"It’s absolutely apocalyptic. The reality is that the record industry is completely fucked up." So says entertainment industry accountant and financial adviser Ossie Kilkenny. His message? That the reign of the major record labels is at an end – and that the power in the global music industry now lies in the hands of concert promoters like Live Nation and AEG.
Not that Ossie (or anyone in the audience) was shedding many tears at the demise of old-style A&R thinking, as they debated the proposition that ‘Record Companies Still Have The Best Talent Scouts’ at The Music Show, in Dublin. Kilkenny’s fellow panellist, Nick Seymour, bassist with Crowded House, recalled a time in the late ‘80s when A&R executives would roll up to his gigs in limos and make a point of flashing the cash in front of the band, offering them all sorts of expensive ‘accoutrements’ – all paid for, he argued, with money that Crowded House themselves had generated.
In what was one of the more explosive discussions of a fascinating weekend’s debate at the Music Show, Kilkenny argued that the spread of internet file-sharing was having a disastrous impact, with sales plunging. Far from ushering in a glorious new age of free music, Kilkenny believes that the cash drain is going to have a major impact on the quality of the songs coming through the record company system.
“Record company revenues are down from €38 billion globally in 1999, to €26 billion today,” Kilkenny said. “What does that mean? They’re earning less revenue. If they’re earning less revenue, we’d assume they’re earning less profit. If they’re earning less profit there’s less money going into A&R. If there’s less money going into A&R, there’s less talent coming through.”
In addition, Kilkenny believes that the trend of the last two decades towards take-overs and mergers – whereby the big record companies have gobbled up their smaller rivals – has taken the recording industry out of the hands of people who really care about music.
“In 1990 there were 19 labels of significance in the world. Most of the ones that are gone, that have been subsumed into the four remaining major labels, are the ones that were run by people that had a passion for music,” said Kilkenny, citing the likes of Island and A&M, both now owned by Universal. He wasn’t pulling any punches as he carried on in the same vein....
“The trouble is you’ve four major record labels left – EMI, Sony Music, Universal and Warners – who haven’t a clue or any interest in talent. The only people who’ve any interest in talent are the people who are peddling tickets to a live audience.
“It’s the guy who takes an interest in concert promotion... they’re the only people who matter anymore. The independent labels, which were driven by real talent and real passion for music, are dead, it’s all over. I don’t know what comes next, but I’m damn sure it’s going to be around live music,” he predicted.
Last year, CD sales in America fell by 15%.
“What does the record industry say? It’s the recession,” Kilkenny stated. “The recession my arse. They’ve been going down every year and they will continue to go down. They’ll tell you that digital sales are now going up. You can go up by 50% from nothing every day you want. But you won’t go up by 50% from 20 billion.”
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Valerie Flynn 
