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MTV and the record companies have developed a relationship that suits all of them just fine. In exchange for free air time, the record companies provide eye-catching videotapes of artists performing their latest songs. The highly stylized three-to four-minute tapes cost an average of $30,000 to make, but some can run as high as $150,000. The payoff can be huge. Men at Work were unknown before they appeared on MTV a year ago. Shortly afterward, their first album, Business as Usual, appeared on the bestseller charts, where it has remained for 47 weeks.
Since MTV is turning little-known performers into superstars, radio stations have responded by opening up their air time to less established artists. Radio Programmer Lee Abrams, who chooses records for 80 pop stations around the U.S., is now scheduling about 70% new releases, while two years ago he played 75% rock classics.
One big problem still faces the industry: home taping. A report by Warner Communications estimates that a million-selling record will spawn about 450,000 homemade copies. Overall, the industry figures that it loses $1 billion in sales annually to home tapers. A bill in Congress that would put a royalty fee on tape and recorder sales is being held up, pending a decision by the U.S. Supreme Court in the Sony Betamax case on the home videotaping of television programs.
Despite the record-industry turnaround, no one expects an early return to the boom of five years ago. Says Al Teller, general manager of Columbia Records: "We're a mature industry. The huge growth of the '60s and '70s is not on the horizon." One reason is that baby boomers, who bought many more records than their parents, are now getting into their 30s and buying fewer records. But music executives do not want to think about those sour trends. For now, they want to sit back and listen to the sweet music those megahits are making.
—By Alexander L. Taylor III. Reported by Stephen Koepp/New York and Russell Leavitt/Los Angeles