Sunday, December 2, 2007
Comments on Mr. Bob Lefsetz Blog on The Kindle
Recently a good friend of mine sent me a copy of a blog from Mr. Bob Lefsetz. I was not familiar with Mr. Lefsetz, a book he had written called “The Lefsetz Letter“ or the Blog. My friend Blake Goldsmith thought I might enjoy his blog titled “The Kindle” and sent it over. I must say I found it interesting for several reasons. His rather “scattered” style of bloging caused me to go to my good friend “GOOGLE” to find out a little more about him and to see if I could understand his writing style and his positions on the various aspects of the music industry and its players.
[Here is the information on how to connect with Mr. Bob Lefsetz and I recommend if you are interested in the music industry and looking for someone who will make you “think” everyday - - not always agree with the thoughts - - but make you think – here is where you want to go, also the Archive will give you the complete “The Kindle” Blog of Bob’s:
Visit the archive: http://lefsetz.com/wordpress/
If you would like to subscribe to the LefsetzLetter,
http://www.lefsetz.com/lists/?p=subscribe&id=1]
I will say that I found much common ground in his writings that I was able to review. I also would take issue with some of his opinions, concepts of the industry, and where and what everyone should be doing in the future.
If you will indulge me, I would like to start with his “The Kindle” blog. First, I would agree with his thoughts on Doug Morris. However, I have known Doug since Big Tree and worked with him on the England Dan and John Ford Coley project. With that being said, he was a great record guy and has somehow lost his way. I read the same article as Bob about Doug’s plans to “hold up” iTUNES for more money - - without contributing anything to the success of the artist or the distribution device (iTUNES). Bob is right - - sadly this is just an example of greed plain and simple. Knowing the man Doug Morris was, I can only agree with him statement “old fart record execs!”
I do not see his analogy between the book business and the record industry. The Kindle project is going to start off with the upper demographic of book readers - - probably the “road warriors” who now stop into a book store at the airport for a paperback, will look at The Kindle as a companion to the iPHONE!
What is the problem? As Bob should know and understand this is the age of Internet and “downloads.” The retail book store industry is going the way of the “Record Store.” So what? It is progress; at least the publishing industry understands their “world” and is preparing for the future. Buying books on line for a $10.00 price or less, makes sense when it is a “drop ship” business. This is the BIG mistake the former C.E.O’s of the major records companies in the early 1990’s. In 1990 Wayne Huizenga had the answer to this problem of the just starting P-2-P File sharing which Shawn Fanning was calling “Napster.” Mr. Huizenga bought up 3,000 Warehouse record stores, created a partnership with NewLeaf Corporation to “hard wire” all of his stores with Fiber Optic lines and create stores that would allow the customer to purchase a download CD and have it out the door in six minutes or less. This concept would “level the playing field” for Independent labels as well as the majors because “distribution” would no longer be a consideration - - all a band needed to do was provide Wayne with a music file which could be uploaded into the system and “let the sales begin.”
Do you know why this failed? The major labels would not license their artists to Wayne Huizenga. Why not? Because they knew it would be ultimately the end of a lot of jobs because without the need for distribution, a central system of accounting, eventually the corporate owners in Germany and Japan would figure it out and they would be gone. So they stonewalled the project, it went away and Napster became the future of the next generation of music listeners.
Think about it. If the executives had endorsed and encouraged the Huizenga project the whole industry could be different now. The new music buyer could have had their download and at the same time “trained” to continue to pay for it. This is the difference as I look at for The Kindle, the industry is creating the next generation of consumer - - if they want to still read. So I think consumers should embrace this technology - -the price will drop, no question and yes, brick and mortar book stores will go the way of Tower Records, but the industry will continue to thrive and give outlet to new and young aspiring authors. In addition authors will have the options of self publishing with this distribution system in place and as Bob has mentioned about recording artists - - keep total artistic control over their written words.
I really do not understand the Jay-Z reference in Bob Lefsetz Blog . Selling over 500,000 units when you own the label and a keeping at least 50% of the wholesale - - I’ll take it and would not call it a failure. Plus if he is going for the “urban” (P.C. term –O.K.) anyonemust know that only 20% of the Urban market have home computers and 85% of white families are computer equipped. Which probably accounts for the heavy Urban leaning of the Top 50 Billboard charts - - Sound Scan records it and Billboard “buys it!” Anyway, look at Paul McCartney, his last album on Capitol sold 40,000 the first week; his Starbucks release did 160,000 in its first week of sales. I would say there is a correlation between marketing and accessibility to the artist’s target market. Maybe Jay-Z should have worked a deal with Foot Locker!
I would not agree that the CD model is totally broken. I would agree that “old fart record execs can shoot themselves in the foot.” They do not know the difference between a well crafted CD like the Eagles or Kid Rock and a filler CD like Hillary Duff or Paris Hilton. Unfortunately, (in my opinion) some great CD’s like the latest by Bob Seger, have gotten lost in the shuffle. I have purchased more CD’s in the last month than I have in the past two years. Why? “Senior artists” are putting out real CD’s with ten plus tracks that are all interesting and listenable. The music business in certainly not “dead.” However it is changing and Mr. Lefsetz is so right that the “old farts” have got to go!
The problem now is the consumer has “choice stress.” There are only twenty-four hours in the day. When the music industry started getting big the 1960’s (Motown, British Invasion), 1970’s (Underground Radio, disco),
1980’s (glam rock, techno) and finally 1990’s (punk and grunge) the free-time options were smaller - - top 40 radio and three television networks. Now there are so many options, there is really no way to get a mass consensus from the public on what is “great.”
Instead it is becoming fragmented and this is not bad. It just means the music industry executives have got to think in terms of marketing and understand the limits of the market they are trying to reach. Radio is so much a “lost cause” - - - I agree (once again) with Bob, terrestrial radio, MTV, and satellite are not going to really create a new superstar. However Cable television and in some cases network television are creating the next generation of artists with the ability to sell-out arenas. Why is this happening?
The reason for this goes back to Robert Silberman, creator and C.E.O. of SFX which became Clear Channel Communication. Everyone knows the story, take the music business and treat it as a Fortune 500 corporation. In other words take the “human element” out of the equation. Buying up all of the major concert promotion companies in the country and consolidating them under one banner SFX then negotiate with the “top artists” for larger guarantees that they had ever seen before. Pushing to the side, the independent small promoters and eventually the agents who were representing them. What came out of this was a “dinosaur mentality” - - eat everything in sight and don’t plant anything. So for a few years it worked great because there was an abundance of artists at the top of their game and looking for the most money. At the right moment Mr. Silberman took his accountants and marketing people into Clear Channel Communications and convinced them if they bought SFX and merged it with the dominance of Clear Channel Communication in the radio broadcast industry it would be a “home run.” Timing is everything! They bought it and bought the company. Unfortunately, did not look far enough ahead. What is missing in the music business today is anyone willing to “plant seeds.” The showcase clubs, small hall venues, promoters willing to work with new acts to get a date with a “winner” - - a negotiating tool of the talent agencies such as CAA, William Morris and Premier - - all gone.
Now Clear Channel Communication is left with radio stations, concert venues and a market that is not what they thought it would be when they bought it. As with so many things, the cause and effect are sad!
I believe the future is responsible people taking control and understanding that this is 2008 (almost) not 1969 (the Woodstock era) and act accordingly. Big corporations controlling the music industry are over. The future is niche marketing.
I could say more, but I hope I made my thoughts clear and have given you some new ideas. The industry needs someone to constantly “needle them.” It appears from my Google search, Mr. Bob Lefsetz has taken up that cause. My only suggestions would be to “curb the anger” and “keep up the good fight.”
[Here is the information on how to connect with Mr. Bob Lefsetz and I recommend if you are interested in the music industry and looking for someone who will make you “think” everyday - - not always agree with the thoughts - - but make you think – here is where you want to go, also the Archive will give you the complete “The Kindle” Blog of Bob’s:
Visit the archive: http://lefsetz.com/wordpress/
If you would like to subscribe to the LefsetzLetter,
http://www.lefsetz.com/lists/?p=subscribe&id=1]
I will say that I found much common ground in his writings that I was able to review. I also would take issue with some of his opinions, concepts of the industry, and where and what everyone should be doing in the future.
If you will indulge me, I would like to start with his “The Kindle” blog. First, I would agree with his thoughts on Doug Morris. However, I have known Doug since Big Tree and worked with him on the England Dan and John Ford Coley project. With that being said, he was a great record guy and has somehow lost his way. I read the same article as Bob about Doug’s plans to “hold up” iTUNES for more money - - without contributing anything to the success of the artist or the distribution device (iTUNES). Bob is right - - sadly this is just an example of greed plain and simple. Knowing the man Doug Morris was, I can only agree with him statement “old fart record execs!”
I do not see his analogy between the book business and the record industry. The Kindle project is going to start off with the upper demographic of book readers - - probably the “road warriors” who now stop into a book store at the airport for a paperback, will look at The Kindle as a companion to the iPHONE!
What is the problem? As Bob should know and understand this is the age of Internet and “downloads.” The retail book store industry is going the way of the “Record Store.” So what? It is progress; at least the publishing industry understands their “world” and is preparing for the future. Buying books on line for a $10.00 price or less, makes sense when it is a “drop ship” business. This is the BIG mistake the former C.E.O’s of the major records companies in the early 1990’s. In 1990 Wayne Huizenga had the answer to this problem of the just starting P-2-P File sharing which Shawn Fanning was calling “Napster.” Mr. Huizenga bought up 3,000 Warehouse record stores, created a partnership with NewLeaf Corporation to “hard wire” all of his stores with Fiber Optic lines and create stores that would allow the customer to purchase a download CD and have it out the door in six minutes or less. This concept would “level the playing field” for Independent labels as well as the majors because “distribution” would no longer be a consideration - - all a band needed to do was provide Wayne with a music file which could be uploaded into the system and “let the sales begin.”
Do you know why this failed? The major labels would not license their artists to Wayne Huizenga. Why not? Because they knew it would be ultimately the end of a lot of jobs because without the need for distribution, a central system of accounting, eventually the corporate owners in Germany and Japan would figure it out and they would be gone. So they stonewalled the project, it went away and Napster became the future of the next generation of music listeners.
Think about it. If the executives had endorsed and encouraged the Huizenga project the whole industry could be different now. The new music buyer could have had their download and at the same time “trained” to continue to pay for it. This is the difference as I look at for The Kindle, the industry is creating the next generation of consumer - - if they want to still read. So I think consumers should embrace this technology - -the price will drop, no question and yes, brick and mortar book stores will go the way of Tower Records, but the industry will continue to thrive and give outlet to new and young aspiring authors. In addition authors will have the options of self publishing with this distribution system in place and as Bob has mentioned about recording artists - - keep total artistic control over their written words.
I really do not understand the Jay-Z reference in Bob Lefsetz Blog . Selling over 500,000 units when you own the label and a keeping at least 50% of the wholesale - - I’ll take it and would not call it a failure. Plus if he is going for the “urban” (P.C. term –O.K.) anyonemust know that only 20% of the Urban market have home computers and 85% of white families are computer equipped. Which probably accounts for the heavy Urban leaning of the Top 50 Billboard charts - - Sound Scan records it and Billboard “buys it!” Anyway, look at Paul McCartney, his last album on Capitol sold 40,000 the first week; his Starbucks release did 160,000 in its first week of sales. I would say there is a correlation between marketing and accessibility to the artist’s target market. Maybe Jay-Z should have worked a deal with Foot Locker!
I would not agree that the CD model is totally broken. I would agree that “old fart record execs can shoot themselves in the foot.” They do not know the difference between a well crafted CD like the Eagles or Kid Rock and a filler CD like Hillary Duff or Paris Hilton. Unfortunately, (in my opinion) some great CD’s like the latest by Bob Seger, have gotten lost in the shuffle. I have purchased more CD’s in the last month than I have in the past two years. Why? “Senior artists” are putting out real CD’s with ten plus tracks that are all interesting and listenable. The music business in certainly not “dead.” However it is changing and Mr. Lefsetz is so right that the “old farts” have got to go!
The problem now is the consumer has “choice stress.” There are only twenty-four hours in the day. When the music industry started getting big the 1960’s (Motown, British Invasion), 1970’s (Underground Radio, disco),
1980’s (glam rock, techno) and finally 1990’s (punk and grunge) the free-time options were smaller - - top 40 radio and three television networks. Now there are so many options, there is really no way to get a mass consensus from the public on what is “great.”
Instead it is becoming fragmented and this is not bad. It just means the music industry executives have got to think in terms of marketing and understand the limits of the market they are trying to reach. Radio is so much a “lost cause” - - - I agree (once again) with Bob, terrestrial radio, MTV, and satellite are not going to really create a new superstar. However Cable television and in some cases network television are creating the next generation of artists with the ability to sell-out arenas. Why is this happening?
The reason for this goes back to Robert Silberman, creator and C.E.O. of SFX which became Clear Channel Communication. Everyone knows the story, take the music business and treat it as a Fortune 500 corporation. In other words take the “human element” out of the equation. Buying up all of the major concert promotion companies in the country and consolidating them under one banner SFX then negotiate with the “top artists” for larger guarantees that they had ever seen before. Pushing to the side, the independent small promoters and eventually the agents who were representing them. What came out of this was a “dinosaur mentality” - - eat everything in sight and don’t plant anything. So for a few years it worked great because there was an abundance of artists at the top of their game and looking for the most money. At the right moment Mr. Silberman took his accountants and marketing people into Clear Channel Communications and convinced them if they bought SFX and merged it with the dominance of Clear Channel Communication in the radio broadcast industry it would be a “home run.” Timing is everything! They bought it and bought the company. Unfortunately, did not look far enough ahead. What is missing in the music business today is anyone willing to “plant seeds.” The showcase clubs, small hall venues, promoters willing to work with new acts to get a date with a “winner” - - a negotiating tool of the talent agencies such as CAA, William Morris and Premier - - all gone.
Now Clear Channel Communication is left with radio stations, concert venues and a market that is not what they thought it would be when they bought it. As with so many things, the cause and effect are sad!
I believe the future is responsible people taking control and understanding that this is 2008 (almost) not 1969 (the Woodstock era) and act accordingly. Big corporations controlling the music industry are over. The future is niche marketing.
I could say more, but I hope I made my thoughts clear and have given you some new ideas. The industry needs someone to constantly “needle them.” It appears from my Google search, Mr. Bob Lefsetz has taken up that cause. My only suggestions would be to “curb the anger” and “keep up the good fight.”
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