I don’t advise you watch it.\u00c2\u00a0 Unless you want to familiarize yourself with everyone’s personality.\u00c2\u00a0 As for seeing government in action, when Orrin Hatch started talking about Utah and the Bowl Championship Series, I wanted my money back.\u00c2\u00a0 Or at least a deduction on my 1040.\u00c2\u00a0 If you think that the music business is a club, you should check out the verbal gymnastics and ass-kissing of these committee members.\u00c2\u00a0 I think we’d be better off investigating them.<\/p>\n
As for the music business personalities…\u00c2\u00a0 The only man who didn’t come across as himself was Michael Rapino. Maybe because he’s Canadian, maybe because he’s a generation younger than his compatriots on the panel.\u00c2\u00a0 One on one, Rapino is a mastermind.\u00c2\u00a0 He’s self-deprecating and aligns himself with you like a fraternity brother, and then proceeds to weave a net that wraps you up tight, convincing you that he’s altruistic and has the true vision of the future.\u00c2\u00a0 It’s akin to Steve Jobs, with just a little less assholity.\u00c2\u00a0 Unlike his brethren on the panel, Mr. Rapino’s career is mostly in front of him.\u00c2\u00a0 So he’s got something to prove.\u00c2\u00a0 But he didn’t prove it here.<\/p>\n
Jerry Mickelson represents the classic promoter.\u00c2\u00a0 An angry force of nature.\u00c2\u00a0 Just watch the movie "Fillmore" to see the venerated Bill Graham in action.\u00c2\u00a0 He could pop off in an instant, at the tiniest offense.\u00c2\u00a0 Classic concert promoters were entrepreneurs, they had to watch every nickel and dime, they were proud of their accomplishments.\u00c2\u00a0 That’s Jerry.<\/p>\n
As for Seth Hurwitz…\u00c2\u00a0 If he were ever to lose his concert promotion business, unlike so many in the music industry, he could find another job.\u00c2\u00a0 Eloquent, well-spoken, the opposite of winning through intimidation.\u00c2\u00a0 Seth’s recitation of history, how we got here, was one of the highlights of the hearing.\u00c2\u00a0 Unfortunately, it represents the past.<\/p>\n
And Irving Azoff represents not only the past, but the future.<\/p>\n
I was just waiting for one of the committee members to ask Irving about Sal Pisello.\u00c2\u00a0 But they’ve probably got no idea who that man was, just like they were clueless when it came to the concert industry.\u00c2\u00a0 Malcolm Gladwell should have held this hearing.\u00c2\u00a0 Because he understands that it takes 10,000 hours to truly be a pro in any field.\u00c2\u00a0 And the four men here are all pros, they all made good points, and all we got from the committee was Bruce Springsteen and Hannah Montana.\u00c2\u00a0 The Senators were so clueless as to prove Irving’s point, that Ticketmaster is a front for the artists.<\/p>\n
Bottom line, the music business is in trouble.\u00c2\u00a0 And concert promotion is only one element of the music business. And no one has figured out how to fix the recorded music industry.\u00c2\u00a0 Actually, one can argue that rights holders have done their best to kill the recorded music industry.<\/p>\n
Watching this hearing reminded me of a similar one held regarding Napster almost ten years ago.\u00c2\u00a0 The record labels succeeded in killing Napster, but then came KaZaA and now they’ve lost 45% of their sales.\u00c2\u00a0 You’ve got to look to the future!\u00c2\u00a0 The labels wanted CDs, priced at far north of ten bucks apiece.\u00c2\u00a0 The heads of the labels weren’t computer-savvy, if they used computers at all.\u00c2\u00a0 They not only couldn’t understand the greatness of Napster, they could not conceive that in the relatively near future, most people would want files, and that people would own much more music.\u00c2\u00a0 If the labels didn’t want to charge?\u00c2\u00a0 So be it.\u00c2\u00a0 Then music would be free.<\/p>\n
We’re building no new arena acts, never mind stadium attractions.\u00c2\u00a0 As for sheds, if they were such a good deal, Live Nation would be promoting more shows in the venues and everybody wouldn’t be laughing about the business model.\u00c2\u00a0 The only person who thinks sheds are a viable business is Michael Rapino, who owns almost all of them. Yet at this hearing Jerry and Seth talked about Bruce performing outdoors in the summer in sheds?\u00c2\u00a0 Hysterical.<\/p>\n
You know who wasn’t at this hearing?<\/p>\n
AEG.<\/p>\n
Jerry and Seth decided to go it alone, not to sell out to Sillerman.\u00c2\u00a0 That was their choice.\u00c2\u00a0 But they shouldn’t be protected from consequences with regard thereto in perpetuity.\u00c2\u00a0 Irving Azoff built AEG for Philip Anschutz.\u00c2\u00a0 In order to have another competitor to sell his talent to.\u00c2\u00a0 Brilliant idea.\u00c2\u00a0 One that could have been executed by Messrs. Mickelson and Hurwitz if they’d so chosen.\u00c2\u00a0 Yup, look for\u00c2\u00a0 a deep pocket to execute a strategy.\u00c2\u00a0 Jerry and Seth wanted to remain fiercely independent.\u00c2\u00a0 That’s like John DeLorean thinking that he could compete with not only GM, but Toyota.\u00c2\u00a0 Or like Kaypro computer being pissed it’s not dominant today.\u00c2\u00a0 Sometimes you’ve got to double down in order to continue to succeed on a first tier basis.\u00c2\u00a0 If you choose not to do so, you don’t gain immunity.<\/p>\n
So, you can sell your tour to AEG or Live Nation.\u00c2\u00a0 One can argue that AEG has better venues.\u00c2\u00a0 But AEG tends to only want the superstars.\u00c2\u00a0 Which they are willing to pay handsomely for.\u00c2\u00a0 Where’s the hearing ordering AEG to develop talent?<\/p>\n
So, there is competition in the concert industry.\u00c2\u00a0 It’s just that you’ve got to have very deep pockets to enter.\u00c2\u00a0 Welcome to the twenty first century world.<\/p>\n
Where was the manager at this hearing?\u00c2\u00a0 Oh yeah, Irving bought almost all of them up.\u00c2\u00a0 Just like Sillerman rolled up the concert industry twelve years ago.\u00c2\u00a0 All I heard from individual managers was complaints that they could do it better.\u00c2\u00a0 Well, they still can.\u00c2\u00a0 But many acts want to align with Irving\/Front Line.<\/p>\n
And then we’ve got Ticketmaster’s mistake.\u00c2\u00a0 The Springsteen debacle.\u00c2\u00a0 That, along with Live Nation starting its own ticketing, may cause this merger to crater.\u00c2\u00a0 Without these two faux pas, this merger passes muster much easier.<\/p>\n
But let’s look at reality.\u00c2\u00a0 Ticketmaster bought Tickets Now for growth, they didn’t want to lose out on the secondary market revenue.\u00c2\u00a0 And Live Nation built its own ticketing enterprise BECAUSE THAT’S THE ONLY PLACE THERE ARE PROFITS!<\/p>\n
We’re all in trouble here.\u00c2\u00a0 Not only the public, supposedly protected by the government.\u00c2\u00a0 Acts can’t get paid for recorded music, and unless they broke eons ago, almost no one wants to buy their music or see them live.<\/p>\n
Live Nation has got such razor thin margins that its health is in trouble.<\/p>\n
So what’s the solution?<\/p>\n
That’s what I want to hear, solutions.\u00c2\u00a0 None came from Jerry or Seth.\u00c2\u00a0 Do they want to sign acts, give them advances like Live Nation or manage them like Irving?\u00c2\u00a0 Nothing’s preventing them from employing this model.\u00c2\u00a0 But they don’t want to, they want to live in 1976.\u00c2\u00a0 As for the labels, they’ve always stolen from the acts, and now, with their 360 deals, they want to steal even more.<\/p>\n
So how do we fix this?<\/p>\n
Not by leaving things the way they are.\u00c2\u00a0 Because they’re totally fucked.<\/p>\n
Do I wish that Sillerman hadn’t rolled up the concert promoters?\u00c2\u00a0 Yes, but for order to be maintained, Frank Barsalona would have had to continue to limit each promoter to his territory, and Frank’s power was broken by Michael Cohl, if not earlier.<\/p>\n
Do I wish that the Telecommunications Act of 1996 hadn’t allowed radio consolidation?\u00c2\u00a0 Absolutely.\u00c2\u00a0 But I no longer listen to terrestrial radio, I’m against commercials, like so many other listeners.<\/p>\n
Do I wish MTV still played videos?\u00c2\u00a0 Of course.\u00c2\u00a0 But I wouldn’t watch, when I can stream any video I want, instantly, online.<\/p>\n
Things change.\u00c2\u00a0 Can we admit that?\u00c2\u00a0 What looks like a powerhouse today can be on the verge of bankruptcy tomorrow.\u00c2\u00a0 GM?\u00c2\u00a0 Remember they wanted to break up that company?\u00c2\u00a0 The Japanese beat Detroit by building reliable cars, what a concept.\u00c2\u00a0 Microsoft?\u00c2\u00a0 Lost out to Google.\u00c2\u00a0 All the money’s in paid search, Microsoft is laying people off.\u00c2\u00a0 Applications are moving to the Web.\u00c2\u00a0 What’s the future of Microsoft Office, never mind Windows?<\/p>\n
You break power by creating something better.\u00c2\u00a0 Whether it be more efficient, cheaper or better.\u00c2\u00a0 Anybody can promote the concert of a new act.\u00c2\u00a0 Very few people want to do it.\u00c2\u00a0 You can take over the industry of developing acts tomorrow.\u00c2\u00a0 The major labels sign very few artists and usually only those who can get radio airplay.\u00c2\u00a0 Why can’t you manage and promote something people want to see?<\/p>\n
Yes, Live Nation might offer a bunch of money to promote the act in the future, but Arcade Fire never signed to a major label.<\/p>\n
So, emotionally I don’t want Ticketmaster and Live Nation to merge.\u00c2\u00a0 I hate consolidation.\u00c2\u00a0 But it happened in our industry and it can’t be denied.\u00c2\u00a0 This merger should not be stopped until someone comes up with a better solution for protecting and developing talent.\u00c2\u00a0 The labels are bankrupt when it comes to this.\u00c2\u00a0 Irving and Rapino are trying to make the old acts money.\u00c2\u00a0 As for the new ones, they’re trying to change the paradigm, where the act gets the lion’s share of the money from all revenue streams.<\/p>\n
You can’t stop progress.<\/p>\n
You can’t jet back to the past.<\/p>\n
Do I trust Irving Azoff?<\/p>\n
No.<\/p>\n
But I don’t trust Bill Belichick either.\u00c2\u00a0 But if I owned a football team, I’d want Bill to coach it.\u00c2\u00a0 Because he might not be a nice guy, but he’s a winner.\u00c2\u00a0 If you watch this hearing, you’ll see a bit of Irving.\u00c2\u00a0 Only he joked in his prepared statement.\u00c2\u00a0 He stood up to the Senators’ questions.\u00c2\u00a0 Isn’t that what you want?<\/p>\n
I bet on Irving Azoff because he’s a winner.\u00c2\u00a0 He’s not going to live forever.\u00c2\u00a0 Nobody is.\u00c2\u00a0 Give him the ball now and let him turn this business upside down, into one in which the acts have more control and more power.<\/p>\n
If I wanted you to like me, if I wanted to please most of the people on this list, I’d rail against this merger.\u00c2\u00a0 Let’s bring down Hubert Humphrey so Richard Nixon can be elected President!\u00c2\u00a0 Let’s sue our customers because music should be paid for!\u00c2\u00a0 Let’s bury our heads in the sand and refuse to see the freight train rolling down the track.<\/p>\n
Conventionally the labels built acts, they created demand.\u00c2\u00a0 Their ability to do that is a shadow of what it once was. Promoters need to build acts.\u00c2\u00a0 And the more rights a promoter has, the better his chance of financial success.<\/p>\n
As for whether Irving needed to sell Front Line to Live Nation instead of Ticketmaster…\u00c2\u00a0 If everybody agrees the money is in the ticketing, isn’t that where you want to be?<\/p>\n
You can’t predict the future.\u00c2\u00a0 Could Ticketmaster and Live Nation merge and things be worse?\u00c2\u00a0 Absolutely.\u00c2\u00a0 But I’ve got no doubt that a competitor would arise.\u00c2\u00a0 Certainly on the promotion side.\u00c2\u00a0 Sometimes you’ve got to take a risk. This is one of those times.<\/p>\n
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