Tune in July 18th to Faction Talk, channel 103, at 4 PM East, 1 PM West.

If you miss the episode, you can hear it on demand on the SiriusXM app. Search: Lefsetz

Are the heartbeat of America.

This is why we triumph. People come up with concepts, products, they innovate…

Never underestimate execution. Ideas are nothing without execution.

But the idea comes first.

The problem is America does its best to squeeze out the creativity of its populace. Via education. Teaching to the book.

It did not used to be this way in the sixties. In the era of individuality school was not rote, projects were limit-testing.  You were always pushed to come up with something new.

Not anymore.

Now life has gotten harder, as a result of income inequality. And therefore parents and children are focused on jobs. They don’t want to fall behind. They want to make a good living. So they color within the lines to try and succeed.

You know where they do this best?

Japan.

Education is very narrow. You listen to the teacher and grind for the test. Being creative, anything that can’t be quantified? That’s excised, close to completely.

This is the heartbeat of the U.S. New ideas. Inventions. Creativity. It’s our culture.

Or it has been anyway.

But unlike the let your freak flag fly individuality of the sixties, today it’s all groupthink, getting along. Look at politics. You stick with the party, otherwise you’re ostracized.

Now when it comes to new ideas, starting companies from scratch…

Most of them don’t come from the highly educated, those who’ve gone to an Ivy League school and gotten an MBA… Once again, the creativity has been squeezed right out of them. The dirty little secret of an MBA today is it’s mostly about building relationships, that will pay off down the road. As for learning something… Oftentimes you’re studying old cases that will tell you how it was done, but breaking the rules, doing something new? You’re trained within a bubble. Whereas those not restricted by this education start with a blank slate. They’re true believers. They start their business and to hell with the usual suspects.

Although historically, once a business reaches critical mass, they bring in the MBAs, the bean counters, and oftentimes the business falters, because there’s no innovation.

We see this in the major labels… They used to be run by entrepreneurs, who oftentimes started their own labels. Now most of the people there have never had skin in the game, have never put their own money on the line, where you can lose it or win big. That sharpens the senses. But if you’re being paid a salary and reporting to the board and it’s a public company…

No wonder the labels are moribund.

Mitch Miller was in control of A&R at Columbia Records, he hated rock, and therefore at first Columbia missed it.

The old always hates the new.

Now in the sixties, the old label heads realized they were out of touch and hired what came to be known as “house hippies.” People without portfolio who were glued to the street.

But now, the Boomers and Gen-X’ers who run these companies think they know better than the younger generations.

Or they try to game the system. Once upon a time it was street teams, now it’s leverage at DSPs and… Creativity? That’s out the window.

Even the acts themselves…

It seems to be completely forgotten that the Beatles released the so-called “White Album” as a reaction to overdone album covers. This was a huge risk. Didn’t the cover announce who you were, didn’t good graphics help to sell an album? The Beatles were saying they weren’t inured to the past, they were taking a risk. Where’s the big risk today?

Every company needs new ideas. Or it dies. Period. No corporation lasts forever.

But when someone comes up with a new idea it’s run by the brass, the numbers are calculated… And then the company usually says no. It’s too big a risk. But all these companies were built on risk.

As for new ideas…

Live Nation… Got to give Michael Rapino props. Come up with a new idea and he says yes. He gives you the money. Everyone thinks that Live Nation wins because of the Ticketmaster monopoly. Now TM helps, but it’s Live Nation which allows its employees to take risks. And this continues to pay dividends. Do all of them work out? If you’re looking for a batting average of 1000%, don’t even start.

Wasn’t it Live Nation that built a temporary stadium for Adele in Munich?

I don’t want to make this about Live Nation, but too many other companies in music are positively sclerotic. They’re doing it little different from the way they always have. To much less success by the way.

They’re shooting for the moon with every release. If it can’t be multi-platinum soon, they don’t even invest, they believe the opportunity cost is too high. But in the old days, the Mo and Joe Warner Bros. would sign stuff that seemed completely left field. And some hit.

That’s how you do it.

No one is doing it that way anymore.

Yes, music is a mature business, but the music itself never is.

This is why the charts are not populated by music school graduates. They can play the notes, but they can’t come up with the IDEAS!

We’ve got to foster creativity in our young, not beat it out of them.

Hell, any time the youngsters start doing something new the oldsters do their best to shut it down. All the innovation happens on the internet, but parents keep saying their children should get off the damn phone!

Of course there are perils in screen addiction. But no one ever focuses on the benefits of internet usage.

China may eat our lunch in AI by doing it differently. It owns electric cars and if it weren’t for tariffs, the Big Three would be decimated nearly overnight. All because the Chinese government invested in ideas. Gave incentives. So there were many electric car startups.

What do we have in America?

A shutting down of innovation. A cutting of research. Investment in fossil fuels.

Stay down this path and America will become a second class country.

Our nation was based on fluidity, the American Dream. You could be a poor nobody and become rich. But today the rich never want to lose their status. They want institutionalized wealth, which is detrimental to our society.

Now a few weeks back I read this article that I can’t get out of my head. It defines the issue:

“Raising Cane’s Grew From an Idea a College Professor Hated – No one believed in Todd Graves’ vision for a restaurant at first. Raising Cane’s is the third largest chicken chain in the US by sales and growing fast”:

https://apple.news/A451et58gSrirIZ1gdeASDg

I learned all this from reading. Which sparks ideas.

Try it.

And this is anathema to those locked into the limited product old school paradigm.

Let’s see… It’s Saturday night and you want to go to a movie. You check what’s available…

People doing this were addicted to the movies, not any movie in particular, and the studios lost their trust, by playing to an ever shrinking slice of the population.

Furthermore, these people now had options. Dining is oftentimes as satisfying, if not more, than a movie. And at home you’ve got the streaming services and…

If you’re remaking old product, more of the same, you’re f*cked.

The bleeding edge of culture is now online. If you want to know what is truly going on in America you look at the influencers.

Oldsters hate this. The smartphone is the devil. But this is why we’re experiencing upheaval in the Democratic party. Youngsters feel that they’re living in the now, which is a completely different universe from what the elected oldsters and the DNC inhabit.

So what do we know about the successful influencers?

They put out a plethora of product. If you don’t post every day, you’re losing. Therefore, fans have a relationship with the influencer. Unlike a relationship with the movies.

When it comes to Netflix…

Customers have a relationship with Netflix, not any of its specific shows. They know if they want something to watch, they will be able to find something, furthermore, the Netflix algorithm will make it easy, serve it up.  And in a world where it’s hard to know what’s truly happening… You’re no longer dependent on following the press, knowing in advance, the Netflix homepage is the press, it is where you find out about things, and that’s great for people.

So…

To make a film of a new concept from scratch is a very heavy lift. Coming up with the idea, executing… There’s no built-in audience. And in most cases, the production either succeeds or it fails. There is no in-between. So the studios put out sequels. Ad infinitum. And there is an audience for that. A shrinking one. Because in a world where there are so many offerings, people have been there and done that, they don’t want the same old, they want to be titillated with the new.

As far as the second season of Netflix shows… The hard core cares, everybody else does not. Inherently the show has a smaller return audience. But people are not canceling their Netflix subscriptions, because they are addicted to the service.

And people are addicted to HBO Max, but a lot fewer. And it’s hard to grow that service, because there’s limited product. Sure, there are hits dripped out week by week, but if it’s Saturday night and you just want something to watch, you don’t go to HBO and look around, you go to Netflix.

So to survive, the movie business has to take chances. But they hate this. Budgeting is difficult. But what if costs are cheaper? However even if the movie costs less than $10 million, that does not mean marketing costs decrease. And what’s worse, as stated above, people are no longer addicted to moviegoing. Used to be people would take a chance on something different. But not today.

So what we end up with is cheaper movies that play on streaming services, where there is a built-in audience. And have you noticed that most of the Netflix product is new ideas? Many of these movies suck, but every once in a while they hit one into the stratosphere, like with “KPop Demon Hunters”… You need to come up to bat constantly, which the studios don’t. And Netflix has a built-in audience. Which is why if movie theatres survive, it will only be for event pictures.

So one thing about the online influencers… They have an identity, unlike too many bland pop stars, afraid to take a stand for fear of alienating a potential fan. The influencers know it’s a great big world, that going for everybody is a fool’s errand, you can make beaucoup bucks appealing to a niche. And in truth, everything is now a niche. Even Taylor Swift is a niche, even though the cloying press would like us to believe otherwise.

The influencers don’t move the ball with every post. But they do take chances, they have to do something new, because otherwise people will not come back. The bond of identity is not enough. You have to push and push and…

This is what the music business has failed to understand. The music business believes it’s about brand names, who front the productions of many songwriters, producers and mixers and…

If the track sounds different from what has come before, and the odds are not high, people may be interested. But the track after the hit, if it’s not different… People shrug.

Don’t blame the audience. The public is sharper than the suits.

If you want to survive as a musical artist, you must constantly be changing it up, taking a risk. This was de rigueur in the late sixties and seventies, but now… You do what you do and you do it over and over again to usually an ever-decreasing audience. You hit and the odds of maintaining that peak…

So labels and musicians have to come up to bat all the time.

However, the purveyors must stop trying to be the movie business, polishing what they think the audience wants and then marketing it to death.

No, cheap and easy and different.

And in an era where no one seems to be able to break an act, you never know when something will hit, sometimes years later.

But the music business is based on building stars. The belief is once you’ve made it, you’ve made it for all time, which is patently false.

As for the aforementioned Taylor Swift… She started off in country, went pop with Max Martin and then switched to Jack Antonoff. She released quieter, personal albums during Covid… How come she gets it and so many of her brethren do not?

Even the endless physical iterations. There’s always innovation. The thrill of the new.

Do not expect the public to stand still, do not expect people to eat what you serve them. You’ve got to titillate people, thrill them.

And do it on a regular basis.

This is much harder than doing it the old way.

But this is the world we live in.