{"id":191,"date":"2005-10-17T18:17:58","date_gmt":"2005-10-18T01:17:58","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/index.php\/archives\/2005\/10\/17\/top-ten-problems\/"},"modified":"2005-10-17T18:17:58","modified_gmt":"2005-10-18T01:17:58","slug":"top-ten-problems","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2005\/10\/17\/top-ten-problems\/","title":{"rendered":"Top Ten Problems"},"content":{"rendered":"

1. Misconception Of The Internet<\/strong><\/p>\n

Physical sales were greatest at the height of Napster.\u00c2\u00a0 That’s no mystery.\u00c2\u00a0 Everybody was EXCITED about music.\u00c2\u00a0 People who never bought a CD, who never listened to music radio, were suddenly acquiring music again.\u00c2\u00a0 Proving the axiom that the Net is a GIANT opportunity to get NON-BUYERS consuming music.<\/p>\n

To replace physical sales with digital sales is to completely miss the point.\u00c2\u00a0 The key is to make everybody not consuming music today a CUSTOMER!\u00c2\u00a0 Think of it like the cell phone.\u00c2\u00a0 Cell phones have been around for twenty years.\u00c2\u00a0 But they only became ubiquitous in the last five years, when the price dropped dramatically and users had a clear idea of what their charge would be.<\/p>\n

Labels could point to tethered subscriptions as an innovation, but it fails the basic tenet of consumer culture.\u00c2\u00a0 You must deliver what the public WANTS!\u00c2\u00a0 Home video didn’t explode until the market shifted from rental to cheap ownership.\u00c2\u00a0 What makes the music business think it’s different?\u00c2\u00a0 Furthermore, the threshold to get into the market must be exceptionally low.\u00c2\u00a0 Sure, maybe not free like Napster, but built into the ISP fee for a couple of bucks.<\/p>\n

Once you get everybody consuming music the benefits trickle all the way down the food chain.\u00c2\u00a0 People want to see music live.\u00c2\u00a0 They purchase merchandise.\u00c2\u00a0 The whole sector is healthy.\u00c2\u00a0 But fearful that they might lose out in the future major labels are thwarting innovation in the marketplace.\u00c2\u00a0 Either they can get with the program or see a shadow industry built up around them.\u00c2\u00a0 Wherein indie acts give their music away for free and make it up on the ancillaries.\u00c2\u00a0 A lame business model compared to actually selling the music, but that’s exactly what the labels don’t want to do.\u00c2\u00a0 People want unlimited unprotected MP3s for one low price.\u00c2\u00a0 Actually, this is what they’ve now got.\u00c2\u00a0 It’s just that it’s free.\u00c2\u00a0 CHARGE THESE PEOPLE!\u00c2\u00a0 Make the old lady in Arizona a music consumer again.\u00c2\u00a0 Don’t try to drive people to Starbucks to purchase outmoded CDs, get them to download music while they’re answering their e-mail.\u00c2\u00a0 Get people talking about music.\u00c2\u00a0 DON’T kill the goose that laid the golden egg, EMBRACE the Internet.<\/p>\n

2. Exposure<\/strong><\/p>\n

You can’t buy something if you don’t hear it.\u00c2\u00a0 Oh, print\/net writings can help, but it’s a well-known maxim that nothing sells music like airplay.\u00c2\u00a0 It’s just that there IS no airplay.\u00c2\u00a0 Terrestrial radio, which dominates in market share, LISTENERSHIP, plays VERY LITTLE new music.\u00c2\u00a0 And, as a result major labels are signing fewer acts and only those that radio is interested in.\u00c2\u00a0 Is it surprising that sales have tanked?\u00c2\u00a0 Sales are greatest when the public HEARS the most new music.\u00c2\u00a0 But the major labels don’t want to embrace other avenues of exposure because they don’t reach enough people.\u00c2\u00a0 They want to sell MILLIONS of copies of an act’s debut record.\u00c2\u00a0 How in the hell is Internet radio airplay going to help them?<\/p>\n

It’s not.\u00c2\u00a0 Because, INHERENTLY, Internet airplay is niche.\u00c2\u00a0 As is satellite radio.\u00c2\u00a0 With scores of music channels on each service.\u00c2\u00a0 This frightens the major labels.\u00c2\u00a0 They can’t reach critical mass.\u00c2\u00a0 Their reaction?\u00c2\u00a0 Try and stop the advent of these new technologies.\u00c2\u00a0 For fear of losing market share.\u00c2\u00a0 Keep the indies out, keep the landscape for yourself.\u00c2\u00a0 Unfortunately, this is a losing paradigm, for the majors have already lost mindshare.\u00c2\u00a0 They can either get with the program now, or just see their revenues continue to erode.\u00c2\u00a0 Major LABELS should be pushing satellite radio subscriptions, Internet-listening.\u00c2\u00a0 They should be PROMOTING new places to expose music.\u00c2\u00a0 Ultimately knowing that THEIR business model will change.\u00c2\u00a0 That they will return to the model of forty years ago.\u00c2\u00a0 Signing many acts, recording them cheaply, trying to find a market for each, and waiting for one or two, or three or four, of these QUALITY acts to blow up because the public EMBRACES them.<\/p>\n

3. Guarantees<\/strong><\/p>\n

They hurt the major labels.\u00c2\u00a0 And they hurt the touring business.<\/p>\n

Unfortunately, in order for guarantees\/advances to go down, labels will have to start paying royalties.\u00c2\u00a0 ACCURATE royalties.\u00c2\u00a0 And they’re going in the other direction.<\/p>\n

But this guarantee-mania in the touring world must end.\u00c2\u00a0 Maybe an act’s COSTS can be guaranteed.\u00c2\u00a0 Their RAW costs.\u00c2\u00a0 But upside should be shared between the act and promoter.\u00c2\u00a0 Acts demand high guarantees, promoters fearful of losing the act to someone else pay them and the public ends up with an overpriced ticket.<\/p>\n

Touring is about demand.\u00c2\u00a0 If you’re doing lousy business, you shouldn’t make much.\u00c2\u00a0 Beyonce, Eminem and his pals…\u00c2\u00a0 The losses they incurred must be made up by ripping off the public on all the REST of the shows.\u00c2\u00a0 These losers should shoulder some of the financial loss for not delivering what the public wants.\u00c2\u00a0 The business SHOULD BE about delivering what the public wants.\u00c2\u00a0 A desirable act in the right-sized venue for the right price.\u00c2\u00a0 Those issues have been back-burnered as agents and manager fight promoters for the most bucks.\u00c2\u00a0 It’s bullshit.<\/p>\n

4. Disinformation<\/strong><\/p>\n

Suing file-traders reduces file-trading.<\/p>\n

If the present business model is not sustained, no one will make music.<\/p>\n

The labels are just giving the people what they want, the urban music on Top Forty radio.<\/p>\n

The industry spin machine is on overdrive.\u00c2\u00a0 The people reporting the story know nothing about the business, so they just repeat the bullshit.\u00c2\u00a0 And the consumer scratches his head.\u00c2\u00a0 This isn’t the world HE’S living in at all.<\/p>\n

There’s no trust between the business and the purchaser.\u00c2\u00a0 The lies are just widening the gulf.<\/p>\n

The fan used to be in bed with Warner Brothers.\u00c2\u00a0 And Bill Graham.\u00c2\u00a0 Figuring these entities were CUSTODIANS, looking out for them.\u00c2\u00a0 Ain’t that a laugh.<\/p>\n

Or, as John Lennon once sang, GIMME SOME TRUTH!<\/p>\n

5. Marty Bandier<\/strong><\/p>\n

Who won’t go to a percentage rate on publishing.\u00c2\u00a0 This is what happens when you’ve got consolidations\/monopolies.\u00c2\u00a0 EMI Music Publishing is SO big that it dictates.\u00c2\u00a0 Same deal with Universal in the label sphere.\u00c2\u00a0 There can be no new music business distribution models if there’s still a penny rate for publishing.\u00c2\u00a0 Yes, the labels want a reduction, and that’s unfair.\u00c2\u00a0 But negotiation must begin.\u00c2\u00a0 This stalemate is just hurting the business.\u00c2\u00a0 In the form of lost sales, as people STEAL the music.<\/p>\n

6.\u00c2\u00a0 The Perception That The iTunes Music Store Is The Savior<\/strong><\/p>\n

The iTMS is great for Apple, it’s death for the labels.\u00c2\u00a0 They were once IN the singles business.\u00c2\u00a0 It was only when they got people to by ALBUMS that the business blew up, that multinational corporations wanted to own labels, for the cash they threw off.\u00c2\u00a0 You’ve got to get more than a buck, or a hypothetical $1.29 with variable pricing, from each customer.\u00c2\u00a0 You don’t buy a car one wheel at a time!\u00c2\u00a0 And, even once you’ve PURCHASED the car you can’t get a single option.\u00c2\u00a0 There are option PACKAGES!\u00c2\u00a0 Want 17" wheels?\u00c2\u00a0 Then you’ve got to get a sunroof.\u00c2\u00a0 Want xenon headlights?\u00c2\u00a0 Then you’ve got to get heated seats and mirrors.\u00c2\u00a0 The auto industry learned that you can only make it by hiking the sales number, the PRICE!\u00c2\u00a0 Get MORE money, not LESS.\u00c2\u00a0 Or, in the alternative, you can’t buy JUST "The Sopranos" from HBO.\u00c2\u00a0 You’ve got to go for the 24\/7 service.\u00c2\u00a0 SOME people watch HBO all the time, others once a week.\u00c2\u00a0 But this is how you get more money, by giving people NO CHOICE!\u00c2\u00a0 Creating something SO GOOD that they’ll go for the whole enchilada.<\/p>\n

7. Endless Hype<\/strong><\/p>\n

By trying to reach every last potential customer the labels are turning off the acts’ core audience.\u00c2\u00a0 The CORE sells the act to others, and is there for the next album.\u00c2\u00a0 Treat the CORE right.\u00c2\u00a0 Fuck the casual buyer.\u00c2\u00a0 Let him come along for the ride (via cheap, all you can eat subscriptions), but don’t let him be the FOCUS of your marketing.\u00c2\u00a0 I mean do you really want to own the album of the act playing dumb, talking irrelevancies on the "Today Show" set?\u00c2\u00a0 We’re selling belief.\u00c2\u00a0 Leave the belief out, and you’ve got a crippled business.<\/p>\n

8. Mass vs. Niche<\/strong><\/p>\n

There are always going to be a few Celines, some Mariahs.\u00c2\u00a0 Who play to the lowest common denominator and sell millions of records while being despised by many along the way.\u00c2\u00a0 Music is not television, nor movies.\u00c2\u00a0 Those two mass media are inherently expensive.\u00c2\u00a0 Records should be made cheaply for a specific audience.\u00c2\u00a0 Not expensively for a theoretical everyman who doesn’t exist.\u00c2\u00a0 Look at cable television.\u00c2\u00a0 There are three hundred channels.\u00c2\u00a0 Other than the networks, everybody’s appealing to a small SLIVER of the populace.\u00c2\u00a0 Same deal in music, but WORSE!\u00c2\u00a0 Because anybody can make a record, there’s no filter.\u00c2\u00a0 So, make something GREAT, not MARKETABLE.\u00c2\u00a0 Something about MUSIC not looks.\u00c2\u00a0 And use the music as kindling to get something started.\u00c2\u00a0 And make another record before you’ve reached everybody with the first.\u00c2\u00a0 Under the rule of satiating the core audience.<\/p>\n

9. Commercialization<\/strong><\/p>\n

Credibility.\u00c2\u00a0 It rarely existed in Top Forty, but the money was never in Top Forty.\u00c2\u00a0 Clive Davis got everybody’s head twisted into making Top Forty hits.\u00c2\u00a0 But, check Mr. Davis’ catalog.\u00c2\u00a0 Nobody even wants WHITNEY HOUSTON today!\u00c2\u00a0 Never mind all the lesser acts Mr. Davis purveyed.\u00c2\u00a0 It’s about building a catalog.\u00c2\u00a0 That sells forever.\u00c2\u00a0 THAT’S why Warner is worth so much.\u00c2\u00a0 NEIL YOUNG, not 2 Live Crew.<\/p>\n

10. Lame Fat Cats<\/strong><\/p>\n

If you’re smart, if you’re innovative, you don’t enter the music industry.\u00c2\u00a0 Where there’s no upward career movement, where brand\/copyright bullies thwart your every move.\u00c2\u00a0 The business likes it the same as it always was.\u00c2\u00a0 So, if you’re an entrepreneur, if you’ve got new ideas, you work in gaming, or computers.\u00c2\u00a0 Where someone RESPECTS you.\u00c2\u00a0 Your ideas.\u00c2\u00a0 The fact that you’re in touch with the street.<\/p>\n

Look at the insane industry salaries.\u00c2\u00a0 The absence of any power, never mind reasonable salaries, for twentysomethings.\u00c2\u00a0 Look at the constant layoffs.\u00c2\u00a0 THIS is an inviting place to start a career?<\/p>\n

ULTIMATELY, young true believers will revolutionize this business.\u00c2\u00a0 They’ll fight the powers that be.\u00c2\u00a0 Release the records themselves.\u00c2\u00a0 Try to find a way around Clear Channel.\u00c2\u00a0 Take the digital sphere into their own hands.<\/p>\n

As far as I’m concerned, the sooner the better.\u00c2\u00a0 Because the kids know it’s all about the MUSIC, whereas the fat cats think it’s all about the MONEY!<\/p>\n

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1. Misconception Of The Internet Physical sales were greatest at the height of Napster.\u00c2\u00a0 That’s no mystery.\u00c2\u00a0 Everybody was EXCITED about music.\u00c2\u00a0 People who never bought a CD, who never listened to music radio, were suddenly acquiring music again.\u00c2\u00a0 Proving the axiom that the Net is a GIANT opportunity to get NON-BUYERS consuming music. To […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[],"class_list":["post-191","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-35","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/comments?post=191"}],"version-history":[{"count":0,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/191\/revisions"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}