March 27, 2006

Breathing Life Back into the Record Industry

A Word on Putumayo Records -- For some time now I've been writing about Putumayo Music, my favorite record label, a company that brings the music industry back to life. I thought I might write some sort of analytical piece for a magazine, but when I put on these records I'm seized with euphoria and my analytical powers recede.

The fact is I love this music. I love this label. Putumayo's owner Dan Storper has the ability to make magical compilations that draw from all over the world. It's almost a genre of its own, maybe a sub-genre. It's like an art edition. Each piece is built around a theme, a cultural grouping, a mood or a groove, with beautifully colorful storybook fantasy covers. They are splendid in every way. When you put them on you can't believe how good they are, how good they make you feel.

Music is about feeling and spirit, about a realm that is separate from the struggles of the working world, a sanctuary from the oppressiveness of society. Music can save you at least for a while. Music that helps people to transcend the mundane materialist world is among the greatest gifts. I think music saves people in times of tribulation, as I certainly believe these are.

I believe music is a great gift, a great resource and a necessity for the sustenance of life. I don't mean the dry Darwinistic sense of survival, I am speaking of life. And without music there can be no true joy in life.

Throughout the offices and factories of the world people toil and turn their life energy to some mundane productive capacity. But they have their music to help keep them alive inside, to keep the deadly drudgery from killing their souls.

To me, those who create music are angels in a way. So I feel a sense of honor for Putumayo and the work of Dan Storper. I have been greatly soothed and healed countless times by Putumayo CDs. You can just put one on and go with it. You know every track is going to be great. You're not going to have to change the CD.

So why would anyone want to read about my ravings about Putumayo? It's not objective and factual. Who can I cite as an authority? How could I write something analytical about it, something with news value or knowledge value to entrepreneurs? What I feel for Putumayo cannot be contained in mundane facts, trends, etc. Hence its final arrival at HeadBlast, home for wayfaring writings.

I am going to post some of my riffs on Putumayo:

Right here right now.

Putumayo, some background details:

Putumayo is a small, entrepreneurial company that is thriving in an industry dominated by a handful of megaconglomerates who have had such a hard time attracting consumers to their products they have resorted to suing them.

I became interested in Putumayo as my own travels opened me up to the pleasure of the music of different countries. Putumayo's founder Dan Storper was a clothing merchant whose international business trips exposed him to exotic music, which he began bringing it back to his customers. He discovered that others were as turned on by the music as he was, and using his store for product testing he staked out a new market for himself. Even years after he sold the clothing store, Putumayo betrays its native grasp of bricks-and-mortar retail by finding its way onto the shelves of stores where major label releases never appear.

Putumayo didn't have to wait for the Harvard Business School study in 2004 that effectively disproved the record industry belief that file sharing was what was killing the record industry. (It may actually be one of the things that stimulates demand, see Harvard University Gazette, Washington Post or CNET News.) The record industry might as well try to get the legislature to ban DVDs, which are taking more of their market than file sharing ever did. The futility of suing music fans was further revealed when the Canadian court system refused to ratify the record industry's contention that file sharing is a violation of copyright. (see CNET news and more) Is it? People have had recording technology for generations. Perhaps not as easy as today's equipment, but that is not what is killing the major labels.

The judge ruled that the recording industry "had not presented evidence linking the alleged file swapping to the ISP subscribers that was strong enough to warrant breaking through critical privacy protections," according to CNET. And furthermore, he questioned whether the record labels had a case at all. Referring to a recent case in which libraries had not been found to be encouraging copyright infringement by the mere fact of having photocopy machines near the books. It's not a copyright infringement to read a book, or to lend a book, only to attempt to distribute for profit. The judge wrote, "The mere fact of placing a copy on a shared directory in a computer where that copy can be accessed via a P2P service does not amount to distribution. Before it constitutes distribution, there must be a positive act by the owner of the shared directory, such as sending out the copies or advertising that they are available for copying."

Alanis Morissette changed her mind on the issue, saying her original response had been based on the panicked reaction of the labels. She told the Senate Judiciary Committee, "My initial resistance to the new services created online was based on the debate having been framed in terms of 'piracy'. Being labeled as such by the record companies, it understandably sent a ripple effect of panic throughout the artistic community. But what I have since come to realize is that for the majority of artists, this so-called 'piracy' may have actually been working in their favor." (See CNET)

While the labels complained about piracy, they were busy with their own piracy, as typified by their scandalous midnight theft of artists' royalties, that they achieved by pushing through an amendment through on the Cable & Wireless Act that caused all the artists' royalties to become the property of the labels. It was an act of shame that fortunately did not stand. (see Don Henley's testimony, this report on BBC, CBS, Counterpunch and Courtney Love.)

Meanwhile, while the big labels fought their fantasy dragon, this little startup record label Putumayo was growing by leaps and bounds. Like innovators throughout history, Putumayo has succeeded by turning the accepted conventions of its industry inside out. Surprise! People still want to buy records if the music is compelling and fresh, and the packaging is a richly designed and informative publishing product.

My sense is that Putumayo is representative of a phase in business development cycles at which industries have consolidated to such a degree that they are controlled by only a handful of very powerful corporations that have become too large to be viable as business operations. In the case of the record industry, 75% of it belongs to four giant corporations (I think it's three now since BMG and Sony merged) that have devoured almost everything in sight. But typical of huge corporations, they have become so macro-focused that many details elude them, details like attracting customers with an irresistible product. In the case of a product like music, there is only so far you can go in turning it into a mass market commodity.

The massive record companies, united in their trade association the Record Industry Association of America (RIAA), constitute a powerful economic bloc with the financial weight to muscle most competition out of the way. That small group of companies also constitute an effective lobby that can gain legislative favors and control the conventional distribution channels. The mergers are portrayed by the media as if only the largest corporation can prevail in the marketplace. But in fact it may be the smaller ones that are best able to adapt to today's constantly shifting ground.

So the dinosaurs are falling, unable to keep up with the rapid changes in technology, world markets and musical styles, unable to fully grasp the global reality they are facing, working on obsolete assumptions and models, and the little mammals are running around their feet, waiting to take over.

Under the Feet of the Dinosaurs
In a world increasingly controlled by massive corporations, it's a pleasure to see an upstart record label like Putumayo making money by putting out infectious music and having a great time doing it, while the major corporate conglomerates flail their pteradactyl wings in clueless futility as they watch their sales decline. It's a thrilling drama in which the little guy wins.

The Big Four record giants, or whatever it's down to now, are essentially a cartel of investment houses that treat their musical product the same way they treat any other product, like a series of numbers on a balance sheet. Music is just another asset to them. Like all major corporations, they are good at buying companies, controlling distribution, lobbying for special favors from Congress, leveraging their capital and control to elbow out competition, and so forth. But when it comes to those elusive, magical qualities of music they seem to have little insight.

While the major labels have been having a huge panic attack over the digital revolution that has brought them to the point of suing music fans and turning aggressive anti-pirating software loose on their customers' hard drives (and having to pay damages for it), some nontraditional record labels like Putumayo have been showing that creative people can still prosper in the music industry by making high-quality, good-feeling musical products that attract customers.

Since its founding in 1993, Putumayo has been finding new ways to meet the voracious appetite of the public for fresh music.

Putumayo grew out of a New York clothing store of the same name. The owner of the store, Dan Storper, collected recordings of music he discovered in the countries he traveled to as a clothing buyer. He played the music in his stores as part of the shopping ambiance, and the reaction was so strong, it stirred his retail instincts. One thing led to another and he started creating beautifully designed packages of collections of international music grouped under various themes, and they sold.

From his standpoint in the retail business Storper could see that even in the age of free digital information, people still like to buy things. Roadside pit stop restaurants and gas stations and airport shops still make millions off of souvenir mugs and trinkets that sell in an endless stream. Storper saw the principle in action, to the soundtrack of a ringing cash register, and he answered the call.

Storper realized that even if there is more free music available on the Internet than anyone could ever have time to even listen to, people will still buy a beautiful package of music, thoughtfully collected, artistically presented with attractive cover art, and informative printed material to amplify the understanding of the music. Storper was a music lover, but he was also a frontline retailer who knew in his gut what the corporate financial whizzes in their lofty towers didn't.

While the corporate conglomerates and their lobby dug in to fight file sharing -- what they saw as their dragon -- Storper just got busy trying to meet the ever-renewing demand of the population for fresh, good-feeling music, which he could see for himself in his own stores.

Storper didn't bother to take the major labels on head-on in the distribution game, in which they hold all the cards. He just forged his own retail distribution network, selling his CDs on colorful displays in 3,000 retail specialty stores. The packages, illustrated with a flashy trademark style of naive art, can sell the CDs by themselves. If the retailer plays the CDs in the stores, sales leap by an order of magnitude.

Ultimately, of course it comes down to the music. The slogan "Guaranteed to make you feel good," was truth in advertising, at least for me. Storper has an ear for melodic phrases, irresistible rhythmic grooves and rich textures that make the selections practically reach out and pull you in. Putumayo also has a knack for blending and cross-pollinating music cultures and feels on a single disk, unifying diverse music through affinities of mood and theme. The variety of the selections itself enfuses the material with great energy. The chemistry of the blending of styles generates great energy. The variety helps keep them fresh after repeated listenings.

The informational material included in the package makes it possible to check any track by number and find out more about the music on that track. The appreciation is enhanced by the presentation of the music in a historical and cultural context.

The company is onto a number of social, cultural and demographic trends that seem to have had little impact on the major labels. Putumayo's music celebrates cultural diversity -- by its very existence it embodies humanistic values, cultural exchange, tolerance -- so it appeals to a growing number of people who also feel passionately about those values. It is an audience that is not well understood by the corporate music industry establishment.

Putumayo sees the core of its target audience as a subpopulation of "cultural creatives," a pop sociology term for 50 million North Americans and millions more around the world.

Putumayo's catalogue now has over 70 releases with titles like World Groove, South Pacific Islands, Sahara Lounge, World Party and Caribbean Playground. The company has developed subcategories of music, like lounge, groove, acoustic, cafe and playground for childrens music.

Putumayo's most popular titles, by such people as Oliver Mtukudzi and Miriam Makeba, have each sold 100,000 copies. The numbers are tiny by major label multi-platinum standards, but without the need for the gargantuan marketing budgets it takes to create a product like Britney Spears, those numbers are adequate to keep Putumayo growing. The company has now sold over 10 million copies of its recordings.

In 2005 Putumayo released American Folk, Italian Cafe, Acoustic Brazil, Mali, New Orleans, North African Groove, Afro-Latin Party, Kermit Ruffins. and Swing Around the World.

In 2006 Putumayo has released Celtic Crossroads, Asian Lounge, The Caribbean and Reggae Playground. Some of the more recent releases that I've picked up, like American Folk or Italian Cafe, aren't as surefire danceable or as exotic as some of the earlier ones. Yet they are also some of the company's biggest successes. French Cafe, Storper recently said, is the company's biggest seller yet.

I recently asked Dan Storper by e-mail if the company's mission had changed and he said, "I think one's taste tends to evolve over time. The Putumayo World Music mission, however, remains essentially the same: 'Introduce people to exceptional music from around the world and the cultures from which the music emerges.' I appreciate quite a wide variety of music and feel that Putumayo needs to offer the public more than a variety of styles but also a variety of tempos and moods. I am drawn to beautiful melodies, vocals and instrumentation and really enjoy well-crafted acoustic songs. So, I don't think it odd that we would present an array of music from African dance songs to Italian cafe songs to American folk music."

Penetrating the U.S. airwaves, which are currently under lockdown by corporate behemoths like Clear Channel, has been another challenge all together. Putumayo is making some attempts to crack it with The Putumayo World Music Hour, the label's own radio. Started in 2000, it now airs on over 120 stations.

Not long before Katrina hit, Storper bought a home in New Orleans and began splitting his time between New Orleans and New York. Putumayo is donating its profits for the sales of its Gulf-based DCs New Orleans and Mississippi Blues to hurricane recovery efforts.

For more information on Putumayo, see

To be continued...

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