THE LEFSETZ LETTER: Duty Now For The Future

SIXTIES


The Beatles and the British Invasion prove there's a huge appetite for music amongst the baby boomers. An era of experimentation is ushered in, aided by FM radio. It's about the statement. If you want to know what's going on, you buy records and listen to the radio.


SEVENTIES


The sixties hang over until about 1973, when the labels are acquired by conglomerates, Lee Abrams programs FM hits and music explodes until corporate rock kills it and disco surges and then they're both dead.


EIGHTIES


Music is saved by MTV. The power of television eclipses the power of radio.


NINETIES


The Tommy Mottola era. You let the media do your promotion. You create two-dimensional acts that are hyped to high heaven by print, TV and radio, driving customers to buy overpriced CDs. No act lasts, but revenue is staggering.


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.


2000


Napster.


It's like the train hit a brick wall. Or rode ride off the cliff. And the old players are still bitching about it.


MTV played no music. Radio had too many commercials. People only wanted the single and stole all the music they needed. And the end of the music world was predicted. But this is not what's happened. Despite lack of recording revenue, more people are making more music than ever before. And more people are listening to more music than ever before. Music is accessible to all. THIS IS A BAD THING?


2000-2010


The major labels bitched themselves into irrelevancy. They own radio and TV, which is like owning the "Perry Como Show" when everybody's tuned into FM. And since the "Como Show"'s ratings are declining, they make everybody who appears sign a contract coughing up a percentage of all their revenue. It's unfair. And who wants to watch the "Como Show" anyway?


Touring… Blend the demand of the early seventies with the ubiquity of the nineties and the economic run-up prior to the 2008 crash and everybody thinks there's an unending demand at inflated prices. But there's not. Music doesn't drive the culture, like in the late sixties and early seventies. Media is self-programmed today, no one can get everybody to pay attention. And the economy sucks.


So we've got a recording industry and a touring industry that are desperately trying to hold on to what once was, endlessly telling us it's the best system ever, as if IBM took out ads saying how great the IBM Selectric typewriter still is. As if Sony advertised the Discman, never mind the cassette Walkman. As if every Apple product didn't supersede the one manufactured by Sony and Samsung didn't make the best televisions. Evolution has changed the landscape. And left us with chaos.


CHAOS


This is what has everybody frustrated. The old model is decaying. And old media chroniclers are up in arms about it.


But we can now view trends.


1. Files have replaced CDs


Quote all the SoundScan statistics you want. Then call Eric Garland at BigChampagne. Illegal trading of files far outstrips physical sales, to the point where the latter are essentially irrelevant. End result, everybody's got a lot of music, and this is good. The only piece of the puzzle left is to move the public to paid services providing everything all the time for a low price. Emphasis on low price. The majors refuse to win this war, refuse to collect a little if it insures they won't collect a lot. But rental/streaming/rented tracks living on handsets is the legal solution that's imminent. Just like digital books.


Kindle made inroads. The iPad tipped the scales. Now Amazon sells almost twice as many files as physical books. And this is a good thing. No manufacturing and no wasted hours controlling/maintaining/evaluating inventory.


2. No one wants the new music of old stars


But there's a desire to hear something new. But the oldsters will not start over, they will not play to empty houses, they're afraid to give up what they've already got, just like the labels, therefore although they book the majority of revenue, they're irrelevant. Headed straight for the scrapheap. Going to their shows is like reading year old newspapers or your school annual.


3. New music


The old powers are trying to perpetuate the old ways. But despite hype in major media, most people don't bond to today's evanescent radio stars. You know how we can tell? No one wants to see them live!


4. Truly new music


We're in the midst of a revolution, that's what you can't see amidst the chaos. People have not stopped making music. Everybody has access to recording equipment, everybody has access to distribution, leading to an incomprehensible marketplace. But for how long?


Search was baffling until Google. Now no one complains they can't find what they're looking for online.


In a matter of years you'll be able to find all the great new music. Algorithms won't be irrelevant, but human opinion will be key. In other words, the

musicians doing it for the music first will beget online sites where it's about the music first instead of profit/selling advertising.


5. Credibility/Trust


The new acts are not imitating the American Idols, nor are they imitating the pop stars du jour. First and foremost, there's nothing to imitate in the "Idol" paradigm. Everyone's singing old songs. To fewer people! You can reconfigure "Idol" all you want, but it's history, and even "X Factor" will be its own private backwater, because people don't want homogenized, soulless crap. If you think they do, you believe we still live in the nineties. And you can't imitate the pop stars, because the average person has no access to the hit producers.


No, the modern musician is writing his own material and recording in his bedroom or basement. Sure, some are dunning you to listen, most are crap, but the underlying scene is healthy and portends a new golden era.


It's all about technology. Now there's no intermediary who gets to say no. Just like there's no intermediary to insure success. You make your music and if it's good, your friends like it. And then their friends. Word spreads online. But because of the cacophony of information, traction is tenuous, development is slow. The end result is only the most dedicated persevere. Those who whine loudest retreat to graduate school or the dullness of a day job. Whereas modern day Bruce Springsteens play in bars waiting for their Jon Landau to recognize their excellence and spread the word. One blog post by the right person and you're suddenly on your way. If you're great.


6. Great


That's all we're interested in. There's too much information and too little time. You've got to be great to keep our interest. Which is why the Zune can't compete with the iPod. Why have pretty good if you can have great?


Acts have been woodshedding for years. Lifers know it's about the music more than self-promotion. Anybody who laments they can't get signed, that no one will back them financially, that they're not on television, should be ignored. This is the last gasp before giving up. Legends don't bitch, they put their heads down and keep on keepin' on.

2010-2020


People will pay for music. Revenue to labels and musicians could be lower, but it won't pay to get it for free, it will be too easy and too cheap to pay.

Acts won't charge a fortune for personal appearances. Old acts on their way out can rip you off, substantial acts girding for the future have to charge reasonably, so concertgoers will take a chance, so fans will keep on coming. It doesn't matter what Irving Azoff and Michael Rapino and Randy Phillips and Jerry Mickelson have to say. They're too old. The aged infrastructure will fall by the wayside and be replaced by a younger generation which doesn't put money first. Because there's just not enough cash in music. If you want to get rich, be an athlete, go to Silicon Valley, become a banker. Music is akin to archery or dressage or some other obscure Olympic sport. You do it for the love of it. But the public admires passion, they're drawn to people who do it for the right reasons, and the underlying power of music allows it to blow up in the way an obscure sport cannot. Then again, extreme sports have put a dent in Little League and all the hyper-competitive youth sports of yore. It's now about self-expression, being a member of the group. This is the opposite of the old wave music business, where elder fat cats tell you how to do it and they build stars surrounded by posses that insulate them from the real world.


CONCLUSION


The bad news had to come before the good. Seeds have been planted that are going to flower into a healthy music scene. Where people are drawn to new acts expressing themselves from the heart beholden to no one. And intermediaries won't be gatekeepers so much as conduits, akin to the trusted deejays of yore.


Doesn't matter what the RIAA says. Nor Lucian Grainge or Irving Azoff. Or me. That's what the old wave doesn't understand. The technology has empowered the public. Change is happening organically. It cannot be stopped. And just like open source software employs the crowd to create something great for free, the crowd will determine what will be successful in the future. It won't be top down marketing, but bottom up. It's won't be about dousing a building with gasoline and lighting a blowtorch, but assembling kindling, lighting a match, nurturing the flame, gently placing more twigs on the fire, growing it to the point where it's almost self-sustaining.


The glasses are coming. We're all gonna be able to focus and see. The great acts will triumph. Sure, crap will still exist, but unlike in the nineties, it will be the sideshow. The main attraction will be acts that are all about the music, not dancing, not appearance, not the show, but what you hear in your ears. After all, isn't that what music is all about?

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