{"id":196,"date":"2005-10-21T13:22:36","date_gmt":"2005-10-21T20:22:36","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/index.php\/archives\/2005\/10\/21\/lack-lessons\/"},"modified":"2005-10-21T13:23:25","modified_gmt":"2005-10-21T20:23:25","slug":"lack-lessons","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2005\/10\/21\/lack-lessons\/","title":{"rendered":"Lack Lessons"},"content":{"rendered":"

1. It’s Not As Easy As It Looks<\/strong><\/p>\n

The music is made by teenagers.\u00c2\u00a0 Supervised by uneducated men who can’t be trusted who are attired in the clothing of teenagers.\u00c2\u00a0 How hard can this be?<\/p>\n

Very hard.\u00c2\u00a0 Although you can’t learn how to be a music executive in college, don’t think the business’ constituency is uneducated.\u00c2\u00a0 They’ve gone to a million shows, read a million magazines, they’ve dedicated their life to this business that is harder to STAY IN than just about anything other than professional sports.\u00c2\u00a0 Furthermore, there is a business culture, never mind a LEGAL culture, that one only learns by being knocked around for years.<\/p>\n

To think that one can waltz right in and effectively take hold of the reins of a major music conglomerate is equivalent to believing a rapper can run CBS News.\u00c2\u00a0 Or a music marketing exec can launch a sitcom.\u00c2\u00a0 Andy Lack would never dream any of the people at Sony Music could do either of these things, why does he believe he can run this musical empire?<\/p>\n

Or, in the alternative, do we lay this fiasco at the doorstep of the teflon-coated Sir Howard.\u00c2\u00a0 For all his good-natured bluster, calling the iPod DOPI spelled backwards, I’ve yet to see how Mr. Stringer has revolutionized Sony.\u00c2\u00a0 A hardware company that made the mistake of getting into content under the fallacious theory of SYNERGY!\u00c2\u00a0 Does Toyota refine gasoline?\u00c2\u00a0 The Sony brass should have sold off the entertainment assets and given control of the remaining operation to the guy who shepherded PlayStation.\u00c2\u00a0 Now they’ve got someone who doesn’t speak the language in control of an operation that doesn’t work.\u00c2\u00a0 Based on the solution of installing Andy Lack as head of Sony Music one doubts that Sir Howard is going to be pulling any rabbits out of his hat in the future.\u00c2\u00a0 That seems to be Steve Jobs’ role.<\/p>\n

2. You’ve Got To Have Friends<\/strong><\/p>\n

Records are not made in a vacuum.\u00c2\u00a0 Certainly not SOLD in a vacuum.\u00c2\u00a0 If you’ve got a career in the music industry, you’ve got FRIENDS!\u00c2\u00a0 You must.\u00c2\u00a0 In order to survive.\u00c2\u00a0 It’s not as simple as throwing money around.\u00c2\u00a0 Look at how many fat cats have started up labels only to go bankrupt.\u00c2\u00a0 You need friends to get you the right placement at retail.\u00c2\u00a0 These same friends will buy your product when you need to make your numbers work.\u00c2\u00a0 Your friends at radio will add a record when you need them to, and MTV will give you at LEAST a shot a year.\u00c2\u00a0 Because EVERYBODY knows that sometime in the future the roles will be reversed, and they’ll need a favor themselves.\u00c2\u00a0 Carp all you want about needing to know someone to effectively operate in this business.\u00c2\u00a0 You might think it sucks, but it’s got a lot to do with WHO DO YOU TRUST.\u00c2\u00a0 Everybody goes through a trial by fire, an initiation, only after one is deemed trustworthy is he let into the club.\u00c2\u00a0 The fact that Andy Lack didn’t even ATTEMPT to play this game is the reason he’s going to be out of a job.\u00c2\u00a0 People were not only annoyed, they were PISSED!\u00c2\u00a0 In a culture not built on education, or family background, but RESPECT, Andy completely blew it.<\/p>\n

3. A Company Is A Team<\/strong><\/p>\n

Even the mercurial megalomaniacal Steve Jobs thanks his team.\u00c2\u00a0 I don’t remember the reams of press acknowledging Donnie Ienner’s contribution to the operation.\u00c2\u00a0 Or, am I to believe this man with DECADES of experience in the business, as everything from a promo majordomo to a major label chairman, was bedazzled upon Lack’s entrance, suddenly realizing he knew nothing about the industry, that this TV man had all the answers.<\/p>\n

If you don’t get everybody to pull together, if you don’t demonstrate you’re human, that you can’t do it all on your own, people are going to steam inside and stop delivering.\u00c2\u00a0 And in a business that requires 24\/7 dedication, this is a major problem.\u00c2\u00a0 If you don’t treat your people right, not only are they not motivated to deliver, they don’t have your back.\u00c2\u00a0 Isn’t it funny that the only person who came to Andy Lack’s defense when the chips were down was Mr. Stringer, the man who hired him?<\/p>\n

4. A Label Is An Ongoing Operation<\/strong><\/p>\n

Epic ran for eons WITHOUT a President.\u00c2\u00a0 Columbia was in disarray.\u00c2\u00a0 What, did Mr. Lack believe a genie would come out of a bottle upon completion of the merger and deliver fully developed platinum acts?<\/p>\n

Virgin has just hired Jason Flom.\u00c2\u00a0 Jason will kick the tires on all of the company’s acts and try to energize those he believes are viable.\u00c2\u00a0 THEN, he’s going to sign new acts.\u00c2\u00a0 Which may not hit the pipeline for TWO YEARS!\u00c2\u00a0 Andy Lack failed to fill the pipeline.\u00c2\u00a0 Is it any wonder he doesn’t have great numbers to fall back on, to justify his career, keeping his job?<\/p>\n

Face it. Andy Lack was a shitty manager.\u00c2\u00a0 Of not only his people, but his company.<\/p>\n

5. Mergers Save Costs But They Don’t Generate Income<\/strong><\/p>\n

This goes along with number 4.\u00c2\u00a0 Sure, cut overhead, but then you’ve got to deliver hits.\u00c2\u00a0 This is what is hurting the Warner Music Group.\u00c2\u00a0 After getting the financial trains to run on time, someone noticed that too many acts had been dropped and not enough investment in new acts had been made.\u00c2\u00a0 Suddenly, after collapsing all those labels into two, Warner has the worst market share in the business.\u00c2\u00a0 In ten years, the operation went from first to worst.\u00c2\u00a0 And how did Universal go from worst to first?\u00c2\u00a0 By INVESTMENT!\u00c2\u00a0 Not only purchasing PolyGram, but hiring seasoned executives, starting new labels, INVESTING IN PEOPLE AND ACTS!\u00c2\u00a0 Do you really think Jimmy Iovine consults a spreadsheet before he pushes the button on an act?\u00c2\u00a0 No, he goes by his gut.\u00c2\u00a0 He FEELS he’s got a winner.\u00c2\u00a0 He gets the ocean liner MOVING!\u00c2\u00a0 That’s what breaking a multiplatinum act is like, firing up a fucking STEAMSHIP!\u00c2\u00a0 Mr. Lack had no gut.\u00c2\u00a0 And just wanted costs cut.\u00c2\u00a0 To quote the old axiom, you’ve got to spend money to make money.<\/p>\n

6. Know Which Way The Wind Blows<\/strong><\/p>\n

Nobody would have given Bruce Springsteen this deal:<\/p>\n

15mill non recoup
35 mill vs catalogue only
10 mill per album for 5<\/p>\n

With a REVERSION clause!<\/p>\n

Everybody knows those days are done.\u00c2\u00a0 When the boomer bands sold megaplatinum.\u00c2\u00a0 These are ROAD ACTS!\u00c2\u00a0 An income stream the label has NOTHING to do with!<\/p>\n

The new paradigm is for these heritage acts to go indie, selling the records themselves, making, in the parlance of David Letterman, ALL the money.\u00c2\u00a0 If Andy Lack had any friends, if he’d done his homework, he would have called Howard Kaufman.\u00c2\u00a0 Who would have set him straight.\u00c2\u00a0 Hell, Jimmy Buffett does BETTER LIVE BUSINESS than Springsteen.\u00c2\u00a0 And sells his records himself and makes MORE MONEY on each one!\u00c2\u00a0 And when he made a major label record, he didn’t get a deal anywhere CLOSE to this.<\/p>\n

Or, to speak in the words of the street, where the fuck was Bruce Springsteen gonna go?<\/p>\n

Not to EMI.\u00c2\u00a0 Not after Mariah Carey.<\/p>\n

Not to Warner.\u00c2\u00a0 That company already re-signed their heritage, label-defining act, Neil Young.<\/p>\n

Maybe to Universal, but not for these bucks.<\/p>\n

Furthermore, Bruce wanted to stay at Columbia, because that’s where his CATALOG is!<\/p>\n

Mr. Lack.\u00c2\u00a0 An ignorant baby boomer.\u00c2\u00a0 Thinking his wine-drinking dinner companions represent reality.\u00c2\u00a0 Believed that Bruce Springsteen still meant something sales-wise.\u00c2\u00a0 Bruce Springsteen is a musical icon who hasn’t made a great record in eons and based on his recent track record probably never will again.\u00c2\u00a0 Give this kind of money to Dr. Dre.\u00c2\u00a0 MAYBE Metallica.\u00c2\u00a0 Although younger, even that band’s sales curve is on the decline.\u00c2\u00a0 Then again, if Mr. Lack knew anything he’d be aware of the fact that Metallica doesn’t GO for the up front bucks, because they BELIEVE IN THEMSELVES!\u00c2\u00a0 Wouldn’t it be suspicious that Mr. Springsteen wanted all these bucks in advance?<\/p>\n

Mr. Lack operated in a vacuum.\u00c2\u00a0 He didn’t quite purchase a pig in a poke, but he demonstrated he was clueless.\u00c2\u00a0 If you were Bertelsmann, wouldn’t YOU want him out?\u00c2\u00a0 Especially since you weren’t CONSULTED?<\/p>\n

7. You’ve Got To Respect The Consumer<\/strong><\/p>\n

Sony Music is not a B2B operation.\u00c2\u00a0 Wherein two mutually dependent corporations interact.\u00c2\u00a0 The company is dependent on its end purchaser, INDIVIDUALS.\u00c2\u00a0 When the man on the street loses faith, you’re fucked.<\/p>\n

Andy just kept disrespecting the customer.\u00c2\u00a0 You KNOW you’ve fucked up when even Walter Mossberg is coming down on your copy-protected CD fiasco.\u00c2\u00a0 That’s what you do.\u00c2\u00a0 To get back at the people stealing the music, you penalize those who BUY the discs.\u00c2\u00a0 To the point where your OWN ACTS are rebelling.<\/p>\n

And what’s the ultimate goal here.\u00c2\u00a0 To break the public and the acts’ back?\u00c2\u00a0 Get them to cry "uncle"?\u00c2\u00a0 Is Mr. Lack that delusional, that he believes he can single-handedly solve the problems of the music business, by dictating to EVERYBODY?\u00c2\u00a0 Ultimate hubris.<\/p>\n

8. Don’t Play A Technologist If You’re Not One<\/strong><\/p>\n

What the FUCK was up with the DualDisc.\u00c2\u00a0 Is this REALLY what the public demanded?\u00c2\u00a0 A sorry-ass two-sided disc that breaks the standard of the CD format?\u00c2\u00a0 People are clamoring for files and you deliver DISCS?\u00c2\u00a0 God, listen to even Bill Gates, who’s pronouncing everywhere that discs are just about dead for MOVIES!\u00c2\u00a0 Which contain REAMS more data.\u00c2\u00a0 To address the failings of the business by delivering a product that is good on paper but irrelevant in the marketplace is just as dumb as those guys out of Colorado who invented a whole new FORMAT!\u00c2\u00a0 On tiny little discs.\u00c2\u00a0 Only a couple of years back.\u00c2\u00a0 In THIS century.\u00c2\u00a0 God, it was such a failure, despite being trumpeted by the business, that I can’t remember its NAME!<\/p>\n

And soon I won’t remember Andy Lack’s name either.\u00c2\u00a0 He’ll be about as relevant to the music business as Bob Siner.\u00c2\u00a0 Who saved MCA Records by destroying it.\u00c2\u00a0 Figuring if he never tried to break new records, he could make a profit.\u00c2\u00a0 Not realizing he was marginalizing the company along the way.<\/p>\n

Lew Wasserman realized he was fucked.\u00c2\u00a0 That he needed a real music man in place.\u00c2\u00a0 He hired Irving Azoff.<\/p>\n

Say what you will about Irving, but he built a label out of whole cloth.\u00c2\u00a0 By making a zillion deals.\u00c2\u00a0 Starting a black music division.\u00c2\u00a0 Al Teller reaped the rewards of Mr. Azoff’s investment for YEARS and Edgar Bronfman, Jr. purchased the assets and built a music behemoth.\u00c2\u00a0 Out of something that BARELY EXISTED a little over a decade before.<\/p>\n

Times are different now.\u00c2\u00a0 Maybe Bob Siner’s philosophy ain’t that bad.\u00c2\u00a0 Maybe Sony should go out of the new music business and just sell catalog.\u00c2\u00a0 Especially if the reins are handed to a fish out of water like Mr. Lack.<\/p>\n

If you want to surprise us, hire Cliff Burnstein.\u00c2\u00a0 A brilliant manager who used to work at a label.\u00c2\u00a0 Someone who understands costs, but also creativity.<\/p>\n

Not that you have to go that left field.\u00c2\u00a0 Just hire somebody who knows music, and the business.\u00c2\u00a0 Who’s better at delivering hit records than pontificating to Wall Street types whose heads are so far up their asses that they have no idea what’s going on until they read the financial reports ANYWAY.<\/p>\n

<\/p>","protected":false},"excerpt":{"rendered":"

1. It’s Not As Easy As It Looks The music is made by teenagers.\u00c2\u00a0 Supervised by uneducated men who can’t be trusted who are attired in the clothing of teenagers.\u00c2\u00a0 How hard can this be? Very hard.\u00c2\u00a0 Although you can’t learn how to be a music executive in college, don’t think the business’ constituency is […]<\/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-196","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-3a","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/196","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=196"}],"version-history":[{"count":0,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/196\/revisions"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}