DATA

Has been underutilized in the music business. SoundScan was a revolution, but then the Internet happened and everybody was caught flat-footed and was so flabbergasted at the evisceration of the business model that the only actions taken were rearguard ones, and those were executed late.

Don’t confuse the product with the sell.

The key is to see if the product has traction. If it doesn’t, don’t expect anybody to invest in it. If you want money, if you want human effort, you must show growth and attention. That’s the data focus of the artist.

As for the seller…

We’re only at the advent of knowing what does and does not work. Does TV work, both ads and appearances? Web ads? YouTube play? No one is correlating cause and effect, they’re just going by their gut. In other words, an appearance on Letterman or Leno might feel good, but is it actually helping an act’s career?

Emotionally, I’d say no.

But emotion will not rule the record business in the future. Labels will look at the effect of activities and then judge whether to pursue them. Waste will be siphoned out of the system. A revolution is brewing. And he who has hit acts and employs data to further success will win. Because that person will generate the most success and money for acts, and hit creators will gravitate to them.

We’re seeing it already in publishing. Kobalt has made its old line competitors very afraid, because the company is data-based, it provides information to its customers on a regular basis and utilizes data to generate more cash.

As for concert tickets… Soon prices will not be determined by hunch, but data. This is a much bigger issue than scalping and StubHub and all the bloviating about the secondary market.

In other words, what is a ticket worth?

Furthermore, regular customers will be courted. A regular customer will be given discount tickets to shows they might not otherwise choose to attend. A regular customer is much more valuable than an inactive one. Right now, no true differentiation is made.

It’s not so much about all the revenue going to the secondary market, as the primary market not knowing how to price effectively. The Stones tried to capture all the revenue and it blew up in their face. The question is how do you price so the arena goes clean, you don’t pull a number out of thin air and see if the public is willing to pay it, discounting after the fact and alienating all involved.

Also, the concept of bidding war guarantees will fade. Promoters will model what an act is worth. It won’t be about the upfront payment so much as sharing in the revenue. Data will drive the sell. This will require promoters to be upfront about costs. Despite what you hear, those days are coming. Every ticket is going to return to the manifest. The big acts will insist upon it.

WINNERS AND LOSERS

Acts will replicate the web model, wherein only monoliths succeed. There’s one Apple, one Amazon, one Google. They each have imitators, but the replicas have a tiny share of the marketplace.

In other words, if you invent a new type of music, you will rule. Others will horn in on your action, and you will fight back by continuing to record and release, i.e. innovating, and you will continue to get the lion’s share of the revenues…unless someone who built upon your base leapfrogs you with innovation.

It’s the sixties all over again. The Beatles put out records constantly. Each one was different. That’s why they dominated.

It just looks right now like there’s endless repetition of the formula. But the cracks are already showing. Top Forty, which is responsible for tonnage, used to be solely rhythmic. Then came Gotye, now comes Lorde. The new and the different is undeniable, the public demands it.

RADIO

Give Clear Channel credit. It sees the future.

Despite all the hoopla by entrenched players that terrestrial radio is burgeoning and forever, Clear Channel realizes this is untrue. So the company is expanding online. As for its iHeart Radio Festival, it’s burnishing the company’s image. Furthermore, unlike radio in general, which is anti-innovation and anti-spending, Clear Channel has invested in its own studio in Los Angeles.

So Clear Channel is better prepared for the future than other radio groups.

But will Clear Channel win?

Only if it is willing to kill its terrestrial model and super-serve its customers. That’s the “Innovator’s Dilemma” in a nutshell. What’s killing terrestrial is the commercials. If you’re beholden to twenty minutes of commercials per hour, you’re going to lose in the future, which is so much more an on demand world. Digital advertising looks different, it’s embedded, it consumes less time. Newspapers were dependent upon advertising, it moved away and newspapers died. Radio and television are just a couple of changes behind, the public will not tolerate this commercial load.

CONCERTS

Humanity will be king. Kanye cancels tour dates because his screen is broken, he’s putting on an extravaganza when more and more people will be looking for honest performance in an increasingly digital world.

He who can play and perform live and write will win in the future. It’s a return to basics. A reaction to today’s overprocessed/fake world.

MAJOR LABELS

He who controls talent wins. It doesn’t have to be the major labels. But since no one else was willing to put their money into artist development, the labels have sustained, they’ve been pulled slowly into the future, but they’re here.

Artist development…don’t equate it with multiple albums, which is an admirable quality, equate it with the spend. Managers are loath to spend. Institutions are loath to spend on art, where you can easily lose it all.

If you want to dominate in the artistic field in the future, you’ve got to spend.

That’s what makes a successful concert promoter. Someone who’s willing to lay their money on the line.

First you start with the money.

Then it’s about insight and inefficiencies.

If you’ve got no money to spend, you’re not in the game.

If you control no major talent, your opinion is not listened to, no matter how brilliant it might be.

CUSTOMERS

Demand full access 24/7 at a low price. Scarcity is history. As are high prices for content. Wireless companies drove down the price of access, content companies were swept along the way. Stop agitating for higher prices. Just try to get a larger piece of the pie.

Music is a huge pie. Don’t complain, dive in.

CUSTOMERS 2

Want to bring their digital lifestyle to music.

Which means they want to do everything on their handheld. They want to listen to music, buy concert tickets and interact with acts. And they want to employ their mobiles at the show. Expect wireless in all venues (it’s already penetrated the NFL), and gamification.

You will earn points for going to the show. There will be a competition with rewards. He who goes most will get a free pass, stuff like that.

It’s all about loyalty. Something the industry has done a poor job of leveraging.

Acts will know who their fans are. They will be incentivized to remain loyal. He who controls the customer data wins.

Hello Mr. Henkel, this is Harvey Johnson
Can I speak to Penelope Ann?

That’s what happened. Right around seven pm. Long before the Internet, long before social networks, teenagers burned up the telephone lines. It was a rite of passage, before we started our homework, we dialed in to catch up on our day.

But first you had to get through the parents.

Everybody didn’t have his or her own phone, calls were expensive! Instead a household shared one line, sometimes only one telephone, and therefore endless arguments ensued. That’s a cry you’d hear throughout America…CAN YOU GET OFF THE PHONE??!!

Before the Beatles, after Elvis Presley, there was a Broadway musical so big every baby boomer knows the songs by heart.

And that musical was entitled “Bye Bye Birdie.”

Original Cast Albums already burned up the chart, but this was the first one written especially for kids. And unlike modern musicals, the score was memorable.

Have you heard about Hugo and Kim?

DID THEY REALLY GET PINNED?

Try it tomorrow. Go up to a boomer and ask that question. And you’ll instantly get the above response!

I had to ask my mother what getting pinned was. I was still in single digits. I knew I was going to college, but I was unfamiliar with fraternities, which have made a comeback amongst boomers’ children, even though by time their parents made it to college they were too cool to join.

But they weren’t too cool to buy this album. And participate in high school and summer camp productions of “Bye Bye Birdie.”

At first we just called our friends about the homework, then we started to gossip, then we started calling girls.

That’s the way it was. Boys made the initial effort. There were no forward girls back then, propriety dictated they wait until a boy showed interest. But then it was open season, and every time your crush called your parents needled you…IT’S YOUR GIRLFRIEND ON THE LINE!

We’d get that thrill, we couldn’t believe they rang! But we hated getting grilled.

We were infatuated. You know what a school crush is like. There’s just something about them. You’d get up all your gumption, look up their number in the white pages, back when every home had a phonebook, and dial.

The goal was to keep them on the line. You always started off with a ruse. Something you needed to know about school. Your goal was to get off subject, to get to know them. Then again, if you were really good at this, you’d be confronted with their personage the next day, and how to follow up?

But really, the telephone was the tool of the fairer sex. Girls hung on the line for hours. Asking just these questions. The same ones they do on social networks today. Because social capital is everything to a teenager.

It won’t last
Not at all
He’s too thin
She’s too tall

Information. The world ran on it long before the Internet. It’s the currency of life.

Penelope, about the prom?

The embarrassment of asking and being turned down.

But the goal was to go steady!

By time “Bye Bye Birdie” hit the boards it was already dated, but isn’t that always the case with Broadway. But we couldn’t get over the fact this musical was made for US! It was one of the first indications we were gonna rule in the future. After all, we already controlled the telephone!

Rhinofy-The Telephone Hour

The album is dying in front of our very eyes.

In other words, what kind of crazy fucked up world do we live in where Katy Perry’s new album “Prism” only sells 287,000 copies in its debut?

One in which everybody’s interested in the single, and no one’s got time to sit and hear your hour plus statement.

This is not emotion, this is statistics. The shelf life of news is shorter than ever. The shelf life of art… You blink and it’s done.

I’m fine with you preaching to the choir, making an album for your fans. You gotta go where you wanna go, do what you wanna do, with whomever…

But if your plan is to increase your audience, spread the word and make money, suddenly the album just isn’t working. The youngsters are streaming singles and the oldsters are staying home. How do I know? Elton’s album isn’t even in the Top Fifty and McCartney’s album barely broke 20,000 this week, and there wasn’t a better oldster hype than for these two projects. People just don’t want ’em.

So what’s the industry to do?

Have a rethink.

In other words, hype doesn’t work.

No one had more hype than Miley Cyrus, but “Bangerz” didn’t even sell 45,000 copies this week. She can go on SNL, tweet her life away, but it’s not moving the needle. Lorde is selling as much as her without the benefit of scorched earth, proving that quality music is as good as hype, but…she’s not burning up the chart either.

We’ve turned into a nation of grazers. And the artist’s job is to constantly be at the smorgasbord. Not to deliver one big meal that is picked at and thrown away, but a constant presence in the public’s face.

Media cannot be limited to the album release date. It must be a 24/7, 365 day a year effort. Same with creativity. If your track gets traction, more power to you. If it doesn’t, go back in the studio and make more.

In other words, if you’re sitting at home bitching that you’re not making any money because the Internet stole your business you’re RIGHT! There are so many diversions that no one’s got time for mediocre anymore. They just want superior. As for piracy… If you think “Prism”‘s sales are low then you believe people are leaving AT&T Wireless because of Skype.

Yes, AT&T’s subscriber numbers are declining. Oh, they’ve got some new iPad accounts, but contract subscribers are moving on to the cheaper T-Mobile and the better Verizon. Castigate me all you want, but the statistics don’t lie.

Just like these album numbers.

If you’ve got a concept album, go ahead and record it. If you’re only interested in selling a little, be my guest. But if you want to penetrate the consciousness of a large group of people and grow the pie, an album isn’t working. Hell, it’s not even working as a revenue model!

Labels are no longer in the record business, they’re in the star business. How to maximize the revenue of an individual or band in as many media as possible, in as many ways as possible. Yes, while you were bitching about piracy your whole business model disappeared.

If music were the government it’d need a new hit. What I mean is the debt ceiling debate is history, the government needs a new hit single to stay in the public eye. But if it was run by musicians, they’d keep imploring people to read about the debt ceiling debate and the government shutdown. But the public has moved on.

You put out these albums and in almost every case, the public moves on in a matter of WEEKS! A few bought it, they heard it, and they’re satisfied, and left waiting for years until you grace them with a new release. The rest of the public is just waiting for a hit single to burble, and if it does, they’ll tap their toes and snap their fingers and ask WHAT ELSE HAVE YOU GOT?

And what you’ve got had better be just as good as the hit.

No one wants album tracks anymore. Not unless they’re every bit as satisfying as the hit.

So it’s not only classic rock acts who are no longer putting out albums, soon no one will do it. Oh, it won’t be soon, because artists think making albums is part of their DNA, going into the studio and making a ten track “statement.”

But that’s like saying typewriters have to be an office fixture. And you can’t post online unless you write in multiple paragraphs. And texting must be abandoned because it’s not in depth enough.

The goal of a musician is to be AHEAD of the audience.

Right now everybody’s behind.

I’m only twenty percent in (yes, I’m reading it on a Kindle), but I can’t recommend it heartily enough.

Because first and foremost it’s readable. Content is not king if you can’t understand it, if you’re not called to it in the middle of the night. If someone doesn’t want to hear your record when they can’t, it’s not a hit.

It starts at the beginning, Bezos’s education. It was alternative. Stimulating gifted students to challenge preconceptions and think for themselves. I’ll posit our educational system is America’s Achilles heel, along with the veneration of empty suits like Kim Kardashian instead of teachers and knowledge workers who contribute, because we treat school as a sentence as opposed to inspiration. Sure, you’ve got to do the hard work, memorize the multiplication tables and get up to speed on grammar, but it’s when you learn to analyze and think for yourself, when you see information is a building block, that you truly become inspired by learning. Blame teachers, blame parents, blame the government focusing on statistics, but until school stops being a sentence, this country is in trouble. But not for the elite. Which is pulling away from the middle and lower classes so fast that our country is turning into a self-perpetuating have and have-not system from the get-go. You can’t make it at a good college if you didn’t go to a good high school, or most probably prep school.

And Bezos went to Princeton. And worked at a hedge fund. And then struck off in search of riches in the newfound landscape of the Internet.

And made a ton of mistakes. Not initially, but once he gained headway. He bought one loser company after another, he built warehouses he had to close. He was on a learning curve, making it up as he went. Because…

“It’s easier to invent the future than to predict it.”
Alan Kay

How cool is that, how accurate is that. That’s why industries/businesses fall by the wayside. They hire people to tell them what’s going to happen instead of creating it themselves. And anybody can have an idea, but can you execute?

Then there’s “the narrative fallacy.”

“The narrative fallacy, Bezos explained, was a term coined by Nassim Nicholas Taleb in his 2007 book ‘The Black Swan’ to describe how humans are biologically inclined to turn complex realities into soothing but simplified stories. Taleb argued that the limitations of the human brain resulted in our species’ tendency to squeeze unrelated facts and events into cause-and-effect equations and then convert them into easily understandable narratives. These stories, Taleb wrote, shield humanity from the true randomness of the world, the chaos of human experience, and, to some extent, the unnerving element of luck that plays into all successes and failures.”

In other words, if you’re looking for answers, don’t. Donald Trump may have had success. So many famous people writing books did too. But if you think you can glean a path from their story you’re wrong. Because not only are there hidden factors, like Trump’s rich real estate father, but most businesses are misadventures, made up on the fly, adjusting when hitting blind corners, with the intelligence and perseverance of the progenitor the only common thread.

And when you get to the pinnacle of business, you experience bullying far greater than that on the playground. Barnes & Noble tried to intimidate Amazon. But once the playing field has changed, newbies are more nimble. It happens all the time in music, young acts are hungry and break the paradigm while old acts so busy cleaning up on the road and living a heady lifestyle are pushed aside.

But this is the story of our time. Amazon dominates in a way no musician can. Illustrating that publicity and fame are overrated. Because there’s not a person alive who wouldn’t rather run Amazon than be Justin Bieber or Miley Cyrus. Rich and powerful people have no problem getting laid, they always fly private, and they’re not dependent upon the hit single.

Well, maybe Apple is. Apple needs another hit.

But Walter Isaacson’s “Steve Jobs” book is no match for Brad Stone’s Amazon one. Because you can tell he’s excited by the story. You’re deposited deep in the jungle, figuring it all out as he does. How this wily pipsqueak built an empire that nearly collapsed but is playing for all the marbles.

It’s a story better than the “Fantastic Four.”

How people worked on both Saturday and Sunday, and Bezos refused to offer bus passes because he didn’t want people leaving work for a ride.

It’s exciting.

And brutal.

It’s not entertainment, where everybody’s overpaid and overspends.

It’s hard fought nickel by nickel warfare.

As a result, no one lasts long.

Except the company. The company endures. Because unlike the titans of today’s music industry, there’s not a personal ethos wherein ripping off the enterprise is de rigueur, but a can-do spirit wherein the captain has something to prove, and won’t give up until he achieves his goal.

Read it.

The Everything Store: Jeff Bezos and the Age of Amazon

Read an excerpt here:

The Secrets of Bezos: How Amazon Became the Everything Store

P.S. One more quote:

“Naturally, some of the reviews were negative. In speeches, Bezos later recalled getting an angry letter from an executive at a book publisher implying that Bezos didn’t understand that his business was to sell books, not trash them. ‘We saw it very differently,’ Bezos said. ‘When I read that letter, I thought, we don’t make money when we sell things. We make money when we help customers make purchase decisions.'”

In a world where every record is good, every movie a hit, the customer is left out. He’s baffled by this tsunami of hype, and unable to make a decision, frequently opts out. People want information. They want aid in figuring it out. He who helps wins.