He’s pissed that I’m constantly bashing major labels. He wanted our conversation to be off the record, but I felt that would undermine the reason for him calling, which was to get his perspective on the record, so here it is.

Warner is not in the business of domination. It’s about signing a few good acts and building their careers. Lyor says to look at their release schedule. It’s not overpopulated.

As for signing those acts, Lyor doesn’t believe in bidding wars. If you invite him to a showcase and there’s another label there, he walks right out. He sees no upside in overpaying for acts.

Meanwhile, when he got to Warner, he constantly heard the refrain that it was "too early" to sign an act. He scrapped that philosophy, he believes it’s never too early. His mantra is sign and develop. So at Warner build it and we will come is not the driving principle, sure they want to help already established artists get bigger, but they’re primarily interested in finding raw, undeveloped talent, without all the traction to ignite a bidding war, that wants to go into partnership on the road to success.

Speaking of partnerships… 70% of Warner acts now have 360 deals. Lyor stressed how difficult this was to achieve, with its competitors only interested in recording rights. Warner’s reinventing the wheel.

Lyor stressed that before the CD explosion 360 deals were de rigueur, that Warner is returning to what once was. He believes 360 deals are good because the label is thinking about the act every day of the year, this is good for their careers.

I brought up the concept of a fair deal, of compensation for the act. I tossed around the concept of 50% of the net going to the act. Lyor agreed in principle, without committing to that specific number.

I also brought up the concept of transparency. Lyor said Warner was developing an app that acts could pull up on their phones that would display everything going on, from streams to airplay to… But he stressed that sometimes it’s harder to change what was than build from scratch, it’s taking longer than he’d hoped, but it’s coming.

Of course I brought up the concept of compensation. That it looked ugly that he and others at the company were being paid so much when the company was losing money.

Lyor said the company was not losing money.

And he said some of the acts were making tons.

I told him he needed to get this story out.

Lyor said he wants to develop great music that benefits society, that’s Warner’s goal. As for my comment that Steve Jobs only gets a dollar in salary and shares in the upside…Lyor didn’t specifically respond to this. Although he did say he’d been in the business for thirty years, had slept on floors and believed he earned his compensation and that you need skilled, experienced people to shepherd a company into the future.

Lyor Cohen is a force of nature. His style is a bit different from Steve Jobs’s. Steve is all about the reality distortion field, charismatically taking you into his own universe and convincing you. Lyor is more in your face. But his will is just as strong.

I told him I have no investment in the major label dying. That I had two goals, one of which has now been achieved.

Yes, one goal was all the music to all the people at a low price. That’s what Spotify delivers.

The other is great music created by people who are fairly compensated. Lyor said he agreed with this. I didn’t bring up the concept of creating it without interference, I spaced that, so I don’t have his response thereto.

If Warner Music can achieve this, more power to it.

One does have to admit Warner is a leader in the new world. It derives more of its revenue from digital, it’s the aforementioned leader in 360, it did not sign on to the money-losing Vevo… But will this be enough? Does Lyor see enough of the new world to transition from the old? Time will tell, although he’s convinced me he’s trying, that he’s remade the company and is less concerned with the past than the future.

As for his competitors…

It’s hard not to beat up Sony. Doug Morris is old school. Sure, a company is nothing without hits. But a hit ain’t what it used to be. EMI is about to be sold and Universal is in upheaval, we’ve yet to see Lucian Grainge’s complete philosophy, never mind the lean, mean team he uses to execute it. But Grainge comes from the hit-driven UK, whereas the US is depleted and depressed, there’s not a dominant radio format, people don’t follow music like the horse races as they do in the UK. Does Lucian truly understand America?

Time will tell.

But we do know the majors’ dominance came as a result of control of distribution, which they’ve lost, anybody can get on iTunes and Spotify. And sure, radio airplay still sells the most records, but radio is fragmented and losing power, so majors’ dominance of this market is less important as time goes on. And then comes the money. You couldn’t do it alone, you needed the major wallet. That’s no longer true, you can do it yourself if you want to.

So the majors no longer control the market. The historical foot-dragging and demonizing of its customer base has put it further behind in the future world. It’s kind of like BlackBerry, thinking that e-mail is all that counts, not foreseeing the app world. But that does not mean a company can’t turn around.

Right now, Warner is at the forefront of the major game. We do need entities to develop and promote music. The majors had a head start. Sony has squandered this advantage, Universal is a question mark. Will Warner win in the future?

Like Lyor said, Warner isn’t in the domination game. Warner’s winning does not mean no one else can. Can Lyor figure out a way to survive and be profitable? He’s trying. And I can’t say one thing he told me on the phone was categorically incorrect.

But that does not mean Warner cannot have competitors. And that they cannot be brand new. That’s your challenge.

Ladies and gentlemen, start your engines, the streaming era has begun. And it’s going to turn the music business upside down. So much of what now exists will evaporate. The game will be completely different. It will switch from one focused on sales to actual listening. Right now, Spotify is pioneering. It appears to be trumping its competitors, Rhapsody, MOG, Napster and Rdio. But the big behemoth Apple is waiting in the wings. If you study the history of the Cupertino company, it’s rarely first, that’s a recent phenomenon, it usually enters a sphere late, after the public is inured to the behavior, and Apple perfects it. Apple was late with CD burners, iTunes was not the first jukebox, the iPod was not the first MP3 player. But Apple employed design, both software and hardware, to create elegant solutions that were intuitive, simple to use, requiring no manual, and ultimately triumphed in the marketplace.

Don’t say Apple doesn’t rent, just look at movies and TV in the iTunes Store. Steve Jobs is famous for saying one thing and then doing another. Funny how he can change position and politicians cannot. Apple only strikes when the time is right, when a business can burgeon. Streaming is now here. Expect only one streaming service to triumph in America. Spotify has the early-mover advantage, but Apple has the installed base, and everybody’s credit card number. And when Apple moves, everybody knows overnight. Steve Jobs gets on stage and it’s bigger than any rock show. Furthermore, users spread the word and people trust Apple.

It makes no sense to own product. You want your music everywhere. Quality will improve with bandwidth. The ship has sailed. What does this mean for you?

1. It’s no longer about the initial sales transaction, but getting people to actually listen to your music. Your relationship doesn’t end when people buy your music, it begins when you get them to click.

2. It’s less about foraging for new customers than satiating old ones. An established fan streaming your track ten times is just as good and cheaper to accomplish than finding ten new fans to stream your track once.

3. Marketing and promotion are reminders to get people to stream as opposed to buy.

4. Historically, it’s been all about the release date. Stopping leaks and working everybody into a frenzy to buy the first week. Now you won’t care if a track leaks, you’ll just put it up on the streaming site and book revenue.

5. Sure, you’ll create events to stimulate streaming. But there will be many as opposed to few. And they’ll be more targeted. Today’s events reach many people who just don’t care. In the streaming future you’ll alert your fan base and then execute. Knowing who your fans are will be crucial. Whether it be Facebook, Twitter, e-mail or some unknown social network, you will go directly to fans. It will not be about pitching middlemen, print and TV and radio, to get the word out.

6. Recommendations will be key. When another band or a fan spreads the word via playlists, infecting new listeners. Radio is inefficient. It’s about advertising, not music. You want to be turned on to tracks by someone with the same sensibility, whose only goal is to turn you on to something great.

7. Playlist makers will be the new deejays. It comes down to who you trust. Anyone can publish, but not anyone can gain followers. Pandora and the like will fade, because they lack the human connection and their recommendation engine is just not as good.

8. You will get into business with he who can guarantee the most streams, not he who can pay you the most money. An advance means nothing. Marketing and promotion mean nothing without resultant streams.

9. There will be a streaming chart, which will cause people to check out winners. This will be determined by data, not influence. It won’t be about paying off the radio station, but reaching critical mass so that others will experiment by listening to you.

10. There will be multiple charts, based on newness and genre. Listeners will comb these to enrich their listening.

11. People will listen to more music than ever before. As a result, money will flow into other areas of the business, i.e. touring and merch.

12. Just because you can play, that does not mean you can win. Just because you’ve got your music on the streaming service, that does not mean anyone will listen to it.

13. Genre will no longer matter. You won’t complain that there’s no radio format for your track. Klezmer has equal footing with hip-hop. That does not mean as many people will listen to klezmer, just that the barrier to entry will be low.

14. To get people to continue to listen you will constantly release new material, make live material public, the album will become passe. It makes no sense to get everybody to listen for a short period of time, you don’t want one big bang, but a constant flood.

15. Every act will have its greatest hits. Album cuts will be for fans only. You will constantly produce, trying to reach the brass ring. You won’t care about the losers, that which does not gain traction. If you fail today, record and release tomorrow.

16. Creativity will burgeon. With it being so easy to get into the marketplace and be heard, risks will be taken.

17. You need someone to gain you attention, you don’t need someone to press and distribute, to get you on the radio, to pay off middlemen to get you exposed. The manager will be king. Record labels will fade. Tribes of like-minded artists are a better place to park your rear end than a conglomerate with a plethora of acts that don’t sound like you. You want synergy. It’s more important to be on the Bonnaroo or Lollapalooza playlist than be signed to the major.

18. Expect those with money and power to try and rig the game. I.e. major labels will try and game the system, generating plays and income for their acts. The streaming service will do its best to try and quash this behavior, but even Google has trouble weeding out those who try to optimize search.

#1 on the Digital Songs chart is LMFAO Featuring Lauren Bennett & GoonRock. The name of the song is "Party Rock Anthem". I’d love to tell you I know it, but I’ve never even heard it. Top Forty is a niche that you can avoid quite easily. If you think Top Forty music rules the world, you probably work for a newspaper or weekly magazine. I have heard of LMFAO. I assume that stands for "Laughing My Fucking Ass Off", if it doesn’t, no harm, no foul. But the interesting thing is LMFAO’s album, "Sorry For Party Rocking", is mired at number 56 on the album chart, having sold 72,350 copies in six weeks and a measly 7,124 this week. In other words, people love the track, but could care less about the act. And when this is the case, touring receipts are anemic at best. Hit singles are a business, but it’s a long hard slog and it’s very expensive to compete. Meanwhile, "Party Rock Anthem" sold 201,514 copies this week for a cume of 2,667,862.

#17 on the Album chart is Mumford & Sons. They moved 18,051 copies of their album "Sigh No More" for a cume of 1,681,293 after 76 weeks on the chart. Which business would you rather be in, LMFAO or Mumford? Mumford has longevity, people are still discovering the music a year in. Its success is not based on promotion so much as the music itself, that’s what’s spreading the word today, the singles are number 130 and 133 on the Digital Songs chart. However each has sold in excess of a million copies. How many of these single purchasers ended up buying the album? This is how it was in the old days, the single was an introduction, if you liked it, you bought another single and then the whole album. Obviously, Mumford has converted a lot of people.

#3 on the Digital Songs chart is Katy Perry’s "Last Friday Night (T.G.I.F)". It has moved 1,747,194 copies. But Katy Perry’s "Teenage Dream" is only #19 on the album chart. Illustrating how different the charts are. The Digital Songs chart reflects Top Forty radio. Which no one in the mainstream will admit is a backwater. Whereas the career artists live long on the album chart. "Teenage Dream" has sold 1,666,399 copies in 49 weeks. In other words, Mumford is bigger than Katy. Music is more important than train-wreck. Katy’s dependent upon hits, Mumford’s got a career. As for that inane story about Katy having five #1 singles from the same album, that’s like saying you’ve broken records in the Arena Football League. Top Forty ain’t what it used to be. We’ve got a changing paradigm. Ever since MTV, the hit single has ruled, album sales have paralleled airplay. But now MTV no longer airs any music and that game is done. We’re not living in an era of singles, we’re living in an era of careers, that’s where the money is. If Katy can continue to pump out singles and sell tickets, more power to her. But history tells us that singles artists are only as hot as their last track…and it’s almost impossible to sustain a run. Especially now, when one stiff track keeps you off Top Forty radio thereafter.

Many say that Foster The People’s "Pumped Up Kicks" is the song of the summer. It’s #13 on the singles chart, having moved 742,762 copies so far, 88,370 this week. The album is #27, but has only moved 138,380 so far, 13,756 this week. In other words, people are not sold on Foster The People as a band yet, they may never be. As for those arguing that #27 on the album chart is not so bad, I’d say that 138,380 copies in a country of 300 million is positively anemic. It’s hard to get anybody to buy an album today. And with Spotify emerging, it’s gonna be even harder. It will be easier to get people to check out more of your tracks, but many won’t do even that, the single is enough. But if you’re a career artist, it’s now about a body of work, forget the concept of albums, forget first week sales, forget impressing physical retailers. It’s about having people believe you’re real, so they’ll check out more than the hit, having them believe you stand for something and are worth knowing beyond the surface of the one radio track.

Adele’s "Rolling In The Deep" is number 10 on the Digital Songs chart. It sold 106,154 tracks this week. But get ready for this, it’s got a cume of 4,691,238! That’s the equivalent of almost 500,000 albums, on this one track, enough to go gold! In the old days, the really old days, the sixties, radio would be just about done with Adele’s "21", having gone three tracks deep since its release twenty three weeks ago. It’s good for radio to stay on one track, but not good for listeners or the act. Radio’s selling advertising, it doesn’t care about music. But listeners have gravitated from Adele’s single to the album. It might have taken Katy Perry five number ones to get to 1.6 million in almost a year, but Adele has already sold 2,832,799 copies of "21" in the aforementioned twenty three weeks, 82,549 in the last seven days for #2 on the album chart. In other words, the public’s already been convinced, Adele is an album artist, she has a career. People are most interested in that which has substance, which is just not beats to party to. This is the future. But it’s much harder than going to Dr. Luke for his latest composition. Yes, Adele’s album was made by committee, but the end result has a unified vision and is unlike anything else in the marketplace, it’s sui generis. In other words, the rule of the early seventies still holds, the biggest acts sound unlike anything else.

Pitbull’s track "Give Me Everything", featuring Ne-Yo, Afrojack and Nayer sold 113,804 copies this week, for a staggering cume of 2,768,169, occupying number 8 on the Digital Songs chart. But his album, "Planet Pit", has only moved 142,975 in six weeks, 12,503 in the last seven days, it’s number 30 on the chart. Pitbull’s a singles artist. Singles artists are flashes in the pan. Hell, how many tickets can Mariah Carey sell today? Tickets indicate hard core fandom, they cost much more than $1.29 or ten bucks for the album. Yes, Mariah sold a lot of albums when that was all you could buy, but once you could just get the hit, most Top Forty radio artists’ album sales took a steep nosedive. And it’s not gonna change. Unless Top Forty radio starts playing the best of the best from all genres, and that’s not gonna happen.

"Every Teardrop Is A Waterfall", from Coldplay’s yet to be released new album, has only sold 469,594 singles so far, 35,785 this week, ending up at position 44. Coldplay is an album act. It’s got fans. The odds of getting Top Forty airplay, which drives single sales, is almost nonexistent. All the media hoopla will help sell the album, but Coldplay has now become the Dave Matthews Band. An act that squeaked under the old wire, when MTV still played music and Top Forty wasn’t a beat heaven, that can no longer play the hit game but will be supported by its fans, who will buy albums and tickets. But in this case, the album has to be really damn good. It can’t be about two or three hits and filler, it must be solid all the way through. Hopefully, Coldplay has achieved this, otherwise not only will album sales falter, but ticket sales too.

#89 on the Digital Songs chart is "Adventures Of Rain Dance Maggie" by the Red Hot Chili Peppers. It sold 19,523 copies this week, for a cume of 77,015, a drop of 66% from last week. There was little pent-up demand or people don’t think the track’s that good or RHCP fans are waiting for the album, maybe they don’t even know the single’s out. Or maybe, without Frusciante, the Chili Peppers are doomed. In any event, no matter how great the track, where would people hear it? With MTV and Top Forty radio closing them out, as opposed to building them like before? Hopefully the album will be fantastic and will solidify their base, otherwise we’ll see a repeat of the Dave Navarro era, when fans shrugged their shoulders and didn’t care. Meanwhile, could the advance single to drive album sales be dead except for Top Forty artists, who don’t sell many albums anyway? Where is someone supposed to hear the single? And now, in the era of Spotify, is listening completely different. Maybe you don’t listen to your favorite act only when it’s got a new album, maybe your favorite act keeps feeding you one or two new tracks on a regular basis so you’ll listen to the band constantly, forever. The money’s in the streams, the Spotify streams. That’s gonna change the whole dynamic of both music-making and promotion. It’ll be less about the hit, and more about the stickiness to the act.

"Don’t Stop Believin’" has sold 4,662,900 tracks so far. It’s the new "Stairway To Heaven".

Kidz Bop Kidz sold another 38,651 copies of their album, "Kidz Bop 20", for a cume of 107,416 after 2 weeks, holding the number 6 position on the chart. This is the future. Think before you record. Don’t play the Top Forty game. Play for the long haul. Establish name familiarity, a franchise. Then again, TV advertising helps so much with this "act", something most performers, especially new ones, cannot afford.

Just got home from the movie theatre where we saw "Transcendent Man Live With Ray Kurzweil".

Transcendent Man Live With Ray Kurzweil

Huh?

Maybe you know the Kurzweil piano. Or the Segway, Dean Kamen, its inventor ,was there too. As well as Steve Wozniak, computer programmer extraordinaire.

They were all in NYC beaming to 49 states, everywhere but Wyoming, a discussion on the future.

The key point Kurzweil wanted to make is human beings operate in a linear mode, whereas technology expands exponentially. In other words, the future is coming to us at an ever-increasing rate. With both pluses and minuses. Kurzweil believes it won’t be long until we live forever. Make it for another twenty years and the developments in health care will be mindboggling. Not long thereafter, we’ll have nanobots in our bloodstream, keeping us alive.

And it was all utterly fascinating, but a few things struck me hard.

One was Dean Kamen referencing Darwin. Kamen stated that Darwin didn’t say the strongest survived, but the most ADAPTABLE!

Think about that…

So many entities are strong but then crumble. From the Mafia to Microsoft. If you’re lamenting the future, if you’re trying to hold back the sands of time, you’re doomed for the scrapheap.

If you’re complaining about the lack of album cover art, of albums themselves, of physical product, you’re not gonna last long. Technology is moving just too fast. Remember when the labels decried Napster? Now every song is available on YouTube, you don’t even have to download it, you can stream it immediately! Sure, many of the videos are infringing works, but the old style laws, the DMCA, can’t keep up with technology. Your best hope of survival is to open your ears and jump into the future.

That’s why the hiring of Doug Morris at Sony Music is such a head-scratcher. Of course a record company is nothing without hits. But technology has changed the definition of a hit. It’s no longer that which is played on the radio which causes a reaction at physical retail. Sure, that paradigm still exists, but it’s forever shrinking. The money’s in souvenirs, in personal contact, it’s about deep niches rather than broad-based tracks. People only want these tracks. Whereas more modern acts, realizing that a career is more holistic, are triumphing. Katy Perry sells singles, Mumford sells albums. Katy Perry makes expensive videos, Mumford undercharges and underplays, extending the length of their career.

Songwriters can’t stop bitching about being ripped off. They don’t see we’re never going back to the past, and that maybe they should ask for a piece of the act’s revenue, just like the labels do in a 360 deal. Why not? Dr. Luke can do this. Maybe only a few writers have the leverage to achieve this, but we live in a society of winners and losers.

In other words, don’t complain about what you’ve lost, figure out how to play in the new world.

And the world keeps changing. Steve Wozniak said how future uses of computers could not be imagined. He suggested Apple create a program for editing movies and the company refused, everybody laughed. Now editing on computers is de rigueur.

And Kurzweil spoke about the wisdom of the crowd. Sure, sometimes the crowd gets it wrong, but usually it’s right.

Think about this.

Instead of battling the people, follow them, even better, lead them, give them what they want.

Sure, Napster was copyright infringement. But the concept of having the history of recorded music at your fingertips was too exciting to resist. It took us a decade to get to Spotify. Imagine how much faster the journey would have been if the Luddites controlling the rights had been willing to adapt. Instead, that revenue has been lost forever.

Intellectual property is worth something. But it’s less about protecting its value according to past paradigms as opposed to maximizing it utilizing new structures. There may be missteps along the way, but to refuse to risk is to remain behind. In tonight’s presentation it was stated that the road to the future is littered with mistakes. No one wants to make mistakes anymore. The label won’t put out anything they don’t think is a certified hit. But history tells us the label doesn’t always know what will be successful. Ahmet Ertegun didn’t want to put out "In-A-Gadda-Da-Vida" and it ended up becoming the best selling album in Atlantic’s history.

Kurzweil has an uncanny ability to predict the future. Down to the year. That makes me wonder… What year will the album die, when will music radio become completely marginalized. I’m not sure, but definitely within a decade. The album? I give it six years at most. Radio… Seven or eight?

The future is coming.

Hell, it’s already here.

Watch this video about 3D printing:

3D printer

They kept referencing it in the presentation. Jay Leno has a machine to make parts for his historic automobiles. They use them in Africa to manufacture necessary items that are not readily at hand.

The ability to endlessly reproduce a track ad infinitum at almost no cost is a good thing, not a bad one. The cost of hearing music is now much cheaper to the end user. Think about the benefits!

The tools of production are cheap and plentiful. Don’t just take my word for it, everybody on this panel agreed.

But everybody on this panel had many years invested in their work. Compare this discussion with listening to the thoughts of Justin Bieber and Greyson Chance. Huh?

Machines are going to outpace people. That’s coming soon. Where does that leave us? Contemplate this instead of trying to engineer the system to make sure we stay in the past. Too many people with too many skills are marching us forward, to resist progress is futile.