THE LEFSETZ LETTER: Disappear/Appear

What Will Disappear:

Discs

It's going to happen sooner than you think. What with Apple introducing a $149 Nano and a $69 Shuffle today. We've seen this movie again and again. Old wave technology holds its own, with slight erosion, and then CAVES! It happened in photography, it's going to happen in music. And the labels are just not ready for it. Oh, retail is. Every music retailer has either gone bankrupt or is letting its lease(s) expire or is diversifying greatly into other merchandise. As for Best Buy, Wal-Mart, etc, it was NEVER about the music. They can survive fine without it. They'll find something else to give away below cost to get people in the store. But, record labels…they're screwed.


Bob Lefsetz, Santa Monica-based industry legend, is the author of the e-mail newsletter, "The Lefsetz Letter". Famous for being beholden to no one, and speaking the truth, Lefsetz addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself.

His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to music business honchos like Michael Rapino, Randy Phillips, Don Ienner, Cliff Burnstein, Irving Azoff and Tom Freston.

Never boring, always entertaining, Mr. Lefsetz's insights are fueled by his stint as an entertainment business attorney, majordomo of Sanctuary Music's American division and consultancies to major labels.

Bob has been a weekly contributor to CelebrityAccess and Encore since 2001, and we plan many more years of partnership with him. While we here at CelebrityAccess and Encore do not necessarily agree with all of Bob's opinions, we are proud to help share them with you.

Napster

Blame it on Microsoft, who can never get software right until the third iteration.

Blame it on the major labels. Who didn't see downloading AHEAD of time and push rental.

But don't blame it on the people. The people want to own music. After all, what's more valuable than your favorite tunes?

Music On Terrestrial Radio

You can't compete with iPods and commercial free music on satellite. Radio will go talk. Its local flavor being what saves it from going belly-up completely.

Music On MTV

Wait, it's ALREADY gone. Give up the ghost, MTV only plays videos so you'll give them talent to use in their promotions. They'd eviscerate it completely if they could, it gets HORRIBLE ratings. Music video, which will be sans major production in most cases, will be a Net form.

Stereos

Actually, for the under-thirty set, they've ALREADY gone.

Music is portable. That's the main place you hear it, on the run. Except for when it emanates from your computer, whether through speakers attached directly to it or via bridges that throw the sound around your house.

You doubt me? Check out a dorm room. Go to a store and try to buy two-channel, even at a HIGH END shop.

Long Term Recording Contracts

Hell, they're already dying in the U.K. The majors LICENSE a record or two and end up with NOTHING!

It's gonna be like the movie business. Everybody's a free agent, nobody's locked up for a long time. Except to THEMSELVES!

THIS is what the Net is bringing us. THIS is why the majors are fighting Net distribution so hard. If you can be on an indie and get paid…god, what do you need the major for?

Furthermore, those contracts that are signed will be more equitable to the artist and clearer and shorter.


What Will Appear:

Clubs

Nothing replaces the out of the home experience. This dancing and drugging to prerecorded tracks isn't gonna go on forever. People want live music. It will start locally, in small places, and grow from there. People want to see the acts they've read about/and heard on the Net. The Net is a conduit to LIVE, not to traditional major labels.

Careers

It's gonna be hard to break someone, but once they've been established, they're gonna be here for good. Because the fans that
supported them on the way up, who built them, who sold their story, won't abandon them because they believe they've got an investment. It's THEIR band, not the MEDIA'S!

A Ton Of Music

Do you remember the one album, three year, five single paradigm?

I don't care if your album has five singles anymore. The correct parlance is five HITS! You'll release a steady stream of product, building investment in the band. Dividends will pay off not only in sale of this music (as part of a bundle, not as single tracks on iTunes), but touring, merchandising… Fans will give you ALL their money.

As for singles artists… It will be the early seventies all over again. You can run a track up Top Forty radio, but you can't make any real money. Hell, the only reason the labels could make real money selling tracks in the past decade was because you HAD to buy the complete album to hear them. Those days are THROUGH!

Powerful Managers

Gatekeepers of talent. That's what the major labels thought they were. In the nineties all the mid-level managers went to work for the labels and the company dictated to those that were left, even the big powerhouses had to deal with "corporate policy". No more. The manager will be king once again.

A Final Price For Tickets

Once the dinosaurs slow down, and the business has to WORK for live revenue, it's going to be scary. Developing new talent is the first criterion for health, but the next will be consumer trust. The final cost of a ticket will be clear. The public will demand it. The days of ordering a $25 ticket that turns out to be $40 are coming to an end. It's gonna be $40. Actually lower, since the ruse will have been revealed.

Attorney Strength

These weasels will just adjust their loyalty to the managers from the labels.

First we kill all the lawyers?

Sounds good to me. They don't write the music, why should they have such guaranteed tenures/incomes? The problem is too many of today's lawyers are loyal to the label before the act, since the label will survive and the act won't. This is truly heinous.

New Blood

Right now there's some twentysomething sleeping on a mattress, working on sweat equity, who's going to be the new king of this
business. Actually, a FEW! Just like Steve Jobs and Bill Gates stole computer thunder from IBM, these guys will decimate the old players. Mainframes are history. Replaced by localized PCs (or PCs strung up in parallel!) Think of the music business the same way. As something DECENTRALIZED!

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