{"id":2534,"date":"2010-01-09T10:17:40","date_gmt":"2010-01-09T18:17:40","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/?p=2534"},"modified":"2010-01-09T10:17:40","modified_gmt":"2010-01-09T18:17:40","slug":"market-share","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2010\/01\/09\/market-share\/","title":{"rendered":"Market Share"},"content":{"rendered":"

He not busy being born is busy dying<\/span><\/p>\n

"It’s Alright Ma, (I’m Only Bleeding)"
Bob Dylan<\/p>\n

I’m reading the new "BusinessWeek".\u00c2\u00a0 Or as it now says on the front page, "Bloomberg BusinessWeek".\u00c2\u00a0 And that makes all the difference.<\/p>\n

I noticed it last week.\u00c2\u00a0 The usual tech suspect was gone.\u00c2\u00a0 The guy who was a mealy-mouthed me-too reviewer is history, replaced with a nerd who doesn’t appear to ever see sunlight, who’s willing to go a bit deeper and show an edge.<\/p>\n

Somehow, the fat has been cut from the magazine.\u00c2\u00a0 And the features in the latest issue hit a bit harder, they’re more incisive, more authoritative.\u00c2\u00a0 Rather than worrying about pleasing advertisers, there’s a bit of independence.<\/p>\n

Well, I’m not sure that description fits Charlie Rose’s interview with Howard Stringer.\u00c2\u00a0 A well-liked man with a terrible track record, Sir Howard has yet to turn Sony around.\u00c2\u00a0 And Charlie, who first and foremost yearns to be your friend, tees it up for Sir Howard in classic Larry King fashion, he lets Sir Howard shine.<\/p>\n

Until the end of the magazine.\u00c2\u00a0 Forty five pages later, Mariko Yasu analyzes Sony’s stock.\u00c2\u00a0 Its shares trade for less than the assets’ value.\u00c2\u00a0 Sony’s stock surged 39% from last year’s battered price.\u00c2\u00a0 But Samsung’s rose 77%.<\/p>\n

Samsung.<\/p>\n

Ten pages earlier, the strategy of the two rivals is delineated.\u00c2\u00a0 Sony’s gone to outsourcing, Samsung’s still making all elements of its LCD tvs, selling Sony glass in the process.\u00c2\u00a0 End result?\u00c2\u00a0 In 2006, Sony had 17.1% of the LCD market and Samsung 15.3%.\u00c2\u00a0 Last year, Sony’s share declined to 15.3%, but Samsung now maintains 22.7% of the LCD market.\u00c2\u00a0 And Samsung makes high-priced sets.<\/p>\n

Meanwhile, Samsung sold $17.5 billion worth of electronics in China while Sony only moved $18 billion in all territories outside Europe, Japan and the U.S combined.<\/p>\n

In other words, Samsung is the new Sony.\u00c2\u00a0 Happened just about that fast.\u00c2\u00a0 While you were focused on the travails of reality TV stars.\u00c2\u00a0 While the iPod became long in the tooth and was superseded by the iPhone and iPod Touch.<\/p>\n

Wow.<\/p>\n

Just as interesting is the resurgence of Atlantic Records.\u00c2\u00a0 Columbia ended up winning the market share race, with the combined once in a lifetime sales of Susan Boyle and Michael Jackson, but up until this last SuBo surge, Atlantic was number one.<\/p>\n

And Interscope was..?<\/p>\n

Jimmy Iovine is off revolutionizing sound at Best Buy, selling Beats headphones.\u00c2\u00a0 But if I were Vivendi, I’d be worried. Is this strategy contributing to Universal’s bottom line?\u00c2\u00a0 What is Jimmy Iovine doing to prepare Interscope for the future?\u00c2\u00a0 What is Universal doing to prepare for the future?<\/p>\n

There’s Vevo.<\/p>\n

But didn’t Warner prove that you’re better off not operating outside of your core competency?\u00c2\u00a0 With both Bulldog and LaLa?\u00c2\u00a0 Vertical integration is a failed eighties concept.\u00c2\u00a0 Once upon a time, CBS owned record stores, that didn’t help them sell more product and they ultimately got rid of Discount Records.<\/p>\n

Howard Stringer talks about 3-D, he’s banking on music…\u00c2\u00a0 Seems to me, he should be focused on electronics, that’s Sony’s core competency.\u00c2\u00a0 But\u00c2\u00a0 Sony is losing there.\u00c2\u00a0 Dramatically.<\/p>\n

Atlantic is leading the way in 360 deals.\u00c2\u00a0 And Warner derives much more of its revenue from digital than any other major.<\/p>\n

My point is not that the major label paradigm is the future, it’s just that if you are a major label, what is your strategy for the future?<\/p>\n

More than ever, it’s a tough row to hoe.\u00c2\u00a0 Because there’s always someone around the corner poised to eat your lunch. Motorola rode the RAZR to the brink of irrelevancy, the mobile phone company might never recover.\u00c2\u00a0 NOKIA peaked. Apple demonstrated that people would pay a lot for functionality they were previously unaware of.\u00c2\u00a0 No one can compete with Apple’s App Store.\u00c2\u00a0 Not even Google.\u00c2\u00a0 All Android phones reserve only 190 MB for apps, whereas on an iPhone, you can fill up the entire memory, 8, 16 or 32 GIGS!<\/p>\n

But better than that, the iPod Touch has all the same functionalities, except for making phone calls.\u00c2\u00a0 Making the market for apps that much stronger.<\/p>\n

In other words, Apple’s got market share.\u00c2\u00a0 For now.<\/p>\n

Microsoft is Universal.\u00c2\u00a0 The shrinking behemoth.\u00c2\u00a0 So busy protecting what they’ve got, overburdened with overhead, neither can make a move, it’s just too risky.<\/p>\n

Let someone else sell the music.\u00c2\u00a0 Whether it be Apple, Spotify, MOG or…\u00c2\u00a0 Focus on creating that which is desirable.<\/p>\n

And one thing we’ve learned, most of what the major labels create is not fully desirable.\u00c2\u00a0 It’s made to run up the radio chart, not to do live business.\u00c2\u00a0 But live business is where the revenue is, and if you’ve got a 360 deal, you want big grosses.\u00c2\u00a0 Meaning that to prepare for the future, you should be selling what appeals to ticket buyers, not radio stations.<\/p>\n

Whatever innovation Live Nation has delivered has not been viewable by the public.\u00c2\u00a0 And Ticketmaster has an image that eclipses that of the RIAA…as in negative.\u00c2\u00a0 Ticketmaster doesn’t even seem to be making an effort to change its image.\u00c2\u00a0 It’s just banking on its exclusive relationships.<\/p>\n

But what we find in the modern era is the public catches on to quality very quickly.\u00c2\u00a0 It’s hard to sell crap for long.\u00c2\u00a0 Just ask Detroit.<\/p>\n

So to continue to come out on top, you must constantly be reinventing yourself.\u00c2\u00a0 And this takes risk.\u00c2\u00a0 And stunningly, too many entertainment companies are afraid of risk, even though the riskiest projects create the most revenue down the line.<\/p>\n

We don’t want to see the 1910 Fruitgum Company, we want to see Paul McCartney.\u00c2\u00a0 Even Jethro Tull.\u00c2\u00a0 There’s some substance underneath.\u00c2\u00a0 Vanilla Ice may have turned his image around, he may now be somewhat likable, but there’s still very little there at the core.\u00c2\u00a0 He’s got fame, but no revenue.\u00c2\u00a0 Whereas Phish has got a modicum of the fame Rob Van Winkle possesses, but tons more revenue.<\/p>\n

But Phish has not figured out how to tap the younger market.\u00c2\u00a0 Their audience is aging.\u00c2\u00a0 And this is problematic. There’s no enticement to today’s college students.<\/p>\n

And there you have the modern music business.\u00c2\u00a0 Let’s just continue to do what we’ve always done.<\/p>\n

But that hasn’t worked for Sony…<\/p>\n

\n
\nSony and Samsung’s Strategic Split: While Sony bets on outsourcing TVs, the Korean giant is building an edge by making its own<\/a><\/p>\n

How To Play It: Smart Moves To Make Now<\/a><\/p>\n

Sir Howard Stringer: Why Sony Is About to Snap Back Charlie Rose talks to Sony’s Sir Howard Stringer<\/a><\/div>\n<\/blockquote>\n

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He not busy being born is busy dying "It’s Alright Ma, (I’m Only Bleeding)"Bob Dylan I’m reading the new "BusinessWeek".\u00c2\u00a0 Or as it now says on the front page, "Bloomberg BusinessWeek".\u00c2\u00a0 And that makes all the difference. I noticed it last week.\u00c2\u00a0 The usual tech suspect was gone.\u00c2\u00a0 The guy who was a mealy-mouthed me-too […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","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-2534","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p96vPs-ES","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2534","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/comments?post=2534"}],"version-history":[{"count":1,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2534\/revisions"}],"predecessor-version":[{"id":2535,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2534\/revisions\/2535"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=2534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=2534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=2534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}