Rock Star CEOs

John Legere is selling a crappy product in a new way and winning all the while. He’s a rock star CEO.

Kind of like Stewart Butterfield, the CEO of Slack, the cofounder of Flickr, who went ballistic on the “Wall Street Journal” today

Slack CEO explodes over editorial about the South Carolina shooting, says ‘f— you’ to Wall Street Journal

Used to be you kept your head down and played to the Street, stayed unknown so you could keep your career. But today’s CEOs, those who win, mostly from the younger generation, have a public profile, just like their audience. Every American is reachable online, except for the rich and famous, and this has got to change.

In case you’re unaware of who John Legere is, he’s the CEO of T-Mobile, the perennially fourth-ranked mobile service in America, which is suddenly stealing subscribers from Verizon and AT&T, not by providing a better service, but one that is aligned with customers, that purveys an image of rebellion and fairness, all embodied by the CEO.

In other words, we know who Shawn Fanning is. Sean Parker too. But ask the average person who the music business titans are and they draw a blank, to the industry’s detriment.

Except for Jimmy Iovine. Who wove a course of self-promotion that didn’t seem to be about him. Jimmy won the same way Legere is, by taking a staid marketplace and selling a second-rate product in a new way and taking market share from competitors. That’s the story of Beats. You can’t find a single person with anything good to say about their fidelity. But fidelity doesn’t matter, the same way T-Mobile’s second-rate coverage doesn’t matter.

Imagine if Lucian Grainge was a public figure. Imagine if Doug Morris were accessible. Michael Rapino too. It would aid the entire industry.

The story of the modern music business is the acts can’t get traction. In a cluttered space, it’s hard to gain notice, especially if you don’t have Top Forty hits. Rather than cheerleading, we get complaining. To the point where the public tunes out. A public that is so overwhelmed it consumes new music at festivals, where they’re captive and can graze, tuning in to see what you’re like. That’s the story of the teens, how you put out an album and it’s over in a week, once your fans have bought it you’re dead in the water. Acts don’t realize you lead with your live show, the record comes later, kind of like the Grateful Dead. You make fans on the road who then dial you up on Spotify. To try to convince people otherwise is fruitless, especially since you can’t make any money with a hit single, because you have no career and that’s the only money you’re going to get, and we all know the big money in music is on the road.

So we need someone to mix it up.

In a world where rich CEOs dominate the culture, we need music’s rich CEOs to steer the public. To have personalities and turn fans on to new sounds.

In the music business everybody is great and everybody is a star.

Only they’re not.

Imagine if Lucian tweeted about his new favorite act. People would check it out. As long as he didn’t tweet everybody on his roster, especially if he tweeted an act that WASN’T on his roster!

When the baby boomers die, the music business will look completely different. The old farts are only in charge because of catalog, which is leveraged to keep them in power, the barrier to entry for young ‘uns is too high, so they stay away and music is poorer for it.

Of course you can say that execs should stay out of the way and let the stars shine. But that’s old school thinking. Back when the stars were really such. Neil Young takes on Monsanto and the young ‘uns ask how they can sell out to the corporation. If a CEO were outrageous, it would be a beacon to his roster.

It’s not hard.

It starts on Twitter. That’s right, that’s what the service is good for. As long as you speak the truth.

No one’s got time for the rantings of nobodies on Twitter, but that’s where you get access to the somebodies, especially the real bigwigs. And you can tweet and the CEOs get back to you, I know, I wrote about Legere and he instantly responded. I didn’t think I flew on that guy’s radar. But he’s reading everything about his company.

There’s so much to say about music. The tunes themselves, the acts, the grosses, the financial shenanigans. In an era of transparency driven by tech music is all about keeping it under wraps, it’s out of touch with the times, which is very sad, because music used to lead.

This is coming. Because competitors in cutthroat battlefields need an edge, and the socially-connected kids know this.

1. Who should I sign? Tweet and ask the public to weigh in, engage people.

2. Give away tickets online. Or graduate people from the peanut gallery to the front row. Sure, bands do this. But Michael Rapino is selling tickets every day of the year.

3. Complain and explain. Why you can’t get a good ticket, what the best strategy is.

4. What kind of private jet you’re flying on. Everybody knows you fly private, don’t try to hide it, fans eat up this information. And tweet pictures of who is with you, whether known or unknown.

5. What you’re eating. Food rules, even more than music. Food trucks broke on Twitter, CEOs can use the service to the same advantage.

6. Go off topic, everybody’s three-dimensional. When you only talk about your own business in glowing terms people tune out.

7. Be negative, be edgy, complain and compete. This is Legere’s strength, he’s not ready to play nice, and you shouldn’t be either.

P.S. To learn more about Legere, read this imperfect story in “Fast Company”:

WHO THE @!#$&% IS THIS GUY? JOHN LEGERE’S STRATEGY FOR TAKING NEW CUSTOMERS BY STORM

Or follow him on Twitter, where he’s got 1.38 million followers exposed to his twenty tweets a day: @JohnLegere

P.P.S. Even more interesting in “Fast Company” is the story on Shake Shack:

SHAKE SHACK’S FRENCH FRY DEBACLE, AND HOW IT RECOVERED FROM ITS BIGGEST MISTAKE

Keys to its success? High quality and slow growth. Millennials are all about natural. Pat LaFrieda is the Beatles of meat and that’s what Shake Shack uses. The music industry is McDonald’s, literally. It’s trying to stuff an old paradigm down a younger generation’s throat. Millennials want authentic and honest. More credits, illustrating the artists involved actually did the work. And those who become instant stars rarely last. You have to grow slowly, learn from your mistakes, adjust, wait for the public to embrace you and spread the word. Anything jammed is ultimately rejected by the masses. Don’t start with backlash.

P.P.P.S. Twitter is not the only forum. Certainly use Instagram, but also do interviews, make news, something music CEOs rarely do, unless they’re bitching.

More Apple Music

It’s gonna go freemium.

Just like Apple pivoted when the indies and Taylor Swift complained about the three month no pay plan, when customers abandon Apple Music en masse after their initial trial, Apple’s gonna pivot again.

Just like Spotify.

Remember when Spotify was gonna be free for only six months? When you had to pay to get mobile? Spotify changed course when it realized it would be dead in the water without the freemium element and that the free tier generated paid subscribers.

We already know Apple Music won’t work. Because of Beats. Come on, with every NBA player in existence wearing the headphones, with every star having his or her own personal model, people should have subscribed to Beats Music in droves. But they didn’t. Because they’re not inured to pay for music, they have to be taught to pay for music, via convenience and price. The moral argument fails. There’s not enough innovation in Apple Music to make people give up YouTube, never mind switch from Spotify.

And speaking of YouTube, I had a conversation with Robert Kyncl wherein he quoted Steve Jobs, who said that you don’t mess with something that’s working. The record companies wanted to raise iTunes prices, Jobs said no. For a very long time. And Kyncl’s point is YouTube pays money for its streams, and it’s only going to get better, because of their advertising infrastructure.

The truth is companies need to spend dollars to reach consumers. And with the decline of network television they’ve got no choice but to go to the web. So YouTube sells against their best inventory. The selling is key! YouTube has sales departments around the world, working with advertisers, explaining how to extract the greatest benefit from YouTube clips. In other words, the reason you see so few ads on the free tier of Spotify, the reason the free tier pays so poorly, is because the company is doing a poor job of selling said ads. But, like YouTube, they will only get better and revenue will only go up.

So, come the fall, when Apple makes all of its product introductions, expect to hear that Apple Music will maintain its free tier. Of course, this isn’t simple, the company will have to sell ads too, it will have to cripple usability on mobile, but it will be the only way to save face. Come on, these are not hidden numbers. Apple can’t afford to have its service fail. And if artists and analysts trumpet paltry payments there will be a stink in Cupertino smelled around the world. All those billions in the bank can’t counter negative publicity.

And speaking of publicity, my inbox is filled with people who think the Taylor Swift/Apple kerfuffle was planned, it was a hoax, all to publicize Apple Music. Based on my conversation with one of the players I don’t believe this, but it’s fascinating that our country has evolved to the point where no one trusts anyone in power. Credit the government. Wherein people say one thing and do another, politicians lie all the time, as do corporations, as do today’s artists. You can seemingly trust no one but yourself.

But the truth is the commotion made Apple look good, it was a greater marketing campaign for the music service than the WWDC stream.

But this won’t make people pay.

Life is about dealing with the hand you’re dealt. And the hand Apple is dealing with on music is…

Spotify was there first, never mind the rest of the also-rans.

And YouTube is the dominant player.

And Apple is offering nothing new. If radio were attractive, iTunes Radio would have triumphed, but it didn’t. As for the vaunted social network Connect…is that our problem, a dearth of social networks? In a world where Windows Phone can get no traction and BlackBerry is dead and Nokia is on life support do we really think anybody cares about Connect?

No, they just want the music.

And right now it’s free.

And it’s gonna be.

Until someone comes up with something so enticing and so easy to use that more people will pay for it.

We’re close, but not there yet.

So freemium should survive, and it will.

P.S. When more people pay, middle class artists will still be screwed. Their income was based on scarcity. If you had a record deal and radio airplay you made money. But today everybody can play and you’re competing against the greatest hits of all time. Therefore, the rich will get richer and the poor…will stay that way…as the middle class declines, just like in real life.

Eddy Cue Caves

I don’t know who to credit more, Eddy Cue or Taylor Swift.

Eddy responded immediately, on a Sunday, proving, once again, if you don’t show up on Saturday, don’t even THINK about showing up on Sunday! Thank you Jeffrey Katzenberg, you too are pivoting, albeit not as fast as Eddy Cue. And that’s just the point, admit your mistakes and move on. He who digs in his heels is wrong. So Eddy gets props here.

But the truth is Taylor Swift just demonstrated the power of audience. An indie artist selling out clubs could say the same thing and have no effect. And the way Taylor Swift garnered that audience was through music. Her original tunes, sung straight from the heart, such that she bonded millions of people to her, who believe in her the way they believe in nobody else, take that Apple.

That’s the power of music. That’s the way it used to be done. That’s why we revere the sixties. That’s why the Grateful Dead can sell out stadiums fifty years on.

Or to quote the bard of the Hollywood Hills, “we haven’t had that spirit here since 1969.”

Notice Cue weighed in. It wasn’t Jimmy Iovine. Who comes from the silent wall of the music business. Just try to get Doug Morris or Lucian Grainge to go on the record. As for Warner, it’s faceless, to its detriment. But instead of standing up for artists, Morris and Grainge stood up for themselves, with their old buddy Jimmy. They have egg on their faces. Cue backed down, can Doug and Lucian? Of course not, they won’t even admit guilt! But they started this thing. And isn’t it interesting that the world’s best records come from Martin Mills and his indie Beggars Group. The majors are a machine that excises art, that don’t stand for anything so much as making money. Which is why artists must do it for themselves.

I don’t know what went through Taylor Swift’s mind. Notice, she didn’t weigh in immediately, this indie/nonpayment for three months story has been percolating for a week. But once she digested the issues she said her piece. In other words, you don’t have to shoot from the hip. But if you’re waiting for every fact to come in, to test the wind to see what public opinion is, if you’re more worried about your career than what’s right, you’re limited.

Come on, this is a bigger hit than anything on “1989.” Taylor Swift just took on the biggest company in the world and WON!

So let her effort be a beacon. Let other artists fall into step. And stop being so afraid. There’s plenty of money in music, Taylor Swift is making millions on the road, never mind her endorsement deals. And it’s the tunes that are greasing the skids. The tour used to be the ad for the album, now it’s vice versa. Taylor’s album is on a downward trend, it’s past its peak, it’s not she who’s suffering here, but…

Think of the Tidal artists. They could have done it for everybody else, but the truth is they wanted to line their own pockets.

So, kudos to Taylor Swift.

And applause for Apple. Because admitting when you’re wrong is nearly as important as being right.

Onward and upward.

P.S. People will forget Apple didn’t want to pay, but they’ll always remember Taylor Swift standing up to the company. Apple nipped the problem in the bud, the longer you let the negativity fester, the longer the stink holds. But the truth is efforts like Taylor Swift’s are career-defining moments of credibility that are trumpeted for eons, they’re what cements artists’ careers. It’s not only hits, it’s identity. Records come and go, people remain. If you stand for something, you’re the hook that catches the velcro loop, and we’re all loops waiting to be caught.

Taylor Swift On Apple Music

She’s right but she’s wrong.

Apple should pay, but Swift acts like she’s above the rules, that she isn’t involved in music business shenanigans.

In other words, while she’s at it why doesn’t she tackle breakage, free goods, radio shows, concert accounting…

It’s a dirty business and Jimmy Iovine is too stupid to realize he’s no longer working at Interscope. In other words, the transparency’s killing him. And you don’t want to piss off Taylor Swift’s fans, believe me, I know.

This is typical music business. You help me and I help you. I’m delivering this great new service that’s gonna save music, so you’ve got to help me out. The same way manufacturers help retailers out with fixtures and advertising.

Only Apple is the most valuable company in the world.

How stupid can it be.

Because the company should be paying. It’s got the cash. And what ever money is involved pales in comparison to the bad blood stirred up by extracting this pound of flesh.

I expect movement here. I expect Apple to extend an olive branch.

Because it’s pissing off the indies too. And Martin Mills has got a fraction of the power of Taylor Swift, but at least he’s on the right side, as opposed to the fat cats in bed with Jimmy Iovine.

First the Watch, now this. Apple’s playing a bad tune.

There seems to be a belief that Apple can save the music industry, that it can do no wrong, that with one pass of its wand it can change consumer behavior around the world. And to believe this is to ignore the history of the internet, where people find holes in the dike, however small, and then make them bigger and bigger and… People will sign up for Apple Music in droves, they like free. They like free so much that they’ll cancel their subscriptions when payment is necessary, three months down the line. The same way they cancel cable. You think parents are not gonna see that charge every month? You think America’s middle class, what’s left of it, is awash in cash? The iPod only took off when the price was lowered. But you could never get one for free. Apple’s family plan is a good start, but it’s competing against YouTube.

Where Taylor Swift’s music remains. Because she likes the money from the ads.

But credit Ms. Swift, she’s the most powerful person in music in America, and unlike her popular brethren, she’s standing up for something. But if it weren’t for YouTube and iTunes, she’d be standing up for nothing at all. Apple’s streaming service isn’t hurting her today, but tomorrow…

It’s kind of like that “Twilight Zone” episode “To Serve Man.” The three majors are blindly walking in to Apple’s camp. Believing the company’s intentions are all good, when…

Now the truth is there tends to be one winner online. One entity with 60%+ market share. And that will happen in streaming music. And it just might be Apple Music that wins.

But not necessarily.

It might be a good idea to partner with a less powerful entity.

Then again, that’s what the three majors did. They’ve got a piece of Spotify…

So, the question is… Who’s on your side? And the truth is the labels are rarely on the side of the artists. As a matter of fact, usually only when it’s in their financial favor. Kobalt revolutionizes publishing payment and you still can’t get an accurate royalty statement from a label, if you can get one at all. This will change, but only when Ms. Swift and her ilk point the finger at their bosses.

So, Swift pointed the finger at Spotify and it benefited the Swedish streaming service. Because at that point the masses were still unaware of it.

But everybody knows about Apple Music. Because of streaming history, because of Swift’s Spotify kerfuffle, because of the WWDC presentation. And when you piss off Swift’s fans…

Well that’s just mean.