percent and unemployment was 25 percent. By comparison, the economy declined 0.3 percent in the third quarter of 2008 and unemployment stood at about 6. 5 percent. Those numbers were likely to get uglier in the fourth quarter, but not ugly enough to justify the images of breadlines, cardboard shoes, and Hoovervilles (Bushvilles?) conjured up by the steady diet of breathless, apocalyptic headlines. “So keep things in perspective,” says Liebowitz. “We may find out that all this talk was nuts.”

Still, the music industry arrives at the Great Economic Melt­ down of ’08 from a peculiar vantage point of having already been melting down on its own for years. Digital piracy and corporate shortsightedness have combined to siphon off an astonishing 43 percent of the industry’s business since its high point in 1999. But, as Rich Bengloff, president of the American Association of Independent Music, notes, that dark cloud may actually be a silver lining. “In the last eight years, the

“We’ve managed to make a go at
it for a while, but we might not be
able to do that next year. I guess
it’s time to get a job.” —Ted Leo

industry has shrunk significantly, lost about a third of its jobs, and a number of labels have closed or gotten smaller,” says Bengloff, a former major­label exec. “So in some ways, we’re bet­ ter off because we’re used to dealing with it.”

Plus, as many in this leaner, meaner music industry are quick to point out, painful economic times haven’t been as painful for the music biz as they have for other industries. “On the optimis­ tic side,” says Reggie Youngblood of Black Kids, “even though people don’t have money, they still need to be amused. Maybe they’ll come out to a show.”

The labels are banking on that optimism. “Historically, we’ve been less af­ fected by recessionary periods because we are a lower­cost tonic,” says Epic Records general manager Adam Granite. “For 99 cents or $10, you can feel better. During the holidays, we may be a preferable item on a shopping list compared with a $50 video game or a $150 electronic device.”

There may be some truth to that, but some early indicators suggest it may be more wishful thinking. Wal­Mart reported a 23 percent plunge in CD sales in the first four weeks of the fourth quarter of 2008, leading the company to further reduce the amount of floor space it’ll be allotting for those shiny silver relics. As Peter Jenner—a former lecturer at the London School of Economics who went on to manage, among others, Pink Floyd, the Clash, and Billy Bragg— puts it, consumers with less money in their pockets and more worry on their minds aren’t likely to revive an already crippled business. “People are going to reprioritize their spending,” says Jenner. “They’ll be saving more, and that’s not counting people who won’t be earning as much because they’ll have lost their jobs. People will be spending less on music. We’re headed toward cheaper ways of consuming, to get better value for your buck.”

For some, that might mean an increase in stealing (or sharing, if you pre­ fer) music instead of buying it. For other consumers, it will mean a further migration of physical sales to digital, not just in the form of downloads, but also perhaps subscriptions to Napster and Rhapsody, and an increased use of free (or nearly free) ad­supported services like MySpace Music, imeem, and Lala.com. But these new avenues generally require you to cough up cash for some sort of gadget—a PC, an MP3 player, a music­capable cellphone, whatever—before you can enter their magical kingdom. And not many rational beings look at their shrinking bank account and think, “Y’know what would fix this? A new iPhone!” Fewer people buying iPhones

means fewer people buying David Archuleta songs to fill their iPhone.

Even worse, according to Sonal Gandhi, a digital­music analyst for JupiterResearch, the advertising dollars the music industry has begun to share from MySpace, imeem, and others may dry up even more quickly than consumers’ spending cash. “MySpace will be competing for the same ad dollars with online video, news, or entertainment sites,” she says, “and there will be fewer dollars to com­ pete for.” In fact, the 360­degree, multiple­rights deals that major labels have been pushing as the solution to all their problems have ironically left them with a lot more of their collective ass hang­ ing out: The dough the labels have begun to taste now that these 360 deals have entitled them to share the revenue from licensing, adver­ tising, sponsorship, and merch ventures will grow more scarce as budgets contract across these partner industries.

Which brings us to touring, the only sector of the music biz that hasn’t been getting reamed for the past decade, but which recently had been feeling the hurt from astronomical gas prices.

Well, gas prices have come down.
That’s the good news. The bad
news is considerable, though.
“Certainly, if there’s increased
unemployment and difficulty get­
ting credit, it’s going to affect dispos­
able income,” says Danny Goldberg,
a former Warner Bros. and Mercury
Records CEO who currently manages the Hives, Steve Earle, and the Old 97’s.

“You may have to lower ticket prices, which means artists have to tour with fewer musicians or crew. It may mean playing acoustically, going in a van instead of a bus, having fewer lights, or touring fewer parts of the world.”

So while we may see at least a brief sunset on the $300 concert ticket, we may also see fewer bands touring, and playing, for better or worse, increasingly stripped­down shows. A wobbly concert industry is troubling because most artists make their living on the road these days, and some have already noticed thinning crowds.

“You can always blame yourself or the fact that people just stopped liking what you do,” says indie agit­punk bard Ted Leo. “I started taking things really personally last year, like, ‘Wow, we’ve really overstayed our welcome in certain places.’ But logically, that’s not going to account for the kind of dips everyone has seen across the board. People don’t have the cash to go out two and three times a week to see a band.”

The Chicago punk outfit Rise Against has coped with the challenging touring environment by joining forces on the road with Alkaline Trio, Thrice, and the Gaslight Anthem, rather than just bringing along, as front­ man Tim McIlrath puts it, “two openers that no one’s ever heard of.

“When we were planning the tour, we knew it would be a time when people would really need a reason to get out of their houses and go to a show,” he explains. “So we put together some pretty heavy hitters. Instead of going on tour, competing against each other, and taking big risks, let’s just go out together.” The result is a stronger bill for fans but also a smaller cut of the profits for each of the bands.

“It depends what you want out of it,” reasons Youngblood. “Will we have to trade in the bus for a van? Perhaps. But I’ve just wanted to make a com­ fortable living making music, nothing extravagant.”

BJ PaPas/Retna