The major labels have snubbed older music fans in recent years, yet over-40s now constitute 44 percent of the CD market, up from 19.6 percent in 1992, according to the RIAA's 2001 annual consumer profile. Unfortunately for the majors, the tastes of graying Beatles and Stones fans have fragmented, making them difficult to reach via mass-marketing. These consumers help support the many smaller labels that market alt-rock, world music, new age, reissues, jazz, folk, bluegrass, post-minimalism, and other niche genres.

Meanwhile, younger fans lose interest quickly and often don't develop strong loyalties. They're less likely to investigate a breakthrough act's previous albums or buy its next one. The genres that appeal to under-25 music fans continue to sell, but individual performers fade quickly.

This is a huge problem for the big labels, who still base their marketing on long-term stars who release multimillion-copy blockbusters. One album that sells 10 million copies is more lucrative than 10 that sell 1 million, because once a CD takes off, the only fixed costs are manufacturing and shipping, which are trivial compared to production and marketing. And long-term careers make each album less of a risk, since the most loyal fans will buy everything an artist releases and profits are high on back catalogs that keep selling.

8:39:24 AM