Tune in Saturday September 21st to Faction Talk, channel 103, at 4 PM East, 1 PM West.

Phone #: 844-686-5863

Twitter: @lefsetz

If you miss the episode, you can hear it on demand on the SiriusXM app. Search: Lefsetz

What a crock of sh*t.

This is what happens when you get caught with your pants down. When you’ve got amateurs running a public company and the books are not cooked and investors see that you don’t present upside and your stock tanks.

Let’s be clear, investor relations is a skill. Keeping the stock price up is a skill. The supposed greatest CEO of the twentieth century, GE’s Jack Welch, consistently reported great numbers and the stock soared, even though he did this through financial engineering and decades later the truth is coming out.

Or there’s Guy Hands, who purchased Capitol-EMI and didn’t realize the company had been lying consistently. Shipping stock to make the Christmas numbers, and then getting it in return over the ensuing year.

It’s a game. But one thing you don’t do is underdeliver. That’s death in the stock market. You want your business to be seen as on a never-ending upward curve. You can talk about minimal growth, but as soon as you say there’s going to be negative growth, or have a bad quarter, missing expectations, you’re toast.

Not that Universal’s last report was so terrible, it’s just that they didn’t tell a good story for the future, everybody wants to hear about a roadmap. Where you’re going. And that it’s rosy.

This is not what Universal did. And now it’s making up for it. With this cockamamie story about superfans.

Rip off your hard core fans at your peril. You want them to be with you all along the way, for decades! The more you charge them in their mania, the more they’ll resent you when your hits cool. And they will, everybody’s chart action dries up. Then again, by that point the acts are off the label, illustrating the short term thinking of those running these companies today. They’ve got no skin in the game, they didn’t start them, they’re only thinking about their bonuses and their exit strategies.

Want to make more money? Break more hit acts!

But the major labels are unable to do this. But that’s where the action is.

As a matter of fact, the indie sector is soaring while the majors’ share is going down. Hits are being streamed less. But to monetize the indie sector is something the majors are unprepared for. They’ve streamlined, they’ve focused on the hits. They’re not tooled for the modern music business.

As for an increase in revenue, which is really what this is all about…

There is a question how many more streaming subscriptions can be attained. No one is quite sure what the future holds, there will be growth, but…

If growth stalls they’ll just raise the price. Quick, look at your Netflix number. Did you cancel when it went up? And in truth, Spotify has much lower churn than video streaming services. That’s how much people love music. And music streaming is still a bargain. But now as it matures, the price can be slowly increased.

And the details are hazy… Grainge is talking to Spotify about a supertier, but didn’t he once say there’d be no exclusives? What about Amazon and Apple, never mind the minor players.

And what will you get for more money?

Higher audio rates are a canard. Almost no one cares. Just a vocal minority of oldsters. And now that this quality is available, most of these wankers don’t even take advantage of it! As for charging more… Tell me about the growth of Tidal…there is none! And Apple doesn’t charge extra for high quality. So how is this going to work at Spotify again?

Not only can most people not hear the difference, most don’t have the equipment to play it back, today’s audio quality is good enough.

So what’s going to come with the supertier?

And a hard core fan wants the price to be less, not more. Since they’re so devoted they want a deal.

As for the umpteen versions of hit product to run albums to the top of the chart or keep them there… That is a fad. How many people without record players are going to continue to buy vinyl?

And sure, t-shirts and other merch are great, but mostly sold at the show and the rights are controlled by the act, and if Universal wants them they’re going to have to pay dearly for them.

This is akin to Clayton Christensen’s “Innovator’s Dilemma,” the disruption Bible. When you focus on your regular customers, on a tinier slice of your regular market, your business is ultimately disrupted and eaten by nimble operators who look irrelevant at first and grow into juggernauts and supersede you. IBM couldn’t compete with Dell, and ultimately sold its PC hardware business. IBM sold to companies who needed rock solid computers, so they tested them many times. Dell felt the quality was good enough, didn’t overtest, sold at a bargain, and ended up owning the business. Hell, Dell even bought DEC! Never mind upstarts that ran into the void that Dell created, like Gateway.

The future of the record business is more acts each of which sells less than a superstar. Period.

And for all the blather about Taylor Swift being America’s Sweetheart, how everybody loves her, did you read yesterday’s “Times”?

“Who Do Voters Really Like? Taylor Swift. – The pop star Taylor Swift has endorsed Vice President Kamala Harris — and is far more popular among Democrats and independents than Republicans.”

https://t.ly/X_nxq

Sure, this is mainly about politics, but even some Democrats are not so hot on her.

So you’ve got a backward thinking record company in cahoots with a backward looking press/PR world self-congratulating and missing the point, the future, because they can’t figure out how to execute in it.

Whenever you oversell, overcharge, bleed the superfan, there’s backlash.

Kid/teen groups have a sell-by date. Sure, there are reunion tours (long after the acts are out of a deal with the label), but many feel queasy about their investment in the low talent trifle of their past. It’s a schoolgirl crush. Sure, there may be some nostalgia, but…

As for concert ticket prices… Sure, you can charge top buck when you’ve got hits on the chart, but when you don’t… Look at the Chainsmokers and J. Lo and…

Which is why you don’t want to be hit dependent, you want your growth to be organic, you want a slot machine that sheds dollars over and over and over again.

These are not the acts Universal is focusing on. They want the big money win. They’re all in. They don’t want a skirmish, they want a war.

Their philosophy is out of date.

Quick, quiz your friends. Are you all watching the same streaming television shows? Absolutely not. And your favorite may not even appeal to your friend. And in music there are many more choices.

Universal needs to retool, all the majors do. They keep cutting back, consolidating, in a world that requires more growth to meet the needs of more people. But they’d rather reduce head count and please the Street, something else that is appealing when numbers are down.

And Facebook can always hire back programmers. But there is not a ready pool of music professionals. And those who get laid off by the label, if they’re any good, find roles in management or the road or they set up shop by themselves. They’ve got no desire to go back in-house where they’re a number as opposed to a name.

But let’s just pretend everything is groovy. Sell investors a crock of sh*t so that the stock goes back up and continues to rise. Damn the future.

It’s not like no one ever thought of monetizing superfans before. This is not a revelation. And the growth here is not stratospheric. It’s not like these superfans are not spending already!

But investors don’t know anything about the music business. So they’re snookered, until they’re not.

But those with history in music are scratching their heads, wondering what Universal is thinking here. At the end of the day, music is an entrepreneurial business, always has been. Thinking outside the box. Not only coming up from nowhere as the manager of a hit act, but Irving Azoff creating GMR out of thin air which now has a value of billions!

Never mind that music revenues keep going up and up because new areas of monetization crop up online. That’s a much bigger story than bleeding superfans. In the past all you had was the retail outlet, physical goods, now site after site crops up online that needs music, that ultimately licenses music, and it does not negatively impact other income streams whatsoever!

Which is why you should never sell your publishing.

But that’s another story.

This is what happens when you report to the Street.

Does the manager do so? The act? They’re independent operators, they’re the heart and soul of this business more than ever. That’s where the action is. Hell, as stated above, the majors can’t even break a new act. You have to do that yourself. Oftentimes in a genre the majors are not interested in.

Music has an upside. It’s on a growth curve. But it’s less about bleeding the superfans, than creating superstars. That’s the history of this business. One unique act lifts all boats, creates excitement, from Elvis to the Beatles to… That’s what we’ve lost. Everybody’s so busy looking for money that they forget that music is about heart and soul, touching people. And the new and different is what people are looking for. There’s a business in the same old thing, but there’s not growth. And, once again, the true growth here is in the world of independents, where creativity develops and grows.

Not that I expect the Street to buy any of what I say above. Because it doesn’t have the time, it’s invested in many companies. It reads balance sheets instead of truly knowing a company’s business.

And it doesn’t understand music at all.

But Universal doesn’t understand the Street.

It’s a match made in hell.

1

The lines were no longer straight on my computer.

I noticed it about five weeks ago. The right side of windows…there was a subtle curve in what I thought to be straight vertical lines.

I rebooted. That’s always the first resort, even on a Mac. But they remained.

I chalked it up to the age of my machine. My 27″ iMac 5k is vintage 2014. I waited for it to come out. I wanted that display. Which is superior to the HD display I purchased with my Mac Pro in 2006, which I now use as a second monitor.

And this iMac has served me well. You have no idea how much additional screen real estate helps. I don’t know how people work on small laptops, even my 15″ MacBook Pro…I miss stuff.

And I want to buy a new computer. I have to buy a new computer. Because Apple has stopped supporting this iMac. I’m stopped at Big Sur, there are no more security updates.

But damned if I’ll spend $4500 on an already obsolete Mac Studio.

When the Mac Studio was introduced in 2022 the complaint was the monitor, which costs $1500, was behind the times. That’s a lot of bread for an antique. But I didn’t need a new computer just then.

And by the following June, the cycle for this product, an introduction during the Worldwide Developers Conference, they’d certainly upgrade the monitor. They did put in new updated chips, M2s, but they didn’t do a thing to the monitor.

And then they stopped supporting my iMac in November 2023. And I decided to just hold on until the following June, and lay down my cash then. But during the WWDC this year they didn’t upgrade the Mac Studio and monitor at all, even the Mac Pro, which is overkill, is still running on an ancient chip.

No, I don’t want a MacBook Air. No I don’t want an external monitor for my laptop. MacBook Airs are good machines, but inherently hobbled, they’re for hobbyists, amateurs, you never know when you’re going to need more power. That app you never use, suddenly you do. I record on my MacBook Pro, thank god I maxed it out. And I even have 32 gigs of RAM in my iMac. Go for greatness, I say.

But then they introduced the M3 chip. And Mark Gurman, the Bloomberg guru who is the expert on Apple said they were going to jump all the way to the M4 for most products. New M4 MacBook Pros are supposed to be imminent. And they’re going to upgrade the iMac too, but the screen size is only 24″, and those three extra inches make a difference. Actually, Apple said they were never going to make another 27″ iMac, which is why I focused on the Mac Studio. But now Gurman says they’ve got one in development, for 2026!

As for the Mac Studio, that’s scheduled for an update in June.

I want to give Apple my money, can’t they give me a machine I can buy?

2

So this went on for a couple of weeks, and then I got on the plane to London and I noticed the exact same curve in the lines on my iPhone. Obviously it’s an Apple problem, I’d just never looked that closely before.

And that iPhone isn’t even a year old.

And my iPad Pro is pretty recent, and when I got back to the States I was lying on the couch reading the news and…

I saw that same damn curved line.

Obviously I had a problem.

Now I know you’re not supposed to Google your problem, but in truth I don’t agree with that. As long as you’re not a hypochondriac, as long as you’re not LOOKING for a problem, it’s incredibly useful.

And bingo, it came right up. Macular degeneration. There was a definitive test. You block one eye, look at a grid that’s the equivalent of graph paper, and if the lines curve…

Needless to say, mine did.

So now I’ve got to get in to see the doctor, who is notoriously booked. But if it’s a crisis, he’s always found time.

And I used to see an ophthalmologist, but now I see an optometrist, one of the best moves I’ve ever made. I ran into Robert Smith at the Troubadour and he didn’t recognize me and he blamed his eyes and I needed a new doctor and he recommended Dr. Silver.

What an experience.

Ophthalmologists don’t want to test your eyes, don’t want to prescribe glasses, they’re looking for serious problems, which few have. Silver works in both Santa Monica and Sherman Oaks and if you want a checkup, call now, you might have to wait a year.

Silver does contacts for the movies, but he’s not that guy, not a starf@cker, and those doctors are rampant in Los Angeles.

And he’s got all these machines, it’s totally up to date, stuff the ophthalmologist didn’t have.

But my schedule was hell. He wasn’t in the office on Monday and Tuesday I was booked solid and as a matter of fact, I couldn’t even make it in until 3:00 or later on Wednesday.

And when nothing came up, they told me to leave a phone message for Silver and he got right back to me, could I come in at 3:15 on Wednesday? ABSOLUTEY!

And that’s when I start feeling guilty. Is my problem big enough?

It was illegal to be sick in my house. You toughed it out. If you complained to my mother she told you to go to school and see how you felt. And this strategy has gotten me in trouble. I’m working on going to the doctor. AND THIS IS MY EYES!

3

So they run all these tests and then Silver gives me a heads-up on rods and cones, brings up the pictures and shows right below the dip of the cone, there’s a gray swath in the left eye. That’s a problem. He thinks it’s fluid, but he won’t go on record, he says I need to see the retina guy. WHO KNEW THERE WAS SUCH A THING!

So we go to the front desk where they call the office and ultimately I get an appointment eight days later, for today at 1:30.

Now Silver said it was a possibility I’d need an injection in my eyeball. That sounds like fun. And I’m strategizing when I could do this. You need a ride for this stuff, and they don’t let you use Uber.

And I was thinking they’d put me out if they had to do it, but what would the recovery be like?

So I got there early, even though most doctors notoriously run late. But I wanted to give respect. Which also came into my sartorial choices. Of course I showered, even though I’d done so the night before, to have B.O. at a doctor’s office…I just can’t imagine it. And I shaved. But could I wear my shorts?

It’s a club. Boomers in L.A. It’s a style. You wear your shorts. It’s a middle finger to the system.

Now I haven’t lived on the east coast for a long time, but back then there were restaurants that not only required a jacket, but a tie. If you were doing business, you had to look sharp. But L.A. is a laid back culture.

But it wasn’t really hot out. Actually, they said it might rain in the next few days, before the temperature soars on Sunday.

Okay, I’ll wear long pants. But what about shoes? I mean I’m going to wear “trainers,” but do I find my cleanest pair, one of the ones they sent me from Brooks? The New Balance Fresh Foams… I got the first edition for walking, in the second edition they changed the soles to black, but on mine they’re white, and they’re not dingy, but they’re not the cleanest.

I decided they were all right.

You see there’s a whole strategy in going to the doctor. One is to dress to the nines. Show that you’re a big swinging dick, have places to go and people to see, that time is tight. My plan is different. I try to appear educated, smart, show that I’m not the average bear. Also, give them more information than necessary. I hate when someone comes back from the doctor and gives you a report and when you quiz them about something that was bothering them on the way in, the person says I DIDN’T ASK!

You’ve got to ask. And the more you talk…

You want a relationship. Assuming they’ll have one with you. If they don’t take insurance, like most top-notch doctors in L.A., they give you time, use it, let them know who you are. Doctors are dealing with boring patients all day long. Get them to look forward to having you in, be a breath of fresh air.

But with some top-notch specialists… They only deal with crises, and therefore they take insurance. There aren’t enough patients to forgo insurance.

And speaking of insurance… Dr. Silver didn’t even charge me! I asked at the desk what I owed and they said nothing. I was there for forty five minutes, had tests on multiple machines, that’s testimony to a relationship right there. Not that a regular appointment with Silver is cheap. But, like everything in life, you get what you pay for. And when it comes to my health, I WANT THE BEST!

4

So I’m filling out the forms. Everybody’s uptight about privacy. But I wish there was a central database of what drugs I’m taking, what surgeries I’ve had. Now if you’re in the UCLA system, it can be accessed by their doctors. And actually, Cedars doctors can access this too. I once went for a second opinion at UCLA and when I went back to the Cedars doctor she started off by saying… “So you saw ___________.” Freaked me right out. But a good doctor doesn’t mind if you get a second opinion, they encourage it. And in truth, this Cedars doctor was more on the ball than the UCLA one. Actually, she left the Cedars system. They overwork you. She’s now independent and she charges…whatever she wants to. But she sees me for an hour. And I can get ahold of her right away in text or e-mail. Doesn’t sound like a big deal, but get older and…

I felt like my grandmother. I remember my mother taking her to doctors, it was a full time job. I pooh-poohed it.

And then there are those who believe they’re immune. They don’t need no stinking doctors! You may feel fine, you may look fine, you may even have plastic surgery to try and look younger, but your insides don’t know that. I know too many people who’ve avoided the doctor and dropped dead. I know too many people who have a history of disease in their family, don’t go to the specialist, and die of the same damn thing. Truly.

But this getting old thing… Everybody tells you that life goes by in the blink of an eye, that they feel young. But that’s not even close to describing it.

You’re just wandering through life. And believe me, even though I’ve had more than a few surgeries, I feel young and alive, I skied 89 days last year, I hike regularly in the mountains, but nobody lives forever. I mean just J.D! And Christine McVie didn’t even make it to eighty. You reach a point where not only are their fewer years in front of you, BUT YOU CAN SEE THE END!

And you don’t want to live to a hundred, because all your friends are dead.

It’s a conundrum.

And most of my civilian contemporaries have retired. Many counting their dollars. On the cusp of the early bird special. I’m still working, I want to work, but how much runway do I have left?

But if I eat right, exercise, see the doctors, take the pills…it’ll all work out, RIGHT?

Wrong.

I see friends who eat KFC. Onion rings. Sure, in our teens and twenties we ate everything, but have you had a scan recently? No one’s arteries are clean. Then again, you can avoid the scan and live in ignorance.

Of course there are smokers who live to a hundred, but the odds are against you. I don’t want to be dumb. My models are David Letterman and Bill Clinton, they had heart issues and wised right up. They eat healthy, they’re thin, they want to LIVE! DO YOU?

5

Now looking at the printout before I left the house it said to schedule two hours, and have someone drive you.

Well they didn’t say anything about driving in the text messages… Don’t you love texts and e-mails? My goal is to talk to no one. It’s never wrong in text. But when you’re spelling your name over the phone, or giving your address, GOOD LUCK!

And since these jobs pay so poorly, they’re not staffed by the brightest people. Be glad you’re dealing with a machine.

So I enter the office and… I won’t say it’s empty, but close, which is a good sign.

And after filling out the forms, which I print on, I’m afraid to use script, my handwriting is so bad, no one could read it, even though I think no one’s reading it anyway. I mean does an eye doctor need to know about a hernia operation?

And then they call me into a room where they ask me more questions and start giving me eye tests.

Eye tests, hearing tests… Are you doing well or poorly? And are the results accurate?

And I’m feeling unentitled. I mean my problems aren’t that bad.

And then the tech puts in numbing drops and checks me for glaucoma and puts in dilation drops and then brings me to another waiting room.

Now I realized I really did need two hours.

Then they took me in another room to take pictures. Actually, the two machines they used Silver had too, but…

The tech at Silver… She’d tell me when to keep my eye open. This woman did not. I figured it didn’t matter. But then I asked her and she said…GOOD QUESTION!

Whoa! This usually spikes my anxiety sky high. I’m taking this seriously, I need more than competence, I need THE EXPERT!

But she says the pictures are good…everything’s digital and instant these days.

And then another tech comes along and hovers… At first I thought she wanted to ask a question. But she didn’t interrupt and didn’t leave, that’s when I realized she was supervising. And the original tech was screwing stuff up and when we were finished, another tech came in and said to stop using the trainee, the waiting room was backed up!

So I went with the trainer to the next machine and it turned out the first tech didn’t even enter my name, but it got worked out, I was brought to another room, and then there was a new tech to interact with! The doctor’s direct tech.

And then he came in.

He was in his thirties. Which is not what you expect, but Silver handpicked this guy. And he’s wearing scrubs and his Nikes…which are far more dirty and worn out than mine.

And he’s studying all the pictures and he says I don’t have macular degeneration. Whew, great!

And then he starts looking into my eyes. With the regular contraption and then this headgear he wears. And when he’s got the headgear on he’s telling me how to move my eyes. In forty five degree increments. And I feel good that I can immediately tell left from right, because you’d be surprised how many people cannot. I did not want him to judge me negatively.

And when it’s all done..

I have macular degeneration.

Wait a second, I thought at the advent you said I did not!

He said he was responding to the note Silver sent, to check for wet macular degeneration, I’ve got dry.

Okay…

And then he says “This is now your baseline.”

I’ve heard that before. That means they’re not going to do anything.

Now wait a second, what is going on here?

Well, wet macular degeneration is a blood bleed, they address that. But dry macular degeneration? THERE’S NOTHING YOU CAN DO!

It’s going to get worse and…

The yin is I don’t have to have surgery. But the yang is I’m going to see this damn curve in lines every day for the rest of my life! And once I noticed it, I see it on the TV, on the edges of walls, it’s EVERYWHERE!

Mostly in the left eye, but the right eye was not spared.

And what caused this?

AGE!

And I’m thinking about that “Twilight Zone” episode. You know, it’s the end of the world and the old guy is thrilled that he can go to the library and read…and then his glasses fall off his nose and break on the concrete and…Rod Serling comes back in.

I’m doing everything right. I’m going for annual checkups. Isn’t there anything you can do?

NO!

So I don’t have to endure surgery. I’ve just got to monitor it, they gave me a grid to look at every day, and take this over the counter pill that’s supposed to slow down the process.

Oh, don’t give me sh*t, if you’ve even gotten this far. The real story is everybody’s got something, they’re just not talking about it. Because if they did, you might judge them. See them as old. Like the people who lie about their age. Who do you think you’re kidding? And really, you’re lying to yourself.

But I was convinced there’d be some treatment, that eyeball injection, and it would be scary, but I’d be back to normal.

No way.

This is my new life.

Now let’s be clear, it’s subtle. But it’s there.

Is this the way this is going to go? Am I slowly going to start falling apart?

Once again, my contemporaries won’t admit it. But I’m telling you now, and Freddie Garrity himself died back in 2006, he was 79. He took ill on vacation and…that was all she wrote.

Now in terms of perspective, this really isn’t that big a thing.

But this is ME! I like everything to run at 100%. My car may be nineteen years old, but other than the cruise control, it runs like a champ, just like the day it came off the assembly line. Regular maintenance, baby.

And when it comes to skis…

I ain’t putting a hundred days on them. They start going downhill after about fifteen or twenty. Sometime after fifty, they’re not the same. And then, as they get up in age…

Why sacrifice? Just buy a new pair! Why have your enjoyment reduced by a pair of skis that don’t hold that well on the ice.

I like things to work right. And I’ve always paid for them, but now I’m trying not to think twice. Compared to my dental bills, a new pair of skis is NOTHING!

I didn’t expect an implant to get infected and need to be redone. I didn’t think I’d need a root canal. I didn’t think another tooth would break in half. And I’m worried about the price of ski equipment?

I mean I’m all in. And if I told you how many pairs of skis I have… And other than two pairs, none are more than two years old.

But skiing is important to me. One of the most important things to me.

But there will be a time when they’ll no longer see me in the shop.

Everybody dies.

But I thought it would happen all at once, or not until I was eighty five or so.

But it’s starting.

Rob Baker and Johnny Fay are members of the Tragically Hip, who have a new four part documentary on Amazon Prime. Whether you’re a fan of the band or not, you’ll like this.

https://podcasts.apple.com/us/podcast/rob-baker-johnny-fay/id1316200737?i=1000670035076

 

 

 

https://music.amazon.com/podcasts/9ff4fb19-54d4-41ae-ae7a-8a6f8d3dafa8/episodes/9174d9be-9d85-4397-8184-2e7e79b256a4/the-bob-lefsetz-podcast-rob-baker-johnny-fay