The Beats Deal

Blame it on Bob Morgado.

Who?

That’s just the point. This guy single-handedly destroyed the Warner Music Group, by believing it was about making the trains run on time, short term profit and loss, by not knowing that business is all about people.

Huh?

Warner was the dream team. Not the umbrella company, but the label based in Burbank, run by Mo Ostin and Lenny Waronker with a seasoned bunch of players. They knew it was about the long term, they invested and built careers, they knew it would all work out in the fourth quarter, when their heavyweights delivered product.

Unlike Doug Morris’s Atlantic. Atlantic was all about the momentary hit. Listened to 2 Live Crew recently? But Morris got into Morgado’s head and the latter squeezed out not only Mo and Lenny, but Bob Krasnow too.

And the Warner Music Group has never been the same.

Oh, then there was that kerfuffle regarding rap. That had Morgado’s successor Michael Fuchs pushing off Interscope. Not realizing that the company’s main asset was Jimmy Iovine, and you didn’t want to let him go. Because Jimmy needs it, he’s a winner, and he won today.

Come on, the guy starts off as Shelly Yakus’s assistant and then the roles are reversed? He’s suddenly working with Lennon, Springsteen, Petty and U2? If you think this is about musical talent, you’ve got none. This is about personality. It’s always about personality.

What did Steve Jobs invent?

The technical hero of Apple was Steve Wozniak, who executed unforeseen breakthroughs. But Jobs knew how to sell it. Jimmy knows how to sell it.

He extracted Dre from Ruthless via Suge Knight, where is he today, and built a new empire over at Universal once the relationship with WMG was terminated. Jimmy did what was expedient. After all, this was the guy who held back the Neverland record, believing it would launch Interscope, when the truth was it ended up being rap, Marky Mark and the “Rico Suave” guy. Yup, it’s all about the pivot.

And today Jimmy Iovine executed the best pivot in the history of the music business. He left it behind.

Huh?

That’s what a businessman wants to do, get out. Only musicians are lifers. Businessmen are all about the money. Clive Calder made more, but he had no second act, Jimmy Iovine’s got a second act. He’ll be the creative “genius” at Apple, because Tim Cook is creatively bankrupt, he’s Bob Morgado reincarnated, he doesn’t understand the fundamentals of the company, he believes it’s about efficiencies, supply chain management, profits and losses, whereas the real winners know it’s about personality. David Geffen. Irving Azoff. Steve Jobs.

They’re different from us. Whip smart, they’re willing to break rules, they see the new game emerging before the old one is history. Irving Azoff built the new MCA Records, upon which the present empire sits. David Geffen gave us not only DreamWorks, but Laura Nyro, Jackson Browne and “Dreamgirls.” And Steve Jobs gave us the Mac, the iPod, the iPhone and the iPad.

What has Tim Cook given us?

A bunch of hot air. Bupkes.

Not that anybody in the press knows. Or any of the analysts. Because they don’t get it. They see only the surface, like Bob Morgado. When really, it’s all about people.

Would everybody be on Facebook if the Winklevosses still ran it?

Ha!

Can you imagine Amazon without Bezos?

Yup, at the end of the day it all comes down to the individual. One person can move mountains.

Which is why Obama’s not the guy, because despite the promises our hope was misplaced. True legends find a way, he did not.

But the right wing is just like the record companies, wanting to keep us in the past, denying the arrival of a future people are already embracing.

Kind of like Apple. Did they really expect iTunes to last forever?

So I tip my hat to you Jimmy, you won. There was no such thing as an obstacle in your way that you could not overcome. And you realized that without the acts, you’re nothing. Really, does Beats win without Dr. Dre?

But now we’re left with…

Who are the winners in the recording sphere today? Lucian Grainge is good, but he never had any skin in the game, he never used his own money.

And Len Blavatnik has nothing but money, but absolutely no knowledge of the sphere. It’d be like me running Oracle. Huh?

And Live Nation is a public company.

And the goal of everybody making music seems to be to sell out. Not understanding that the true legends did it for themselves. What is striking about Geffen, Azoff and Jobs is their independence. Even Jimmy, who started a new business for himself while working for the man.

So we won’t have an exciting musical future until new personalities get into the game. That’s how EDM started, independently, before everybody sold out, the mainstream missed it at first.

And that’s the power of music, that’s the power of a scene. And it always comes down to individuals.

And the reason the music blew up was because it was the vision of individuals. Whether it be the Beatles or Jay Z. We thought it was their truth. Does anybody believe it’s Katy Perry’s truth? Or Rihanna’s truth?

So Jimmy’s gone. He’s burned out on the unwashed ignorance of the music business. He’s lifted himself up, into the big leagues.

To the wrong player. I bleed Apple, but it’s getting tough to have faith.

And there’s no innovation at Samsung.

And Google is scattershot.

And Amazon is the company you love to hate.

But believe me, the future will be molded by individuals, we just don’t know their names yet.

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  1. […] Or la création de cette valeur est un processus particulier, une alchimie que les champions de la high tech ou les gourous du marketing-produit n’ont jamais su maîtriser… On remarquera à ce sujet qu’aucune tentative de reprise d’une société de production – major ou indépendante – par des managers issus d’autres secteurs économiques n’a été couronnée de succès : il suffit de rappeler le fiasco de l’acquisition d’EMI par le fonds Terra Firma et CityGroup pour s’en convaincre. Ces compétences sont rares, et impossibles à acquérir sur les bancs d’Harvard ou du MIT… comme le rappelle Bob Lefsetz dans son récent post sur le sujet, « the reason the music blew up was because it was the vision of individu…. […]

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