GUITAR HERO

It was a fad.  Stuns me that a business that specializes in selling fads didn’t realize this.  Ringtones were going to save the music industry, then ringbacks and Guitar Hero/Rock Band.  They’re all fads.  In the modern tech world you get in early and get out early, just like with a musical fad.  Give props to Scooter Braun and his Justin Bieber movie.  Because it won’t be long before there’s no fever surrounding the Bieber.  How do I know?  Because I’ve lived long enough to see everybody from the Monkees to NKOTB to the boy bands to Miley Cyrus come and go.  And let’s not forget Leif Garrett…

LADY GAGA/EXPRESS YOURSELF

"Express Yourself" was a hit in 1989.  That’s twenty two years ago.  Most of GaGa’s fans hadn’t reached consciousness or weren’t even born yet.  No one cares.  And "Express Yourself" was a good record!

PEAS AT THE SUPER BOWL

Of course they sucked.  But they weren’t playing for you, they were playing for the mainstream.  The Hold Steady are never going to play the Super Bowl, get over it.

THE GRAMMY SHOW

Train-wreck incarnate.  The same people complaining about the Peas are gonna bitch about this show.  But never forget, it’s about television, not music, it’s about ratings, not quality.  Just like radio is about advertisements, not content.  Don’t get your knickers in a twist.  The show is meaningless.  Just a celebration of what once was in the mainstream.  Yes, most of the stars will be gone tomorrow.  And the audience doesn’t care, it’s too addicted to Facebook.

EGYPT

We were there first, music fans already revolted.  They killed not only the album, but the major labels.  We’re living in an era of chaos.  To complain is to be Mubarak.  The audience was oppressed for too long, given an opportunity to go its own way, it did.  Remind me how it helped the audience to have to buy a fifteen dollar CD to hear the one track that was a hit? Now they just buy the hit on iTunes.  And if they don’t do that, they don’t even bother to steal it, they just watch it on YouTube.  You don’t need to own it, next year it won’t mean anything.

WARNER/EMI

The latest report is that Warner wants to sell itself before EMI, to get the most cash.  The major labels were decimated by the Internet.  Their assets are worth something, but not what they once were.  Publishing will go for a lot.  Someone will end up with the masters.  As for new music, that’s up for grabs.  Who’s going to break new music?  Who’s going to pay for its development?  That’s a problem we need solved, but you don’t see VCs and techies throwing money at that, because it’s just too difficult, it’s easier to trade on the assets of what once was.

EMI

Ignore Faxon.  Banks don’t like to hold assets.  That’s not their business.  EMI’s for sale, it’s just a matter of when.

VINYL

Enough.  There are people who collect buggy whips too.  Sure, it sounds better.  But do you think everybody’s going to drive fifties Thunderbirds because they look better?  Face the future, don’t try to bring back the past.  At some indeterminate time bandwidth will be so plentiful and cheap that quality sound will return.  But it’s not imminent.

THE DECLINE OF WEB-BASED E-MAIL

The Decline of Web-Based E-Mail

People check their e-mail on their mobile handsets.  Young ‘uns don’t use e-mail at all.  Think mobile.  That’s where all the action is.  That’s how you reach customers.  And that’s what’s killing the major labels.  They’re still making revenue from physical product when the future is streaming to the handset.  If you’re married to the past, you’re lost in the future.

WORLDOMETERS

worldometers

The numbers are positively staggering.  You need to start right in front of your nose, but don’t stay there.  The money to be made exploiting music around the world is huge.  You don’t need to reach everybody, there are so many people out there.

HOWARD STERN ON TWITTER

Howard Stern – Twitter

Today he watched his own movie, "Private Parts", and tweeted the real story behind all the scenes.  Musical acts should go on Twitter and do the same thing, tell the real story behind making their music and being on tour.  The public eats this up.  If you do the tweeting yourself and are honest.  Don’t forget, the key is TRUST!

HUFFPO

Turns out the success of the site is SEO, which stands for "search engine optimization".  This is not a formula that cannot be replicated.  The site’s advantage is what again?

Web Words That Lure the Readers

OPRAH’S DISASTROUS RATINGS

On her cable channel, OWN.  Why?  Because she’s not on it and no one knows where to find it.  In other words, even though you were lead singer of a hit band, that doesn’t mean you’ll be an overnight solo success, many people still don’t know who you are.  Furthermore, can Oprah’s ratings suck (they’re lower than the channel she replaced) because there’s no negativity?  We’re sick of seeing rich people tell us how great they are!

Oprah cable ca$h

At least James Murphy fell on his sword.  Admitted he was not prepared and tried to take action.  The rest of the concert industry?

As for the public…  Just because you listen to a band’s music ad infinitum that does not mean you’re entitled to a front row seat at a tiny price.  Seats are worth more than that.  And unless a special system is put in place to make sure you get them, you’re not.

Paperless would be the best solution.  But it appears to be illegal in New York.  Why?  Because the scalpers don’t want to be put out of business and the legislators are too dumb to know the truth.  But it’s worse than that.  The public doesn’t want paperless either.  People talk about the inability of a grandmother to buy tickets for her grandchildren, but the real point is the public wants to scalp too.

What we’ve got here is the mortgage crisis.  Everybody wants a home for a cheap price and everybody wants to get rich flipping it.

How do we know this?  Because when paperless is employed, demand shrinks.  Shows don’t sell out.  Because the mania’s gone.  Only those truly interested in going buy tickets.  And that turns out to be fewer people than everybody thought.  And it kills your career overnight.

So first blame the acts.  They don’t want to risk playing to an empty building.  Isn’t an entertainment career based on smoke and mirrors?  Why reveal the truth?  That despite being in the news every day you’re not that big a star, like Miley Cyrus, she went paperless and found out that not that many people wanted to see her, she hasn’t toured since.

And let’s also blame the acts for refusing to sell tickets at fair market value.  Maybe the front row really is worth $500.  So charge it.  But you don’t want to do this, you’d rather blame the big bad scalpers than risk appearing greedy.  Maybe every other row is fair market value and you institute a system where fans truly can get the other good seats.  Paperless does this well.  Ask Trent Reznor.  His final show at the Wiltern was sans scalpers.  Sure, fans had to line up, but no one complained, it was an EVENT!

And Metallica manages to get fans in too.

So James Murphy was ignorant.  Dumb.

But the act is always at the center of the show, in a bubble, insecure, he truly does not know what he’s worth.  The final show in America’s number one media market?  That’ll definitely go clean.

But if you think they’re gonna put all 20,000, or in this case 13,000, seats on sale on Saturday morning, you’re sorely mistaken.

The public’s been told this story again and again and refuses to believe it.  They blame Ticketmaster and scalpers.  Do you really think Ticketmaster is in a conspiracy on one LCD Soundsystem show in New York?

Let’s investigate…

There was a band pre-sale, handled poorly.

American Express card holders get priority.

Then there are senate seats and other holdbacks and in the case of a 13,000 seat show, it appears 1,000 seats were truly available on Ticketmaster on the general public on sale date.

In a market of tens of millions is it a stretch to think 1,000 tickets sold out in seconds?

Now I’m not down with the scalpers.  I can’t believe they got that ridiculous law passed.  But they’re only there because the act won’t charge fair market value.  And sure, it’s bad if scalpers use bots or inside connections at Ticketmaster to get tickets, but if you think this is the only way they get ducats, you’re ignorant too.  They buy the senate seats.  Not only do season ticket holders not want to see certain concerts, they want the profit from resale too, just like the acts.

James Murphy could publish exactly how many tickets go on sale to the general public, but he doesn’t want to.  No act wants to, they’re afraid of the public outcry.  This information is available to acts, but they don’t want to disseminate it. Because if the public doesn’t believe it can get seats at a fair price, it’s out.  People turned on Toyota, they could turn on the concert industry too.

Then again, there are alternatives to Toyota.  And not to a hot act.

So it’s incumbent upon a hot act to be informed of realities and to do its best to make sure that good seats get in the hands of their fans.  You may abhor Bon Jovi platinum packages, but they wouldn’t exist if people didn’t buy them.  True fans are willing to pay a fortune to be up close and personal.  The extras just dress up the fact that you’re paying a fortune for a good seat.

The industry does not want change.  Acts and promoters want that American Express money.  And with recorded music revenue down, acts scalp their own tickets.  It’s less seamy than selling them at fair market value.

Is this news?

No.  Print media and TV have done this story again and again, but the public refuses to believe it.  It’s easier to just blame Ticketmaster and the scalpers than the acts and the promoters and the venues.

So it’s just like the rest of America.  The rich profit and the poor get screwed.  I wish the poor knew the concert industry better, but they can’t seem to figure out politics, so the odds of them figuring out the concert industry…

But the average person only goes to a show once a year.

You wonder why?

The Rageful Tweets of A Nation of LCD Soundsystem Fans Defeated By Ticketmaster

No one got tickets to LCD Soundsystem’s farewell show and now everyone is pissed

Murphy’s response

Compaq built a blockbuster business providing a product IBM would not.  Personal computers containing the latest chip.

Not only did Compaq’s PCs contain the latest hardware, it was tested a multitude of times, Compaq was Mercedes-Benz.  A very profitable business satiating a growing customer base.  Until its lunch was eaten by Dell.

Dell said computer hardware is trustworthy enough, it doesn’t need to be tested.  And if we sell PCs direct, made to your exact specifications, you can buy what you want at an unheard of price.

Compaq crumbled and was sold to HP.  Dell ruled.

Until PCs became commodities.  When suddenly no one cared about brand name or what was inside, but price.

Computers went from a labored decision, like buying a house or car, to an impulse buy, at retail, instead of mail order.  HP ate Dell’s lunch by producing laptops to Wal-Mart’s specifications at extremely cheap prices.  Now people decide what to buy on cost.  Fifty dollars more or less and they’ll purchase an HP, Dell, Lenovo or…

Well, really there are only a few computer companies left.  Because it’s almost impossible to make any money selling them, the margins are just too thin.

Is the same thing happening to concert promotion?

Once upon a time there were regional promoters, who controlled their territories and made a handsome living doing so. But as time went by, agents ate away at their profit margins, and before Bob Sillerman rolled up the regionals Michael Cohl blew up the game with international touring models, bypassing the regionals completely, maybe employing their production services for a low flat fee.

In other words, there’s no loyalty.

Used to be the promoter lost money on you in the club, but made it back at the arena.  The promoter was there for your development and was paid back accordingly.  Now acts go to the highest bidder.  And they want almost all the money.

Concert promotion has become a commodity.

Sure, there’s an issue of what buildings to play.  But if you’re going on an arena tour and AEG commits more capital than Live Nation, Randy Phillips gets the tour, or the opposite takes place and Rapino pays.

Where’s the little guy?

Left without enough capital in a market that’s shrinking in margins.

I’m not saying indies will disappear.  Just that the middle and top will be ruled by deep-pocketed players.  And these behemoths will win because they can pay the acts more money.

That’s what an agent wants to hear.  On the same tour, I can make more working for Live Nation than AEG or vice versa.

How do you make more money?

Employing data and the upsell.

If the data says visitors to the arena eat at Ruth Chris’s before the gig, and a coupon can be sold with the ticket and the act gets a cut, that’s more money in the act’s pocket, the act goes with that promoter.

In the world of commodities, only the big survive.  Who drive costs down to nothing.  Who can buy better and perform.

Look at flat screen TVs.  Everyone agreed the Pioneer plasma was the best.  But Samsung killed Pioneer, literally, by making LCDs much cheaper that were almost as good.  Scale allowed Samsung to do this.

There’s little brand loyalty in the commodity world.  Do you really care what kind of milk you buy?

But what about SERVICE?

Speak with all the electronics dealers who were put out of business by mail order and Amazon.  Turns out the public only cares about price when it comes to commodity items, just like acts.  Does it REALLY matter who produces your arena show?

And if the promoter can show you how to sell those tickets so you can sell out the building, you’re all ears.  That’s an agent’s job, to get the most money for playing the biggest hall the act can sell out.  If you make a million dollars playing an arena to a thousand people you’d better save your money, because your career is toast.

How do you scale the house?  Promoters pull the numbers out of their asses, as they do with ticket prices.  Sure, they look at past demand, but they don’t have any real time data.  And that data is now available.

In other words, Perez Hilton could not compete with TMZ, because of the latter’s scale.  Turns out gossip is a commodity, we go to whichever site breaks the most stories first, we don’t care about the rest.  Same deal with links pages.  Does the HuffPo have a lock on great links?  No.

Now when done right, art is not a commodity.  Nor is love.  Each act and relationship is unique.

Unless you’re using the usual suspect writers and producers and are going to a whorehouse.

Focus on your art.  Be different, be unique, that’s how you survive.

But just like there are no MP3s that sell for ten bucks, concert promotion will end up a commodity, a service that very few provide.  It was inevitable.  Bob Sillerman may have started the process.  Live Nation may not be the ultimate survivor.  But someone will be.

Bob,

I read your column on Live Nation with great interest yesterday.  If you dialed into one of their quarterly analysts’ calls, read their myriad of press releases, and/or reprinted their 10K, you could have saved the time it took you to drive to Civic Center Drive.  The following are some of my responses since the slant on your blog makes it sound like any attempt at competing with this 800 pound gorilla is pointless.  This kind of "anti-innovative" thinking coincides with your premise that there is no room for new ideas or invention on the web because Google, Amazon, and a shrinking Ticketmaster.com already exist.  

Here are my responses:

1).  AEG Live’s combination of touring, regional offices, real estate with roofs, festivals, and secondary ticketing yield a margin greater than 4% since we built, rather than bought, our EBITDA and carry very little debt on our books.

2).  Cirque du Soleil and the Bell Centre in Montreal, where the Montreal Canadians and more than 40 concerts played last year, have been doing transactions on their websites for more than 2 years with no reduction in their business since leaving Ticketmaster. They are building their unique brands and now have a direct relation with their customers. Considering your source, I doubt that Live Nation lost 25% of its revenue by "doing it themselves."  This may have had more to do with pricing and content choices, since the CTS software functions quite well for our AEG arenas in Germany and Livenation.com never engendered the same kind of consumer loyalty that Amazon.com or iTunes.com have.

3).  AEG decided that it made more sense to build our owned brands, not a third party’s, which is why we switched to Outbox. Coke does not market Pepsi and vice-versa.  This is not an ’80s model, this is a 2011+ business strategy that takes advantage of all the internet has to offer from data mining to data sharing to interaction with our consumers and so on, while allowing us and our partners (facilities, artist clients, sponsors, independent promoters, etc.) direct access to and ownership of all the data "our" content generates.

4).  After the "illuminating" presentation made by Mr. Azoff, Mr. Rapino, and Mr. Hubbard you wrote that: "They decentralized buying….it’s a local business" .  Thanks for so astutely defending my argument why the sale of tickets does not benefit from a national platform the way a mass marketer or distributor would.

Additionally, Fred Rosen asked me to thank you for reminding his current and future clients that he is "all about the buildings."  That is how Ticketmaster was created and the fact that the merged LN/TM have moved away from that model, has created a real competitive environment that gives facilities, content distributors, artists, and independent promoters a choice in how they interact with the public.

It amuses me that Irving and Mike felt compelled to "schmooze" you after my previous response when Irving, who I consider very bright and a friend, admonished me at the last Lakers’ home game for engaging in your blog.  If I realized that you could be so easily co-opted, I would have invited you to my office for an afternoon tea.

Randy Phillips