From: A Major Agent
To: Bob Lefsetz

Please keep my name out of this.

In addition to the 10 cancelled Lilith dates Live Nation just cancelled 25 Jonas Brothers dates yesterday.  No national press release, just announcements in the local markets.  They also cancelled some american idol dates.

From: Bob Lefsetz
To: A Major Agent

are you sure it’s 25, I can only find reference to a few…

From: A Major Agent
To: Bob Lefsetz

I’m pretty sure.  They are only announcing them locally.  Maybe some of the local offices aren’t announcing them until the beginning of the week.

Lilith Fair co-founder Terry McBride on the tour’s travails: ‘No matter what the media says, there won’t be any more cancellations’

Read the comments.

Terry McBride is making a classic twenty first century mistake.  He’s playing to the media, not the fans.

Yes, Lilith got caught in the Tour Crunch Of 2010.  It played by the old rules when we’ve suddenly been ushered into a new world.

It’s become a walk-up business.

Remember the Dixie Chicks?  They were excoriated by the press, dropped from country radio and then went on a sold-out tour.  How could that be?  They sold all the tickets months in advance, before the fracas occurred.

Then Celine Dion leaves Vegas and puts shows on sale over a year in advance.  Do you know what you’re doing fifteen months from now?  I certainly don’t, unless it’s a holiday, and then I sure don’t want to go to a show.

And feeding this frenzy we had high prices and scalpers and ultimately V.I.P. packages, all based on the premise that it was hard to get a ticket and everybody wanted to go.  But suddenly, when Miley Cyrus went to paperless ticketing, it turned out demand, if not skimpy, was far less than perception.  Gigs no longer sold out.  Mothers were no longer pissed.

And I don’t want to get into a long discussion of career arcs, who’s hot and who’s not, then again, I must say if you’re hot, your tickets sell, but very few acts are that hot today.

So:

1. Risk

That’s inherent in business.  We wanted to remove it from the concert world.  If you truly believe in your show, stage it. Because you won’t truly know what demand is until the very last minute, because concertgoing culture has changed. Only diehards need to buy in advance.  Others wait to see what their plans are, who’s going, what the price is.

2. Price

Ever notice that all movies are the same price?  Sure, 3-D has gone through the roof, but the numbers are not good

(Free registration: http://www.btigresearch.com/2010/07/01/dear-movie-industry-should-boise-consumers-really-spend-53-more-to-see-last-airbender-in-3d/). 

Is every act in it for himself or are we in it together?  Especially now, when very few acts can drive enough business to meet the guarantee.  Prices need to come down so people come to the show on a regular basis.  This is not only good for Live Nation, but business at large.  People get into the habit of going and they’re willing to take a risk.  Now, going to a show is getting married.  Can we turn it into a date?  A bad date is troublesome, but you shrug your shoulders and move on.  A bad marriage?  You’ve got to get a divorce, there are money issues, it’s hell.  If going to the show is hell, how often do we expect people to go?

3. Price 2

If there’s price protection at every electronics store, how come we can’t have it in the music industry?  If you buy a ticket and the price goes down, we refund the difference.

4. Trust

Without it, you’ve got no business.  When your product is hot, people will line up to buy it.  I.e. Dell.  Then Dell outsources customer service to Bangalore, makes defective computers and denies it and business goes elsewhere, in this case to HP.  (Never mind that Dell didn’t see the model change to retail sales at physical establishments once PCs had become a commodity.)

5. Value

Just because you put up a show, that doesn’t mean people want to go.  It’s got to be a good proposition.  The bill has to be desirable.  Don’t build a show by favors, but what will bring people through the door.  And, if fewer people are coming, bring in a co-headliner.  The ancient acts do it at the sheds, why can’t newer acts do it too?

6. The Media

You can control mainstream media, but you can’t control fans.  It’s like there’s a black market in information, only in this case, the black market is the real market.  You’ve got relationships with writers, they bend over backwards to be nice to you, desiring further access.  Then you’ve got the fans, on Facebook, tweeting, and it’s only what they say which is truly important, because they’re the ones buying the tickets!  I’m not saying you should ignore mainstream media, I’m just saying it should be secondary to social media, placating the fans.

7. Social Media Stunts

Terry McBride and Lilith should have special timed offers on Twitter.  One VIP ticket for free a day.  Or auction off a meeting with Sarah or every star with the proceeds going to charity.  Or auction off a signed guitar.  Make it quick, leave the mainstream out.  Get fans to go into a frenzy and tell each other.  Also, why isn’t Terry giving away performances in homes in every market?  Come on, some act on his bill would be willing to show up and play in a living room to build excitement.  For a new model guy, Terry’s positively old school here.  You’ve got to drive people to the show today.  And you do this via the Web, via social media.

8. Stop Selling

Desperation is a turn-off.  You can’t beg the customer to come, but you can relax and give the appearance that you’re all in it together.  Terry looks like Nixon.  Or Roger Clemens.  No one believes Roger Clemens is innocent, even though none of us know for sure.  Everyone thinks Lilith is in trouble.  How do you combat that perception?  Not by telling me what a great car the sudden acceleration Toyota is.  Hell, did you notice when Toyota got in trouble, they focused on price?  If your tour is in trouble, maybe you should do the same thing, because businesses across the nation see that that works, that everybody’s got a price.

9. Stop Blaming Live Nation

They paid for your tour, without them you’re nothing, or at least a hell of a lot poorer.  LN’s got tons of its own issues. But by pointing your finger at them, absolving yourself of power, you’re just playing the blame game, you look like you’re in the second grade.  You got in business with Live Nation, defend them!  Terry does a halfway good job of doing that here, but I don’t want one more act complaining about Ticketmaster or parking fees.  Lower YOUR fees and put limits in your Live Nation contract.  Go to all-in ticketing.  Reduce parking and beer.  Sure, the latter is difficult, but let’s be clear, fees are the profit center for Live Nation and they can’t eliminate them until you lower your guarantee.  So, either you’re part of the problem or part of the solution.  Either you’re willing to take less up front and work with Live Nation as a partner or you’re greedy, no different from the bankers on Wall Street.

10. Demand

Your album can’t come out after the tour begins.  No way.  Demand is just not that great.  Hell, we may go completely topsy-turvy, the tour might be months after the record release, when demand has been established.  Almost no acts get recorded music traction anymore.  If you’re using this to create demand, you’re screwed when the release date slips or your album stiffs.  There’s no buzz on Lilith.  Sarah doesn’t have a hit record.  There’s no URGE!  Maybe all these acts should have done a one off album in advance.  Gotten them all in a room and recorded a bunch of covers.  You can stream it on YouTube, embed it on your Facebook page and buy it on iTunes.  (Or acts should emulate the jam bands, instead of making it about rote performances of recorded hits, make every show unique and different, with new songs and improvisation, so either you were in attendance or you missed it…sure, it ends up on YouTube and RapidShare, but it’s not like being there, then again, watch it or see it after the fact and you want go to next time…P2P and the Web are your friends!)

11. If You Build It, They Will Come

Then you’d better be building one hell of a show.  That’s the U2 model, the album’s far from successful, but they go on tour with bells and whistles.  Or the superstar of yore reunites, like the Police.  Today even the Eagles no longer go clean.  Everybody has to create demand.  Is it a hit single, cheap prices, magic marketing, an incredible bill…  All of these elements are now key.  Screw up a bit and you’ve got a Pontiac Aztek instead of a Scion xB.  And isn’t it funny that Pontiac is out of business.  Yes, a few mistakes and you’ll be gone too.  At least car companies try, they refresh models every few years.  Do you want to buy an ’82 Cutlass?  Then why do you think people want to overpay to see you perform your old hits every year at the amphitheatre?

Last night we went to Privilege.

Not until 3 A.M., of course.  Before that we went to dinner.  A lovely outdoor place that reminded me of Woody Allen’s "A Midsummer Night’s Sex Comedy".  You remember, that romp in the Catskills.  I love those east coast summer nights, when it’s so warm you don’t need a jacket and you can eat outside.  Which is what we did.  And the deejay broke from the electronica for a minute to play Lou Reed’s "Walk On The Wild Side".  So weird to hear a forty year old song when the shelf life of a hit today is less than a year.  Whore it out soon, it might be worthless in the future!  We sang the "do, do, do, doos" and marveled at the connection between what once was and what now is.

Then we stopped at Aura while a member of our party ran an "errand".  Every spot has got a deejay.  Not spinning vinyl.  They’ve all got these Pioneer contraptions that spin CDs.  And Macs.

And from there, on to Privilege.  The world’s largest nightclub!

Want to know what it was like to be a rock fan in the sixties and early seventies?  Go to Privilege.

The access road is dirt.  People are milling around the parking lot and the place is a barn.  The focus is on the music.  And the people.

But one difference between now and then is the cost.  Clubbing in Ibiza is EXPENSIVE!

How expensive?

I’m not exactly sure.

You can pay at the door.  Or buy a package, so when you fly from the U.K. for the weekend, admittance is included.

Or you can be like me and get on the guest list for the V.I.P. area, allowing you to breeze through the entrance for nary a dime, and then sit down on a couch and get nicked for expenses so grand you want to cozy up to Live Nation.

It’s kind of like Vegas.  You know, those parties with "bottle service".  Which is a euphemism for very expensive alcohol included.

So we march into Pacha on Monday night, feeling like kings, sit down in our couches and are immediately served a tray of water, juice and Grey Goose vodka on ice.  Price?  400 Euros.  That’s $500.  More, actually.  Order another bottle of vodka, which does come in a lit bowl, and you’re in for another 300 Euros.  Who can do this every night?

Russians.  The truly rich.  Which there’s no shortage of.

Or you can get down into the pit with the hoi polloi, at somewhere between 50 and 80 Euros.  Drinks on top of that.

So you’d better be having a very good time.

There was the classic list confusion at the entrance of Privilege, which seemed like nothing so much as a run-down amusement park.  But a bit of finessing and we all got in.  To the V.I.P. area, where we were confronted with that potential astronomical bill.

The deejays were spinning.  Girls on platforms were dancing.  The crowd was strangely quiet, none of the pogoing of Pacha, there were far more boys than girls.

I would have stayed, but the assembled multitude just wasn’t up for the cost, never mind the ear-splitting horn right above our designated seats.

The venues of yore started out as something else.  Usually rundown, they were resuscitated for this lucrative new use.  Privilege had that feel. That this was a giant cavern utilized for profit.

We escaped via a back road that was narrower and bumpier than any in upstate New York and deposited our buddy across the street at Amnesia, for gay night.  He hasn’t woken up yet, I’m awaiting a full report.

How can Vevo not be profitable?

That’s what Rio Caraeff said in the "Financial Times".  That "We hope to be profitable in a fairly short number of years."

Let me see…  You aggregate already produced videos, which in any event are on a different balance sheet, you make a deal with YouTube wherein 80-90% of your content is streamed on that site, and you collect advertising, this is the holy grail of Vevo, AND YOU’RE STILL NOT MAKING MONEY??

Did you read the "Fast Company" story on Warner Music?  Now you’ve got to read anything in the straight media about the music business with a giant grain of salt, because these reporters are usually just that, collecting information, with no underlying understanding of the business they’re reporting on.  But, there are some interesting statistics revealed.

"WMG’s digital sales were up 11% last quarter, with digital music making up 30% of its revenues worldwide and 47% in the United States. (Sources say that at Atlantic, digital music approaches 60%.) Overall revenue is steady at more than $3 billion annually and margins are up. In comparison, Universal Music’s revenue last quarter dropped 13% and digital music sales dipped 2%."

How Warner Music and Its Musicians Are Combating Declining Album Sales

In other words, Warner is focusing on the future and Universal, the so-called behemoth, is living in the dark ages.

Lucian Grainge can’t arrive soon enough.  Vevo is the last hurrah of Doug Morris?  If Vevo is a victory lap, bring back Tiffany and Boyz II Men.

Now there are a couple of mainstream reporters who follow the music business on a regular basis and do get it right.  One is Ethan Smith of the "Wall Street Journal".  Today Mr. Smith reports that Warner Music, a Vevo hold-out, just made a deal with MTV to sell ads for its videos.

"Warner Music Taps MTV to Handle Online Ads With Its Videos"

Let’s start with infrastructure.  Vevo has forty ad salespeople and MTV has 150 selling online ads.  Furthermore, MTV promised to put Warner videos at the head of the class, giving them preferential treatment at its outlets.

Sure, the devil is in the details, but it appears that Warner’s the winner here.  Edgar and Lyor’s company has OUTSOURCED the function as opposed to building in-house infrastructure.  Vevo, should be making money now!  This isn’t artist development, sites live and die essentially overnight online.  Something is wrong with Vevo, it’s top-heavy or there’s just not enough money in online video or…

But it goes deeper.  The music industry has been run by Universal, a giant that controls the new neutered RIAA and bullies its compatriots.  And you’ve got the moribund Sony throwing in, (sure, they got lucky with Susan Boyle, but beneath the surface, there’s almost nothing there, fire everybody and put Barry Weiss in charge and give it a go, then again, Weiss is clueless when it comes to digital) and the supposed forward-thinkers at EMI making a deal too.  And you wonder why the major labels are in trouble.  They missed file-trading, they’re going to end up with a cloud-based track system which brings in less revenue than a cheap subscription scheme, and they’re still peddling overpriced CDs and trying to crack down on ISPs.  Finland just declared broadband access "a legal right"

Finland makes broadband a ‘legal right’

and you’ve got wankers at Universal lobbying to cut off traders’ access.  Tell me how you’re going to win this one?  I can’t have Internet access because the copyright bullies are mad at me!  Huh?  Let’s see how the Supreme Court comes down on this.  Meanwhile, you’ll never get legislation, or it will take years, longer than it does for Vevo to be profitable, to enact a law and meanwhile you’ll have missed the future.

The future is now.

At least Warner realizes this.