to own music."
On the bright side, Christian music is doing slightly better than the music industry overall, with a current sales pace 5 percent behind last year compared to an 11 percent lag in the mainstream.
"Flat is the new up," says Bill Nielsen, VP for merchandising at LifeWay Christian Stores, noting the phrase used to describe sales of recorded music. "We hear this from nearly every key partner. Times like these really test everyone's resolve. It takes courage and creativity to continue supporting a declining category like recorded music to the degree that we are." John Mays, Vice President of A&R for Centricity, doesn't think that fight will last too long: "No one wants retail to go out of business. But down the road I don't see a lot of physical product being sold."
Record labels are in dire straits, with many restructuring and some disappearing altogether. As EMI-CMG's Thompson puts it, "The labels are bleeding out of the eyes, because they're spending money to make records and they're trying to market the records, but then the people who like the records just take them. It's gone from being a theoretical problem of what piracy is doing, to an actual body count." Centricity's Mays says the body count translates to his estimation that about 50 percent of record label employees have been laid off since 2000.
Thompson says the new economy has destroyed the old the "farm league" system, which enabled artists to develop through constant touring, improving production, and hard work over many years—the formula that worked for the likes of Switchfoot, Sixpence None the Richer, and P.O.D. "Labels can't afford to develop an act over five or six years anymore," he says. "Now it's like five or six months."
John J. Thompson
Since there's little margin for error, labels are taking fewer risks. "A few mistakes of creating something that doesn't sell can be terminal for your organization," says Mays. "I've never felt that before, but it's a reality for us all now. It used to be that you would miss on seven or eight things out of ten, and the others would pay for the ones you missed. That's not the case anymore." As a result, creativity and experimentation are getting hammered. "A freedom to fail has to exist in creative work, or you'll never hit," says Mays. "You must be able to experiment and try things you have a hunch about." But the recession has changed all that.
Radio may never be the same again. Mark Ramsey, president of Radio Intelligence US, speaks in nearly apocalyptic terms: "Recession assumes a cycle, and a cycle assumes it will come back up. But in this case, every observer of advertising acknowledges that it's not going to come back quite the way it was before." He observes a "new frugality" among advertisers that he says will not go away, and as a consequence, commercial radio is down 30 to 40 percent. "When you take 40 cents off the dollar and you've got to pay your loan, it's a lot." Stations are cutting jobs and trying to survive in this "new revenue reality." Ramsey believes commercial radio can still adapt, identifying digital models that will please listeners and advertisers.
Christian radio is different because most of its stations are non-commercial—immune to the pressures of declining ad dollars, but relying on donors who may be struggling financially. Still, the non-comms are doing surprisingly well. Share-a-thons are meeting their goals, and while stations report a decline in large donations, the number of average-sized donations is increasing and some stations are up over last year. Nonetheless, Ramsey highlights the need for innovation. "Some of the highest rated stations are simply background stations. If they disappeared, most listeners wouldn't notice. Any one of those stations can be fairly easily duplicated 1000 times over."
Ministry in challenging times
Matthew West
Recording artist Matthew West says many musicians are choosing not to tour during the recession, when that's just what many listeners might need the most.
"It's the opposite of what needs to be happening," he says. "We need to be out there." West did a 30-city fall tour to smaller crowds than usual, "but we feel like God had us there for a reason. You're on the road and thinking, How are we going to pay for this? But people are losing their jobs, they're in the audience, and they need encouragement."
Smith tries to focus on the ministry and not the money.
"There are times when I'm discouraged," she says. "But as much as I'd like to make a living off of this, it's a ministry to me. That's why I continue to work at Starbucks, so I can go do a conference for teenage girls, or be part of a tour. When doubts creep in, I refocus on God: You are God over the economy, and bigger than my dwindling bank account. Do I believe that or not?"
Downhere's Germain says the band tries to remain philosophical about the fiscal crisis.
"I think about the recession a little less than I think about deeper issues," says Germain, "like the entitlement of a generation that would get themselves into debt. Right now everybody's pointing fingers, and everybody's angry. People are pointing their fingers at government, or their state, and not many are pointing at themselves, asking 'Why did I buy this house with money I did not have?'"
Bandmate Glenn Lavender calls this "gut check time for the Christian music industry"—and because people will always need to be ministered to, the industry must figure out how to accomplish that task.
A silver lining
The boom of the 1990s might have actually done the music industry some harm. Once upon a time, artists—particularly in Christian music—never expected to make a living. They were in it with a passion for art and service. When some started to succeed, many saw Christian music as an opportunity to make money. A new economic expectation emerged, and the art and the passion were often diluted. Thompson thus sees a silver lining to the cloud of recession. "The lack of monetary benefit has filtered out some of the people who should not have been doing this in the first place," he says. "If the people who are in it for the money are gone, it leaves more turf for those who had something a little bit loftier in mind."
Motivation is now the key, says Thompson. "If you're waiting for the payday, it sounds like it. If you're really in it for something else, the payday takes care of itself. Either it comes, or it doesn't—but you've had such a good time doing it anyway, you don't care." Still, he concedes that "it's a little bit more difficult to make music after you're done at the factory and you're wiped out. It's hard to tour when you're working 40 hours a week. That's the thing about silver linings. There's still a cloud."
Downhere's Germain puts it this way: "I think you'll see people who have a valid voice finding it in a better place, people that didn't have a valid voice finding new careers in different industries, and artists that had nothing to say going away."
Nathan Clark George
Mays is upbeat about the improvisation he's seeing in challenging times. "The constraint of having less money has produced some fantastic creative solutions. The entire creative community is able to do things they didn't think they could do five years ago. I just did an iTunes exclusive track with an artist for $500, with a producer. I would have laughed at the idea three years ago, when we thought you couldn't do a single track for less than six, seven thousand dollars. The economy has forced us to be more creative about the way we go about things, and that's a really good thing. If we needed a reset, and I guess that would go for the church too, then praise God for it."
George notes another positive: "This recession, along with the general industry collapse, is getting rid of the whole stardom mindset, and that's a great thing. If I never make it big and sell 400,000 copies of my CDs, that's just fine. I don't think the Bible says we need stars. The Bible says we need servants."
For Mays, one positive outcome has been personal. "From a kingdom perspective, I am more keenly aware of being a good steward than I've ever been in 20-something years of doing this. The fact that we are able to make music and put it out to people is a precious gift. That we have money to do that is something that we need to be grateful for.
"We've all had to bend our knee to God's sovereignty in all this. God is saying, 'You be faithful with the gifts I've given you. I'll decide what reaches people and what doesn't.' All of us admitting our weakness and bending our knee to that has been a very positive thing. As an industry in general, I think we've turned more to God to sustain us than to ourselves."
Mark Geil is a freelance writer and the director of the Biomechanics program at Georgia State University in Atlanta. He lives in Kennesaw, Georgia with his wife and three daughters.
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