Op-Ed: The Warner Stock Drop – By Bob Lefsetz

Now the financial community thinks the labels suck too.

The public has known it for years. Ever since Tommy Mottola rammed his high concept crap down our throats in the nineties. That's what the business became. One note "superstars", who either rapped about bitches and ho's or believed melisma was the highest form of vocalization. What's worse, the albums contained were made up of filler rivaling that of the pre-Beatle days, when it was truly a singles business. Only one problem! You couldn't buy the single! Ha! Fuck you customer!

Until Napster and CD burning, when the public took the music business back.

How could people do this? Didn't they know that music was a controlled environment? That it couldn't exist without major labels run by titans? You'd think Warner, et al, had a deal with Guitar Center, disallowing purchases unless you had a deal. But this was and is untrue. Anybody can make music. And now, more than ever before in the modern era, they don't want to make it for a major label.

Many people believe the owners are not going to fix radio. They're just gonna consolidate and add commercials, withdrawing cash until nobody listens anymore and the stations have been devalued to next to nothing. But the head honchos at labels are not that cynical. They believe they can pull a rabbit out of the hat. Rather than cutting new music production and blowing out their catalogs, they're making like it's 1996, and one of these evanescent no-talents is gonna sell ten million copies of his vapid album.

Yup, they truly believe. It's astounding the crap being thrown by the major labels. We've just got to stop P2P. Digital's gonna replace discs. It's kinda like the Administration and Iraq, EVERYTHING they've said is wrong, exactly the opposite, in fact.

Let's start with the fallacy that without them, there will be no music. That if people don't pay for music, people will stop making it. But instrument sales are through the roof. Seemingly everybody's making music. And everybody can record it in GarageBand, if not Pro Tools. And distribute it on MySpace. Oh, all of this is for free, but it can be done! What is the labels' answer to this?

Buy a disc. It's of higher quality.

But they only know how to sell the discs of people with Top Forty hits. And Top Forty is airheads and rappers. Stuff MOST people ARE NOT INTERESTED IN!

Think about this. They're trying to sustain their business by selling narrowcasted crap in a world where you can steal all of these wares instantly on the Net. Talk about a failed strategy!

And now the Street knows it. As represented by the stock of Warner Music. EMI? It was so bad, they had to blow it out to private equity. People know there's no future in recorded music, because the labels MADE IT SO! Rather than stroking their chins and trying to figure out the new world, they're just repeating what they used to do in the now gone twentieth century. It would be as if Smith Corona was telling everybody the typewriter was gonna make a comeback.

But lately, the labels haven't even been saying THIS! They're shrugging their shoulders and stating that music is a bad business, and they need a piece of management/touring. Huh? Isn't that like GM saying they need a piece of Exxon Mobil?

Gasoline works fine in Toyotas. People don't have to listen to major label releases. You can't get a gig only if you have a major label deal. Actually, many of the new touring bands are making it without a major label! Their fans are happier, and whatever music they can sell…they get to keep the lion's share and NOBODY TELLS THEM WHAT TO DO!

What do we need the major labels for if they can't sell music?

It's not like we've got a dearth of managers, and we need the wisdom of the majors. It's not like so much of today's music can get on the radio, where labels have their relationships. As for TV? TV kills acts! Ask everybody from Buck Owens to Vanilla Ice. Buck felt his appearances on "Hee-Haw" made it so nobody took him seriously, it was in all the obits. Vanilla Ice? All he's got is TV, making appearances based on his coming out of the backwoods/where is he now factor.

And it's not like labels can HELP with touring. They're not licensed agents, and they're not interested in careers. And there are plenty of merch companies out there.

What CAN the major labels provide? MONEY! That's all! But the deal is so heinous, that many musicians now say no. Not only the newbies, but the stars, who can get paid from Starbucks to newspapers.

The labels can double-talk all they want, but their only solution is to figure out a way to get paid for music. That's their business. But they've devalued music, and refused to license just about anybody with a reasonable digital distribution model. So, until they can figure out a way to monetize the way people now get music, from their friends, they're fucked. And no amount of spin can help them.

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