The new sound (and business) of music

Nipper, the old RCA Victor mascot, sizes up a listening experience far different from a gramophone. CBS News Illustration

Though live music is always best, most of us enjoy most of our music most of the time through recordings ... and these days we can listen to our favorite tunes in more ways than ever. Our Cover Story is reported now by John Blackstone:

This morning, we're showcasing the very latest in high-end audio technology. Yes, vinyl long-playing records, introduced back in 1930, are still state-of-the-art (that is, if you play them on a $50,000 Brinkmann Balance turntable).

Blackstone asked, "Why do I want to go back to the old turntable with the needle and tubes and big speakers and shelves full of record albums?"

"For that, you'll just have to sit down and listen," said Will Kline of Music Lovers Audio in Berkeley, California.

He took Blackstone for a spin through the highest in high-fidelity components. The experience reminds you of those old Maxell tape ads: sound that blows you away.

Be prepared to have your budget blown away, too. A system like this will cost you more than $100,000.

Throw in a suitable amplifier and speakers and you're easily in the hole for a quarter-million or more.

But take heart: you don't have to break the bank to tap into some cutting-edge sounds.

From high-end listening rooms to the music player we carry around in our pocket, technology is now delivering more music, to more places, than ever.

"We're very close to a future where just about every recorded song that we know of is just a couple clicks away on your phone," said Caleb Garling, a technology writer at the San Francisco Chronicle.

"So it doesn't matter how big a record collection you might have at home -- what's in your pocket is going to be bigger?" asked Blackstone.

"It should be bigger," said Garling. "All that data still will exist in big cloud servers. Your phone is going to be your window into, basically, all of music."

Garling sees the future of music in companies like Spotify and Pandora that send (or to use the proper lingo "stream") music to phones, cars and home computers. There are inexpensive subscriptions for sale, but most listeners choose to pay nothing and endure a steady stream of ads in exchange for free music.

How different is it from listening to radio -- free music with ads? "In some ways, it's not at all," said Garling. "There are a lot of people who listen to music all day without paying a cent."

Some streaming services let listeners pick specific songs. Others, like Pandora, figure out what kind of music a listener wants.

Michael Addicott works on Pandora's Music Genome Project, training the company's computers to become your personal disc jockey.

"Each song has a musicological fingerprint, if you will," he said. "There are literally hundreds of points of DNA that can be tracked and scored."

Click "thumbs-up" or "thumbs-down" on a song, and the system gets to know your tastes -- even better, they claim, than those closest to you.

"This is really the cornerstone of our recommendation technology," said Addicott. "And I think it is probably better than the recommendations your wife could make."

Pandora, based in Oakland, Calif., is the granddaddy of the streaming business, founded all of 14 years ago by Tim Westergren.

"We stream more hours of music every month than YouTube streams hours of video," he said. "Around 80 million people come every month to Pandora. So we actually are now the biggest radio station in virtually every market in the U.S."

Although recording industry revenues are less than half of what they were a decade ago, streaming services offer new hope: digital music piracy is now on the decline. It seems most people find it easier to stream than to steal.

So, is this a Golden Age for music-lovers?

Westergren said, "I think it is. The utopia really is that every artist reaches the audience they deserve. And I think with mediums like ours, you get closer to that, because you can efficiently -- whether you're a banjo player or classical clarinetist, a chorale singer, a funk-drummer, whatever you play, we can find that audience where they are.

"There's not a broadcast radio station playing all that music. But for Internet radio, there's a home for all of it."

Streaming sites paid out more than a billion dollars in royalties to record labels in 2012 (the most recent numbers available). But the amount they pay each time a song is played is tiny -- as little as six-tenths of a cent -- and only a fraction of that ultimately goes to musicians.

It's left many of those who make music complaining this "Golden Age" for listeners is leaving them in the Dark Ages.

"The margins on the songs themselves are trending towards zero," said Garling. "That's a reality in the music industry right now."

Garling says that today's musicians would be wise to follow the business model of a San Francisco band that found fortune long before the Internet Age: the Grateful Dead.

The Dead encouraged their tie-dyed fans to record concerts and trade tapes. Others in the music business considered that stealing.

Garling said, "A lot of people like to joke that maybe the Grateful Dead was the first social media band, because they allowed people to record their shows, and that was viral marketing for their shows, and their merchandise."

It helped create those loyal fans known as "Deadheads" who crowded into shows. Over three decades, the Grateful Dead had only one Top 10 hit. But at their peak, they took in $50 million or more a year from performing live.

Grateful Dead guitarist Bob Weir may be showing more than a touch of gray these days, but he hasn't lost his enthusiasm for playing and promoting music -- and he sees live performances streamed on the Internet as a way young musicians can build their fan base.

Weir recently founded the Tamalpais Research Institute, just north of San Francisco, perhaps the world's most high-tech studio for streaming live audio and video on the Internet.

Chris McCutcheon, CEO of TRI, told Blackstone, "Bob had an unlimited budget. He exceeded that by half! And we continue to."

He and Weir hope the same technology that has hurt record sales would help sell audiences on live performances.

"You know, the phoenix will have to rise from the ashes," said Weir. "Because the music industry as we have known it is destroyed. One of my big concerns is that artists have to be able to make a living. Something new will have to arrive. And we're here to help that be born."

As much the music business is changing, one thing is certain:

"People are going to need music -- that need is not going to go away," said Weir. " I would love to see the best and the brightest starting to come back to the arts. And one of the ways of doing that is to make it both aesthetically and financially rewarding."

For listeners, of course, music is its own reward . . . no matter how it reaches your ears.


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