An estimated 55 million U.S. viewers are expected to tune in to the 46th Grammy Awards ceremony on Sunday (Feb. 8) to see a star-studded show.
For the industry, however, the Grammys has always been more like a gathering of tribes. It’s one of those few occasions where otherwise fierce rivals come together to reaffirm why they got into this business: a passion for the music.
While this year’s event marks no special anniversary, it will be bittersweet and poignant nonetheless. That’s because many who are attending — from top executives on down — are unlikely to be back.
The industry is in its third year of a major upheaval. Along with the 30% decline in sales, the industry has been hemorrhaging thousands of jobs. This year, though, the flood is likely to turn into a torrent, because a long-expected wave of mergers is finally crashing down.
Over the past several weeks, Sony Music and BMG have announced plans to join forces, and Time Warner has agreed to sell its Warner Music Group subsidiary to venture capitalists led by former Seagram executive Edgar Bronfman Jr.
Each deal has been followed by pronouncements of major cuts to come as the companies try to right themselves. But whether the industry can regain an even keel this year or anytime soon remains to be seen.
Losing the lionsThat’s because the next looming crisis may be in the executive suite.
Many of the pioneers who built the business are lions in winter. Over the next few years, the industry is likely to lose decades of executive experience.
Well-educated, business-savvy executives are waiting in the wings, of course. But they came up under a system that by and large no longer works. Do they have what it takes to make it in the harsh new business climate?
Sooner or later, for example, the major labels must come up with creative solutions that embrace digital technology. That includes coming to terms with file-sharing services and capitalizing on new opportunities, such as ring tones and Wi-Fi.
The industry must continue to find new artists and add enough value to its products. And the next generation must also come to grips with the fact that music-related businesses such as touring, merchandising and licensing are booming, with much of the revenue bypassing them.
So they must reinvent themselves as multifaceted entertainment companies. But that will require massive re-engineering. At the Grammys, the tribal leaders will have a chance to reminisce about the good years and no doubt talk about looming changes.
Then, they’ll go back to their respective offices to deal with the raging storm, fierce rivals anew, until the tribes gather again next year.
Until then, we can only wonder who will not return. But time will surely tell.