This is just about a number.
Don't get your knickers in a twist. All this discussion about distribution overshadows the real story in the business today, which is the music itself.
We are in a crisis.
All the major media is focusing on the Grammy awards when in truth there should be touring awards. The business has flipped, completely. Now all the action, all the excitement, is in the live sector.
Used to be the live sector was dependent upon the labels to provide talent, to build it. Now the labels don't even support their acts' tours, they buy very few tickets. The acts are on their own. But even more interesting is the fact that so many of today's acts are not signed to the three major label groups, and don't need them whatsoever. Why give up AT LEAST fifty percent of your streaming revenues to your label when you can keep essentially all the money yourself. But the dirty little secret is for so many of these acts, the streaming income amounts to one extra show. So...
Recorded music is sexy. We love the bling, the stars. We're eager for the new.
Then again, the big story this week is the Apple Vision Pro. When was the last time we had an act that was a great leap forward, that gained everybody's attention? Music used to be the land of innovation, where the envelope was pushed, but the classic acts are usually superior to the vaunted acts of today. I can't find one person in the business who feels the same way about boygenius as the press. Most can't even listen to the album. Talk about a disconnect.
But there is one breakthrough story in music this year. And that is the Sphere. Quick, ask someone, ANYONE, if they know about the Sphere. And you will find out they do. The Sphere has penetrated the consciousness of America. And almost all of these people will tell you that U2 is the Sphere's opening act. Why? Because the Sphere itself is sexy, a breakthrough far bigger than that of any acts putting out music this year. Come on, have you seen the graphics on the OUTSIDE of the Sphere? They were the highlight of Formula One in Vegas, far superior to the race itself. And as far as what's inside... Talk to anybody who's been to the show, no one is equivocal, absolutely everybody testifies. Many have been more than once. This is the excitement we used to see in the music itself!
I can't tell you that the Sphere makes economic sense, but you've got to give credit to Jim Dolan, the most hated man in New York, for taking a risk, a very big risk. How is it that Jim Dolan is more of a visionary, is willing to risk more than any act plying the boards. Interesting, don't you think? But that's what happens when you think outside of the box, literally. That's what we're all hungry for, that which we cannot conceive of, that blows our minds.
TikTok is something different. TikTok is like the music itself. TikTok is selling humanity. It's a reflection of American society. And the cognoscenti don't like to look at it. Because they don't like what they see. They want everybody to be like them, to turn off their devices and do what? All this banter about TikTok in D.C... Never have so many talked about something they know so little about. And in moribund D.C. they no longer legislate, they just hold grandstanding hearings. Mark Zuckerberg apologized yesterday, whoo-hoo! Are we going to see meaningful change? No. Then again, when will D.C. realize you don't hamper, don't change what already exists, you get out in front of it. Like Spotify.
Yes, Spotify gave the public what it did not know it wanted. All of the music for a low monthly sum, on demand. And if you wanted to kick the tires, you could even listen for free, albeit with ads and a few restrictions.
And Spotify saved the recorded music business. You may not know this, but believe me, Lucian Grainge does.
Got to give Lucian credit, unlike his predecessor, Doug Morris, he's not trying to hold back innovation, he's trying to harness it, go along for the ride, hopefully lead the pack. But the music industry has failed consistently when it comes to tech innovation. Because it's a different mindset. How many musicians are great business people? That's how many record executives are good techies.
But at least Lucian is willing to license the music.
And that's what this TikTok fight is all about, licensing music.
But TikTok does not need the music. Sans the music, Spotify is dead. Music is Spotify's engine, its heart. As a matter of fact, Spotify is trying to broaden its business to be less dependent on music, which does not scale financially for them.
But TikTok has a business without music. TikTok can survive completely without music. And the Chinese company knows it.
But Universal knows that when the most powerful social media outlet only represents 1% of its revenues, something is wrong. And Universal is right.
But techies have no respect for content. And isn't it interesting, Hollywood was scooped and trumped by Netflix. Turns out that even Disney and Warner don't know how to compete. Weren't the big boys supposed to come in and teach Netflix a lesson? Well, that didn't happen, now these old wave studios are licensing content to Netflix for the income. Turns out Netflix is forever, the big kahuna. As for the rest... Wait for the consolidation. And never forget that music has it much more together than streaming television. Pay a bit over ten dollars a month and you can get everything. Whereas streaming TV is Balkanized. And now there are ads, which was the big breakthrough of Netflix, no ads. And you can't get everything for one low price, and you hate all the companies and players as much as you hated the cable company of yore. But you don't hate Spotify.
And maybe you love Apple and Amazon, Spotify's two biggest competitors. But let's be clear, they don't need music. It's a zit on the ass of their business. And that's not a good partner to have, one that does not need you.
And TikTok... It's not only the heart and soul of America, but the world!
And TikTok is asking for heinous things. Right to use music in ads without permission, much more. I don't believe ByteDance really thinks it can get all of this, it's just a negotiating ploy, if they ask for everything, the final result will be closer to their desires.
So Universal pulled their music from TikTok. Did TikTok shut down? Do you see public blowback? Not yet.
But TikTok not only brought a Fleetwood Mac song back from obscurity, TikTok breaks acts. Not only Universal acts, but acts with no label at all!
Not being on TikTok hurts Universal, but once again, TikTok is not Universal's only avenue of distribution, not only does it have Spotify, et al, it's got YouTube and radio, but...
This is where the younger, impressionable generation is.
Universal needs TikTok, unfortunately more than TikTok needs it. So Universal wants to make a deal, just one more favorable to them.
And by not making a deal with Universal, TikTok's image is tarnished. Government already hates the platform, and now it's using its power to marginalize one of America's major industries, entertainment? In an era where all the music is available to everyone?
And this is not like the auto strike. That shut the plants down, completely. Eventually the manufacturers caved, on very positive terms.
Ditto the writers and actors. Eventually a deal had to be made, without one there would be no production. (However, no production did help in the short run, for those with a backlog of product.)
But TikTok does not need Universal's music to survive. As big as Universal is, it's still got Sony and Warner, and even if it lost those two no one is preventing amateurs from coming up with new tunes on their computers and uploading it.
In other words, Universal has lost control of distribution. That was the major labels' ace in the hole, the essence of their business model. They controlled the number one avenue of exhibition, i.e. radio, and an indie might be able to get a record in a retail store, but good luck getting paid.
A record store without records has to close. But not TikTok.
So it's all about the number. Universal can't stay out of this forever. It's not like there's an alternative, although Instagram's Reels has turned out to be great competition for TikTok.
But, once again, this battle is a sideshow, taking eyeballs off the main issue, which is the music itself.
Distribution is easy to understand. We argued about it for a decade. We heard people would never pay for music again, that turned out to be untrue. That the major labels would sink, that proved to be untrue if for no other reason than their catalogs.
TikTok has a vaster audience than Taylor Swift, Morgan Wallen, the Beatles and the Eagles. That's the outlet's power, which is humongous.
But it's not only TikTok, look at Apple. Some of the world's most powerful content companies are railing against the App Store changes in Europe. Which are an improvement, but not anywhere near as much as they thought it would be, and want.
And in myopic America, we think it's all about America. The EU is stepping up for Ukraine, and when it comes to business regulation, the EU is far out in front of the U.S.A.
But you can't say that, because no one in America wants to believe they're inferior in any way, U.S.A, U.S.A!
So if you're focused on this TikTok/Universal kerfuffle, you're missing the point. You're focused on the battle instead of the war.
It's hard to come up with innovative music. And it's harder to quantify. Which is why everybody talks about these business and tech issues.
But music runs on that, music. That's the lifeblood of the music industry, not Universal, Spotify or TikTok. It's all about the fuel. And we've got more fuel than ever before, but if you want to know which way the wind blows, you don't listen to a record.
And there are many causes. The young and impressionable have been overloaded with imitative dreck, what would inspire them to create a breakthrough?
And income inequality is so bad and the odds of creative success so low that the best and the brightest don't go into music creation, it's too risky.
And as great as Morgan Wallen is, there's no artistic breakthrough there. As for Swiftmania, you very rarely hear about the music itself. Great business stories, but don't confuse this with the Talking Heads, who couldn't sell out stadiums but showed that what was in your mind, your conception, was more important than your looks.
MTV made music about the trappings. That has faded in the twenty first century, and there are all those acts that can sell tickets who don't stream in prodigious numbers.
But if you want to know what is going on in the music business, call Michael Rapino, not Lucian Grainge. Want to know what is happening? Talk to your local promoter/booker, you'll be surprised what is selling tickets.
But we're still looking for that one breakthrough act that will lift all boats, that will gain our attention and inspire others to follow them.
But for now, we'll go to the Sphere.
But we're waiting for what's inside the building to be just as exciting as the Sphere itself. It will happen, could take decades, we never got a new Beatles, but that's where our focus should be, not on a negotiation between titans who will come to an agreement that will be quickly forgotten.
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