April 14 marked the end of an era along Music Row and at country radio. The middle of April was a time of profound change along Music Row, as on the very same day we learned that Sony Music Nashville chairman Joe Galante said he was leaving and Disney’s Lyric Street Nashville was shutting its doors. With terrifying swiftness – but in moves that business analysts knew were bound to happen eventually – the men whose companies distributed the music of Kenny Chesney, Carrie Underwood, and Rascal Flatts were no longer with those firms or had announced that soon they wouldn’t be. Just think about that. Galante for years has been Nashville’s most powerful label head and, since Bruce Hinton retired from MCA several years ago, Joe was the smartest record guy here. Goodman and Howard had led Lyric Street since the company opened its doors in 1997. Their greatest triumph was Rascal Flatts, the country pop trio whose 2006 album Me And My Gang sold an astounding 15 million copies in the age of digital downloads. With Randy and Doug between gigs and Joe about to be, we have to realize a couple things about today’s music and record business. First of all, the cold, hard realities of the modern marketplace have taken a lot of the fun out of running a business that’s supposed to be a blast. For years, the record business was indeed fun. It was a magic carpet ride for those lucky enough to break in during the 1960s and 1970s, as these three did. For decades, the record business was virtually minting money. In the 1970s, 33-rpm albums were about $4 and 45-rpm singles about 75 cents. In Los Angeles, where I was working in the Seventies, rock stars were bigger than movie stars. The 1980s saw the last great innovation the record companies have made, when the CD was introduced. Consumers were happy to fork over $15-20 for this new product, often repurchasing their complete record collection. Suddenly, the labels’ profits which had been solid in the 1970s when albums were $4 soared thru the roof because the principal product had quadrupled in price to $16 for a CD, and the public kept buying it. That’s when the companies got sloppy. Even mediocre albums were selling well, so the labels often made albums with one or two strong radio singles and a bunch of filler tracks which shouldn’t have seen the light of day on an album. Meanwhile, the labels stopped making singles altogether by the early days of the 21st century. As Billboard chart historian Joel Whitburn has said, this was one of the record companies’ biggest blunders. The labels also stopped doing their own technical R&D (research&development). As noted above, their last innovation had been the CD, and that came 30 years ago. 1980, there was no World Wide Web, no cell phones, no high-speed Internet – and no iTunes. Steve Jobs had been fired from the company he founded, Apple, and following his return, the company was still in trouble early in the 21st century. Jobs was in hot water again with the Apple board by 2001, and the share price had dipped under $10. Oh by the by, in April 2010 Apple stock was worth $230 per share. One of the big reasons was iTunes, which Jobs introduced early this century. This was true music innovation, but it now being done by a computer company. Moreover, iTunes gave consumers the ability to buy a product they loved – singles – all over again, and do so for about That was devastating news for the record companies. Their shortcomings and sloppiness were coming home to roost. Not only that, millions of former consumers were stealing their product off the Web, a crisis that remains today. This made corporate boards, like those that run Sony Music Nashville and Lyric Street, became more and more squeamish about their music divisions. These multinational companies – Sony is based in Japan and Disney in Burbank – did not have music as their core businesses. Sony was an electronics maker and Disney made movies and ran theme parks. So the music industry shrunk. In 2009 sales of CDs, still the business’s main product, had dropped by half from 1999 levels. That made the business unsustainable, in consultant language, and labels along Music Row were closing or laying off employees. For our generation, the recession that started in late 2007 became the equivalent of the Great Depression our parents and grandparents lived through from 1929-1945. Accountants at the parent companies of record labels began wielding immense power, because the music numbers that added up for decades no longer made any sense. When these trends climaxed on April 14 with Galante’s announcement and the closure of Lyric Street, Music Row and country radio were faced not just with economic trauma but emotional trauma, because these three guys helped build modern country music and modern country radio. Their absence from country music will be felt for decades, and their contributions should be remembered and honored forever.

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UPCOMING EVENTS:
May 7-8 – Rock & Load University, Nashville
May 11 – Grammy Block Party – Owen Bradley Park
June 10-13 – CMA Music Festival, Nashville