Where We’re At

Clive Davis doesn’t break records, he breaks acts.

In the latest issue of "Rolling Stone", Rick Rubin gushes about his Sonos with Rhapsody system.  Hate to tell you Rick, but you’re late to the game.  I’ve had one for years.  As have many rich techies.  But this does not mean this equipment and service is about to break through to the masses.

Sonos throws your music to all the stereo systems in your house.  It’s pretty amazing, you use a hand-held controller that allows you to manage what’s playing in multiple rooms from anywhere in wireless range.  But this assumes you’ve got multiple stereo systems.  How many people have multiple stereo systems in their homes today?  I’d venture that hardly anybody has one stereo system in their house.  Unless you’re counting the speakers attached to their computer.  So Sonos is a niche product.

Rhapsody gives you access to just about everything legally available in the music world.  Its shortcomings in catalog only matter to those who are going to steal and never pay anyway.  Its under twenty dollar a month cost is a bargain to the same people with stereo systems who are thrilled about Sonos.  But those less wealthy are frightened off by the caveat…  That if you don’t pay, you lose everything you’ve got.  Music as a service.  Sounds good if you’re a rich record executive, but two hundred dollars a year is more than most people presently pay for music.  And at least they get to keep what they purchase.

But more interesting to me is the premise that rental subscription services will save the major labels.  That their only problem is theft.  This assumes that their business model is sound, as long as people pay for music.  But this is patently untrue.  The major labels of today resemble not a whit the record companies of the fifties, never mind the seventies.  The labels of yore were counting on singles and doubles, they were thrilled with the occasional home run.  Today’s labels are predicated on the grand slam.  Homers are the least they’ll settle for.  If you’re not going platinum, they don’t want you.  But how many acts can go platinum anymore?

Did you read the David Brooks column?  The one revolving around Little Steven?

The Segmented Society

If you haven’t, and I’d wager that most haven’t, based on my discussions recently, that proves the point.  This guy is writing in the "New York Times", he’s a known quantity, and he’s got very little traction.  He’s preaching to the converted.  And it’s taken a long time to convert the public.  It took his insightful book "Bobos In Paradise" to even get the gig in the "Times".  David Brooks is not radically different from a musical act.  And, as his piece says, it’s hard to get noticed in today’s segmented society.

Labels believe if they beat enough drums, run a track up Top Forty, that they’re going to sell a lot of records and establish a career.  Wrong.  Most people aren’t listening to Top Forty, and if they do, and become enamored, they only want the specific track.  And they’ve got no illusion the act’s follow-up will touch them in the same way, if they even hear it.

This is where Clive Davis comes in.  He realizes it’s about more than a hit record.  That you’ve got to establish a platform, upon which you launch the record, which is only one element of the act’s stardom.

How does Clive do it?  By choosing very few acts.  Usually only one at a time.  And then slowly introducing said act to the media, not the public, but the media.  Showcasing his unsigned performer at his Grammy party.  Letting the people who spread the word own the act for frequently over a year before the record is released.  Clive gets the press on his side.  And doesn’t put out the record until he’s convinced the insiders will sell it for him.  Everybody from the newspaper reporter to Oprah.  The career is managed.  We like the act.  No one hates Alicia Keys.  And no one hates Whitney Houston.  We might have a problem with Barry Manilow, but you can’t deny that Clive made Barry a star.  Barry left his fold for Concord Records but immediately returned.  It’s not about the disc, but the package!  You may not like Barry’s greatest hits of the decade series, but the public does.  Ditto for Rod Stewart’s execrable albums with Clive.  Not only do they sell, he’s doing boffo at the b.o.

Meanwhile, generals far younger than Clive are desirous of getting the music in the marketplace as soon as possible.  And milking it for all it’s worth.  They’re not managing the career so much as their short term bottom line.  And they’ve ended up in crisis.

Still, Clive can’t sell many records.  There are no diamond awards in the music business anymore.  No Whitney Houston "Bodyguard" albums.  Gone, passe.  Clive’s just carved out a niche.  As has the jam band.  The jam band and the other touring denizens aren’t in search of a hit, they want fans, they want to stay alive, so they can tour ad infinitum.  They’re not looking to a Rhapsody-style service to save their bottom line, they’re oftentimes giving the music away.

In conclusion:

  1. The public doesn’t want rental subscription today.  Maybe in the future, but not today.  If Steve Jobs anoints it, it will have a bigger impact, but it will not become dominant.
  2. Subscription won’t save the majors, because superstars like those built on MTV are not coming back, you just can’t get enough mindshare, not enough people are paying attention to anything in this dense, incomprehensible, multi-choice world.  Hell, it took Katrina for most of the public to see the flaws of the Bush Presidency!
  3. The record business is no longer about signing and releasing.  It’s about managing an act’s career.  Selling the act to the media and the public.  Aligning the audience with the performer, not the song.  It takes a lot of time.  The record must be solid, and radio-friendly.  The act must be likeable.
  4. Stars are not the only musicians to inhabit the landscape.  It’s hard to become a star, you depend on the media and radio.  But you can be a working musician by going directly to your fans.

We’re in a new era.  We’re never going back to the twentieth century.  No one can sell the tonnage he used to.  You can kick, scream and complain all you want, but you’d be better off spending time finding your place in the new landscape.

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