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  • From: "Jeremy Blair" <jerblar AT gmail.com>
  • To: "RTP-area local music and culture" <ch-scene AT lists.ibiblio.org>
  • Subject: Re: Lefsetz Letter - When the CD Dies
  • Date: Wed, 30 May 2007 00:17:06 -0400

Good point, here's a counter point: I bought Modest Mouse and Cold War Kids
yesterday on Amazon. I probably buy two or three CDs a month. I like album
art because it is an extension of the thoughts and feelings around the music
that came to be recorded. I'll always pay for that. I also rarely leave a
live show without buying a disc, for me its part of the experience.

On 29 May 2007 19:48:11 -0700, coolfishing AT gmail.com <coolfishing AT gmail.com>
wrote:

Bob Lefsetz write an email newsletter about the music industry. I
don't always agree with what he has to say, and not even sure I agree
with everything below, but he makes enough good points that I thought
I'd re-post this here.

glenn

"Everyone in the industry thinks of this Christmas as the last big
holiday season for CD sales," Mr. Sinnreich said, "and then everything
goes kaput."

http://www.nytimes.com/2007/05/28/arts/music/28musi.html?_r=1&oref=slogin

Love it or hate it, the "New York Times" is the paper of record. If
for no other reason than most news organizations no longer DO any
reporting, they just rely on wire services and print commentary/
opinion. "The New York Times" sets the agenda. And when they go on a
story, it has legitimacy. Wall Street, the business community, they
now know what active music consumers know, that the CD is headed for
extinction. With everybody clued in, its death will be hastened.
THEN what?


1. Indie Retail

Survives. Just like vinyl has never gone completely away, there will
be people who will want to own discs in the future, whether they be
CDs or vinyl. Most of the indie stores that have weathered the crash
will continue in business, assuming their owners still want to keep
the doors open. Most have diversified, they don't rely solely on
music to make money. They will be kept alive by collectors. But they
will not matter. Just like vinyl doesn't matter. Disc sales will be
a sideshow. If you make a business out of it, more power to you, but
most people just won't care.


2. Big Box Retail

Best Buy and its brethren are going to kill the CD. They're gonna
shrink floor space and titles and one day they're just going to stop
selling discs completely. This will happen long before record labels
desire to give up on the physical format. Retail is in tune with its
customers' whims, it has to keep moving forward to survive. Soon CDs
will be evidence of the past, and these stores want to be the future.
Big box retailers will kill the CD the same way the industry killed
the cassette and vinyl. They'll just stop stocking them, and the
consumer will go elsewhere.

I think Aram Sinnreich's prediction is right. After this Christmas,
big box retailers will start folding their tent. Oh, maybe they'll
sell a few titles. But so do supermarket chains.


3. Radio

Radio hasn't given a shit about CD sales for years. Radio exists in
its own little backwater, where the advertiser is king and the music
is just part of the sausage. Hey, so many of the records that zoom up
the chart are not available at ANY price! With indie promo
essentially gone, radio groups are not worried about losing the
relationship with labels, there are no more perks left to acquire. As
for radio station shows and other give-backs, you don't need the label
for that, just the manager. The manager will be more powerful than
ever before.


4. The Promoter

When the CD dies, Live Nation is going to be in even deeper shit.

Oh, AEG will be too, but they tend to only want to be in the
blockbuster business.

You see forever, the road took its clues from the labels. The labels
signed the acts, promoted them, created DEMAND! Now the promoter has
to create demand himself, and so far, he's shown no talent for it.
Oh, he could cede this development process to Net radio and other
developing exposure media, but that just means he'll have to settle
for smaller shows, and less revenue. Doesn't bode well for your stock
price.


5. The Agent

Will have to work in concert with the manager to help create demand.
This won't solely be the province of the promoter. The label did the
heavy lifting for seemingly EVERYBODY in this business, what happens
when the label goes KAPUT!


6. The Manager

It starts with the manager. He creates the original demand. But the
goal used to be to sell to the highest bidder, to get the label to
COMMIT! And that commitment yielded exposure, which could earn you
money on the road, and in the old days, royalties. NOW WHAT?

The manager has to piece together all those new media strategies, to
try to get his band traction. MySpace, music blogs, it's not about
grand slams anymore, not even home runs, but BUNTS! Spreading the
word, building demand, is like starting at the bottom of the minor
leagues, working your way up to AAA, and then entering the bigs.
First in KC. Or Seattle. Some secondary market. It's gonna be
tough. And the manager is going to be starving all the while, because
fifteen or twenty percent of nothing is nothing. Which is why the
established managers only want established acts, and a vacuum has been
created for new managers to develop new acts. But there will be
starvation along the way, and only the fittest will survive.


7. The Act

Has to get a manager. That should be your goal, to create enough
noise to get someone to commit their money, time and effort to growing
your act. You can only go so far by yourself. After all, you've got
to write the music and play it! So, the act lights a fire, which
burns up through the manager, agent and promoter. As for the label?


8. The Label

There will be no labels if you can't get paid.

The online business presently doesn't deliver what the consumer wants,
which is ownership of a ton of unrestricted music for a low price.
Those wishing to sell recordings only have six months to solve this
problem.

It ain't iTunes. Even Steve Jobs says most people who buy iPods buy
almost no music at the iTunes Store (http://www.apple.com/hotnews/
thoughtsonmusic/).

It's not Rhapsody or Napster... You've got to get a new player, when
iPods rule. And the public is not ready for rental.

So...

The only solution is some kind of legal P2P. But the labels and
publishers are not ready for such. Therefore, stasis and infighting
will kill the recorded music business.

Sad, if you think about it. People should pay for music. But the
owners won't LET THEM! Not in the way they want to.

It's not about mergers, or laying people off, the solution is on the
other end, delivering a lot of cheap music. But no one is prepared to
do this. It's fascinating watching the movie. As fat cats inured to
an old way of doing things proceed to destroy their business.


9. Publishers

Will survive. And thrive.


10. The Public

We haven't had that spirit here since... Well, if not 1969, then
1979, or '89 or even '99. But 1999 was almost TEN YEARS AGO! The
public thinks that most mainstream new music is crap. And if the
labels die, GOOD RIDDANCE! In other words, most people just aren't
paying attention. They're not only not buying discs, they're not
going to overpriced shows with exorbitant ticket fees either. In an
era where it's about getting the masses involved at a cheap price, the
music industry has catered to an ever shrinking few willing to overpay
for crap.

Joe and Jane Public want music. But they'll just steal it. Or listen
to the radio.

As for new stuff? You'll hear about it from your friends, if you're
INTERESTED! Otherwise, you'll just fire up your home theatre and
watch one of the 500 channels or a DVD.

Music has turned itself into a second class citizen. Via greed, via
an inability to wake up and admit we're living in the future.

It's not like this inevitability, the impending death of the CD, was
sprung upon the executives in the middle of the night. It was obvious
at LEAST seven years ago, when the original Napster gained serious
traction. The only person who saw the light? Steve Jobs. And he
made his money from selling iPods, and now iPhones. If the iTunes
Store never goes ga-ga, he just shrugs his shoulders and moves on. As
for the music industry??

There will be a new music industry. But it will not look like the old
one. It will be run by youngsters, with different values, spreading
the word amongst their peers. They won't sell out to Madison Avenue
because Madison Avenue won't have any idea what they're doing. When
the new acts do get traction, will advertising even LOOK the same?
Will anybody be watching the commercials on television? Will we live
in a Google ads world?

Google, Microsoft and Yahoo are duking it out online. Even AOL. You
wonder why AOL went free? For the EYEBALLS! There wasn't enough
money in selling online access to compete with the big boys focused on
ads.

Same deal in music. By catering to a select ignorant or addicted few,
willing to overpay for discs, the music business ignored the
mainstream, failed to see what the people wanted and where they were
going.

The people are digital savvy. It's in their DNA. Selling McCartney
discs at Starbucks is the last Hail Mary left. Whether it's
successful or not, you won't be able to do it during Christmas '08,
Starbucks won't be able to stand the hit to its credibility, its
customers will LAUGH at them, DISDAIN them.

The disc is dying, are you prepared?


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