Falafel King.\u00c2\u00a0 On Broxton.\u00c2\u00a0 In Westwood.\u00c2\u00a0 That’s where we met.<\/p>\n
And I couldn’t help feeling it was part of Warner’s austerity program.<\/p>\n
Lyor flies United.\u00c2\u00a0 Coach.\u00c2\u00a0 Sure, he uses his miles to upgrade to business, but there are no black cars at Warner anymore, Jet Blue is the company airline, you see the music business is in the middle of a storm, and Warner’s battened down the hatches, is doing its best to sail through.<\/p>\n
One thing you can’t argue with is Warner’s increased market share.\u00c2\u00a0 Sure, Universal is still the behemoth, but Warner is growing its piece of the pie.\u00c2\u00a0 As for overall revenues?<\/p>\n
Well, Lyor hopes they go up.\u00c2\u00a0 He spent the morning at Cricket, looking at their mobile music model.\u00c2\u00a0 He said the interface was fantastic.\u00c2\u00a0 And that a music fee was just going to be added on to the bill of these customers without contracts.<\/p>\n
I’ll have to wait to see it.<\/p>\n
But I must say, Lyor was not unfamiliar with the issues.<\/p>\n
He spoke of transparency.\u00c2\u00a0 We needed it.\u00c2\u00a0 A manager, an act should be able to log on every day and see where their music was streamed, what they got paid.\u00c2\u00a0 Is this ready today?\u00c2\u00a0 No.\u00c2\u00a0 Is this in the near future?\u00c2\u00a0 No.\u00c2\u00a0 But Lyor said it was inevitable.\u00c2\u00a0 Trust must be reestablished.<\/p>\n
Trust and magnificence.\u00c2\u00a0 That’s a word Lyor uses quite a bit.\u00c2\u00a0 He doesn’t want to release good music, but MAGNIFICENT music.\u00c2\u00a0 Fewer artists doing it incredibly well.\u00c2\u00a0 How long it takes them to break?<\/p>\n
He doesn’t believe in the old model, of balls to the wall, hype it in every medium ad infinitum.\u00c2\u00a0 His philosophy is more akin to Paul Masson’s…\u00c2\u00a0 Didn’t Orson Welles claim that no wine would be sold before its time?\u00c2\u00a0 Lyor believes you’ve got to be wary of the backlash, of burning your act out before it gets its start.<\/p>\n
You’ve got to invest, develop, wait for that magic moment, the track that will put the act over the top.<\/p>\n
Like Jay-Z.<\/p>\n
Lyor paid 5 mil for the Jay-Z album because of what the rapper told him.\u00c2\u00a0 That this was the first album Jay didn’t cut to a schedule.\u00c2\u00a0 The tracks came together organically, this was the record Jay wanted to make, was ready to make.\u00c2\u00a0 Sure, Lyor heard a few cuts before he made the commitment, but he didn’t hear "Empire State Of Mind".\u00c2\u00a0 But he trusted Jay.<\/p>\n
But how do you get paid in the future?\u00c2\u00a0 Lyor referenced a meeting with Prince, who was as concerned about this as Bono, not for himself, but acts coming up.<\/p>\n
Lyor believes there’s no bump coming in the future, no CD replacement business about to blow the business up.\u00c2\u00a0 But he hopes that cloud computing will deliver increased revenue.\u00c2\u00a0 If it doesn’t?<\/p>\n
Well, Lyor’s already making 50\/50 deals.\u00c2\u00a0 He anticipates more if recorded music income doesn’t increase.\u00c2\u00a0 He wants to be partners with the acts.\u00c2\u00a0 For a long time.\u00c2\u00a0 In 360 degrees of revenue.<\/p>\n
Sure, Warner missed out on a few deals, deciding not to overpay for one hit wonders.\u00c2\u00a0 For two years, Lyor felt a bit in the wilderness.\u00c2\u00a0 Truly, scoping the hinterlands for acts that would be willing to sign a 360 deal.\u00c2\u00a0 But now everybody realizes this is the future.\u00c2\u00a0 But is every company prepared to play in the new world?<\/p>\n
Warner cut $400 million in overhead almost overnight.\u00c2\u00a0 Sure, this entailed firing a bunch of people.\u00c2\u00a0 Like the 52 year old promotion man.\u00c2\u00a0 What was he going to do now?\u00c2\u00a0 Lyor expressed compassion, contrary to his cutthroat reputation.<\/p>\n
Then again, maybe Lyor is cutthroat.\u00c2\u00a0 As in running a gang, that he will defend to the limit.\u00c2\u00a0 If you’re on Lyor’s team…<\/p>\n
And who’s on his team?<\/p>\n
Rob Cavallo.\u00c2\u00a0 Lyor speaks with him thirty times a day.\u00c2\u00a0 It’s important to guide talent.\u00c2\u00a0 To ask questions, raise issues, express the parameters, to ultimately get not only what you want, but to satisfy the talent too.\u00c2\u00a0 People like to know where they’re going.<\/p>\n
But what impressed me most was the story Lyor told of going to the second floor of his townhouse and cranking the vinyl to the max and leaning forward, into the music.<\/p>\n
All this talk about TV syncs, commercials, video games…\u00c2\u00a0 In all those media music is in the background, you experience it leaning back.\u00c2\u00a0 Music needs to be up front and center, people need to experience the magic!<\/p>\n
I couldn’t agree more.<\/p>\n
The record Lyor was playing for his girlfriend?<\/p>\n
Crosby, Stills, Nash & Young.<\/p>\n
Yes, you might see him as the hip-hop maven.\u00c2\u00a0 I was surprised this was the record he was playing.\u00c2\u00a0 But great records affect you this way…\u00c2\u00a0 It’s not about bumping asses in the club, it’s about wanting to get closer, to feel it, to get inside.<\/p>\n
Does Lyor mangle the language?<\/p>\n
Absolutely.\u00c2\u00a0 He repeatedly talked how bosses "incent" him.\u00c2\u00a0 I could have corrected him, but I got the point, so why.<\/p>\n
And if I made points he didn’t get, Lyor said so.\u00c2\u00a0 As in, he was not afraid to appear less than knowledgeable.<\/p>\n
As for that exorbitant compensation?\u00c2\u00a0 Lyor believes he earned it.\u00c2\u00a0 He’s put in 100,000 hours.\u00c2\u00a0 He increased market share.\u00c2\u00a0 What’s the value of that?<\/p>\n
Yes, Lyor believes in himself.\u00c2\u00a0 And his confidence is infectious.\u00c2\u00a0 If you’re an act, looking to make a deal.\u00c2\u00a0 He appears to be living in reality.\u00c2\u00a0 When all the press about the major labels is they wish the nineties would come back.\u00c2\u00a0 Lyor knows the twentieth century is history.\u00c2\u00a0 It’s about finding out how to make it work now.<\/p>\n
Now the last time I got together with Lyor, I couldn’t get a word in edgewise.\u00c2\u00a0 On one hand, I dreaded today’s meeting.\u00c2\u00a0 Because I can only listen for so long. But this was different.\u00c2\u00a0 This was a conversation.\u00c2\u00a0 Hell, I told him if we were going to the cloud, why not blow out MP3s today, no one’s going to want them in the future, just like no one wants cassettes.\u00c2\u00a0 He thought that was an interesting idea.\u00c2\u00a0 Maybe they should.<\/p>\n
And he told me a lot of shit that I can’t repeat here.\u00c2\u00a0 Not because the stories were so juicy, but because they exposed the blind spots of his competitors.<\/p>\n
Did Lyor close me?<\/p>\n
I’ll say that he’s akin to Michael Rapino.\u00c2\u00a0 They’re cut from the same cloth as Steve Jobs.\u00c2\u00a0 You sit there, listening, and they convince you.\u00c2\u00a0 They call Steve Jobs’ web the "reality distortion field".\u00c2\u00a0 Is Rapino distorting reality?\u00c2\u00a0 Well, maybe he’s juiced up, high not on alcohol, but the adrenaline it takes to tackle Live Nation’s problems, but he understands those problems, he realizes Live Nation’s job is to find innovative ways to sell more tickets, to partner with acts to grow revenue.\u00c2\u00a0 Anybody can put on a show.\u00c2\u00a0 But can you do more?\u00c2\u00a0 As for Lyor…\u00c2\u00a0 It’s hard to argue with two things…\u00c2\u00a0 Warner’s aforementioned increase in market share and the fact that Warner derives a larger percentage of its revenue from digital than any other major record label.<\/p>\n
Hell, the challenge used to be distribution, how do you get the record in the store, how do you get paid.\u00c2\u00a0 But those were the old days.\u00c2\u00a0 Today, you’ve got to convince an act that you’ll stick by it, not pressure it to take short cuts, to take the easy way out for short term revenue, all the while encouraging them, guiding them to create that one breakthrough event, whether it be a single or a live show, but whatever it is, certainly rooted in music.<\/p>\n
Do you want to make a deal with Lyor?<\/p>\n
Well, he doesn’t want to waste money.\u00c2\u00a0 It’s not only the cash involved in acts you drop, but the man hours, the opportunity cost, he wants to get it right.<\/p>\n
I think he could close you.<\/p>\n
Did he close me?<\/p>\n
All I can say is I had no need to argue with him.\u00c2\u00a0 He showed up on time, stunning me, I haven’t had this experience with a major exec in memory, and he listened to me and agreed with my take on the reality of the business.\u00c2\u00a0 Like the fact that the average customer is hungry for music, but doesn’t know where to go, doesn’t know what to play.<\/p>\n
We’ve got to create great music and lead people to it.\u00c2\u00a0 Point out the CSNYs of today.\u00c2\u00a0 Hell, grow the CSNYs of today.\u00c2\u00a0 It’s the only way out.\u00c2\u00a0 The old way, of spending lavishly to jam crap down people’s throats…that’s history.<\/p>\n
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