Customers trust the banks.
Fans trust the acts.
Therefore, high speed electronic trading could not be eradicated and we can’t go to all-in ticketing.
You don’t want to believe your banker is ripping you off. But that’s what these big brokerage houses were doing in their dark pools. Selling access to high speed traders. Making trades that were less than satisfactory to the customer.
In order to get people to change, you’ve got to bring them across the divide of disillusionment.
Acts scalp their own tickets on a regular basis. They refuse to go to all-in ticketing because then the price will appear higher, better to have Ticketmaster take the blame.
Actually, the situation with high speed electronic trading and Ticketmaster is very similar. Each developed to fill a vacuum.
I won’t recite the history of Ticketmaster’s development. But I will tell you the fees are so high because they’re a way to prevent revenue from being commissioned by artists.
You see the artists are the culprits.
BUT YOU DON’T WANT TO BELIEVE THIS! You’ve stayed up all night listening to their music, you’ve signed up for their mailing list, you can’t fathom that they’re part of the problem.
But the truth is they want to commission all revenue. But the fees are not commissionable. So, the promoter gets kicked back from Ticketmaster, the fees are his profit, otherwise he would not be able to be in business.
This is the way it works. The promoter guarantees a huge sum to your favorite artist and he’s got to get it back.
The artist could play for a small guarantee and a percentage of the net, but he doesn’t want to, and doesn’t have to, because people are lining up to pay him, unless they’re not. The truth is if you’re nobody, you can’t make any money.
But let’s stay with the hit acts. The promoter takes all the risk and the act makes all the money. No one shows up and the act still gets paid.
But the act wants even more. So this Ticketmaster game was developed in order for the promoter to make a profit. Sure, Ticketmaster takes a bit, but nowhere near as much as you think.
As for the insane fees on developing acts… Welcome to the real world, where blockbuster acts get paid and you don’t make money until you’ve truly broken through. Usually these acts play clubs, and the club has overhead, and winning and losing nights, they want to stay in business. Used to be the labels supported the clubs, but that went out the window with Napster and the Internet.
But you don’t want to hear all this. Or you already know it and see it as the normal way of doing business.
But the point is, fees could be eliminated tomorrow, if only the acts said so.
When a ticket is twenty bucks plus another twenty in fees, it’s really FORTY BUCKS! But the act wants you to believe they care about you, that they don’t want to charge too much, and it’s the big bad boys at Ticketmaster who are to blame. But the truth is, if the tickets were really twenty bucks, the gig wouldn’t happen, because costs wouldn’t be covered, no one could make a profit.
And I’m wasting my breath here. Because I’ve written the above numerous times and my inbox still fills up with people blaming Ticketmaster.
But the point is… Some people know how this world works.
And some people don’t.
And if you’re one of the latter, I hope you’re employed by someone else who doesn’t fire you, because if you’re forced to live by your wits, you’re going to be in trouble.
Many people have e-mailed me Jesse Winchester’s performance on Elvis Costello’s “Spectacle.” It illustrates the power of television and also the fact that traditional metrics truly don’t capture the status of an artist.
An artist’s worth is not his sales, either recordings or tickets, never mind merch and sponsorship, but the impression he makes, whether it’s indelible, whether it sticks with people.
Based on the amount of e-mail I’m getting linking to this clip, Jesse Winchester was a star. No joke.
So I’m sitting on the floor of a Starbucks in Idaho Springs waiting for I-70 to reopen. Electrical outlets are at a premium and our driver said he’s waited for four hours for the highway to clear, so we might be in for a long haul.
Meanwhile, there are a few things on my mind.
I’m sure everybody there is having a good time, but I’m not sure it has much to do with the music. When did concerts devolve into a place to see and be seen? Probably when the festival paradigm took over. Now they’re events, not concerts. As for the headliners…if you can’t miss the reunion of OutKast then I fear you’re still living in the aughts, using a flip phone and unaware we’ve got tablets, never mind LTE.
Second, breaking rules.
The flight attendant said we could not go to the bathroom, they were ready to serve drinks. But the problem was they weren’t going down the aisle yet, could I steal a run to the loo?
My dad was a rule-breaker. Alternatively he stated if everybody jumped off a bridge, does that mean you should too?
Bottom line, are you coloring inside the lines or outside them?
All the winners color the exterior, while insisting you remain interior.
Kind of like all that business b.s. you read from CEOs, informing you how to make it. Sean Parker never says he stole the e-mail addresses from Napster to start Plaxo, as the legend goes, and no one winning will go on record about the corners they cut. Cash flow is everything. Independent labels don’t pay royalties because they need the money.
Now I’m not telling you to rob banks. But if you see a stupid rule, maybe you should break it. All innovation is about breaking the rules, which is why Coachella falls so flat. All the innovation is non-musical, it’s about food and sculpture. Whereas the acts paint by numbers (thank you James McMurtry!) Isn’t it funny the last ten years have been dominated by TV singing competitions where people tell you how to perform, where you’ve got to run the gauntlet to get noticed. Artists don’t do this, entertainers do.
New musical stars will emerge that will rivet the public. But they’ll be different. They won’t be focusing on sponsorship or fashion shows but causing us to look at the world just a little bit differently. That’s what rule-breakers do, make us challenge our preconceptions. Coachella is a celebration, it’s not art.
Third, there’s a very interesting interview with Fred Wilson on BusinessInsider:
I hate to admit I’d rather read the musings of a VC as opposed to the blathering of nitwits in “Rolling Stone,” but that’s the truth. Fred is a thinker who has something to say. The people in RS are fame whores eager to promote their next forgettable project.
Furthermore, Fred’s got a better track record.
But what fascinated me most were Fred’s comments on Instagram:
“A lot of the stuff that was on Instagram has now moved to Snapchat. It doesn’t mean that people are not using Instagram, but if I go back and look at my Instagram feed a year ago versus today, there’s a lot of people who were in my Instagram feed a year ago who aren’t there today. They’ve been replaced by brands.
So now my Instagram feed is full of things like the New York Knicks and restaurants posting amazing photos of food. The young Facebook user base who left Facebook to go to Instagram has now seemingly moved mostly to Snapchat and my generation plus brands are what’s on Instagram now.”
Old people are the ones still on Facebook and now using Instagram. Youngsters move on. For all their supposed love of brands, when ads appear, they disappear.
In other words, by time the mainstream starts touting something, it’s done. Just ask Fred, his company Turntable.fm died right after an insane wave of publicity.
Point is if you’re in the tech game, if you’re in the popular culture game, you’re concerned with where the people are going. The music business is primarily concerned with where people have been, believing they’re going to stay, buying CDs, listening to radio…
Building something from nothing. Seeing the future. Changing the world. That used to be music’s job, now it’s the VC’s. In other words, Fred Wilson is a bigger rock star than everybody appearing on stage at Coachella. He’s reaching more people, and thrilling them all the while.
Finally, there was an article in “BusinessWeek” that the convertible is dying.
I’d give you the link but now I’m writing from the back of a CME van moving slowly in a twelve mile line of cars on the east side of the Eisenhower Tunnel. The wifi is not working.
But the point is, convertibles are baby boomer dreams. Hell, they’re still buying expensive ones, Mercedes makes many. But VW is stopping. And Chrysler. You see kids don’t care about cars.
But they care about going to the festival to see and be seen, to take selfies and upload them.
It’s a completely different world these days.
Baby boomers think they run it.
But they just live in it.
Time is passing them by.
Because they’re all about leisure and lifestyle, and it’s very hard to keep your finger on the pulse when that is so.
Once upon a time music led change and adapted to the new world.
The concert companies are doing an incredible job of extracting dough from customers. Give AEG credit for making Coachella a foodie paradise.
Just don’t tell me it’s about the music…
Wifi is working!- “Convertible Car Sales Have Plunged as Image of Fun and Freedom Dims”
ADVANCE PROMOTION IS DEAD
Your anticipatory hype is forgotten in the endless tsunami of new data. It makes no sense to build anticipation, it just dissipates. Now you pounce when the story is hot. Radiohead started it, Beyonce improved upon it and now Michael Lewis is taking it to the book business. The new watchword of marketing is SURPRISE!
PEOPLE LOOK FOR AN EDGE
It’s no different from Sony selling Mariah Carey singles for 49 cents to go number one. Everybody’s trying to rig the system. But when this is so, it’s he who is honest and has credibility who gains people’s ears. That’s what today’s musical artists don’t understand. That by chasing the buck, whoring themselves out to anybody who’ll pay, they’re losing their identity, they’re becoming no different from their compatriots. Want a tribe? Go your own way, have integrity, speak from the heart, people will follow.
Unlike in the music business, Michael Lewis is building a long term career. Sure, he started with a hit, “Liar’s Poker,” but many of the greats do. Then he wandered in the wilderness until he truly found his groove. “The Blind Side” made him a star years after the book came out, and “Moneyball” enhanced his reputation. You think you’ve made it but the truth is most people have never heard of you. Now people have heard of Michael Lewis, to the point where he can hype his book on “60 Minutes.” That’s almost equivalent to playing the Super Bowl. Only unlike Bruno Mars, Michael Lewis has something to say.
MOST PEOPLE CAN’T READ
“60 Minutes” did a good job of explaining the story:
But the truth is most people will not read “Flash Boys” because they can’t. Inured to television, they can’t hold multiple concepts in their brains at one time, when the reading gets tough, they give up. “Flash Boys” is even harder to read than “The Big Short,” it’s the hardest book I’ve read in years. But wading through gives you passage into the club, and the truth is all winners want to be in the club, but most just say they’re there, without truly being inside. Success is not only money and status, it’s wisdom and knowledge. You gain that through experience, and hard work, like reading “Flash Boys”
Despite “Flash Boys” being a difficult read, Michael Lewis is a great writer. He’s evidence of the blockbuster syndrome. We only have time for great. I’ll read anything Lewis writes because he’s trying to get it right, he’s not dumbing it down for mass consumption, and his style is to explain without emotion, he lets the carefully laid out facts sway you.
JUST BECAUSE SOMEONE’S RICH, THAT DOES NOT MEAN THEY KNOW ANYTHING
Nobody on Wall Street could explain flash trading, except for those perpetrating it, who were tight-lipped. Imagine a world wherein a label head has no idea how the records are made, how they get on the radio, that’s what’s been going on on Wall Street.
SPEAK THE TRUTH AND BLOWBACK WILL BEGIN
They’re not gonna let Michael Lewis edge in on their turf. As soon as the book came out, insiders pooh-poohed it. They always do. America is a game of who has the biggest dick, and those at the top whip theirs out on a regular basis and the little people succumb to this intimidation. You get ahead not by kissing butt, but by standing up to power, that’s what a great artist does. Michael Lewis is a great artist. Nobody on the “Billboard” chart is.
CURIOSITY RULES THE WORLD
Brad Katsuyama couldn’t understand why trading had changed. He searched for answers. It was a long torturous path. He found them. If you’re not busy questioning, you’re busy dying.
SUCCESS IS A TRIAL BY FIRE
In other words, they’ve got no time for you until they do, after you prove yourself. Brad Katsuyama worked at the also-ran Royal Bank of Canada, the big boys laughed at him, but when he enlightened them and proved he could make them money… You want access? In business it’s all about money. Doors open when you can make people a profit.
MONEY ISN’T EVERYTHING
Coders quit jobs they find unfulfilling. There’s more money on the Street than there is in music, but many leave aside the riches because there’s no fulfillment. In other words, when you’ve got access to money, you realize money is not the only thing.
Change doesn’t happen without it. Brad Katsuyama quit a $2 million a year job to open a new exchange. There was no guarantee it would be successful. It still may not be.
We don’t get good music because those at the top are all about the money. And those at the bottom don’t understand the game. What we need are people who rise above who stand up to the b.s. That was what made Kurt Cobain a hero. He was insanely talented and yet refused to play the game, he needed to stay punk. It killed him. Hopefully it won’t kill you.
MAKING A DIFFERENCE
We all need a purpose. Being famous is not one. That’s just an end. But in today’s culture we’re inundated with the scorecard of fame and money, because they’re easy to quantify. Work takes up an insane amount of time, it needs to be fun.
In the old brick and mortar book days, W.W. Norton would either be caught short or overprinting. It’s hard to guess the amount of physical inventory necessary. But in the digital sphere, where you can buy a book wirelessly in a foreign country, a runaway success can continue to run.
If you’re unfamiliar with technology, you’re going to have a hard time being a success. That does not mean you’ve got to code, but you’ve got to know what coding is, and fiber optic cable, and have a familiarity with tablets and smartphones and not only usage patterns, but where the game is going. If you want to bring back the past, you’re doomed to live in it. It’s hard to see 0′s and 1′s. Some people believe they need to be able to touch something to experience it. But the truth is so much is virtual these days. And this frees you up to play. But in a world of cacophony, you must execute at the top level and deliver that which intrigues if you want attention.
ART IS FOREVER, TECHNOLOGY IS NOT
The fiber optic cable laid from Chicago to New York is being superseded by microwave transmission. A great record is forever, nobody wants yesterday’s flip phone.
IGNORANCE IS NOT BLISS
It just ensures you continue to be the tail wagged by the dog. Inform yourself. Care. It’s not only stimulating, it’s profitable.
THE WORLD RUNS ON MONEY, SO WHAT HAPPENS WITH IT COUNTS
The cash the flash traders were extricating from the system reduced productivity, the same way so many of the best and the brightest are wasting their time in finance as opposed to making a difference creating something.
LINKEDIN IS A TREASURE TROVE OF INFORMATION
That’s where IEX found so many of its talented employees.
INTERVIEWS WILL TELL YOU ALL
In Wall Street if they want to know what’s up with a competitor’s business, they make like they’re trying to poach you, or fill a gig, and you’ll spill your guts.
THOSE AT THE TOP USUALLY HAVE NO CLUE WHAT IS HAPPENING AT THE BOTTOM, AND WHAT’S HAPPENING AT THE BOTTOM USUALLY BECOMES THE NEW TOP
It’s like record execs who didn’t use e-mail. But still, most execs don’t have the time to check out social networks and WhatsApp, believing they’re beholden to radio and retail. The truth is all these new systems will eclipse radio and retail, and if those in power let young ‘uns in, they would. And they will eventually.
YOU DON’T NEED A PEDIGREE TO SUCCEED
Brad Katsuyama went to the local university in Canada. Sure, Yale and Harvard will open doors, but they won’t make you a success. Furthermore, they may not make you think. Read this editorial re the job opportunities of the Ivy League prospect:
THE PUBLIC HAS A VERY SHORT ATTENTION SPAN
Those in power on Wall Street know that this brouhaha about flash trading will fade. Power is often about distracting the masses. If someone can easily become famous on reality TV, they’ll put all their energy there as opposed to doing the hard work to climb the ladder and crash your established party.
THE GOVERNMENT CAN’T BE COUNTED ON
Because of the revolving door between the companies being regulated and the regulators themselves. Furthermore, the best and the brightest rarely work for the government. And those who are rich get the best justice, it wasn’t only O.J.
MAKING A LOT OF MONEY MAKES YOU NEITHER HAPPY NOR LIKABLE
“Flash Boys” is littered with put-downs of the blowhards who think they rule, but are oftentimes clueless.
WE CAN’T ERADICATE EVIL BUT WE CAN INSPIRE GOOD
That’s the ultimate message of “Flash Boys,” that one person can make a difference. Then again, Brad Katsuyama built a team around him. Which he found through relationships and interviews and LinkedIn surfing.
GOOGLE WILL TELL YOU EVERYTHING
He who knows how to sift out information wins in the end. Almost everything is lying in plain sight, assuming you know how to enter the right search terms and know what you’re looking for. This is the education that is sorely lacking in our schools. How do you theorize and reconstruct the obvious to end up with new insights? That’s your challenge.