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First of all, there's been a humongous change in the market. (Stop me if you've heard this one before; I feel like I type this exact same rant into somebody's thread every couple of months.)
When "Mr. Tambourine Man" came out, it was a big hit-- sold a couple hundred thousand copies.
Ten years later, Columbia Records let Roger McGuinn's recording contract lapse. McGuinn, who'd been recording for Columbia in the Byrds and as a solo artist for ten years, was no longer considered commercially viable, because he was only selling a couple hundred thousand copies of his albums.
Why was Columbia able to make money at that volume in 1964, but not in 1974? Because the whole scale of the marketplace had changed. The vast changes of the era-- the Beatles, the Summer of Love, and Woodstock-- had spawned millions of new music consumers whose tastes had to be accommodated (which is to say manipulated).
I believe that McGuinn's couple thousand fans were, if not the same people, the same *types* of people, in that they enjoyed music for musical reasons. (I think so because I'm a guitarist and singer and the Byrds have always been heroes of mine, so I think Byrds fandom is a sign of conspicuous good taste! Your mileage may vary.) But I think one of the things that happened because of Woodstock Nation was that our musical choices became a much more prominent part of our identity-- by identifying so strongly with musical styles, we made it possible for us to have music marketed to us for reasons that had very little to do with the inherent musical qualities of the product, that had more to do with taking a stance or copping an attitude. And that's why now we have audioanimatronic performers like Britney Spears and Ashlee Simpson, whose "music" is entirely crafted for them by producers, and who may not even be able to perform it in live situations. To their producers, their value is that they're easily manipulable, and they're marketably cute. To consumers, their value is that they're predictable, and cute.
Where are the musically literate listeners? Not at that counter; they're vastly outnumbered, not to mention that they probably find that sort of "music" uninteresting. Some of them have been buying McGuinn's recent output from the Folk Den, or mp3.com, or directly from McGuinn himself in concert. But he doesn't get on the charts from there. Nor do the new artists that could have been his modern day equivalents. Your mission, if you choose to accept it, is to go out and find them.
The other point I would make in this context is that we paint what we see. It was a lot easier to make uplifting music in the '60s than it is today, because there was a lot about the '60s that was truly inspiring, and precious little of that remains nowadays.
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