Today we learned that the GIBSON Guitar Company has filed for bankruptcy. Like Bourbon or baseball, hamburgers or Ford Mustangs, Gibson is one of those living breathing American landmark institutions whose products are so beloved by people from all over the world that it would last forever. They’re adored and worshiped, bought, sold and traded above ground and underground and coveted like gold, classic paintings or vintage cars. The older they get the more valuable they become.
As a longtime Gibson sponsored artist and avid fan, I admit that this news still seems more than anything else just surreal at the moment, but not necessarily a complete surprise. It’s a cold wake up call for sure. Gibson guitars are expensive. Hell, all musical instruments are expensive when you can’t pay the rent, which is the unfortunate situation that most professional musicians and music artists have found themselves in over the last 15 years — especially the ones who have refused to give up or turn it into a hobby or attempt to start a new career.
Yesterday I posted an important piece about some proposed legislation that has the potential to significantly help increase the royalty rates that music artists are paid in this struggling new world of music streaming. The drastic reduction in artist compensation from all potential revenue streams happened so quickly and drastically that most people are still trying to just catch up and learn about it…. It’s hard to take all the data in and fathom just how bad it’s gotten for the musicians and songwriters that each of us chooses to love and follow.
At the heart of it is the simple fact that as a global society we forgot to acknowledge or even notice that music, the commodity, somehow somewhere down the line became FREE. Which yes is crazy. It’s impossible to type that sentence or read it and not do a double take. Especially when you start to ponder how true it is. Despite how fun and easy it’s been for all of us as consumers to have access to free music over the last decade or two, it’s had a devastating effect on the music industry and the artists who create that music.
From 2000 to 2015 music-sales revenue dropped by double digits every year. That’s insane. Do people really not value music THAT much? Or is it more just due to none of us stopping to notice? To the latter, I’d say “Hell, I noticed… How could you not?” So is it more a problem of us just not knowing what to do about it? Not knowing how to fix what we started perceiving was a broken system? Music became free….. We KNEW it was illogical and crazy. Didn’t make sense. Nothing of value is free.
But who was in charge? Surely they’re doing something about it. But alas, no one was doing anything about it and we’re going on 18 years of declining revenue…. The recent news earlier this year that I Heart Radio had also filed for bankruptcy was yet another sign post of the crumbling music industry.
We’ve seen this movie before. Book stores, music stores, office supply stores, hardware stores, non-chain coffee shops, newspapers and magazines, clothing lines, movie theatre chains, all four “big network” television companies and pretty much every retail and department store brand… all gone or in the process of going. Or at least transitioning. At best. One can hope.
The music business is just another industry breaking down fast from the disruption that takes place when technology advances and enters an industry too quickly or in some cases completely takes it over. Call it the digitization of the music business. Music became digital. And for many that meant free.
But in reality it’s just one of thousands of used up old unwanted relics lining the side of the highway to the digitization of our entire society. It starts at the top, at the corporate level, and then slowly works its way down to the workers. In this case, that means the songwriters, producers, musicians, recording artists and everyone else who makes a living from making music. And then from the bottom up it continues to crumble.
So it’s not that shocking to hear that Gibson is going bankrupt. Truth is, if musicians can no longer afford to buy music instruments, who’s going to buy them? Pawn shops and eBay have been chock full of guitars and every other kind of musical instrument for decades now. It’s one of the most coveted secrets in the biz — we never buy new. We always buy vintage. They’re better (or so we tell ourselves…) and they’re way more affordabe. And we know we can turn right around and sell that same guitar for the same price in a few weeks or months or years whenever times get hard.
As working musicians we’ve been using our guitars and basses and drums as an alternate form of cash for the last 15 years…. Selling them when we need to eat. Buying them back when we catch a lucky break. But unfortunately that doesn’t help Gibson. Nor does it help the last of the dying music stores that attempt to stay alive for one more year in the ghost town strip malls of America’s larger cities.
But before you light a candle and stream “The Day the Music Died”, there is actually some GOOD news in all this. And it’s just starting to happen. We’re calling it the New Renaissance of the Music Business or Music Consumer, depending on who you ask. And it’s seeming to take flight fast. It turns out that most people LIKE paying a subscription for their media content. Netflix is proving it. (Granted, Netflix charges too little to actually make a profit. They exist based solely on their ability to accrue more debt. Sad but true. Just like HULU and pretty much everyone else in the streaming media business. But it’s a start.) Combined with the advent of portable stand alone speakers like Amazon’s Alexa or Echo (JBL makes awesome ones. Apple’s Homepod is also said to sound AMAZING…), consumers are flooding into subscription based music streaming services like Apple Music or Spotify.
That’s the “good” news. The bad news is that none of these services are profitable yet…. because they’re charging way too little per month in order to acquire new customers. It’s the classic amazon model. Cut prices to below profit in order to lure new customers in and slowly raise the prices later down the road. It works. We’ve seen it work. But of course that means they still can’t afford to pay a living wage to the people who create the products they sell, music artists. At least not yet. BUT… it’s definitely a step in the right direction. And that’s a positive.
One gets the feeling that somehow Gibson will survive. The same way that Ford and GM have managed to… It might get hairy ugly. But they’ll make it. We all will if we remember to #respectmusic
Read more about Gibson’s latest bankruptcy filing here: https://www.musicradar.com/news/gibson-files-for-bankruptcy