You’ll like Donny Osmond after listening to this podcast, he’s definitely not a bad apple! We talk about growing up in Southern California, the Osmonds, the Donny & Marie TV show, as well as Vegas and his new album. Donny talks about being broke and needing to resuscitate his career, he’s fully aware of his public image. And who inspired his comeback, none other than PETER GABRIEL!

https://podcasts.apple.com/us/podcast/donny-osmond/id1316200737?i=1000541478405

https://www.stitcher.com/show/the-bob-lefsetz-podcast

https://music.amazon.com/podcasts/9ff4fb19-54d4-41ae-ae7a-8a6f8d3dafa8/the-bob-lefsetz-podcast

“MPs and music industry bodies criticise pay of Universal head Lucian Grainge – After a bonus payment, Grainge will earn more this year than all UK songwriters did from streaming and sales in 2019”: https://bit.ly/3bZdK9w

It’s capitalism

What stuns me about this blowback is it took weeks to gain traction. Going public Universal had to put all this in its prospectus, furthermore it was reported, but if you’re interested in art more than money, you missed it.

Just like you missed the memo re streaming payouts, which even the U.K. government got right, IT’S THE LABELS’ FAULT!

Streaming outlets take approximately 30% of the gross, which is not that high when you consider brick and mortar retail, even YouTube ad revenue splits. But somehow Spotify, et al, are supposed to dig deeper into their pockets, cough up all their running costs and their profits and go out of business in the process. We haven’t seen such malarkey since the sixties, when the hoi polloi said music should be FREE! Which music essentially was this century, until Spotify came along and monetized the infringement by providing an easier way to listen to music. People will pay for convenience. And they have, never mind the ad-supported Spotify tier.

Now the truth is major label advances pale in comparison to what they once were. When they were selling overpriced CDs in the eighties and nineties money was raining down and they didn’t mind giving some of it to their guaranteed hitmakers. But now, with the slump in revenues at the beginning of this century, with so many other ways to monetize, advances have not concomitantly bounced back up. Furthermore, we don’t have the guaranteed hitmakers of yore, ones who’ve sustained over decades. So…

It’s about the money. Not only for you, but investors and Lucian Grainge.

Lucian did the unthinkable, he got the EU to allow him to buy and retain most of Capitol/EMI’s assets. For years competing labels tried to buy Capitol/EMI, but they were thwarted at every turn.

And then he readied Universal for sale.

How did he do this? BY MOVING INTO THE MODERN ERA! Yes, Lucian Grainge has more foresight than seemingly ever act on his roster, save those who made tech investments earlier in this century. It’s Lucian who was gung-ho about Spotify. And it saved the recorded music business. Hell, if you waited for the acts to make it happen, it wouldn’t. These are the same acts who refuse to see that their cheese has been moved. The last two decades have been all about disruption, but somehow their careers can’t be disrupted, meanwhile they can now record on their laptops and put their music on streaming services almost for free and promote online for free. That’s the trade-off. Want to win today, embrace the new tools, the new paradigm.

So, Lucian gets Universal in shape to go public. It’s not like this was privileged information, it was in the news FOR YEARS! But just like Ticketmaster takes the heat for acts, Spotify took the heat for Grainge.

And a good chunk of Lucian’s compensation is a result of bonus clauses, based on the stock price. So, if someone does a good job you want to penalize them? Hell no.

But…

That’s a lot of money.

But not compared to a techie. If you’re not a billionaire, you don’t count. At this wealth level you can’t even afford a private jet, you can have a NetJet account, but only a big swinging dick can afford the largesse of a private jet. It’s really a dick thing, comparing units, because most people would do better with fractional ownership. Then again, how many people in America have enough wealth to afford fractional ownership?

Now the truth is if you want to make money, don’t go into the music business. The music business is to a great degree still pure thievery, but the barrier to entry is nonexistent. To be a doctor you need endless years of education. You need to be smart and do the work. Same deal with the CEO of a Fortune 500 company, there’s a good chance they have an MBA. Maybe an uneducated sot can make a living in finance, but don’t bet on it, it’s the educated with their old boy network who make the big bucks consistently.

Yes, that’s another feature of the straight world. The ability to make double digit millions year after year. That’s nearly impossible to do as an artist, even the Rolling Stones can’t tour every year, you’ve got to let the market lay fallow, to replenish demand.

Now the truth is entertainment executives have always been overpaid. It started in the movie business. But that’s all smoke and mirrors. You can be in a blockbuster and the studio still says the film is unprofitable and you’re not owed anything. But in music, we can now see the streams on Spotify, hard data, WHERE IS OUR MONEY?

In the hands of the major labels.

Now in truth the music business flipped thirty years ago, despite so many of today’s artists not even being born then, never mind knowing the history. Tommy Mottola ushered in an era where the executive was more powerful than the act, and usually had a longer career. And the label clawed back power. They decided what could be released, it was no longer the seventies where you recorded off the radar, delivered the LP and the label had to put it out unchanged.

And if we go back to that era, Mottola put the knife in Walter Yetnikoff, after CBS Records was sold to Sony. And when there’s a sale, there’s always a healthy profit. Just ask David Geffen, who made $500 million selling his label to Matsushita!

But Lucian did not own Universal. And it could have gone public without him, but it’s doubtful the price would have been as high.

Which is all to say that under the rules of traditional world capital markets of the twenty first century, Lucian Grainge earned his money. He started at the bottom, he worked his way up, that’s nearly impossible to do. One can say it’s harder to get to where Lucian Grainge did than to become a hit artist. As far as clawing that cash back, forget about it, it’s history, it’s all in black and white, and it’ll be forgotten, just like Clive Calder’s multi-billion sale two decades ago. And just like Calder took his money and went home, eventually Lucian will be done too, like every other exec, it’s only the music that remains.

And it’s all owned by the three major labels, that’s why they’ll never go away, they own the history of recorded music, and they’re using it as leverage. That’s why they have such sway over streaming services and anybody who wants to use music in the future.

And in that history, there were a ton of flops. But some megahits, which if royalties are owed are de minimis, the rates being so low. Yes, used to be assumed that the label would screw you, and you wanted the money up front, because you knew they’d never account honestly.

And then there were reversion clauses, such that Aerosmith got back their masters and could then license and sell them again, for double digit millions.

Do I think it’s fair that Lucian Grainge made more money in the year than all of the acts on his label? No. But as you can see, it’s more complicated than it appears.

Also, if you’re a new act, you don’t have to make a deal with a major label, it’s your choice.

And the major labels missed the publishing game. Hipgnosis and Primary Wave bought the greatest hits of the rock era and are using them as leverage, they own so many assets, expect the publishing share to go up. Not that the money will flow to the writer/owners, THEY SOLD OUT! You take the cash at a price. Or you could not take the cash and the asset could fall in value, that’s the risk you take.

But…record labels need to pay artists more. I mean how in hell did Universal have all this money to pay Lucian Grainge in the first place? The labels have been crying in their beer for years, and in the process they lowered advances, enacted 360 deals and made even more money than they did before. The artists have leverage, but you’ve either got to have monster hits or the artists must band together, which they are, to attack SPOTIFY???

I mean Daniel Ek made his billions, BUT HE BUILT IT! It’s not like there’s a slew of overpaid people at Spotify. How can there be, having to give 70% of every dollar to rights holders? Which is why Spotify is expanding into podcasts and more, BECAUSE MUSIC DOES NOT SCALE!

So please stop beating up on streaming services, other than YouTube, which deserves the hate with its horrible, greedy splits. There’s no more money to give.

But as illustrated by this Grainge payout, there’s plenty more money in the coffers of the labels. But we’ve never figured out how to extract it. Because the label lives on, but almost all of the acts do not. And acts don’t want to piss off their label, and they’re afraid of organizing and wasting time and trade secrets. That’s right, every musical act is competing against every other one, there’s only so much money in the marketplace, the public can’t afford to see EVERYONE!

So I think Lucian got paid too much. Then again, I think the entire compensation scale is way out of whack, especially if you didn’t start/build the company. If it’s your idea and you build it from scratch you should be entitled to big bucks, although you should pay taxes. But how can you make this much working for the man? Where is the RISK?

So Lucian Grainge is an example of this insane paradigm, but it’s not only him, and he’s keeping up with the Joneses, you may not live in their neighborhood but Grainge does, he wants equivalent compensation.

And, as far as big corporate paydays in recorded music to come? I don’t see any, BECAUSE THERE ARE NO ASSETS FOR SALE! No record label to go public, this is a one time deal.

But all the artists, even Paul McCartney, are lining up to pile on Spotify. Demonstrating ignorance, which money and business talent runs circles around.

You’re an artist, if you have success, use it.

As for the government protecting you, good luck. And the government can hurt as well as help you, you’re better off working outside the world of regulation.

But that brings us back to the top. How in hell was the Universal acquisition of Capito/EMI allowed? Giving Universal untold market share and power, which believe me the company exercises.

But that’s in the rearview mirror. We’re going forward. Universal is no longer the only shop in town. Used to be if you weren’t with a major, you couldn’t get your album distributed, now ANYBODY can get their music distributed. Listened to? That’s another thing. But that’s where the money is, in listens, and if you retain the rights and people continue to listen you’ve got quite the annuity.

The major labels have less power than ever before. Radio, their ace in the hole, is at best the cherry on top in the process of making a hit. And youngsters don’t even listen to terrestrial radio with all its ads in an on demand world. And as far as mainstream publicity, that’s declined in power dramatically also. Today it’s about a weird elixir online that you try to push into success. And most times it’s based on the acceptance of the music, not hype. Word of mouth spreads the word. But no one has cracked the code yet, the signposts keep shuffling and moving.

So there’s a lot of opportunity. Are you up for the risk? With the risk comes the rewards. Remember that.

And if you want to complain, be a student of the game, follow the business news, it’s all there, because when you recite idiocies like Spotify needs to pay more the insiders with power just laugh at you. Really. Because you don’t understand the game. Which is the first rule to playing it. But the big boys not only play it, they reinvent it. How big is your canvas, how hard are you willing to work? I’m not blaming the artists here, I’m just saying opportunities are not low hanging fruit, you’ve got to beat the bushes, spend years in the wilderness to make this kind of money. And be able to get along with people and play the politics. That’s what Lucian Grainge did, that’s why he got paid the big bucks.

Forget that Elon Musk is crazy, forget the Wall Street valuations, GM or Ford must merge with Tesla or be permanently left behind, on the way to the scrapheap.

It’s not where we are today, but where we are tomorrow. And twenty five years of disruption tell us you can be too early, but nothing is as bad as being too late.

The automotive industry is looked at as a manufacturing business. That’s old school. Cars in the electric world will be all about software! Remember back in the last century, during the computer boom, how many different manufacturers there were? Packard Bell and Gateway even made major inroads. But manufacturing is a low margin business. The winners were all software companies. Look at Microsoft, Google, Facebook, and Apple’s specialty is the integration of software and hardware. As for Amazon…it’s got great software, but it also possesses first mover advantage. The first mover, if it continues to innovate, often dominates. As long as it reaches scale. Furthermore, the main driver of Amazon’s profits isn’t the delivery of goods, with so much human labor involved, but AWS, Amazon Web Services. And now Amazon is losing market share there because it’s become about adding software to the hosting package, read Monday’s “Wall Street Journal” story for edification:

“Amazon’s Cloud’s New Boss Is Girding to Defend Turf in the Field Company Pioneered – Adam Selipsky, in interview, says AWS aims to offer more cloud software as Microsoft and Google challenge its market dominance”: https://on.wsj.com/3qqdl8P

Forget Rivian, forget all the American electric car startups. But don’t forget their Chinese brethren, already in the marketplace, and not only in China, a huge market. All these new companies have to push a heavy rock up a hill that includes not only software, but manufacturing. And one of the reasons Amazon does so well is because it’s a trusted name. Do you really want to risk your hard-earned capital on an upstart that may not only work imperfectly, but will leave you high and dry when the company goes bankrupt? I don’t think so.

Tesla is here today. As is its charging network. The company is selling as many units as it can produce. Unlike Detroit, Tesla is selling to Hertz AT FULL PRICE, assuming it can even deliver the quantity.

This is where GM and Ford shine, manufacturing. This is why Tesla needs one of them. To ramp up and dominate, so the company rides into the future as the undisputed leader, not only technologically, but in sales.

Detroit, i.e. GM and Ford, have expertise in manufacturing. They just don’t know much about software. Volkswagen, first mover in the electric sphere amongst legacy manufacturers, has been hobbled by software issues in its march forward: 

“VW’s Hopes of Catching Tesla Hinge on a $30 Billion Tech Reboot – Internal battles, technical glitches and a complex structure have hampered the German auto giant’s software efforts”: https://bloom.bg/3c192IE

It’s harder than it looks. I.e. it may look like an electric car, but equaling Tesla’s experience is nearly impossible. So far, GM has put out the Bolt, a tiny auto with battery problems, and Ford has recalled its Mustang. Unfortunately, despite American nationalism, the Japanese still make the most trouble-free cars, which is a reason for Tesla to shy away from GM and Ford, but without scale you’re doomed. That’s how Microsoft won, via scale, providing the operating system for IBM computers. The best does not always win, assuming the competitor is good enough. But when it comes to cars good is not good enough. No one wants car problems anymore, that’s so last century, middle of last century.

So AOL merged with Time Warner. Talk about a disaster. Gerry Levin’s vision was correct and the upstarts knew more than he did about the future, it’s just that AOL was built on air, soon to be superseded by the World Wide Web. Electric cars are the future. That’s been decided. And unlike AOL, it’s already here, the vision is complete, there’s not a major disruption right around the corner.

Forget Mary Barra, forget everybody in Detroit. They’ve missed the memo time and again. They’re managers, not innovators. And the last twenty five years have proven that innovators disrupt the storied class, very slowly, derided, and then seemingly overnight. This is what Clayton Christensen said. Yeah, at first you pooh-pooh the competitor, and then it gets good enough and eats your lunch. All those people are buying Teslas despite continuing manufacturing defects. Sure, Tesla has gotten better in manufacturing, but it is still not major league.

But if Tesla’s blueprints could be used in Detroit? Problem solved!

And also GM or Ford’s problem solved. They risk being legacy companies that go down to zero. The digital sphere is littered with companies like this. Do you remember BlackBerry?

So, a merger would be a win-win. It would demonstrate vision. And solve each company’s respective problem.

As for the self-driving “problem,” don’t you get it? It’s not the accidents/injuries/deaths, this is how it works in software, it takes a while to get it right. But when you do.. Come on, were you computing in the eighties? Software was buggy, constantly improved, and then the companies got it right. Tesla is on the bleeding edge here. We will have self-driving cars. The company that gets there first will have a huge economic advantage. Meanwhile, GM and Ford and the rest of the auto industry are afraid of regulators, who are clueless, and inactive in the most revolutionary auto leap forward. Electric cars are a small step compared to self-driving cars. You need to be in this sphere.

But that’s software. All those bells and whistles in Teslas… Those are Easter eggs demonstrating the company’s ability to write software, they’re so good at it that they can spend money and time adding fun features just for the hell of it, to entertain their customers.

In the future, you will be buying a computer, not a car. It will look like a car, but under the skin it will be a computer. This is bedrock, not up for discussion, this is not a far distant vision, this is now! So who is prepared for now? Certainly not GM or Ford. As for the other worldly manufacturers, there are not as obvious merger candidates, GM and Ford are the ones for Tesla.

Yes Tesla’s valuation is through the roof, so GM or Ford can’t purchase it. And there’s no reason for Tesla to do the reverse. It should be a no-cash transaction. Then again, there are tax issues, so many issues investment bankers specialize in.

Sure, Ford just got an almost ten billion dollar win via the public debut of Rivian, but money won’t buy you love and it won’t buy you software stability, no, that takes effort.

This is the way to go. Otherwise GM and Ford are at major risk. As for Tesla…can it scale up in time? Doubtful. But having GM or Ford’s manufacturing infrastructure…

Oh, one more thing, the Tesla brass ends up in control. Give the Detroit CEO a title, and then shortly thereafter squeeze them out with a golden parachute.

You don’t win by committee in tech. It’s all about a singular vision, usually from the founder/CEO. You let the old guard have power at your peril.

Every day more people are warming up to Tesla. They’re on the road, purchase is seen as much less of a risk. But imagine if they were made in concert with Detroit and were everywhere?

Then you’ve got a done deal. Dominance. For decades.

Go for the prize.

https://bit.ly/3mZnaZ5

Start at 1:33:33

I can’t believe I found this.

So I was driving over the hill, going through the SiriusXM channels over 300.

Used to be these were only internet stations, but if you’ve got a relatively new radio you can bring them in over the air in your car.

And I started with Road Trip Radio, #301, driving songs, and not all old.

And then I moved my way up to the dial to Jam On at 309 and I heard this.

Now you’ve got to know I’ve got a noisy car, but one of the best stereos extant. The best of Focal all around, an AVI subwoofer, a JL amp and an Alpine tuner. So what you’re hearing right now is not equivalent to what I heard, there’s no way to replicate the experience in front of your computer, or on earbuds, but in my car…

I’m done with politics, at least for the last week. I give up. I’m just thankful I live in blue California. It seems we’re going to go back and forth, from right to left, same as it ever was, but the parties and their beliefs are not the same as they ever were, but…this is a long explanation to tell you I haven’t been listening to news in my car, but music…well, at least when I’m not listening to Howard.

And I must admit I heard something on one of the modern stations in the 300s that appealed to me earlier in the evening, but it was this STS9, Sound Tribe Sector 9, track that appealed to me.

Used to be Jam On was further down the dial, but now that station is called “Phish Radio,” and people bitched when this happened, but maybe having two stations is better, especially when you can pull in both in your car.

Now the jam band scene… It peaked sometime in the nineties, but it still sustains, it even has its own festival, Electric Forest, never mind so many act-based festivals around the country. And jam band music is the opposite of hit music, it’s all about the live performance as opposed to the recording, a perfect fit for today’s experiential world. But, the media hasn’t caught up with the new world yet, it believes it’s about the limited Spotify Top 50 when nothing could be further from the truth, there are more genres doing better than ever before, but it is hard to climb the ladder and become ubiquitous and rich, so you’d better really like being a musician, because the money is not spectacular, then again if you read the reports on Astroworld you learned that music was just a feature, an element of Travis Scott’s empire. He’s built a business, which is the goal of so many Millennials and Gen-Z’ers, but for those of us who remember the old days, primarily before MTV created a monoculture, it’s all about the music and only the music.

Music is like pornography, you know it when you hear it. If you don’t like it, that’s fine, nobody likes everything, and now more than ever criticism means little, you can bitch but it falls on deaf ears, everybody’s having too much fun listening to the music of their desires.

So, once upon a time there was nothing more than the music, maybe some lights. And most of the venues had seats, you were there to listen, not to hang. You were in your own private reverie, merging with the performer(s) and their sound. When done right, it was a transcendent experience, you had no photographs, just a brain imprint and that was enough, you can still recite the details of great concerts the way golfers can replay every hole.

But in today’s multifarious world, it’s hard to find new music, playlists have not solved this problem, they’ve only confused it, never mind being imperfect. You want something new, but not finding an entrance point you give up and play the oldies, or just watch streaming television, but when you encounter something new you dig you’re elated.

Not that “Shock Doctrine” is new, the original studio version was cut in the aughts. But it’s just a blueprint for what’s come after.

Now looking at the SiriusXM readout I saw that this version of “Shock Doctrine” was performed live on the 9th of October, of 2021! Needless to say, it’s not on Spotify, probably never will be. And it wasn’t easily searchable on YouTube, but going through a million sites I found it. Which kind of amazed me.

Now the truth is it was the groove of this live performance of “Shock Doctrine” that got me. Not only did I feel comfortable, I melded with the sound, I was happy. This was not exterior, but interior. It pierced my body right down to my soul. I arrived at my destination yet I could not turn it off, I didn’t want the experience to end.

And then I started thinking about the experience, being at the gig, having the sound wash over me. And it’s only about the sound, not about the recognition of the hit, and every night the set list is different, the set is not set in amber.

So tune in at about 1:34:25 to hear what hooked me. The descending notes. Over and over again. Hypnotic.

Now this is not the only sound I like. I like acoustic singer/songwriter as well as metal. But this electric/synthetic sound is one that, when done right, resonates with me.

Now finding the concert online, I let the show play on beyond “Shock Doctrine,” and it was just as enticing, I became unmoored, on a journey. And sure, the beat is important, but it does not dominate, there are elements of melody, despite not being a hokey pop confection.

Hell, listening to STS9’s “Shock Doctrine” just makes me FEEL GOOD!