The complaint of the major labels is very real.\u00c2\u00a0 Their business is evaporating.<\/p>\n
Last week’s sales were off 12.9% from the comparable week in 2004.\u00c2\u00a0 This on top of sales decreases for the past half decade.\u00c2\u00a0 Which now seem to be ACCELERATING!<\/p>\n
First explanation.\u00c2\u00a0 Dearth of superstar product.<\/p>\n
Only one problem here.\u00c2\u00a0 No one’s figured out how to BUILD a superstar in 2005.\u00c2\u00a0 Oh, the majors WANT ONE, they’re praying for MANY, but the hits just don’t keep coming.<\/p>\n
The formula was solid.\u00c2\u00a0 Get the act on MTV.\u00c2\u00a0 All over radio.\u00c2\u00a0 And in every publication known to man.\u00c2\u00a0 Unfortunately, no one’s paying attention anymore.\u00c2\u00a0 MTV gave up on videos.\u00c2\u00a0 Radio’s become so predictable that the younger generation has tuned out.\u00c2\u00a0 There’s no central place to break a record.<\/p>\n
This is not a music business condition.\u00c2\u00a0 It’s an American business condition.\u00c2\u00a0 It’s the result of choice.\u00c2\u00a0 Everybody’s off in his own self-interest world.\u00c2\u00a0 And, the barrage of hype from other worlds just rolls right off him.\u00c2\u00a0 Think of the movie business.\u00c2\u00a0 Have you noticed you stopped paying attention to the new releases?\u00c2\u00a0 That you no longer watch "Ebert & Roeper", barely peruse the reviews?\u00c2\u00a0 BECAUSE THERE’S JUST TOO MUCH DAMN PRODUCT!\u00c2\u00a0 (Never mind that most of that product sucks.)<\/p>\n
You don’t read about this in "BusinessWeek".\u00c2\u00a0 But the customer is fatigued.\u00c2\u00a0 He’s only got twenty four hours in a day.\u00c2\u00a0 He just can’t pay ATTENTION to all the marketing messages.\u00c2\u00a0 I remember when new release day was a personal HOLIDAY!\u00c2\u00a0 When I’d trudge down to the record shop and check out the new albums.\u00c2\u00a0 Now, there isn’t a single album I’m waiting to hear.\u00c2\u00a0 I figure they’re all crap.\u00c2\u00a0 I wait for someone I trust to weed through the detritus and tell ME what’s good.\u00c2\u00a0 All the old filters?\u00c2\u00a0 They’re bought and paid for.\u00c2\u00a0 Eliot Spitzer only confirmed what the public already knows.\u00c2\u00a0 That big league infrastructure is a domain of publicists and hand-outs and people on the take.\u00c2\u00a0 That there’s no entertainment NEWS, just fabricated stories.\u00c2\u00a0 And, if people truly want real news, they go online.\u00c2\u00a0 To gawker.com.\u00c2\u00a0 To awfulplasticsurgery.com.\u00c2\u00a0 Where renegades not beholden to the system speak their truth.<\/p>\n
But be clear, it’s not just a disgust with business as usual.\u00c2\u00a0 We live in a Tower of Babel society.\u00c2\u00a0 The center no longer holds.\u00c2\u00a0 There IS no center!\u00c2\u00a0 Jessica Simpson is not the Carpenters, she’s not even Olivia Newton-John.\u00c2\u00a0 There are vast swaths of the public who don’t know who she is and don’t CARE that they’re out of the loop.\u00c2\u00a0 As for Lindsay Lohan singing…you can complain she’s got no talent, but your protestations are cries in the desert.\u00c2\u00a0 The ONLY people paying attention are prepubescent girls, everybody ELSE knows Lindsay’s got no talent and doesn’t give a shit whether she had her boob implants removed or not.<\/p>\n
Think about this.\u00c2\u00a0 This is HELL if you’re a major label.\u00c2\u00a0 You’re all about the machine.\u00c2\u00a0 Ramping up records to TAKE OFF!<\/p>\n
But they can’t take off.\u00c2\u00a0 Let’s just happen to say you get a record moving on Active Rock.\u00c2\u00a0 That track ain’t never gonna cross to Top Forty.\u00c2\u00a0 There’s no path anymore.\u00c2\u00a0 That record begins and ENDS at Active Rock.\u00c2\u00a0 The format’s not a starting place, it’s its own little BACKWATER!\u00c2\u00a0 Budget accordingly.\u00c2\u00a0 Don’t plan to make a profit after one million, because you’re never going to REACH one million.\u00c2\u00a0 Not the way of the last twenty years, through ubiquitous exposure.\u00c2\u00a0 That game, if not completely through, is completely MARGINALIZED!<\/p>\n
Everybody knows a real musician plays.\u00c2\u00a0 Nobody thinks all the so-called divas have any talent.\u00c2\u00a0 And, they might want to buy rap music, but they certainly don’t want to hear it performed.\u00c2\u00a0 Then again, rap music has got a home.\u00c2\u00a0 In da club.\u00c2\u00a0 That’s where they break acts today.\u00c2\u00a0 It’s like the rock road of thirty five years ago.<\/p>\n
But what if you’re not a rap act.\u00c2\u00a0 What can you do?<\/p>\n
Either you’ve got to be satisfied selling a whole bunch fewer records, OR you’ve got to attack the market a different way.<\/p>\n
Everything’s viral now.\u00c2\u00a0 That doesn’t mean you should hire a viral MARKETING team.\u00c2\u00a0 What that means is word SPREADS, but slowly, from one trusted source to another.\u00c2\u00a0 I tell you, you tell your friend, top down marketing is on the decline, because of the lack of trust.\u00c2\u00a0 So, it comes down to quality.\u00c2\u00a0 How can you reach one person who will tell everybody else.\u00c2\u00a0 Reread "The Tipping Point" for instruction.\u00c2\u00a0 BUT, major labels don’t want to start a trend, they want an act to emerge FULLY-GROWN!\u00c2\u00a0 Like Britney Spears.\u00c2\u00a0 They want a new act to DEBUT at number one.\u00c2\u00a0 What they call artist development is reaching platinum in a year.\u00c2\u00a0 Whereas the old artist development, building something credible over time, is the only game that’s left.\u00c2\u00a0 But, it’s a game the majors don’t want to play and aren’t prepared to play.\u00c2\u00a0 Because revenue comes in VERY slowly and it takes A LOT of people to fuel the enterprise.<\/p>\n
But it gets worse for the major label.\u00c2\u00a0 Because their model is to sell recorded music.\u00c2\u00a0 As an album.<\/p>\n
The album is dead.\u00c2\u00a0 History.\u00c2\u00a0 Oh, believe me, acts will still make more than a single.\u00c2\u00a0 But, the music will be released constantly on the Web.\u00c2\u00a0 This is the only way they’ll be able to keep their fans’ attention.\u00c2\u00a0 But how will you acquire this music?\u00c2\u00a0 How much will be charged?\u00c2\u00a0 All we know for sure is everybody will have a lot of music and it will have a low aliquot per track price.\u00c2\u00a0 That’s DEFINITIVE!\u00c2\u00a0 The buck a track iTunes pricing is as irrelevant and FALLACIOUS as the $100 videotape.\u00c2\u00a0 Yup, that’s right.\u00c2\u00a0 Videotapes used to cost a C-note.\u00c2\u00a0 Because studios didn’t get a cut of rental revenue.\u00c2\u00a0 But then, when formats changed and the price dropped, DVD became an OWNERSHIP format.\u00c2\u00a0 But don’t equate movies with music.\u00c2\u00a0 They don’t make a thousand movies a year, whereas that many music tracks are cut every day before lunch.\u00c2\u00a0 Which brings us back to the original point, who’s gonna wade through the shit?\u00c2\u00a0 And, we all don’t have the same taste, so you’ve got to be able to LISTEN to all the recommendations to decide what you want to keep.<\/p>\n
Which brings us to piracy.\u00c2\u00a0 Is piracy hurting the major labels?<\/p>\n
Sure, but less than they say.\u00c2\u00a0 I’m not talking about PHYSICAL piracy, the counterfeiting of discs, I’m talking about P2P and burning.\u00c2\u00a0 You see, a great percentage of the material traded is on a TRYOUT basis.\u00c2\u00a0 The threshold of acquisition is so low that you might as well go through everything everybody recommends.\u00c2\u00a0 This is good for music, but bad for the labels as they see the market.\u00c2\u00a0 They’ve lost control.\u00c2\u00a0 What’s a track worth?\u00c2\u00a0 How are they going to stop this? Even though it CAN’T be stopped.<\/p>\n
Call it the iPod effect.\u00c2\u00a0 There are now enough of the players out there.\u00c2\u00a0 It’s like broadband.\u00c2\u00a0 Remember when the goal was to keep the site simple, because of 56k surfers?\u00c2\u00a0 Now, fuck the slow surfers, if they can’t afford a broadband line, they can’t afford to buy your product ANYWAY!\u00c2\u00a0 There was a tipping point.\u00c2\u00a0 At about 25% broadband penetration.\u00c2\u00a0 Now, at approximately 50% broadband penetration, we’ve got video ALL OVER the Web.\u00c2\u00a0 It’s even being SOLD!\u00c2\u00a0 (Remember how long it used to take to DOWNLOAD a tiny clip back at 56k?)<\/p>\n
People no longer want the CD.\u00c2\u00a0 At ANY price.<\/p>\n
And, as we’ve seen above, a buck a track makes no sense.\u00c2\u00a0 It doesn’t fit their desire.\u00c2\u00a0 To check out and own more music.<\/p>\n
Sure, there’s rental, i.e. Rhapsody & Napster.\u00c2\u00a0 But the dominant iPod is not rental and we’re an ownership society.\u00c2\u00a0 This battle cannot be won.<\/p>\n
So, the major labels are geared up to sell a product nobody wants in an ineffective manner.\u00c2\u00a0 That’s like driving a truck towards a cliff.<\/p>\n
Sure, catalog will be worth something once the new paradigm is monetized.\u00c2\u00a0 But how long will they leave the P2P money on the table.\u00c2\u00a0 How long until they realize everybody ALREADY is acquiring a vast personal library far exceeding the size of all those previous?<\/p>\n
You know the major labels are off their game because they can’t seem to generate stars anybody wants to see.\u00c2\u00a0 Billy Joel can sell 50,000 seats at an indoor stadium in SYRACUSE and Eminem and every other hot rapper TOGETHER can’t even sell out an arena in a metropolis.\u00c2\u00a0 Wow!<\/p>\n
Will we have stadium shows in the future?<\/p>\n
I’m not sure.\u00c2\u00a0 I wouldn’t bet on it.<\/p>\n
Then again, modern word of mouth is on steroids.\u00c2\u00a0 Because of e-mail.\u00c2\u00a0 You can reach more people very quickly.<\/p>\n
But, as stated above, the main criterion is quality.\u00c2\u00a0 And, development is VERY slow.\u00c2\u00a0 For once you push the button on something, you kill its credibility.<\/p>\n
The game has changed forever.\u00c2\u00a0 We’re seeing the evidence now.\u00c2\u00a0 With lousy CD and ticket sales.\u00c2\u00a0 It’s not just a matter of hanging in there.\u00c2\u00a0 The days of yore are NEVER coming back.\u00c2\u00a0 No matter how many people the RIAA sues.\u00c2\u00a0 No matter HOW low you make the ticket prices on new acts.\u00c2\u00a0 One must get down in the pit with the people.\u00c2\u00a0 Where they live, on the Internet.\u00c2\u00a0 And, you must KNOCK on their door, not beat it down with a battering ram.\u00c2\u00a0 And ASK them whether they’ll check out your new stuff.\u00c2\u00a0 And, not bug them thereafter, hounding them to buy a remix album or the same album one more time with two new tracks.\u00c2\u00a0 You’re going to have to leave it in the consumer’s hands.\u00c2\u00a0 And, if the consumer likes it, if Mikey likes it, he’ll tell everybody and will buy EVERYTHING you’re selling.<\/p>\n
This is the majors’ worst nightmare.\u00c2\u00a0 Because they have very little control.<\/p>\n
But the dirty little secret is they’ve ALREADY lost control.<\/p>\n
<\/p>","protected":false},"excerpt":{"rendered":"
The complaint of the major labels is very real.\u00c2\u00a0 Their business is evaporating. Last week’s sales were off 12.9% from the comparable week in 2004.\u00c2\u00a0 This on top of sales decreases for the past half decade.\u00c2\u00a0 Which now seem to be ACCELERATING! First explanation.\u00c2\u00a0 Dearth of superstar product. Only one problem here.\u00c2\u00a0 No one’s figured […]<\/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-250","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-42","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/250","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=250"}],"version-history":[{"count":0,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/250\/revisions"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}