THE LEFSETZ LETTER: The Prince Flap

This is HYSTERICAL! Is the pint-sized rocker truly going to get the last laugh?

Oh, you remember, when he changed his name, and painted "Slave" on his cheek. The big bad record company wasn't allowing him to do what he wanted, which was to release more MUSIC!

For those who've forgotten, that was Warner Brothers, run by Mo Ostin and Lenny Waronker, the most respected, the most credible label in the business.

But Mo was an accountant. This didn't make BUSINESS sense! Releases had to be staggered, marketed and promoted, the public just couldn't devour that much music.

But what about artistry, what about FANS!

So, Prince ultimately got his freedom and went on his own personal hejira. A walkabout. A journey in the desert.


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.

He used the newfangled Internet to form a club.

Well, that didn't work.

Prince was a joke, a has-been. Someone off the grid, that you no longer paid much attention to.

And then Prince executed a masterstroke. He decided to display his still prodigious skills on national TV, and then go on tour and GIVE his new album away!

Hell, the concert tickets were so expensive anyway (albeit cheaper than those of most long in the tooth rockers), what difference did it make if he threw a few pennies away if it got his new music in the HANDS OF THE FANS!

Yes, just a few pennies. Hell, the value of a plastic disc declined to almost zero, just like its cost, when AOL flooded the market with them.

Getting the music in the hands of fans. That's what technology allows, cheaply. This is what has been driving the record labels INSANE! They've got a model. Not any different from the one Mo employed back at Warner Brothers in the nineties. You craft an album, run up the publicity and sell it for in excess of fifteen bucks. But is this serving the ARTIST, never mind the FAN!

A true artist desires one thing more than any other. To get his music EXPOSED!

Oh, the labels will say it's all about the money. Well, maybe it is to the execs, who are sans talent and sans mission, that's probably why they said that Napster would kill music. Maybe their PROFITS were threatened, but music would live on just fine. Because the people who make it, THEY'VE GOT TO MAKE IT!

Lindsay Lohan, Hilary Duff and Paris Hilton wouldn't make music if it were free, but Radiohead would, and so would Coldplay.

So, if you're a heritage act, and radio will have nothing to do with you, how do you get your message out there, how do you get people to hear your new music?

In one fell swoop, Prince has trumped McCartney. The "Daily Mail" is going to deposit TWO MILLION CDS in the hands of old fans and potential new ones, AS A PREMIUM, essentially COMPLETELY FREE TO THE CONSUMER, the disc comes with the newspaper. What's even BETTER, Prince is getting PAID FOR THEM, by the "Mail"!

Win-win, wouldn't you say?

Not if you're a music retailer. Or a record label.

The retailers, they're dropping like flies. The Fopp chain suddenly bit the dust in the U.K., and you've heard of Tower Records, haven't you?

Think about this. Prince is going to reach MORE people, and ultimately make MORE MONEY, leaving traditional CD retailers OUT OF THE LOOP!

And what does he need the label for? He's rich enough to record the music on his own, and who needs all the services they charge for, getting discs in the store, paying the retailers to stock them, trying to get tracks on the radio unsuccessfully, when he can accomplish ALL THIS BY HIS LONESOME AND KEEP ALL THE MONEY!

It took more than ten years, but the game finally caught up with Prince. He's suddenly at the FOREFRONT!

Wal-Mart? The Eagles should have made a deal with a media company TO GIVE THE ALBUM AWAY! A bidding war, what's a new Eagles disc worth as a promotional tool?

And suddenly, everybody's got your music and you've gotten paid.

Radio didn't play "Hole In The World" that much, it's not like you can count on radio this time around, but maybe all the hoopla of giving the album away will CAUSE radio and TV to embrace new Eagles tracks.

I don't want to beat Irving and his band up too badly. They were at the forefront LAST YEAR, when this deal was MADE! If Henley wasn't such a perfectionist, the album would have been on sale MONTHS ago and they all would have looked like geniuses.

But who's gonna be the first classic act that's gonna give away their record in the U.S?

A new Police record?

The Stones would have been better off giving their album away, they barely sold any copies of "A Bigger Bang" and the band's records never sold that well anyway!

Now if you want to get on the radio, if you want to build an act, this paradigm doesn't look too good. You need the traditional label, with its infrastructure and ties to radio and other media outlets.

But do you really need THEM? Or, in the future, will you be able to OUTSOURCE these functions?

Better yet, let's say you don't make music that CAN GET ON THE RADIO! Which is seemingly everybody but rappers or pop airheads these days. Where does this LEAVE YOU?

Well, music shouldn't be free, people should pay for it. But until the labels wake up and authorize new modes of acquisition, allowing more people to own more music at a cheaper price, should free be a part of YOUR STRATEGY?

It already is. Even at the most basic level, the ability for the audience to hear four tracks on MySpace.

Every band has a MySpace site. You have to. The public EXPECTS IT! They just put your name and "MySpace" into the Google field and presume you'll come up. You're THRILLED IF PEOPLE WANT TO LISTEN! That's the HARDEST PART, getting people to LISTEN! That's what the labels have screwed up, the ability for people to HEAR the music. The old bait and switch, one good track that has to be purchased as part of an album of dreck, that paradigm is history, that's done, the Net killed that.

And now the Net seems to have killed record stores.

And despite the long arm of the government, trying to kill small Web stations, the Internet is killing terrestrial radio.

And that free music, traded P2P and hard-drive swapped, it ends up on iPods, many people never even TOUCH the radio dial.

Right now, at the halfway mark in 2007, the revolution has finally begun.

EMI making a deal with SnoCap? Selling by track is economic death, never mind at $1.30. But notice they're unprotected MP3s, UNTHINKABLE AS RECENTLY AS 2006! You see, EMI is DESPERATE!

Retail is screwed.

Are the labels screwed too?

It seems so. Their cash cows are going to do it themselves, like Prince and the Eagles, or extract heinous terms. And, if you've got no guaranteed sellers, HOW DO YOU MAKE YOUR NUMBERS?

By not even being in the new music game, by ceding that business to newcomers, functioning at a much lower economic level, and by selling the assets you already POSSESS!

Yup, trying to sell EVERY LAST ZEPPELIN track to people. Lower the price, and give people more.

Otherwise, the way we're going, people are going to EXPECT, like with Prince, that the music be FREE!

Time to monetize P2P. Time to throw the long ball. Because the acts, and labels are always dependent on the acts, are getting RESTLESS!

In other words, the lunatics are taking over the asylum.

WHAT A GREAT MOVIE!

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