Quiet This Time : Baby Boom Rocks Music Scene Again

Eight years ago, carpenter Will Ackerman borrowed $300 from a group of friends and recorded an album of his own folk-jazz-classical-flavored guitar music entitled “In Search of the Turtle’s Navel” that he sold for $5 a copy.

Ackerman, the owner of Windham Hill Builders, a small contracting firm in Northern California, never figured to make a lot of money with his quiet brand of music. But he did, and in the process he may have disturbed the status quo of the rock-oriented U.S. recording industry.

That record is one of 37 albums, mostly by similarly serene piano and guitar soloists, released by Ackerman’s Palo Alto-based Windham Hill Records. Last year the company had sales of about $20 million, according to Ackerman.

All the albums have been profitable. Fourteen have appeared on Billboard magazine’s charts of best-selling records and tapes, and one--pianist George Winston’s “Autumn,” produced for a piddling $1,720--is about to reach “gold record” status, representing 500,000 albums sold.

Different Yardstick

Said 34-year-old Ackerman, “One of the ironies of our success is that we did it by completely ignoring what the big record companies have determined is commercial.”

In fact, some experts see the dramatic sales increases of Windham Hill and other small labels specializing in jazz, blues, folk and other so-called alternative music as part of a growing grass-roots movement away from teen-oriented music and the expensive marketing methods of the major record companies.

Michael Porter, a Harvard Business School professor specializing in competitive strategy, said the small labels have a competitive advantage over the big companies because they are more in touch with the changing tastes of the largest audience of all--the baby-boom generation of roughly 60 million Americans (an estimated 31% of the population) born between 1946 and 1964.

Like Variety of Styles

“The baby boomers are quite eclectic in their tastes,” Porter said. “They like rock if it’s good, but they get tired of the noise. They want a more acoustic (non-electric) sound and more serious lyrics, and they are increasingly interested in more sophisticated musical forms that aren’t commercially pushed by mainstream music industry.”

One critic has described Windham Hill’s product rapturously as “melodious, mood-provoking music that puts you in touch with those deep and warm feelings that give pleasure in an unhurried way.” Others have labeled it less charitably as “mood music for the 1980s,” “hot tub music” and “Yuppie Muzak.”

“It’s aural relief from the onslaught of rock ‘n’ roll,” said Bob Reitman, vice president of marketing services for A&M; Records, which last year acquired the distribution rights to all Windham Hill’s recordings. “It’s what people are playing when they have friends over for dinner or a game of Trivial Pursuit,” he said.

Whatever it’s called, the music has struck a chord with a very desirable group of consumers. Ackerman refers to them as “the disenfranchised mainstream . . . people whose lives parallel my own, with the idealism of ‘60s and early ‘70s and the experiences of the Vietnam War.” They are “mostly 25 to 35 years old, professionals, predominantly white, upper-middle-class and college-educated,” he said.

“These people are appalled by the conformity of radio programming,” he said. “They are not spoken to eloquently by heavy metal or new wave music. Nothing is being made for them.”

“The point is, the industry is missing the boat in a big, big way by not appealing to the baby boomers, the largest group and the one with the most money,” said radio programming consultant John Sebastian (not the folk-rock singer of the 1960s). “This group is the No. 1 ad agency buy across America--no teens, no 55-plus. All of this audience is in the money demographics, there’s no waste for the advertiser.”

They’ve Always Bought

Ironically, it was the baby boomers who helped give the record business its headiest success in the late 1960s and 1970s, when their taste for rock music drove record sales from less than $2 billion a year to more than $4 billion in 1978. But as they matured, married, entered professions and began raising families, they bought fewer records and sales slumped industrywide.

Sebastian said baby boomers quit buying records “because they weren’t hearing anything they liked enough to buy; the industry turned its back on their new tastes.”

Joe Smith, chairman of Elektra Records during the boom years of the mid-1970s, agreed. “Back then we saw (sales) numbers with teen acts that were so startling, we lost sight of all the other music and let the (older) audience slip away,” he said.

“The baby-boomers grew up but the industry didn’t,” said folk singer Tom Rush, one of a growing number of recording artists who have successfully launched their own independent labels after being rejected by the major companies because they supposedly had no appeal for teen-agers.

Formed His Own Firm

Fred Catero recently formed his own jazz-oriented company, Catero Records, after 35 years as a staff producer for a number of major companies, most recently CBS Records. “The big companies are going to have to wake up to the fact that rock ‘n’ roll is just one segment of the market, like jazz,” he said. “Right now the biggies are going through what Detroit went through when Japan came over with little cars: Rather than change, they’re spending more and more on promotion and advertising trying to sell what they were tooled up to do.”

Extensive market research conducted in 1980 by New York-based Warner Communications Inc. indicates that the baby boomers still spend more money on records than any other age group, including teen-agers.

However, “no one in the industry wants to hear that,” said a Warner executive who asked not to be identified. The executive acknowledged that although teen-agers are a steadily decreasing segment of the population (down from 12.6% in 1980 to an estimated 11% in 1984) the large companies direct most of their efforts at selling to them because “the record industry needs to break new artists and new artists, like new fashion, are typically bought by younger people.”

Harvard’s Porter added, “My analysis is that the Windham Hills and the Tom Rushes are responding quickly and finding new ways to reach this audience, while the major companies are being pulled kicking and screaming along behind.”

“The music that captures the ears of the baby boom is music that has lot more live-ness than what you hear on radio--a less manufactured and studio-produced sound,” said Marion Leighton, one of the three owner-founders of Cambridge (Mass.)-based Rounder Records.

Specializing in “roots-based music of all types--a lot of folk, new acoustic, New Orleans, some Western and even old-time string band and fiddle music,” Rounder’s sales are up more than 15% this year, according to Leighton.

“There’s definitely an increased interest in a prettier, mellower, more natural sound,” said Bruce Kaplan, the 39-year-old founder of Chicago-based Flying Fish Records, a folk-oriented label that has seen a 40% sales increase over the last two years, according to Kaplan.

Jazz Sales Also Up

In the jazz field, Palo Alto Records, a jazz label based in Palo Alto, had a sales increase of 28% in 1984, according to administrative and production manager Jean Catino.

Established 3 1/2 years ago by three founders of the Benham Management Corp., which manages Capital Preservation Fund, one of the leading money market firms in the country, Palo Alto has released 66 albums and plans to release 30 in 1985.

“The jazz market is expanding,” Catino said, “But the majors have turned away from it, I guess because they figure a 4% to 5% share (of total record sales) isn’t worth pursuing. That’s just fine with us.”

Sam Sutherland, jazz columnist and Los Angeles bureau chief of Billboard magazine, said the industry’s estimate of jazz’s share of sales--3% to 5%--is low because a majority of jazz albums are released by small companies that are not members of the Recording Industry Assn. of America and therefore their sales are not figured in the total.

“My gut tells me it’s at least twice that, easily 10%,” said Sutherland, who estimates that the major record companies were responsible for fewer than 100 of the more than 1,000 jazz albums released this year.

The big companies spend an average of $150,000 to record a pop album, as much as $200,000 in promotion costs to get the record played on the radio and an average of $40,000 to produce a video version. Consequently, albums often have to sell more than 200,000 copies to break even.

As a result of their high costs, the major companies have dropped scores of formerly successful artists in recent years because the artists’ sales have fallen below the level the companies consider profitable. Warner Bros. Records cut more than 30 artists from its roster in 1984, including such well known performers as Van Morrison, Arlo Guthrie and Bonnie Raitt.

A number of the dropped artists, Guthrie included, are forming independent labels and are discovering that without the enormous overhead of the major companies, they can sell fewer records and still make more money.

A spokesman for Guthrie said, “The whole time Arlo was with Warner Bros., you couldn’t even find his records in the stores around here (the singer’s home town of Washington, Mass.). It just didn’t make sense.”

Other artists are signing up with the smaller independent companies. “We don’t do the promotion game, we’re not forced to compete with CBS and Michael Jackson, so our overhead is structured in such a way that we can take an artist who is financially unfeasible for major--an artist like McCoy Tyner, who sells 20,000 to 30,000 albums--and do better for him than a major could,” said Palo Alto’s Catino.

Of necessity, the small companies generally spend a fraction of what the majors spend on production. Among independents surveyed for this article, most said that $10,000 is the maximum they spend recording an album and some quoted figures as low as $500 for a solo instrumental album. Windham Hill’s most expensive album, according to Ackerman, was an “extremely complex recording” by the jazz group Shadowfax, which cost $25,000.

“One advantage we have is the economics of what we’re doing--our break-even point is so low, about 2,500 copies,” said folk singer John Stewart, who launched his own Homecoming Records last year after recording 27 albums for major labels in a 23-year career that started with the Kingston Trio.

“We discovered that if we did our homework before going into the studio, we could make a record for as little as $5,000 and have it sound just as good as if we’d spent $100,000.

“We also found we could sell it not just in record stores, but also in bookstores, boutiques, gift shops and direct mail,” Stewart said. “We’ve sold a helluva lot of cassettes out of Ginger Snips, a hairdressing salon here in Malibu. They play it and people say ‘That’s great, what is it?’ and they say ‘It’s right here on the counter next to the creme rinse.’ ”

According to Stewart, Homecoming’s first three record releases--including a sampler album of the label’s five artists titled “The Gathering” and Stewart’s first all-instrumental album, “Centennial”--have sold a total of 10,000 copies. “So we’re making money, we’re doing the music we like and we feel we can grow,” he said.

Despite spending less on production, a number of independent companies have established reputations as “audiophile” labels for their high-quality recordings and elegant packaging.

Omaha-based American Grammaphone, for example, first came to the attention of consumers when stereo stores began using Fresh Aire, its “18th-Century classical rock” album series, to demonstrate speakers. So many customers wanted to buy an album along with the equipment that the stores soon began stocking the records, according to the company’s founder-owners, Chip and Carol Davis.

For the most recent album, Fresh Aire V, the Davises recorded with the London Symphony Orchestra and the Cambridge University Singers, partly in a medieval cathedral two hours outside London. The total production cost was only $60,000, according to Chip Davis.

Pressed in “100% premium virgin vinyl” and packaged in “the finest imported rice paper sleeves,” the five Fresh Aire albums have sold a total of “close to 1 million copies” at an average price of $15 each, said Carol Davis.

From a series of interviews with 25- to 44-year-olds in seven cities, consultant Sebastian said he found that the elements of quality and exclusivity are very important in selling to the baby boomers, who tend to disdain anything mass produced or merchandised. “These people are upwardly mobile and they aspire to quality in every aspect of their lives--whether it’s in cars, shoes, television shows or music,” he said.

Independent label executives admit that in order for their records to sell at the 100,000-plus level, they need broader exposure on commercial radio stations. That is just around the corner, said Sebastian, who has staked his career on the prediction.

Two years ago, Sebastian was one of the top radio consultants in the industry, advising 25 album-oriented rock radio stations about what music to play. He gave up those clients last year in order to develop a new program format that he calls Eclectic-Oriented Rock, aimed at the tastes of the baby boomers.

“It’s not just folk and jazz, it’s all forms of quality music that’s not getting played, including songs by artists on big labels who aren’t getting promoted,” he said.

According to Sebastian, there are a few commercial stations around the country that are “doing phenomenally well” with music programmed to appeal to the baby boomers. The success of these stations will produce “a domino effect among other stations and, in the next year or two, there will be an EOR-type station in all of the 50 major markets,” he said.

Sebastian also predicts that the stations’ success “is going to bring along the record companies, because if something is selling 50,000 copies now, with more exposure it would sell tremendously, on one-tenth of the promotion given to Michael Jackson or Lionel Richie.”

Dave Littrell, general manager of station KEZX-FM in Seattle, agrees with Sebastian.

As a so-called “beautiful music” station, KEZX “lost money for 15 years,” Littrell said. Two years ago the station changed formats and began catering to the baby boomers by playing a large helping of folk- and jazz-oriented records from “alternative” record companies like Windham Hill, Flying Fish and Rounder.

“We’re now firmly in the black--No. 2 in the market (out of 52 stations) in 25- to 44-year-olds,” said Littrell, 36.

Even the most optimistic small-label entrepreneurs stop short of saying that rock ‘n’ roll is dead or that the major companies are about to topple. The so-called “Big Six” companies--CBS, Warner, RCA, Capitol-EMI, Polygram and MCA--distribute about 85% of the records and tapes sold in the United States, and their dominance is expected to continue for the foreseeable future.

But Harvard’s Porter said the the small companies will definitely make a dent in the big companies’ market if the big companies do not start paying more attention to the tastes of the baby boomers. “Right now they are in gridlock and not responding effectively to this enormous potential market,” he said.

A similar situation existed once before. In the early 1950s, the major record companies of the day--RCA Victor, Columbia, Capitol and Decca--lost touch with a large segment of music consumers and nearly missed out on the biggest bonanza in recorded music.

According to a Vanderbilt University study of the recording industry published in 1975 by the American Sociological Review, the post-World War II success of independent record companies specializing in “communal music” such as jazz, rhythm and blues, country and western and folk was “an index of the audiences’ growing disenchantment with the available popular music.”

But the major labels missed the signals and continued with their “brass- and reed-based dance band music,” according to the study, titled “Cycles in Symbol Production: The Case of Popular Music.”

The rest is musical history. In 1955, Elvis Presley and rock ‘n’ roll, a blend of several types of communal music, exploded onto the scene and the big companies suddenly were faced with intense competition from a spate of independent labels that were lucky, or far-sighted, enough to be on top of the trend toward teen-oriented music.

Now it appears that things may have come full circle. Today, the small companies are hoping that the success of Windham Hill will help change what one independent label executive describes as “the prevailing national aesthetic that popular music has to be teen-oriented.”

“It’s us against the big guys,” said John Stewart. “The reason the dinosaurs died off is that the rats ate their eggs and they didn’t reproduce. Well, we’re the rats.”