A&M Records Pres. Says He’s Exhilarated by Music’s ‘Perfect Storm’

How the business will look coming out the other side is hard to say, Fair conceded, though it won’t involve $8.99 CDs -- or in fact any CDs at all. Cut-rate discs wouldn’t cover the costs of the high “proportion of ’stiff’ acts, or acts that just don’t succeed, to those that do,” he said: “What we have to let go of is the CD itself. We're talking about files… It’s the CD that’s holding us back. We're holding on to something we've outgrown.” The future is here, he concluded, and it’s as promising as it is threatening. “We're going to leave the Model T behind, whether we like it or not,” Fair said. “And the time is now.”

The state of the music industry is “malaise and disgorgement,” on one side, Fair said. The impact of digital technology is pervasive and fundamental: It’s altering everything about how consumers acquire music but also how they feel about it, he said.

P2P is “a miracle of technology, but the real issue is copyright,” Fair said: “The billions of illegal downloads of our copyrighted material” ripple all the way down the industry “food chain,” beyond even the employees who can or can’t be hired to the amount of Snapple to be ordered. Once the ease of unauthorized movie downloads approaches that of songs, “the nightmare is going to be apparent” to all, he said. He expressed mystification about the attitudes of music file-sharers: “Why don’t they understand there’s value in that recording? Why will they download, yet they'll pay” good money for a concert ticket? Fair conceded the difficulty of stopping unauthorized P2P swapping without eliminating the promotional value of the technology, which has become important “especially with things like rock music now.”

CD burning is unjustly overshadowed by P2P as a piracy problem, Fair said. A father, knowing it’s illegal, has his child download and burn “Night Moves.” Or the son takes “dime CDs,” makes 25 copies of an Ashley Simpson album and sells them in the schoolyard. “It’s not just the downloads; it’s the copying,” Fair said.

From another side, an indecency mania impinges, centered on the FCC, Fair said, referring to the “overreaction to something like Janet Jackson, which dominates the national Zeitgeist and takes over the media… In Europe, they're laughing at us.” The effects of lost production trickle down from musicians and engineers to caterers: “These jobs are gone. They're not coming back… They go to Prague. They go to London. They go to Moscow, and 200 people are out of work. This is an unaddressed problem.”

Digitization without standards means “the guy in the tape vault doesn’t even know how to find the tapes any more… It’s not like rows of tapes any more.” What actual tapes remain are disintegrating. The labels “don’t understand: There’s a smoldering smell of smoke from the back of the archive.” Sometimes, A&M can’t find a master it needs: “We go to Tower Records, buy the CD and master off that.” A solution isn’t easy: “It’s going to take tremendous investment in things like data farms.” Adopting “a digital solution that isn’t mired in 900 ways to do it” probably will require a disaster precipitated by the inability to find a master by a major artist, Fair said.

“The house isn’t the cathedral any more. It’s the car where it’s really banging,” Fair said: “Satellite radio is fantastic.” In homes, speakers are embedded in walls and “the house plays the song,” so home stereo no longer is the big deal it used to be. The labels don’t pay enough attention to vehicle acoustics, Fair acknowledged. Subwoofers are crucial to the sound “in Jeeps and Escalades,” but he had to have a subwoofer bought for a master studio because they're not common there.

Fair didn’t put much stock in Super Audio CD as a savior. Questioned by a listener, he recalled a Sting recording at a meeting to introduce label chiefs to SACD at a meeting. “That’s cool,” he characterized as the response: “Can we go now?” Exquisite sound is great for the “high end audiophile,” but he suggested it was beside the point for the typical consumer, who listens to a song on an MP3, “which mashes it to shit, on their little computer speakers.”

He did say he found the new dual-sided DVD highly intriguing: “We'll see if it'll survive… I want to sell records in clam-shell cases, like DVDs. I want to experiment with that. That feels very sexy to me.”

“There are so many incredible things happening as things grow back,” Fair said: “It’s a joy to watch.” He cited Apple’s iDisc and iTunes, which are igniting a love of gadgets and cultivating into a passion the downloading to create personal jukeboxes -- a trend comparable to the arrival of the radio in the livingroom, Fair said. The new U2 edition of iPod points the way forward in “branding hardware to an artist.” Dolby Digital 5.1 playback in homes is another exciting development, he said: Users “love hearing the explosions going on around their head.” Rehearsal.com seeks to draw fans in deeper with subscriptions to virtual seats at stars’ tune-up sessions. A profusion of popular talent has emerged the past year or 2, he said.

Wireless home speakers using Wi-Fi, American Idol, ringtones and mobile song downloads all point toward music’s conversion in our lifetimes from a product to a utility, pervasive throughout people’s lives and days, Fair said: “You're happy to pay your $12 a month or whatever it is, and it’s there all time.”

Even label consolidation, including the “cataclysmic” Sony/BMG merger, has an up side, Fair said: The industry includes some of the strongest people he’s seen since the late 1970s “because of the survival of the fittest.” “These are not bean counters. These are not accountants. These are not lawyers. These are music people… I feel emboldened. I feel really encouraged. I feel hopeful… It’s really a glorious fight for the right thing.”