Part 4: Dead Cats, Higher Taxes and Other Fearless Predictions

… in this world nothing can be said to be certain, except death and taxes – Ben Franklin

My own efforts at making predictions has been a mixed bag. I was aware when the 90’s came to a close that a new trend was inevitable, since pop music trends typically last 8-10 years. I kept waiting for a song to hit so big, that it would show what direction the next wave would take. However the biggest selling song of that year was Believe by Cher, who was already 53, and unlikely to have much of an impact going forward.

The emerging technology at the time was the Internet, and of primary concern to the music industry, the MP3 audio format. People were already ripping music CDs onto their computers. What the MP3 format did was compress those files to a size that, in the days when dial-up Internet access was the norm, made them transferable to a worldwide audience. ultimately became a historically significant url for indie artists, who in the site’s heyday provided most of the content there. … The nature of the situation was a chemical reaction; all these musicians and songwriters who had for years harbored dreams of stardom without any outlet for their music gathered in one place.

When the Tipping Point finally happened, it wasn’t a hit song after all. This time it was a computer application called Napster. It made its debut in June of 1999, and quickly spread from the computer geeks to over 25 million users by February of 2001. It was shutdown a few months later but the damage had already been done. The iPod was introduced in October of that year, and along with other devices that could play MP3s, including many cellphones, the widespread adoption of MP3s was complete. This marked the end of a 100 year business model that relied on selling physical copies of prerecorded music. These sales accounted for half of the data used to create the Billboard Hot 100 chart, and the other half of the formula, radio airplay, was also in trouble. With the accuracy of the chart data in question, what the future held was anybody’s guess.

Now, with the benefit of hindsight available, what actually happened was not all that different from trends past. For starter’s Cher’s Believe was the anti-thesis of the organic, cutting edge, anti-commercial grunge scene of early 90’s and a harbinger of what was to come. There were six song writers, three producers, all of which were disconnected from the performer, a plastic (both literally and figuratively), slickly marketed, corporate creation whose legendary voice was altered by a new computer process called Auto-Tune. It was in many ways, the revolution of the 80’s all over again.

My own prediction at the time was that the power pop band Green Day was going to take a big step forward and help define the emerging trend. At the time they were statistically in decline, with incrementally slipping album sales and decreased chart performance for their singles. However chart position is a bit of a misnomer, particularly #1 songs. A lot of songs hit #1, in fact its the most common kind of hit since songs are referred by their highest position and you can’t climb beyond #1. Final chart position is very context driven and in the end, true talent is shown by not the size of the hit, but by the consistency in producing them. Bill Joe Armstrong (pictured), the primary songwriter for the band, charted 14 original compositions between 1994 and 1998. He was also just entering his late 20’s, which is typically the peak creative years for a musician. The resulting album, Warning, was released in 2000 and was the least successful of their career. The one after that however was huge.

The mistake I made with Green Day, and can be easy to do with developing trends, is over estimating how quickly the change will happen. In 1991 when Nirvana hit it big with Smells Like Teen Spirit, part of that success was an iconic music video. Nirvana would produce four videos to support their album Nevermind. Pearl Jam, the other leading grunge act, released four videos as well to support their 1991 album Ten. Music videos were already well into their decline, MTV debuted The Real World in 1992, the first of many reality TV shows that would completely change the format of that TV channel. Thus it wasn’t until 1993 when Nirvana just made one video to support their follow-up album and Pearl Jam didn’t make any, that this change became evident. Now some acts never stopped making videos, but overall this stalwart of the 80’s music had reached its nadir.

Music videos came back in a big way in the new millennium, as did overly commercial pop songs, and back to basics pop punk bands like Green Day. The very same elements that conspired to create the sound associated with the 80’s joined forces again, twenty years later and it was in many ways quite predictable. In 1987 Rick Astley had a #1 hit with Never Gonna Give You Up, exactly twenty years later he’s back. The reason for this is another characteristic of waves, a shadow of the original trend that follows the nadir, often called a Dead Cat Bounce.

The term “dead cat bounce” is derived from the idea that “even a dead cat will bounce if it falls from a great height.”

It’s often said that advertisers most covet the 18-55 year-old demographic. Thus radio, which is solely funded by ad revenue, specifically tries to court individuals in that age range. They do this by playing music that appeals the most to 35 year-olds (the mid-point of that demo), which is assumed to be the same music that was popular when that person was a teenager. You can see this another way by observing how the Hot 100 chart has a roughly 20 year cycle of contacting down to a narrow format (1964, 1984, 2006) between periods of wild divergence in musical styles.

At the moment we are in another shift to the left as the Tipping Point for the present wave, Youtube, expands and inspires many imitators. Flash video is presently the medium of choice but that will fade as the reward for making promotional videos wanes again. There is also plenty of money to be made again as the Black Eyed Peas I Gotta Feeling scored over 7 million paid digital downloads in 2009. The focus now will be getting people to go beyond just hits and to explore increasingly fragmented genres. Technology is opening new doors, particularly wireless access and the widespread adoption of smartphones. In all likelihood this will allow new business models based on bandwidth usage and location-based advertising. One thing is certain, in about five years the current trend will be dead, the pattern will reverse itself and taxes will go up.

In particular income taxes will definitely go up. You can make the case that since income taxes are at historical lows that the pattern suggests they will go up. You can also look at the fractals, in particular the fuel for change, the baby boomer voters who will be exiting their primary earning years and entering retirement. When income taxes go up it won’t be an isolated event, some other tax will go down or services will improve. Over the long-term change by its very nature is progressive. In fact if I had to give an opinion I would say The Future’s So Bright, I Gotta Wear Shades.


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