Lunch With Daniel Ek

It’s about the data and the footprint.

In other words, the more information you have, the fewer mistakes you make, and if you’re America-centric, you’re gonna get your butt kicked by those who see the entire world.

Music is a dumb business.

Technology is not.

Musicians know the least about everything in life other than what they do. Which may be the result of total dedication to their craft. In other words, if you’re not doing it myopically, you won’t make it. But to listen to artists rail about the future and payment is to listen to uninformed crybabies wailing. You learn not to take children out of the crib. Leave the artists there too.

As for businessmen… It’s all about relationships and intimidation and the music business did not see the technologists coming, they’re still having their lunch eaten by people who see a future they cannot.

Like Daniel Ek.

I’m not saying Daniel is a rip-off artist hoodwinking the labels, he’s got to play fair, because he needs their licenses. But living in Sweden, where the Internet connection is screaming, and growing up in the land of tech, he just sees things a bit differently.

Kind of like Pandora.

No one can compete with them because of their data.

You see every time you log on to Pandora, the service learns more about you. To the point that no one else can compete. Their suggestions are going to be better. Sure, you don’t want to leave the same way you don’t want to abandon Sprint for Verizon, but the truth is you’re getting better service from Pandora, and despite all the press being about royalties, the reality is no one can compete with the service they’re delivering. Certainly not Apple, whose iTunes Radio has had no impact since the launch date.

Kind of like BeatsMusic. You log on, check it out, and then…

You see Jimmy Iovine lives in the land of marketing, but the kings of tomorrow live in the land of data.

Spotify never launches a product that fails, because they’ve tested it long before it launches. Yes, up to 150,000 users might be employing new features without knowing it. So by time Spotify rolls the feature throughout the world, they know it’s going to gain acceptance, they know it’s going to work.

Kind of like free mobile access.

The company had more sign-ups in the one month they launched it than they did in the previous eleven. But they knew that, the data told them that in the test.

In other words, while the record labels are still dependent upon CDs, Spotify is multiple steps ahead.

Can anybody compete with them?

The labels certainly think so, because they’re ignorant as to the winner take all nature of the web. Where one company dominates, whether it be Google, Amazon or Facebook. If you think we’re going to have multiple streaming services per territory, you believe the history of the Internet will be upended, and the data shows us otherwise.

As for Amazon… They’d be profitable if they didn’t spend $3 billion in China and $2 billion on entertainment rights.

Yes, Daniel Ek gave me that perspective, when I asked him about the profitability of Spotify. Were they going to be chasing the elusive profit for years, or…

If Amazon was interested in satiating its critics, it could stop spending on tomorrow and deliver the numbers everybody wants today, but it might not triumph in the future.

It’s all about triumphing in the future.

Spotify’s in so many countries around the world that you’re probably unaware some of them exist. They’re not in Japan, where people subscribe to rental kiosks, wherein they bring the CD home, rip it, and return it for another. Because the rights holders will not deliver reasonable terms. And there’s no YouTube.

There’s no music on YouTube in Germany, so Spotify subscriptions are huge.

In Scandinavia, they’re running in excess of 10% of the population, paying.

And now they’re part of Apple’s CarPlay. And Android’s automobile play too. Spotify is platform agnostic. And over the course of this year, Spotify chips will be embedded in so many entertainment devices, so your boom box or speaker will know what you were listening to last, and will play it on the touch of a button, or a command from your phone, streaming directly from the Internet, or your phone.

And the truth is Sonos streaming is hard.

Yes, Sonos is the streaming kahuna. Because it has figured out both hardware and software. That’s how Apple succeeded. It’s still the recipe for modern success. You can build the chip, but can you build in the delay from speaker to speaker? Can they speak to each other?

And Bluetooth might rule in units, but does the sonically superior Sonos garner all the revenue?

This is very different from play my record because I made it. The pure intimidation paradigm the business has historically run upon.

Daniel Ek is building a service so good, that you’ll want to pay for it and not abandon it.

Will Beats go free? Will it sell itself to Apple or Amazon?

Maybe. That’s Jimmy’s out. Because he’s exhausted his marketing power. People tried out Beats and abandoned it. The curation is cool for a couple of days, but then you’re done.

Or, we could have the ongoing discussion about how Spotify rips off artists and kills music dead.

But that’s only for musicians. Labels are making a fortune from streaming services. Are they passing most of it on to artists? No. But that’s not the streaming services’ fault.

And streaming kills piracy. It’s just not worth the effort.

And streaming is not only what the public wants, but what it’s already embraced.

Spotify’s vision is to have your music follow you everywhere. So it can be called up with the touch of a button.

As for the ability to sync only 3,333 tracks to your mobile handset…that’s not technology speaking, that’s rights holders speaking, they imposed that limit. Which might ultimately be lifted.

So Spotify wants to be in Japan. And China. And India. But most of the major territories are already covered, so profitability is imminent. Then again, there’s constant reinvestment in the product. To make sure it doesn’t hiccup, to make sure it delivers what you want. People rarely tolerate bugs anymore. They expect it to work, right away and forever. It’s all about scale.

As for the purchase of Echo Nest… It’s about predicting what people want to listen to. And that company with 70 employees was founded by M.I.T. people in Boston.

So techies have taken over the world.

That’s the story of this decade.

The aughts were all about the freak-out, the disruption, the casting aside of the baby boomers who believed it was about going to lunch as opposed to knowledge.

But now it’s all about tools. He who has the best wins.

And you ensure loyalty via data.

It’s no different from Billy Beane and the Oakland A’s.

You’ve got to collect the numbers and sift through them.

Which is why booking bands is cool.

But agents and promoters will be utilizing software to determine who plays and at what price in the future.

So either get on the bandwagon or get out of the way.

And know if you want to know what’s going on, a meal with expensive wine tastes good, but you’re probably gonna learn a lot more by lunching with the guy in a t-shirt.

Cowboys and Indies

Would Bob Dylan have made it without Albert Grossman?

I just read a new music industry book entitled “Cowboys and Indies,” which will be published in June. I doubt it will be a runaway success, unlike “Hit Men,” it contains no bombshells. But it does add a deeper layer of insider knowledge to the stories all of us fans have heard over the years. But does anybody under the age of thirty care that the indies threw in the towel, unable to play the majors’ game?

Yes, a huge focus of the book is on Chris Blackwell and Jerry Moss, and their ultimate decision to sell out. Distribution and radio promotion killed them, the playing field was not level.

But what truly intrigued me was the history long before I was born, starting in the middle of the nineteenth century, with the birth of recording devices. You see…the business has been forever filled with characters suing to get their own way. Hustlers abound. In other words, what happened after the Beatles was not new.

But what has been sticking in my brain is the story of Bob Dylan. How he was desperate, begging Carolyn Hester for more gigs, and ultimately signed by John Hammond when she agreed to let Dylan perform on her album.

As for the result, Dylan’s initial LP? It sold 1,300 copies. That was a disaster then, just as it still is today.

But Hammond wanted to do another, although he was not encouraged from above.

But then came Albert Grossman.

Dylan eventually parted ways with the manager, but that was long after his sixties success.

Dylan convinced Hammond he was an orphan, that he had no mother and father to co-sign his underage contract. Dylan said to trust him.

Big mistake. Albert got involved and wanted to void the contract.

Hammond was pissed, a member of the gentry, he believed in being upfront and honest. But Hammond and Columbia caved. And Bob Dylan became one of the biggest stars in music history.

That initial album was almost all covers. Dylan was just another character. But Grossman gave Dylan space. And convinced his clients Peter, Paul and Mary to cover “Blowin’ In The Wind.”

It was a surprise when Dylan broke through with “Like A Rolling Stone.” Most of us knew him as a writer, if we knew him at all.

But Albert Grossman made the wholesome Peter, Paul and Mary stars at the tail end of the folk boom and he utilized the work of his unknown client to seal the deal.

Behind every star is a manager. Who knows better than to see himself as a musician. Whose expertise lies in career planning, in clearing the way for his artist to create, and be handsomely compensated for his work. You may not know their names, but without these managers, you probably wouldn’t know the names of their clients.

Then there’s the curious story of Ken Kragen. Who made Trisha Yearwood, Travis Tritt and Gallagher stars. All of whom fired him, all of whom fell off the edge without him.

You think it’s about acts and labels and radio, but the truth is behind every superstar there is a visionary, looking to build and protect his charge so he can gain his commission.

Albert Grossman has been almost completely forgotten.

But Todd Rundgren gained success on his label after blanking out with the Nazz.

Grossman managed Gordon Lightfoot. And the Band. And Janis Joplin.

Sure, Grossman went to college, but he didn’t study the music business, he graduated in economics.

He started off as a club owner.

And he put Peter, Paul and Mary together!

So renegotiating with Albert Grossman was the best thing John Hammond ever did. Sure, he paid more, but like that old Billy Preston hit says…nothing from nothing leaves nothing. You can have a brilliant contract, but if you’ve got no sales, you’re going to have no income.

Albert Grossman built Bob Dylan. Columbia Records helped.

And Dylan probably wouldn’t have gotten more than his initial chance if Grossman hadn’t become involved.

Because Dylan could create his character and hustle, but he could not be his own best advocate. Because you can’t negotiate for yourself and it’s rare that a great artist is a great businessman.

A great manager gives his client room to grow. Builds him up while softly criticizing. Keeps him on the path. Takes the long view.

Did Grossman rip off Dylan?

I’ll let you decide.

But without him, there’d be little to steal.

“Cowboys and Indies: The Epic History of the Record Industry”

Thoughts

OSCAR RATINGS

The best since 2000, so we can’t evaluate the show on a quality level. That’s the modern world, if it sells, if it makes money, if it gets good ratings, it’s review proof.

But that is not benefiting our society. Without honest evaluation our culture suffers. Do we really want to make the bankers king and be beholden to the almighty dollar?

PUTIN

It’s complicated, and it’s scary, and it’s so different from the U.S. because all these countries are right up next to each other and interdependent. I saw the wall fall, I saw Communism replaced by capitalism, but now it’s kind of like that Talking Heads song, same as it ever was… Or is it “Life During Wartime”?

OUT OF THE LOOP

Once upon a time I knew everything. Now today I’m unaware what’s number one, I don’t watch every TV show and I feel out of the loop. On one hand it’s age, I don’t care anymore. On another, it’s the lack of having children, who tend to keep us informed, but now everything is fodder, grist for the mill, you’re somebody today and nobody tomorrow, our culture is no longer cohesive. Used to be a pop star would come along and cement us all together, but that won’t be Bruno Mars, he’s good but he doesn’t stand for anything. And it won’t be Rick Ross, because at this late date a whole swath of Americans have decided they don’t like the decades old hip-hop and can’t be reached with it, and it won’t be white college kids staring at their shoes warbling with bad voices. The only people hewing to the basics are the Top Forty acts employing the hit songwriters, who are old men providing a service as opposed to delivering something to stand for.

WHATSAPP

Last week’s news. Or was it the week before? Used to be hits lasted for months. Oh, they do on radio, which is all about advertising and afraid to take a risk, but if you believe radio is driving our culture you probably don’t use a smartphone.

OBAMA

If he’s the leader of the free world, why doesn’t he lead?

What a disappointment.

HEALTH CARE

It’s happening, get over it.

JERRY BROWN

Experience counts. Which is why Max Martin and Dr. Luke write the hits and the youngsters don’t. Experience teaches you the landscape, develops your instincts and intuition, which is why outsiders never make it in the music business, from Andy Lack to Roger Faxon to Steven Cooper, because they can’t feel a hit. It’s a dirty business, and if you can’t feel it between your legs, if you don’t need it, you’re not gonna last.

iTUNES RADIO

Single-handedly proved that Apple no longer controls the future of music distribution. Will they buy BeatsMusic to get a leg up? (That’s Jimmy’s only play, he can’t beat Spotify the same way your Tumblr can’t beat the “New York Times.” Oh, let me make it simple… Spotify is willing to lose more money to make it. And success on a big level is all about deficit financing. He who can spend to achieve his long term goal will most likely achieve it.)

TELEVISION

We’re addicted to story. YouTube doesn’t deliver this. Whoever does wins. Forever.

TIME WARNER/COMCAST

Just like American Airlines/US Airways. They’ll divest until the government is happy, then the merger will go through.

BOOK OF MORMON

What kind of crazy world do we live in where a static play lasts longer than any record. One in which the creators take chances and blow an audience away that can’t stop talking about it. Furthermore, did you notice the winner of the Best Original Song Oscar for “Frozen” got his start with “Avenue Q”? Could we be seeing a renaissance of musical theatre? No, because it’s too expensive and investors only want sure shots, just like in the movie business. But we did get “Book Of Mormon.” If only it had a hit song…

SOCIAL SECURITY

The story isn’t how it’s gonna run out, but that you just can’t live on it. Too many baby boomers never saved for a rainy day and they’re gonna be shocked to find out they can’t even afford the five o’clock special.

MOBILE

The future is phablets.

Bottom line, you need access. A traditional smartphone screen is too small and anything larger than an iPad Mini is too big. We want to be connected all the time, we want utility in this experience all the time. Women and nerds are leading the charge. Women because they can carry their devices in purses and nerds because they’re unafraid of looking…nerdy, carrying around large screens. Large screens are de rigueur amongst business titans…they want their whole world at their fingertips, so do you. In other words, we live in a mobile world, the big screen is fading…

JOHN MAYER

You fired your manager because you wanted a hit and then you two-timed America’s sweetheart, at least that’s what the gossip pages say. You probably can never have another hit single anyway, but if you want one…rehabilitate your image, either keep it in your pants or settle down with one woman and do some charity work while you’re at it.

STATUS

Means less the older you get. But it’s everything to the youngster. If you can sell status, you’ll make a mint.

THE PHOTO

Has replaced the t-shirt. Once upon a time you evidenced your loyalty by wearing a band’s t-shirt, now you just post a pic of yourself, hopefully with the act, at the gig. Could merch go the way of the ringtone?

CARS

Baby boomers care, their children do not. They don’t know what the horsepower is and don’t need to know. Hell, many don’t need a car at all. I guess that’s the exponent of being able to connect with others without leaving the house.

FOOD

It’s cheap and it’s easy, as Foghat so eloquently sang. But did you ever notice it’s all about the best in food, but it’s rarely about the best in music? We’re just not shooting high enough.

TASTEMAKERS

Howard Stern testified about Verizon Wireless today, and he’s just a user, not an endorser. Tastemakers are more important than ever, since we live in a world of cacophony and want others to make sense of it for us. He who has credibility is king. In other words, all this hogwash about selling out…dollars are exchanged, but it doesn’t move the needle, it doesn’t change people’s perceptions.

LANDLINES

Suffer from lack of investment. The owners are pushing us to mobile and Internet telephony the same way Detroit killed the trolleys.

CUTTING THE CORD

A delusion. Internet access will go up in price while TV channels will go down. Your provider has got you by the balls. Your only option is competition. May Google Fiber come to your town.

EDUCATION

It’s about learning a state of mind, how to analyze problems, not memorizing facts and acing tests.

MOOCS

Dead, because no one not in college wants to put in the time to learn, other than a handful of people who’ve already graduated from college.

NETFLIX

The king of curation. They feature that which everybody has agreed you want to see. It’s the blockbuster principle in action. With everything available, we gravitate to the best, and more and more we gravitate to the same stuff. This week’s tip? “Chasing Ice.” The images alone will make you a believer in climate change.

Courtside Seats

I watched a lot of basketball in my lost decade, from the day my ex moved out until the Internet came along and rescued me.

You’ve got to understand, the Lakers are L.A. religion. Till he blew himself up, both literally and figuratively, Kobe Bryant was the most powerful and popular person in Los Angeles. The movers and shakers came to him, not vice versa.

But I stopped paying attention.

It wasn’t the move to Staples Center so much as the retirement of Michael Jordan. I’d seen the best, did I really have to waste so much time thereafter?

It’s really about the playoffs. You start watching sometime in April and you don’t emerge from the darkness until June. And sure, there’s a bunch of garbage time during the regular season, but the closer you get to the end, the harder it is to tune out, you never know when Reggie Miller will be a thorn in your side.

But that was years ago. I’m aware of LeBron, but I wanted my life back. I stopped paying attention.

Last Friday night I went to my first game…in Staples Center. I pulled my car up to valet parking, for $200 a pop, and ran into a new friend on the way in. I never pegged him as a roundball fan, but he revealed he had courtside seats!

And on Saturday, he e-mailed me, did I want them?

But let’s get back to Friday. Sitting in the box of a household name entertainer, I was so far from the action that I stayed engaged in conversation, getting details, as to the six figure cost of this space.

Yes, major league sporting events are not for the poor. Not in person. That’s why they’re televised. In truth, it’s just like the days of yore, the Roman Colosseum, it’s entertainment for the rich.

And last night I experienced it.

Turns out if you buy a floor seat, you get a discount on valet parking, it’s $130 a pop.

But the people sitting alongside me can afford it. People like Jeffrey Katzenberg, Joel Silver…

As for the TV stars, I doubt they own their seats. I figure the studio gave Christopher Meloni his. And Ashton Kutcher and Mila Kunis theirs.

And they weren’t as good as ours.

You’re immediately separated from the riff-raff. You take an elevator into the bowels of the arena where your ticket is checked numerous times, the security is as tight as the White House, and then…

You emerge onto the floor.

That’s the most amazing thing about it. Your feet are right on the wood. Your chair is on the rubber covering the ice, you can feel the cold.

So, these giants are pushing the ball around, warming up. And that’s what they are, so tall you realize the barrier to entry is height, and no mere mortal is gonna make it.

And then there’s the infrastructure. The scout sitting nearby, a woman with a Spalding notebook featuring the same skin as the ball. And the TV commentator with heels higher than she. And Stu Lantz in his suit… I’ve been around famous people, but sports are different. It’s more…everybody.

So the game begins. And the Lakers fall behind almost instantly. After all, they’re in last place.

But the Pelicans are not much better. Still, they pull ahead by double digits.

So I’m studying the Laker Girls, all of whom appear to be illegal. And in perfect shape. Not ultra-skinny, like the movie stars, but healthy, athletic. All smiling with too much makeup I couldn’t help but wonder if this was the peak of their life, where they went from here.

And we were so close you couldn’t read the scoreboard. That’s right, we were part of the set, we were on TV.

So we hit halftime and Guy Oseary gets up to talk to Ashton and Mila, like they’re all friends, like they all went to high school together.

And then Mila comes over to make nice with Jeffrey, who’s finished his McDonald’s and is yet to delve into his candied apple.

And I’m eating chicken tenders, taking it all in.

And then the game heats up. The Lakers come within four after being down by five times that number.

It’s palpable. The vibe in the building has changed. People are standing. The guy behind us is trash-talking. The game has tightened up.

And it’s then that I think of Bob Costas’s quote, that sports are a metaphor for life.

This is not ski racing, or car racing, or so many other sports wherein equipment is key. This is just about sneakers and socks, basketball is pure.

And I’m thinking how most of these players will be done long before forty, their glory behind them, as well as the lease payments on their fancy cars, with no ring to evidence a championship.

But for this one extended moment, we’re all in it together. We don’t know how it turns out. We’ve got no edge. We’re subject to the vagaries of life, the bounce of the ball, the traction of our shoes…

We lost.

And you could say it was disappointing.

But not really. The thrill was more palpable than any amusement park ride. Because this wasn’t manufactured, but life.

Was it worth $2,750 a ticket?

You can decide.

Meanwhile, I’m waiting for Frank Robinson to clear the way so they can pull up my car and I can jet away before most people have located their rides.