I think that there's a certain kind of professionalisation of folk music - artists with well polished reworkings of traditional and pseudo-traditional material - that has been on a long decline. Obviously there is an aging population going to folk clubs, there#s a demise of many venues and radio shows, and although there's a new generation of professional performers coming through the Newcastle University course, they're probably going to need to look to other venues. There's a bigger question, in my mind, of whether any of that was folk to begin with. When I listen to recordings of folk music (which I do VERY rarely, mainly when I'm listening to old tapes my dad has in the car, or when I'm researching different versions of songs) it sometimes seems like a subgenre of pop music more than something like the people singing and playing their own music. There are still venues for traditional music (I like to hunt out places where I enjoy listening to people play and sing, and to find places where I can sing traditional songs myself), I think it's just becoming more disconnected from the limited commercialisation of folk that we saw in the 60s and 70s. It's becoming smaller, but in spite of that perhaps a little bit closer to what it once was - people of varied talents and abilities enjoying and passing on tunes and songs amongst themselves.
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