Observations Observations

March 1, 1999

Click on music

In the beginning, Edison created a sound-recording device with a tinfoil-wrapped cylinder. Today, we have digital audio compression technology that converts music into zeros and ones. It allows musicians to upload their music in near-CD quality on the Internet and lets listeners download it in a relatively short time onto their PCs. Independent musicians like Favorite Atomic Hero, a start-up rock band from Boston, can reach listeners directly by posting their songs on their home page or on download sites like MP3.com.

Becoming a star is another matter. Selling a million copies of a CD requires repeated radio airplay, advertising in retail stores and music magazines, getting videos played on MTV, and touring. Major labels have the money and access to help make all this happen. Independent musicians, on the other hand, do not receive enough promotion to become big sellers. It is easy to post music online, but how can you gain visibility at MP3.com, a site that hosts more than 31,000 aspiring unknowns?

Still, the technology does give musicians new opportunities to reach a greater audience and the potential to make some money. Major labels promote musicians but they also get to keep a large portion of their record sales revenue a start-up musician could get one dollar or less per CD sold. So, if independent musicians ever become successful on the Internet, they can make as much money selling fewer records by keeping a greater percentage of the revenues. Although digital downloads have not made financial success stories for independent musicians so far, they have certainly eliminated geographical limits. Adam Birkenhead, the vocalist and bassist of Favorite Atomic Hero, was happy to find that the band sold CDs to Germany and England through MP3.com. Before, their only distribution channel had been one retail store on Newbury Street, Boston.

- Mizue Morita


Building bubble?

Construction has been the fastest-growing industry in New England in terms of employment since 1998, growing at an annual rate of over 5 percent. Does this signal that the region is headed for a repeat of the bust of the late 1980s? Unlikely, says Boston Fed economist Yolanda Kodrzycki. "Construction in the region still represents some catch-up to make up for the lack of activity earlier in the decade,” she notes. In fact, the construction industry's share of New England's employment is actually modest relative to the peaks in the early 1970s and late 1980s.


Pay Dirt

Electrical equipment and industrial machinery are among the top merchandise exports from each of the six New England states. Beyond that, the states show their differences Vermont exports food; Maine sells paper, lumber, and wood abroad; and Rhode Island sells . . . scrap and waste?

Yes, that's right. Rhode Island has a $100 million annual income exporting scrap and waste. And it's not all wrecked cars, newsprint, plastic, and rubber. In fact, the lion's share comes from the reclamation of precious metals.

Metech International, based in Mapleville, Rhode Island, is a leader in the industry and one of several such companies in the state. It does a multimillion-dollar business recovering tiny amounts of gold, silver, and other metals mostly from used computers and other electronics products. Metech takes these products to its Rhode Island plant where it samples them to determine the metal content. The material is then shipped to smelters in countries such as Canada, Sweden, and Belgium where the metals are recovered and resold, eventually to find their way back into the manufacture of electronic goods.

"A lot of precious metal recycling is here because of the state's jewelry industry,” says James Gardner, manager of manufacturing operations at Metech. But today the industry is mostly high tech, with clients from the semiconductor and electronics industry. Given the high cost of mining it the old-fashioned way, they are happy to pay Metech to turn their trash into gold.

- Lee McIntyre