As usual, let the music industry be an example of how the future’s going to look. They had a business model for decades that went something like this:

Photo by Arne Hendriks

1. Sign artist to label.
2. Record album that label owns 90% of.
3. Send artist on back-breaking tour schedule to promote album.
4. Bribe or outright own radio stations to promote album and tour.
5. Profit.

If you haven’t read any articles or watched the news lately, you might assume that this model still works. I’m sorry to tell you that the little-round-disc industry (formerly the music industry) isn’t making a profit like it used to.

1. Why sign new artists when it’s easier to manufacture them for a pre-existing marketing plan? Or just sign a 15-year-old starlet that’s too young to understand the way contracts work, too young to stand up for their rights, and too young to sing on key with any semblance of soul.
2. Albums can now be recorded in basements with an iMac. No label required.
3. Gas is over $3 per gallon in many places, making touring expensive and keeping concert-goers from driving anywhere.
4. Radio’s still big, but Pandora’s getting bigger. And it’s not controlled by people… the robots pick the play list!
5. Blame, demonize, and eventually sue alleged “pirates” to recoup less than a million in lost profits. Spend multiple millions doing so.

So what do we do to “save the music industry”? Do we write to our government asking for money or tax breaks so major labels can hire more people even though they’re not actually making a profit any more? Maybe we should ask the government to bring back the 1960′s, that would be about as effective.

How about we change the whole industry instead?

The reason I say “the little round disc industry” as Chris Penn calls it instead of “the music industry” is because the music industry is doing perfectly fine. Entrepreneurs and small startups are popping up left and right- many of them failing, many of them succeeding -and doing the jobs that the old industry used to do profitably. Independent artists like Derek Sivers started bypassing the labels and selling their own music, and we all know how that turned out. The internet has made PR, distribution, and promotion much more affordable and much easier for guys like me to flourish.

I made my own job. I make an American product with American labor. I export that product to other countries. Though it’s kinda tiny, I do indeed make a profit. When I get the money to do so, you can bet your ass I’m hiring some American help.

I know not every industry can evolve the way my industry is changing, but I sure as hell hope that people aren’t expecting the government to wave a wand and make more jobs. Make your own jobs. Make better products. Provide better services. Hire American workers and spend your money at American businesses. You’re the only one that can create jobs.

Hell, we should get Obama to wear a State Park Ranger hat and just hold a press conference saying, “only YOU can prevent unemployment.”

• Buying cheap plastic junk from China
• Driving the most inefficient vehicles ever designed by man
• Taking out loans for things we know we can’t afford
• Fueling our entire transportation system with a substance whose price is controlled by a tiny group of people who don’t like us very much
• Letting our government spend money without telling us what it’s buying (Halliburton, anyone?)

is not exactly a plan for success. Excellent. Now we can start rebuilding from the ground up, right? I have a simple plan, and there are two sides to it:

Side A: Buy things that are valuable. Don’t mistake “lowest price” for “best value”, that’s the kind of thinking that sent our middle class jobs to India and China. Don’t think that “ability to re-sell later” is value, either, there are plenty of homeowners out there sitting on smoking piles of good intentions and bad debt. Buy things that will last, that will support a good lifestyle, and will leave as little negative impact on the world as possible. The downside? You won’t be able to afford as much. The truth? You’ve never been able to afford what you’ve been buying.

Of course I believe music is something of value, otherwise I wouldn’t be making it. Music is the emotional chronicle of our time. Long after we’re fertilizing our great-grandchildren’s corn fields, our era will be defined by what we listened to.

Then there’s Side B: Make things that are valuable. Again, don’t mistake “lowest cost” for “best value”. You’ll never compete with third-world manufacturers if you’re aiming for the bottom. Aiming for the top means making something that contributes to the world. With every cost compromise you only destroy your own reputation as a creator of valuable things. The size of the markup isn’t as important as what the thing actually does.

As a musician, I will not write or produce music that I wouldn’t want to listen to. There will be no “save a horse, ride a cowboy” coming form my lips. Ever. If I don’t think the song is going to touch someone, force them to think differently, or start a revolution (or all three), I won’t even hit the record button.

Where do we go from here? We go to Value. You could, I suppose, call it Quality. Pirsig wrote a whole book about defining Quality, but his conclusion is simple: Quality exists before we make or buy anything. If we do not allow that sense of Quality to be the GPS for our economic vehicle, we will only continue driving in circles until we run out of gas.

Remember all those terrorist-loving liberals that told you not to ship jobs overseas, to buy American goods, and to find domestic energy sources? They were right. That is what will save us. Our economy is not built around lending houses to each other, it’s built around items and services of actual value. If we’re not selling American-made goods and services, we have no money.

And as my friend Chris Penn points out, if we’re borrowing money for things we can’t really afford, we make the problem worse. Our personal economies dictate our national economy and we must live within our means. Believe me, I could’ve qualified for a loan at my old day job, but I knew I couldn’t really afford a house. I didn’t yet (and still don’t) have the value in my own pocket to back up the value of a house.

Of course, I should mention that American musicians sell their American-made wares both at home and abroad via the internet and international touring. You already knew that, though.

The important thing here is to realize that the solution to our problem will not come from some complex economic magic. The problem will be solved when we as consumers start making and buying products of value right here in America.

¹This is not meant to diminish the contributions and financial woes of my friends in other nations. My point is that we as Americans seem to have forgotten that in a capitalist economy, national or global, we have to be selling as much as we’re consuming if the balance sheet is going to even out in the end.

This friend confides that he’s as worried as I am about the coming economic upheaval, though he carries a much prettier game face than I do. Sometimes I wonder if that’s really all that’s necessary in times like this; if carrying a flashlight in the dark can help you find the light you’re looking for.

Obviously by posting this I’m letting you look behind my game face to see the concerned businessman underneath, but I suspect there are a lot of you who are in my shoes- indie musicians, small marketing firms, freelance designers, etc.

So I’ll make you a deal: I’ll try to remind you why you got into business doing what you love (and try to send some business your way) if you do the same for me. Maybe with enough flashlights out there we won’t see the dark anymore.

[tags]Matthew Ebel, piano rock, recession, economy, entrepreneurship, enterprise starship, enter the dragstrip, unnecessary tags[/tags]