The New Wave Meets the New Economy
By Melanie Warner

(FORTUNE Magazine) – Late last month a sober crowd of new-economy types stood in a packed room at the Robertson Stephens Tech 2000 conference cradling free drinks and watching Devo perform. Those at the party not born during the Ford Administration may remember Devo as the early '80s band famous for resting flowerpots on their heads and singing "Whip It."

I wondered when the last time was that most of these people had heard a Devo song. Their high school prom? The year yellow power ties were all the rage? Actually, for some it was less than two years ago, when Devo played for an even bigger crowd at ZDTV's launch party.

This made me curious: Was Devo the band to get for your launch party? Or was this all some kind of joke? Neither, really. Robertson says it simply wanted a cool act for its party. But don't get the idea that Devo is riding the conference circuit, a late-career endeavor for musicians that's about as respectable as dinner theater for actors. Mark Mothersbaugh, the guy who started Devo in 1972 with his friend Jerry Casale, says that the band agrees to perform at two kinds of events--charity affairs and gigs that pay big bucks.

Valley parties fall cleanly into the latter category, paying Mothersbaugh "six figures." Mothersbaugh lives in L.A. now, and he and the other band members make their livings writing music for film, TV shows (including Rugrats), and commercials. A cerebral guy who's more philosophical than your average rock star, Mothersbaugh has also been thinking a lot about the Internet and how it will affect musicians. He's on the advisory board at (, a designer of music Websites, but fears that ultimately Internet music companies are going to screw over artists. Devo's music is available all over the Web; when people download it, the band gets nothing from the transaction. Whereas every time a Devo song is played on the radio, Mothersbaugh sees as much as $0.12 in royalties. "I think all these Internet companies are running around thinking, 'How can we get out of paying the artists?' " says Mothersbaugh. "Eventually [Internet companies] figure out these lame arrangements, but there'll be no real compensation for your creativity as an artist."

You might think that musicians would welcome the Internet's ability to bypass labels and find an audience directly with consumers. But unless those consumers are willing to fork over cash and the sites are willing to do some real promotion of bands, it won't work that way, he says. Mothersbaugh, who's not a big fan of most pop music, thinks that the Internet will actually discourage the development of talented musicians who aren't as photo-ready and easily digestible as Ricky Martin, Britney Spears, or Sugar Ray, because there will be no one to pay them or promote them. "There will be lots of little sites that nobody pays much attention to," predicts Mothersbaugh.

One venture capitalist I talked to has also been grappling with this dilemma. He is considering funding Napster (, the latest mouse that's gotten inside the music industry's elephant trunk. Yet he thinks what Napster is doing is illegal, and probably won't hold up in court. (For more on Napster, see "Who's Afraid of This Kid?" in the archive.) "Is it ethical to fund a company that's doing something illegal, knowing that eventually we'll figure out a way to do it legally?" he wondered aloud over lunch recently.

It's easy to cheer about the disruptive effects of the Internet when the people being disrupted are the record labels. They're the big bad guys, muscling artists into unfavorable long-term contracts and charging $15 for CDs that cost a few dollars to produce. The Internet drives a big stake through the heart of their distribution channel. But when you think about poor, struggling artists' not getting paid for their work, the Internet doesn't seem so cool anymore.

Mothersbaugh says that Devo would come up to the Bay Area again to do more tech parties if the price was right--even though the band didn't exactly have the time of their lives at the Robertson Stephens party. "It was the only time in our career that we were told to stay backstage," says Mothersbaugh. "They didn't want us mingling." Nonetheless he did talk to a few people; he found the crowd, which he described simply as "wealthy," to be a little odd. Mothersbaugh spoke to one guy who said he made "routing systems" and was worth $250 million. But the guy has no idea what to do with his money and figures he'll just go start another company.

And people thought Devo was weird.

--Melanie Warner