Formation

The Music Machine Before Punk

In 1976, two-thirds of the British record market was shared between six major transnational companies. These 'majors' were vertically integrated: not only did they originate recordings by signing artists and putting them into the studio, they also manufactured discs and tapes and then distributed and promoted them to the shops. Each controlled three of the four main aspects of the record business, while EMI had a stake in the fourth — retailing — through its chain of HMV record shops.

Table 1 below shows the percentage of the British market held by recordings originated by the big six in 1976. In some cases the proportion of record sales in which a major had a financial interest was even higher, since many smaller record companies used the majors to manufacture and distribute their products. Thus it was estimated that EMI handled about one-third of all records sold in Britain during the mid-1970s.

Internationally, the picture was similar. Each of the majors had overseas branches, ranging from EMI's 28 to the handful owned by RCA and Decca, but they also had licensing arrangements which could ensure access to every market of significance in the Western and Third worlds. A survey of 19 of the most important countries for record sales by Martti Soramaki and Jukka Haarma showed that the proportion held by the five largest transnationals in 1975–6 (excluding Decca) was under one-half in only Israel and was generally over 60%, as in Britain. Table1 The percentage of the British market held by recordings originated by the six largest transnational companies in 1976.

The unusual element was that the manufacturing cost of a record or tape is only a small part of the overall price — some 20% of the wholesale price paid by the retailer. And while artist and composer royalties have to be paid on every copy sold, the other principal expense for the record company is that of origination — the cost of studio recording and mixing. Therefore, once that origination cost has been recouped by a certain level of sales (which obviously varies with each recording) the proportion of the record company's income from each unit sale which is pure profit jumps dramatically. The company's gain in increasing sales from, say, 200,000 to 400,000 is then not double, but several times as much.

The classic transnational sound of the 1970s was that of the Swedish group Abba. Their recordings were actually the property of their own production company, Polar Music, but were leased to CBS for worldwide manufacture and distribution. Abba sang in English, but a particular transnational kind of English which had been established through the global hegemony of the United States in popular culture, through movies and television series as well as songs. Abba's lyrics were free from any local (i.e., Swedish or Nordic) references or themes which might have impeded their reception in Japan or Colombia, relying instead on stereotypes related to those of Hollywood or Tin Pan Alley. Musically, too, their sound was a skilful blend of pop-American styles from the previous two decades, as Philip Tagg shows in his exhaustive analysis of Abba's hit record 'Fernando'.

Britain had been a major source for this transnational music ever since the Beatles had emphatically proved that it wasn't only Americans who could become global stars. By the 1970s, in fact, its importance for the majors was less as a large market for records than as a 'talent pool' from which they could fish out potential international superstars. This was the prime motive for a number of American companies opening up their own branch companies in the UK, discontinuing previous arrangements under which their records were licensed to either Decca or EMI. With a British office and local scouts, promising acts could be signed directly to the American transnational. As a result, the majority of British musicians with international status in the mid-1970s were associated with foreign-owned companies. They included David Bowie (RCA), Bay City Rollers (Arista), Fleetwood Mac and Rod Stewart (Warner Bros-WEA) and Led Zeppelin (Atlantic-WEA).

The transnational perspective, then, defined the criteria for success in popular music in the 1970s. It also had its repercussions in the process of recording itself. Since the rewards from a global hit were potentially vast, the majors were willing to invest large sums in the preparation of both artists and recordings. Most of that money was spent on and in recording studios, whose technology had become increasingly sophisticated. In particular, the exponential increase during the decade in the number of tracks, or channels of sound, into which the music to be recorded could be separated, allowed musicians and producers to manipulate the sounds to an unprecedented degree.

In the popular music sphere of 1976, the expert manipulation of that technology (preferably by a respected record producer) had become accepted as the precondition for successful and competent music. Although punk rock was soon to prove that exciting and valid recordings could be made for a fraction of the cost, the generality of musicians in 1976 identified good records with expensive ones. And since the only source of adequate finance for the studio costs of a good recording was the major or large independent label, the only path to artistic success musicians could imagine lay through convincing those labels that one's own work would prove commercially viable.

The grip which held musicians in thrall to the priorities of the major companies was doubly reinforced by the fact that there were (apparently separate) artistic reasons for taking the 'capital-intensive' road. Since the late 1960s, the 'progressive rock' genre had emphasized the primacy of recorded music over live performance, and had equated musical excellence with a meticulous (and time-consuming, hence expensive) attention to detail in, and maximum use of the technical resources of, the recording studio. The pattern had been set by the Beatles and the Beach Boys, whose 'Good Vibrations' single in 1966 reputedly took six months in four separate studios and cost £5,000 (over $10,000) to produce.

This gigantism had its effects on both the live performance and the forms of progressive rock. Live shows were increasingly expected to provide an exact recreation of the studio recordings, and therefore demanded large investments in extra musicians or various pieces of electronic equipment. In many instances, such shows ran at a loss and the record companies covered the costs, regarding them as a form of publicity for the album proper. Meanwhile, the musical forms used by the bands became larger and larger. Three-minute songs seemed unsuitable to the opulence and grandeur of the studio machinery and the musicians' ability to demonstrate virtuosity on guitar or keyboards. Song-cycles ('concept albums') abounded, and there were lengthy instrumental pieces like Mike Oldfield's massive hit, Tubular Bells (1973). The themes of the concept albums were also inflated, as groups like Pink Floyd, Yes or Genesis grappled in various ways with the mysteries of life.

Progressive rock, however, represented only one strand of British popular music in the mid-1970s. Performers in the genre concentrated on making albums rather than singles and many of them had first achieved prominence in the 1960s or early 1970s. Their audiences also tended to be composed of those whose sense of a musical tradition stretched back to the Beatles and the Beach Boys. Progressive rock itself had emerged in the late 1960s as various musicians tried to distance themselves from the 'unserious' pop music of the singles charts. The rock/pop schism was still apparent in 1976, with so-called 'teenybopper' music (exemplified by the Bay City Rollers) and the emerging disco dance music of artists like Chic and Tina Charles forming the main pop trends.

These two genres (progressive rock and pop) represented two poles of music in the mid-1970s, however, and between them were a range of other styles. Most notable, perhaps, were a number of survivors from the pre-schismatic era, whose work intermittently hinted at a unified approach which could straddle the pop/rock divide. They included ELO, Elton John, and Paul McCartney, whose 'Mull of Kintyre' sold over two million copies in Britain alone. Far more artistically significant, though, especially for the future personnel of punk rock, was David Bowie. His ambitious attempt to re-unify the musical elements scattered between pop and rock in a modern (rather than nostalgic) way will be considered later in this chapter.

Meanwhile, the record industry was faced with the growth of a new market, one which was stimulated by forces from outside the music companies themselves. In 1972, a Canadian company, K-Tel, had launched the first television-advertised album of recent hits. Its success drew the major record companies themselves into the same field so that by 1976 the total spent on the advertising of 'TV albums' was over £5 million. The most heavily promoted albums could expect to sell over a million copies in Britain, as EMI's Beach Boys 20 Golden Greats did in 1976–7.

It was assumed that the audience contacted through television were not regular record buyers, and were in a slightly older age group. Hence, they were sold 'oldies' collections by stars of the 1960s or else new albums by already established superstars. So determined was the assault on this television audience that in 1976 nine of the top 20 best-selling albums in Britain were TV-advertised re-issues.

The sales of these records were assisted by a retailing revolution in the mid-1970s — the move into record selling by the large multiple stores, Boots, Woolworth and W.H. Smith. These groups immediately began a policy of selective discounting on the best-selling albums, which maximized sales on those records already in the Top 20. The result of this was that the 'turnover' of album titles in the charts slowed down considerably, making it more difficult to succeed, especially for newer artists. In addition, those newer artists lucky enough to be signed to a major company faced the prospect of less support from the label as the advertising budget for TV albums soared. A further difficulty for those artists lay in the fact that the growing market share of the multiple stores (30% by 1976) was made at the expense of the specialist record shops. These independent retailers, whose numbers now began to diminish, would invariably stock a far wider range of titles than the multiples. They would certainly be more likely to make available records by new or unknown musicians.

By 1976 the shape of the record industry in Britain had changed sharply from that of the late 1960s. In the earlier period, rock music (not pop) had been at the centre of the record companies' strategy. The profit margin on an album was greater than that of a single and it seemed that the Beatles had proved that rock musicians were durable and could be expected to retain their popularity for some years.

In the mid-1970s, it was more difficult to locate a centre. There was no guarantee that the new teenyboppers would follow the evolution of their predecessors of the early 1960s, who graduated from screaming at the Beatles to analysing the lyrics of their later songs. On the other side, there seemed to music industry figures to be a slowing down in the emergence of new talent in rock, a process exacerbated by the pressure on funds available for investment in such talent caused by discounting and TV advertising. And was it the case, some people wondered, that the future lay not with the pop or rock sphere but with the new-style MOR (middle-of-the-road) audience revealed by the success of TV marketed albums? Over all of this hovered the awareness that in global terms the discovery of one new superstar could revolutionize the fortunes of the lucky company.

Worries in the Industry

It is certainly time we got a super new UK thing like the Beatles. The music business needs a shot in the arm. We are overdue for it. (Wayne Bickerton, producer and small label owner, August 1976)

These issues came into sharper focus when the sales returns for the latter part of 1976 were published. As Fig. 1 shows, the overall figures for the year showed a no-change position for singles and the first decline in album sales for a number of years. More immediately, the figure for the third quarter dropped by 30% compared with July-September 1975.

These statistics were set against a general recession in the British economy. Unemployment had climbed to over one million and inflation had reached a peak of 18% in 1975. In this context, there was evidence that the proportion of their disposable income that consumers were prepared to devote to recorded music was slipping. Figures from the record industry's own trade association showed that in 1974, 0.4% of all consumer spending in Britain had gone on records. By 1976 this had dropped to 0.34%, a decline of around one-seventh.

The music press of the time provided other indications of unease about the state of popular music, and especially rock, in Britain. In July 1976, around the time punk rock was beginning to surface as far as the media was concerned,Melody Maker published a discussion about the incidence of violence in the current scene. There were references to a new mood of cynicism and aggression in the audiences for expensively-priced outdoor events like 'The Who Put The Boot In' and the Reading Rock festival, while bands such as Doctors of Madness and Heavy Metal Kids were accused of 'inciting the audience to violence'. That this was precisely the comment that would soon be made about the Sex Pistols perhaps suggests a previously unnoticed continuity between punk rock and the music scene which preceded it.

A year earlier, in one of the same paper's routine surveys of 'The Future of Rock', Peter Jenner of Blackhill Enterprises, an agency concerned principally with 'underground' and alternative music, made this comment:

The Big Show will vanish. ... I think the political thing is a possibility. I'm thinking of someone who's 16, who's going to start saying, 'Look, all this stuff these bands do with these huge P.A.s and lights, that's not where it's at. It's down to the people. And I'm going to get out my acoustic guitar and sing revolutionary songs in pubs, working-men's clubs and factories.'

Jenner's percipience was marred only by his assumption that the reaction against the 'Big Show' would take the form of a re-run of the folk-protest of the 1960s.

His attitude was not widely shared within the record business. In May and June 1976, the Big Show had its finest hour when the vast spaces of Wembley Stadium and Earls Court were filled with fans of Bowie, David Essex, Uriah Heep, Elton John and the Rolling Stones, who were even visited backstage by Princess Margaret.

In so far as anyone was concerned seriously about the future of the record industry (and the chairmen of both Decca and EMI warned their shareholders of 'adverse trading conditions' ahead in their end-of-1976 statements), they took the view expressed above by Wayne Bickerton. The difference between the Beatles and other new stars had been that the Beatles' success had benefited not only the record company for whom they recorded, but the whole industry. It had led to an overall rise in the level of recorded music sales, and a strengthening of the position of British companies within the world music market. Ever since the breakup of the Fab Four, many people in the music industry had nursed the hope that there would be a 'Next Big Thing', the New Beatles phenomenon, to lift the British record industry to a new plateau of profitability. Talent scouts and A&R (Artist and Repertoire) managers were on the lookout for the Next Big Thing.