1. It’s Not As Easy As It Looks

The music is made by teenagers.  Supervised by uneducated men who can’t be trusted who are attired in the clothing of teenagers.  How hard can this be?

Very hard.  Although you can’t learn how to be a music executive in college, don’t think the business’ constituency is uneducated.  They’ve gone to a million shows, read a million magazines, they’ve dedicated their life to this business that is harder to STAY IN than just about anything other than professional sports.  Furthermore, there is a business culture, never mind a LEGAL culture, that one only learns by being knocked around for years.

To think that one can waltz right in and effectively take hold of the reins of a major music conglomerate is equivalent to believing a rapper can run CBS News.  Or a music marketing exec can launch a sitcom.  Andy Lack would never dream any of the people at Sony Music could do either of these things, why does he believe he can run this musical empire?

Or, in the alternative, do we lay this fiasco at the doorstep of the teflon-coated Sir Howard.  For all his good-natured bluster, calling the iPod DOPI spelled backwards, I’ve yet to see how Mr. Stringer has revolutionized Sony.  A hardware company that made the mistake of getting into content under the fallacious theory of SYNERGY!  Does Toyota refine gasoline?  The Sony brass should have sold off the entertainment assets and given control of the remaining operation to the guy who shepherded PlayStation.  Now they’ve got someone who doesn’t speak the language in control of an operation that doesn’t work.  Based on the solution of installing Andy Lack as head of Sony Music one doubts that Sir Howard is going to be pulling any rabbits out of his hat in the future.  That seems to be Steve Jobs’ role.

2. You’ve Got To Have Friends

Records are not made in a vacuum.  Certainly not SOLD in a vacuum.  If you’ve got a career in the music industry, you’ve got FRIENDS!  You must.  In order to survive.  It’s not as simple as throwing money around.  Look at how many fat cats have started up labels only to go bankrupt.  You need friends to get you the right placement at retail.  These same friends will buy your product when you need to make your numbers work.  Your friends at radio will add a record when you need them to, and MTV will give you at LEAST a shot a year.  Because EVERYBODY knows that sometime in the future the roles will be reversed, and they’ll need a favor themselves.  Carp all you want about needing to know someone to effectively operate in this business.  You might think it sucks, but it’s got a lot to do with WHO DO YOU TRUST.  Everybody goes through a trial by fire, an initiation, only after one is deemed trustworthy is he let into the club.  The fact that Andy Lack didn’t even ATTEMPT to play this game is the reason he’s going to be out of a job.  People were not only annoyed, they were PISSED!  In a culture not built on education, or family background, but RESPECT, Andy completely blew it.

3. A Company Is A Team

Even the mercurial megalomaniacal Steve Jobs thanks his team.  I don’t remember the reams of press acknowledging Donnie Ienner’s contribution to the operation.  Or, am I to believe this man with DECADES of experience in the business, as everything from a promo majordomo to a major label chairman, was bedazzled upon Lack’s entrance, suddenly realizing he knew nothing about the industry, that this TV man had all the answers.

If you don’t get everybody to pull together, if you don’t demonstrate you’re human, that you can’t do it all on your own, people are going to steam inside and stop delivering.  And in a business that requires 24/7 dedication, this is a major problem.  If you don’t treat your people right, not only are they not motivated to deliver, they don’t have your back.  Isn’t it funny that the only person who came to Andy Lack’s defense when the chips were down was Mr. Stringer, the man who hired him?

4. A Label Is An Ongoing Operation

Epic ran for eons WITHOUT a President.  Columbia was in disarray.  What, did Mr. Lack believe a genie would come out of a bottle upon completion of the merger and deliver fully developed platinum acts?

Virgin has just hired Jason Flom.  Jason will kick the tires on all of the company’s acts and try to energize those he believes are viable.  THEN, he’s going to sign new acts.  Which may not hit the pipeline for TWO YEARS!  Andy Lack failed to fill the pipeline.  Is it any wonder he doesn’t have great numbers to fall back on, to justify his career, keeping his job?

Face it. Andy Lack was a shitty manager.  Of not only his people, but his company.

5. Mergers Save Costs But They Don’t Generate Income

This goes along with number 4.  Sure, cut overhead, but then you’ve got to deliver hits.  This is what is hurting the Warner Music Group.  After getting the financial trains to run on time, someone noticed that too many acts had been dropped and not enough investment in new acts had been made.  Suddenly, after collapsing all those labels into two, Warner has the worst market share in the business.  In ten years, the operation went from first to worst.  And how did Universal go from worst to first?  By INVESTMENT!  Not only purchasing PolyGram, but hiring seasoned executives, starting new labels, INVESTING IN PEOPLE AND ACTS!  Do you really think Jimmy Iovine consults a spreadsheet before he pushes the button on an act?  No, he goes by his gut.  He FEELS he’s got a winner.  He gets the ocean liner MOVING!  That’s what breaking a multiplatinum act is like, firing up a fucking STEAMSHIP!  Mr. Lack had no gut.  And just wanted costs cut.  To quote the old axiom, you’ve got to spend money to make money.

6. Know Which Way The Wind Blows

Nobody would have given Bruce Springsteen this deal:

15mill non recoup
35 mill vs catalogue only
10 mill per album for 5

With a REVERSION clause!

Everybody knows those days are done.  When the boomer bands sold megaplatinum.  These are ROAD ACTS!  An income stream the label has NOTHING to do with!

The new paradigm is for these heritage acts to go indie, selling the records themselves, making, in the parlance of David Letterman, ALL the money.  If Andy Lack had any friends, if he’d done his homework, he would have called Howard Kaufman.  Who would have set him straight.  Hell, Jimmy Buffett does BETTER LIVE BUSINESS than Springsteen.  And sells his records himself and makes MORE MONEY on each one!  And when he made a major label record, he didn’t get a deal anywhere CLOSE to this.

Or, to speak in the words of the street, where the fuck was Bruce Springsteen gonna go?

Not to EMI.  Not after Mariah Carey.

Not to Warner.  That company already re-signed their heritage, label-defining act, Neil Young.

Maybe to Universal, but not for these bucks.

Furthermore, Bruce wanted to stay at Columbia, because that’s where his CATALOG is!

Mr. Lack.  An ignorant baby boomer.  Thinking his wine-drinking dinner companions represent reality.  Believed that Bruce Springsteen still meant something sales-wise.  Bruce Springsteen is a musical icon who hasn’t made a great record in eons and based on his recent track record probably never will again.  Give this kind of money to Dr. Dre.  MAYBE Metallica.  Although younger, even that band’s sales curve is on the decline.  Then again, if Mr. Lack knew anything he’d be aware of the fact that Metallica doesn’t GO for the up front bucks, because they BELIEVE IN THEMSELVES!  Wouldn’t it be suspicious that Mr. Springsteen wanted all these bucks in advance?

Mr. Lack operated in a vacuum.  He didn’t quite purchase a pig in a poke, but he demonstrated he was clueless.  If you were Bertelsmann, wouldn’t YOU want him out?  Especially since you weren’t CONSULTED?

7. You’ve Got To Respect The Consumer

Sony Music is not a B2B operation.  Wherein two mutually dependent corporations interact.  The company is dependent on its end purchaser, INDIVIDUALS.  When the man on the street loses faith, you’re fucked.

Andy just kept disrespecting the customer.  You KNOW you’ve fucked up when even Walter Mossberg is coming down on your copy-protected CD fiasco.  That’s what you do.  To get back at the people stealing the music, you penalize those who BUY the discs.  To the point where your OWN ACTS are rebelling.

And what’s the ultimate goal here.  To break the public and the acts’ back?  Get them to cry "uncle"?  Is Mr. Lack that delusional, that he believes he can single-handedly solve the problems of the music business, by dictating to EVERYBODY?  Ultimate hubris.

8. Don’t Play A Technologist If You’re Not One

What the FUCK was up with the DualDisc.  Is this REALLY what the public demanded?  A sorry-ass two-sided disc that breaks the standard of the CD format?  People are clamoring for files and you deliver DISCS?  God, listen to even Bill Gates, who’s pronouncing everywhere that discs are just about dead for MOVIES!  Which contain REAMS more data.  To address the failings of the business by delivering a product that is good on paper but irrelevant in the marketplace is just as dumb as those guys out of Colorado who invented a whole new FORMAT!  On tiny little discs.  Only a couple of years back.  In THIS century.  God, it was such a failure, despite being trumpeted by the business, that I can’t remember its NAME!

And soon I won’t remember Andy Lack’s name either.  He’ll be about as relevant to the music business as Bob Siner.  Who saved MCA Records by destroying it.  Figuring if he never tried to break new records, he could make a profit.  Not realizing he was marginalizing the company along the way.

Lew Wasserman realized he was fucked.  That he needed a real music man in place.  He hired Irving Azoff.

Say what you will about Irving, but he built a label out of whole cloth.  By making a zillion deals.  Starting a black music division.  Al Teller reaped the rewards of Mr. Azoff’s investment for YEARS and Edgar Bronfman, Jr. purchased the assets and built a music behemoth.  Out of something that BARELY EXISTED a little over a decade before.

Times are different now.  Maybe Bob Siner’s philosophy ain’t that bad.  Maybe Sony should go out of the new music business and just sell catalog.  Especially if the reins are handed to a fish out of water like Mr. Lack.

If you want to surprise us, hire Cliff Burnstein.  A brilliant manager who used to work at a label.  Someone who understands costs, but also creativity.

Not that you have to go that left field.  Just hire somebody who knows music, and the business.  Who’s better at delivering hit records than pontificating to Wall Street types whose heads are so far up their asses that they have no idea what’s going on until they read the financial reports ANYWAY.