Think Like A VC

You have to sign more acts in more genres and stay with them for many years.

That is the only way for the major labels to maintain market share.

They just aren't making enough bets. They're still mired in MTV thinking. I.e. there are a handful of universal hits and you want to control them.

No, there are more hits in more genres than ever before and if you're just skimming from the top, you're missing out on the moonshots.

In other words, you have to forgo the data and look at the music.

And it hasn't been this way for a very long time.

The model is clearly established. Warner/Reprise of the sixties and seventies. The labels themselves had gravitas. Nothing was thrown against the wall. There was a reason every act was signed, and the label stood behind them for years, usually five albums. Did all of them break through? Of course not, but a good number of them were profitable, and it was nearly impossible to predict which ones would blow up.

Contrary to popular belief, most VC funded projects do not fail. They just do not return at 10x, never mind 1000x. 2x and 3x are still winners, but not enough to drive the entire business. Which is the same at a record label, you don't expect everything to be giant, but hopefully most stuff doesn't fail.

VCs invest in new ideas. They look to the future. They go where no one else has. To own a vertical.

I get why majors want hits, because in the streaming era those are the records that pay. But so many of those acts have no career, they can't tour and they don't last. And therefore you make money once and then...

Never mind opportunity cost. If you're investing in the next me-too record, you can't invest in what is great thereafter.

The biggest music business story of the past few years is Zach Bryan. NO ONE would have predicted that he would sell out stadiums so soon. Bryan was not selling what anybody else was, nothing in the Spotify Top 50 sounded like Bryan, so when you heard his music it stood out. Furthermore, like Warner/Reprise of yore, Bryan is credible. Won't do anything for a buck. It's all about the music and the relationship between the fan and the act.

Now the music business blew up in the sixties because of FM radio. Owners could no longer simulcast on FM what they were airing on AM. This gave a window to all sorts of alternatives, from Cream to Wild Man Fischer.

What has the internet wrought?

Streaming. Anybody can play.

And that's very important to acknowledge.

The paradigm of yore was to spend a ton of money getting it right, because if you did cash rained down. Now you can't spend that much. Furthermore, costs are down. So the script has flipped to capturing lightning in a bottle. To have many writers and remixers is to miss the point. That's an old paradigm.

As for streaming itself, it pays handsomely to the victors, but the profits don't come close to those of the CD era, when product was expensive and royalties were low.

Furthermore, marketing costs have decreased. You can reach the public for free. And the old ways of marketing deliver de minimis results. Print means almost nothing, as does TV. Terrestrial radio means more, but far less than it used to, and not only is it decreasing in mindshare, the young, impressionable audience does not listen to it. (To argue with me here is to miss the point, if you're defending the past, you're dying, you just don't know yet.)

Used to be A&R people found acts with value and invested in making the record.

But then the script flipped to the Doug Morris model. Throw everything against the wall and see if it sticks. I.e. get it on the radio and see if it sells.

That's history too.

Everything grows from the bottom up these days, just like in the late sixties. Word of mouth is everything. The public is hungry for quality product.

But all we get is Sabrina Carpenter.

If I read one more rave review about her new album...

This is pop music from a Disney character. The hard core audience that sustains this business is not interested in her whatsoever. What you've got here is a famous name blown up by the machine. Sure, she might have a hit, but does anybody BELIEVE in Sabrina Carpenter? Only the brain dead.

And there's a business in brain dead. But Warner/Reprise rarely invested in it. Because it was all about timing, knowing when to invest and when to fold in a very short period of time.

Look at it this way... Do you know of any Top Forty acts from the sixties and seventies selling out stadiums?

Well, the Eagles have no problem, and they're not the only ones.

Never mind seemingly every rocker of the eighties, from Def Leppard to Green Day to Motley Crue.

But what have we got in the Spotify Top 50? Brands. With the focus on the external. Where they've been, what they're selling, the music is just a vehicle to make bank. Furthermore, everybody sells out, and as soon as you sell out you've lost credibility. Sure, social media influencers sell out, but that's a different business. Instead of owning its uniqueness, music is trying to be a commodity like everything else, to its detriment.

And sure, Taylor Swift is selling out stadiums, but this is not equivalent to the British Invasion, where the Beatles were followed by the Stones, the Hollies, Herman's Hermits, Gerry and the Pacemakers, the Dave Clark 5, the list is endless.

Actually, Hannah Gadsby had it right in yesterday's "New York Times." She called Taylor Swift "'a can of Coke masquerading as a sorority cult.'"

Genius, and accurate.

But you can't say anything negative about Swift, then you're a hater.

But come on, all this hoopla, is it really about Swift's music?

Swift hasn't made anything that goes straight to the heart since her first two albums written with Liz Rose. Working with the producer du jour and selling multiple versions of vinyl to remain number one? That's commerce, not art.

And other than the money... Does anybody who made their bones in this business in the sixties, seventies or eighties care?

No.

Not to mention that even Swift made it in a different era. Sans the success in country, there's no success in pop.

And this isn't to rain on Swift's parade, but to illustrate how broad the marketplace is, how much opportunity there is elsewhere.

We don't even have a reasonable Swift imitator, because it's a dead end. There's no movement here. But all the news is dominated by her.

Yeah, she wrote a song about me, after I wrote how her appearance on the Grammys would kill her career. But I was wrong. I was playing by the old rules, the new rules are your dedicated fans will keep you alive no matter what, as long as you are serving them. But how many people are dedicated fans? How many people can even sing two Swift songs? Phish sells out arenas, and they're far from ubiquitous.

The whole business needs a rethink. But the three heads of the major labels are out of touch. At Universal and Sony we've got men stuck in the eighties and nineties. It's all about worldwide hits. But that's no longer the game. As for Warner... You've got a guy who knows nothing about music lording it over those who do.

The math in music comes AFTER the success, not before. You can count streams, but if you're all about the data going in, then you're not about the music.

Opportunity is rampant for indies. Now is the time to make the music you want to, that doesn't fit in the Spotify Top 50 pigeonhole. The public is hungry for the new, the different and the credible.

You only have to look at the movie business for example. By playing it safe, releasing less product in specific genres, the movie business has become decimated. You're not going to get a "Squid Game" in the movie business. You'll get that on streaming because Netflix realizes we all have different tastes.

I mean who even wants to listen to the Spotify Top 50?

Twenty acts for ten years. Who is willing to take that plunge? NOBODY!

But that's the way it used to be, that's what built this business into the juggernaut it is. But instead, the majors are wearing blinders.

There will be change. We can't go for this long with the old genres continuing to dominate.

Also, nobody with brains wants to be a musician, the odds are long and the pay ain't great. You can make more at a bank, in many jobs. So we don't get the best and the brightest.

But if we show the POWER of music... Everybody wants power. To influence the culture. Used to be the acts were bigger than the politicians, but no more. But they can be again.

All bets are off. We're open to all comers. My girlfriend talked about buying one meat ball at Whole Foods today. She was referencing the Ry Cooder cover of the Singer/Zaret song on his first album. This is culture. I know this song by heart. Took years for Ry Cooder to break through. But he's still got a career. Yesterday's flavor of the moment? HISTORY!

P.S. Hannah Gadsby was about to give up and then she threw the long ball and did a special that included art history, that people weren't even sure was comedy, and now she's a cultural icon. And instead of boasting, she's expressing anxiety about her career. And talking about ecology with throwaway toys. This is what the majors used to sell, not anymore.

"'Hannah Gadsby: Woof' Review: A Comic's Pet Themes - In a soul-baring new show at the Edinburgh Fringe, the Australian stand-up leans once again into fears, anxieties and mental health worries."

Free link: https://rb.gy/yyrj6q


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