“The Harsh Reality About the Music Business, and a Pantomime Led By Clueless Self-Regarders”: https://bit.ly/2LMLAW6
Ingham is angry, and it has improved his usually dry writing. Tim is sick and tired of every musician believing they’re entitled to make a living from streaming music. Disinformation rules. Kinda like yesterday’s story about Gary Numan saying he was only paid 37 pounds for a million streams. Were they self-selected streams or were they radio? Were they ad-supported? Was it for songwriting/publishing or recording?
The musicians are ignorant. Seemingly the bigger career you’ve got, the less you understand the modern music business, especially streaming. As for re-education… It really doesn’t matter, the ship has sailed. But they’re having hearings in the U.K., and Ingham addresses these. But most interesting is his figures after taking participation of the labels and Spotify, et al, out of the equation… There’s just not enough money for everybody to make a living on streaming music, just like there was never enough money for everybody to make a living in the physical era. I keep saying this, thank god someone else is. It’s kinda like the disinformation that has people still believing that Trump won the election, and I get e-mail every day saying that… The story that streaming is the devil echoes in its own impenetrable chamber and it’s a sexy story that riles people up more than the truth…that making a living in music is hard, and ultimately for the very few.
As for user-centric payments… The only study so far says that small artists get paid even less, but we can try it, fine with me, but don’t expect to get rich!
So it turns out making cars the old way is very different from making them the new. The old way, perfected over a hundred plus years, is to focus on mechanics, manufacturing, but in electrics the key is software, which can be updated over the air as your car sits in its garage.
De rigueur with Tesla, non-functioning with VW.
Yes, VW has sold electric cars that need to be brought to the dealership to be updated. These cars are stripped down, because the company just couldn’t get the software straight. They had various teams working on it, and merging it all together…nearly impossible!
As for the mental state of the employees:
“The biggest challenge, said Mr. Hilgenberg, isn’t the technology, it is the mind-set of the people – their reluctance to embrace radical change until circumstances force them to. ‘In the middle of success it’s not easy to understand why you need to change now,’ he says.”
Sound familiar? This is exactly what the dearly departed Clayton Christensen warned of two decades ago. And the question becomes will Tesla gain so big an advantage that it can never be outpaced?
Everyone said the big boys would triumph once they got in the game, they’d kill Tesla. It hasn’t happened, and the Model S has been in the marketplace since 2012, it’s not like the signs weren’t obvious.
Kinda like in the music business…
Napster got traction in 1999 and the labels ignored it, they were too busy banking the profits of overpriced CDs. Then they thought they could kill file-trading with legislation. Then they tried to compete with clunky, copyright-protected systems. And ultimately, the industry ceded distribution to third parties. First Apple, which ended up being behind the ball itself, it was superseded by Spotify, and it’s Spotify that killed piracy, with its ad-supported tier, created by a young man with no history in the music business. Is Tesla Spotify?
Spotify’s value keeps going up. As for the labels, the company went public and Warner sold all its stock, and Sony half, meanwhile the value of the doubled has doubled, talk about not believing in your own business…
As for the major labels themselves, anyone who predicted their doom forgot to realize that they owned the history of recorded music, their catalogs, which they’ve used to extract huge advances from streaming companies, and which represent a huge portion of their revenues, never mind having essentially no costs…no marketing, no manufacturing.
So, all the news today is about an Apple Car. Belief is that manufacturing will be outsourced, today the word is it will be Kia. Apple has factories in Asia make their computers and phones, could they do this with automobiles? Or do you need to make the whole thing? WE DON’T KNOW YET!
But back to the labels… All the action in the past few years has been outside their purview, the latest being TikTok. Can you say “Old Town Road”?
Now the truth is in order to insure their market share, major labels overpay for hits. If you can generate one, they dangle huge sums in front of you. Sometimes it pays to take the money and run. But if the deal is not so rich, are you better off being independent, especially since the marketing tools are at your fingertips? Furthermore, the majors’ market share is padded by the distribution of indies, their true share of revenue has actually gone down, their piece of the pie is less. And, the labels are more savvy, but they’re not very nimble…now that music is a gold mine once again, with revenue rising, expect third parties to enter the sphere, especially as most tech investments become moon shots, very few being successful.
So people have been making fun of Elon Musk for years, now he’s the world’s richest man. Remind you of anyone? Steve Jobs! Who was an exile and then came back to turn Apple, the laughingstock of computer manufacturers, especially after the introduction of Windows 95, into the most valuable company in the world!
In other words… If you’re looking for the future, don’t ask people working at the big companies. Also, the media gets it wrong time and again, if for no other reason that those on the beat are uneducated in the minutiae of the sphere. If you want to know what is going on in the niche, you’re going to end up reading relatively obscure online writers, there’s a deep expert in every category, but they don’t play the big media game, if they even care.
Which brings me back to MSN… Don’t you remember? MSN was gonna kill AOL!
But AOL was smart, at the peak of its valuation, it merged with Time Warner. Steve Case was right, he employed his leverage to move the company’s ball down the field.
Ultimately, both MSN and AOL failed. Because it turned out that portals were just an intermediate step, and that high speed access would become a commodity business sold by the cable companies and telcos and that all the money would be in search and its advertising, and Google’s sale of advertising all over the web.
As for Facebook…it conspired with Google re advertising. That’s the latest lawsuit if you’re paying attention. But the deal happened while regulators, elected officials and even big media were not paying attention.
As for Facebook, Zuckerberg saw the future. He pivoted to mobile. And he purchased WhatsApp and Instagram. As for WhatsApp, anybody who’d traveled outside the U.S. was aware of its dominance, but most Americans don’t leave its borders, and too often those who do are old and not tech-savvy.
It all happened in plain sight. Just like with Tesla. And Volkswagen.
Used to be cars were sold on how they look. Tesla realized this, and hired a hotshot designer, but the truth is that’s not what is selling Teslas, it’s their software, which most people just can’t see. Teslas just work. Kind of like Macs, but not quite. So far, no one has been able to equal Tesla’s battery efficiency… This is another rule of tech, never rest on your laurels, keep innovating or you will be left behind. Sure, patents are important, but the key is to look forward, not back.
Who knows, maybe the traditional automobile manufacturers will ultimately catch up with Tesla, but right now they’re years behind. No company ever truly competed with the iPod, and then Apple morphed it into the iPhone. A separate device to play music? That seems so quaint! As for Android…it dominates in handset sales, but profits are low and it turns out everybody with a dollar, who is willing to spend, is on iOS, its App Store kills Google Play, and its much more secure. But, Google made Android free. Is someone going to make electric car software free? I wouldn’t bet on it.
Once again, the paradigm is repeated over and over again. In one industry after another, it’s just a matter of time. Don’t lament the loss of the new, look to solutions in the future. Read yesterday’s “New York Times:
“Three News Hubs, 24-Hour Coverage: The Times’s Global Relay – From New York to Hong Kong/Seoul to London, journalists can collaborate around the clock to report on a breaking story.”: https://nyti.ms/2Mfn7Ix
News never sleeps, just like rust. There is no downtime anymore. If a story happens anywhere on the globe at any time the “New York Times” has people on the case, they have bureaus in 30 countries. How is the local newspaper supposed to compete? IT CAN’T!
Turns out the revenue online doesn’t come from ads, but subscriptions. And the only way to compete locally is to flip the script, forget about national and international news and go hyperlocal, in both stories and ads. The reason Fox News focuses on opinion and gets its facts from the “New York Times” is they don’t have a concomitant footprint around the world, nowhere close!
The big get bigger… Online, every store, every song is right next door, you can’t compete on price, and if you’re not the best, if you’re not dominant, you’re probably an also-ran.
How do you switch a manufacturing company into a software one? It turns out it’s very difficult. Furthermore, it’s been proven that usually software succeeds, has fewer flaws, IF FEWER PEOPLE ARE WRITING IT! Yes, you just can’t throw more programmers into the fray, it just doesn’t work.
Now VW hired a guy from BMW to pull all its software together. The aforementioned Dirk Hilgenberg was frustrated with BMW, pulling back its reins on electric, focusing on profits as opposed to the future.
And Hilgenberg created a new group at VW, known as the Artemis project, to pull it all together. Turns out that a huge chunk of VW’s electric car software was written by third parties, and it never worked together. Does this remind you of Boeing?
Forget the 737 MAX, Boeing’s got much deeper problems. It employed the Japanese system, with outsourcing and just-in-time, but it turned out third parties were not reliable, and in airplanes, reliability is key.
So maybe Elon Musk was right, unless you’re responsible for everything, doing everything in-house, you just can’t deliver a quality, working product. Volkswagen could not. Can Apple? Good question…
You must be willing to throw away the past to succeed in the future, you must not try to prop up failed efforts, you must be willing to write them off. Zuckerberg did this with mobile software… Facebook spent two years developing a mobile app based on HTML5. But it was a piece of crap! So Zuckerberg canned it and started from scratch, writing a native app for the iPhone. Meanwhile, Facebook did both of these before most established companies even had a high functioning mobile app, never mind porting their business to it. Can you imagine the state of Facebook without mobile? DEAD!
So we’re decades on, and old companies are still being toppled. And then there’s the inane book business, run by invested in the past oldsters, who do all their business on computers but then physically print the final product. How dumb can that be? Isn’t that like making vinyl records, a niche business? More and more people read everything digitally. But, the publishers were aided by an ignorant government that forced Amazon to change its sales structure despite the case being about Apple’s iBooks. In order to protect the public, the government ended up INCREASING the price of e-books. Proving, once again, that if you’re depending on the government to understand technological change, you’re sorely mistaken. So now an e-book can even cost more than a physical book. Thank god this ship has sailed in the music business, digital dominates and it’s the on demand streaming platform that generates all the revenue, that keeps on growing, that has created a recording revenue renaissance!
What did Bob Dylan say? To lead or get out of the way? We don’t need more managers, we need more innovators! It turns out those who think outside the box, who cannot make it in the company structure, create the future and change the world. Most MBAs can read a spreadsheet, they just don’t know how to build a company, or run those that exist, keeping them alive by disrupting them constantly!
Beware of buying an expensive gasoline-powered car in the future. Turns out they’re going to crater in value just like those 35mm Canons and Nikons. Electric has already won the future. If you don’t know this, you’re the opposite of a seer. Don’t get too comfortable where you are, because change is constantly coming. And the future has positives and negatives, but many more of the former. Sure, there are no more vent windows in cars, but they all come with air conditioning. And digital music does not skip. And electric cars pollute less.
But you’re probably not a leader. The fascinating thing about the Volkswagen story is the leaders were clueless too!