the week the music (biz ) died

i still insist that getting rid of cd singles, or at least making them harder to find, was the beginning of the end for the big boys. what's the alternative? duh, just download it.

Does anybody here read the "Lefsetz letter"? Bob Lefsetz is I think a former music biz lawyer. He sends out e-mails and gets other bizzers to respond. At times his 'rockist' love of 'authentic artists' and his dislike of of pop and rap can be annoying, but sometimes he has a point. Here's an excerpt below the link:

The Lefsetz Letter-First in Music Analysis

"Hit tracks turned out to be a costly business. No one believes in the act, there’s no longevity, you’re constantly reinventing the wheel. But, if you have an act that can generate capital for years, you can make much more money at a far reduced cost over a long period of time.

The majors don’t have this time, but the new indie acts do. They create MySpace pages, they allow live taping and trading and they go on the road. They’re building an enterprise based on them, not on a specific song.

And the songs these acts tend to write… They’re not three and a half minute ditties. They’re akin to that underground FM music of the sixties, completely counter to the system, new and different.

The big time purveyors still believe that there’s one mainstream, that everybody adheres to, that everybody is interested in the antics of Jay-Z and Britney. And there are those who pay attention. But a great segment of the public has tuned completely out. They want something more real. And they turn to the Internet to get it.

They comb Websites, they participate in newsgroups, they go anywhere and everywhere, instantly all over the world, to find like-minded people who will turn them on to stuff that appeals to them. And when they find it, they support it. They’re not about ripping off the bands they embrace, they’re about buying all their merch and turning their friends on to them.

We definitely have two worlds. Flummoxed by the new game, the old powers refuse to participate in it and rail against it. Decry file-trading all you want, but so many of the new acts give their music away for free, stealing isn’t an issue for them. And, interestingly, their fans ultimately buy the CD as a badge of honor, to support the act!

Will superstars emerge from the Net world?

Interesting question, but not the point. The point is the changing percentages. The major sector is declining, and the indie sphere is growing. And the indies don’t want to play in the majors’ world. They can do it via their own systems. Oh, maybe a new enterprise will emerge that groups and markets these indie acts, but it won’t look like a traditional label, and the deals won’t be the same. Terms will be straightforward and honest. Accounting will be transparent.

Some might say the lunatics have taken over the asylum.

I say thank god. It’s time a new generation dominates, one with different values, one that is not beholden to the blow ‘em up on TV paradigm embraced by those running the major labels today. These new players are about the music, and the culture. Elements way off the radar of those making quarterly reports.

Give people something to believe in and they’ll give you all their money. Hell, isn’t that what religion is about? Think about your act as a religion. Gain adherents. They’ll spread the word. And guard your core principles very closely. The more honest and trustworthy you are, the more people will flock to you. And the slower the build, the longer the career."

in order to buy the Geto Boys album in Knoxville you had to ask for it at the counter. that was sort of fun, actually.

Not as much fun as asking for "God Save The Queen" by the Pistols at the counter of Smiths or Boots in Jubilee Week!

I think the UK/US differences are quite interesting in this discussion.

As far as I know, physical recorded music sales have held up pretty well in the UK, certaionly in comparison with America. Is this still the case, does anyone know?

And if it is, why? The most obvious difference is that the UK is one market, with national radio getting far better ratings than local commercial radio, for example. This would seem to imply that marketing is easier here, both through a band being able to cover the whole country in a handful of dates and in the conventional sense.

That in turn suggests that marketing is key. I'd have thought the really big acts will still make big bucks, but much of it through tie-ins and commercial deals. I would have thought that lower down the chain, lots of people won't make a living, but will perhaps benefit from an improved low-key infrastructure, including the kind of promo/bookings/management companies that Hurting was talking about. As overall profits fall, the audience, however, may become both more concentrated (with the marketing budgets being focussed on fewer acts with better chances of success) and more distributed (with the smaller labels not having as much to spend). It remains to be seen whether you would actually have a meaningful pop, as in mass, culture below that top level. Or would advertising-driven websites/publications have a vested interest in doing the hyping/buszz-generation etc. on their own, without pres guys from labels, in order to drive their own revenues, thus employing "sifters" to work through all these low-key DIY or just above that level acts and push them. In that case (which is in some ways the current situation anyway), you would have a situaiton with r 'gatekeepers' as strong as or even strongethan the labels currently are.

I'm waffling. And thinking aloud.

Single track sales are still pitiful in the UK, even once downloads are included.

in philly, there was a record store where you had to ask for the skrewdriver records behind the counter.

curmudgeon: i'll take a look at his site, but just based on what you posted i am not impressed with this lefsetz guy. especially this:

They comb Websites, they participate in newsgroups, they go anywhere and everywhere, instantly all over the world, to find like-minded people who will turn them on to stuff that appeals to them. And when they find it, they support it. They’re not about ripping off the bands they embrace, they’re about buying all their merch and turning their friends on to them.

i mean, based on my own habits and those i can guess at from ilm, i comb websites participate in newsgroups go anywhere etc etc... and then rip off that shit just like i did the britney and jay-z albums

i think he's right about people learning to turn a good profit on a small scale, but the romanticism i just don't think is there. (i know you posted that with a caveat but, you know, just sayin)

Er, sorry about the spelling in that last post!

Sometimes that Leftsetz guy is fun to read just because what he says is unintentionally funny (some of his baby boomer nostalgia) , and other times it's fun to see the responses he get to his ocasional diatribes(Both the Clap Your Hands Say manager and the Arcade Fire's manager have e-mailed him )....

emailed him to complain?? you'd think he'd all down with clap your hands and the arcade fire

Yea, his criticisms of the way they market themselves were not consistent with the point of view he espoused in that excerpt above. Weird.

It seems like everything that blames the recording industry for putting out bad music, not listening to consumers, not "developing artists," and all that means little next to the fact that you can get almost all music now for free. Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business? Maybe there has been, I don't know. But downloading a torrent is roughly the same number of clicks as downloading an album from iTunes or ordering it from Amazon, so it seems like a no-brainer which choice consumers will make.

To answer my own question -- yes, there is an example where people pay voluntarily and it's called shareware. And I could definitely see the music industry going to a new two-tiered system whereby big artists team with corporations to sponsor their albums and insert advertising into their songs (Levis sponsors a pop album, etc.) while indie artists go to a shareware system of donations. I bet some of them would do OK, especially if they had a close interaction and trust w/ their fanbase.

"Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?"

I don't think people buy off iTunes because they like the way the industry runs their business. They do it, I would guess, because (a) it's the legal way to get music or (b) because they want to help the artist make a living, or (c) because they don't know how to find and download torrents.

But as to your question of an example: people leave tips at restaurants even though they don't have to, to be served. People order food in restaurants and only pay after they've eaten it.

Thing is, the indies seem to do okay by building up just the kind of artist identification/loyalty you're talking about. They don't make great heaps of money, but fans tend to be dedicated and willing to spend substantial sums on music (albums, shows, merch) and keep up that spending over years and even decades. So they don't currently need to "go to a shareware system". Any more than they already have, I mean...

It seems to be the majors who are having a hard time making the old model work in the manner to which they've grown accustomed.

The weird thing about the Leftsetz bit is that Jay-Z is actually a good example of someone who did the "slow build" kind of career he's talking about and built a lasting brand, fan loyalty, etc. that will continue to make him and his eventual estate money for a very long time.

Meanwhile, I actually see the danger of the opposite trend in the indie world - a fast-moving, loyalty-free world where the availability of such a wide variety of music and the sheer number of new albums coming out every year leads people to be mercurial and dismissive and rarely stay with artists for the long haul.

Could be. Dunno. At present, indie kids still seem pretty serious about their favorite artists and about spending money on music in general. Then again, I don't really have my ear to the ground WRT trends in the business...

Meanwhile, I actually see the danger of the opposite trend in the indie world - a fast-moving, loyalty-free world where the availability of such a wide variety of music and the sheer number of new albums coming out every year leads people to be mercurial and dismissive and rarely stay with artists for the long haul.

Hurting OTM

But downloading a torrent is roughly the same number of clicks as downloading an album from iTunes or ordering it from Amazon, so it seems like a no-brainer which choice consumers will make.

i wonder how many people out there are like me. it was worth it to join emusic for a number of reasons (nb not street teaming for emusic here but fuck it i think it's great). the first was just the overall lower hassle of getting shit from one place, with uniform and high quality, FAST, (usually) correct tags -- as opposed to illegal d/ling which is a crapshoot as far as availability, reliability, and speed. plus i was excited by being able to SHOP again, i really missed that experience. browsing thru every month is a lot of fun. somewhere in there was a niggling moral concern with wanting to see someone get paid for what they did, too.

so it's not a 'no-brainer' really! i added it up and decided paying a little was a good thing. i still rip shit off all the time, still, so, it's not either-or anyway.

the point being that if a legal service can offer something that beats the negatives of the illegal experience and price it right, there you go, success.

This doesn't get mentioned too often, but how do you think the separation between the computer and the stereo plays into this. Of course, tons of people are fusing the two, or only use computers. But there's still enough of a divide for folks to have only music they listen to on their computers and music they listen to on their stereos. By they way, what are the recent trends in the sale of stereo components?

Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?

drinking water (i'm not sure that people liking the way the industry runs its business is the reason for this. rather, people just like the product, whether its taste, or marketing, or packaging, or whatever, and they see the price as reasonable)

sorry, that middle sentence doesn't read well.

"Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?"
http://www.sooaf.com/quebec/bouteilles/aquafina.JPG

whoops, just beat to it by fact checkin' cuz.

Quantum's question totally OTM. Gear purchasing = canary in the coal mine.

This doesn't get mentioned too often, but how do you think the separation between the computer and the stereo plays into this.

This is still a slight issue for me, as I haven't invested in really good computer-to-stereo equipment (I have a crappy headphone jack adaptor), and I'm still nervous about the permanence of my computer-based music (external hard drive could fail, etc.)

If it wasn't for emusic, I'd probably just keep buying physical recordings, but the economics and convenience of emusic have made it irresistable.

I totally agree. I only own a laptop, and I use one of those headphone-RC cable jacks into the aux.

Thought of that, but that's not why people byt bottled water.

buy. sorry, busy.

Srsly if I were in the hardware business, I'd create a specially-designed and marketed hard drive just for music, or maybe for music and video - one that's designed to last a long time and rarely fails and also maybe looks cool and has some built-in features beyond just being storage. Sort of a bigger, more permanent iPod.

A jukebox lockbox, if you will.

I don't feel like I'm getting "user value" or whatever if I don't have a CD with a sleeve. Call me old fashioned. Also, I have a fucking great big hi-fi on a rack and stands with expensive cables and it sounds better than any computer I ever heard.

While there's a few good points here, the whole basis for this discussion is completely pointless.

Overall Music Sales: 2004 - 817,000,000, 2005 - 1,003,000,000, 2006 - 1,198,000,000

That's a 19.4 % increase from 2005, and 46.6% from 2004. And that's just according to Nielson Soundscan, which I don't think does a great job in covering all the boutique stores and sites.

So how about we tell the RIAA and all the other chickn' littles to shut the fuck up and get on with it?

First step is to provide deep catalog titles in high bandwidth formats. Music Giants is getting the idea. However, the prices are just stupid. While it's taking the right step in offering uncompressed downloads, I'm still not getting printed album art and a disc, which still happens to be very reliable, convenient backup storage. There are also no manufacturing and distribution costs. So rather than $14 to $20, shouldn't they be priced at around $5? Wake me up when they are.

if you read what you'd just linked to, you'd see nothing that really contradicts this thread's point (which specifically covers first quarter 2007 sales). that statistic converges album and single sales -- album sales are down, so net gross is plummeting. though it's definitely a good point that overall sales are up.

OVERALL MUSIC SALES (01/02/06 - 12/31/06)
(ALBUMS, SINGLES, MUSIC VIDEO, DIGITAL TRACKS - IN MILLIONS)
UNITS SOLD 2006 2005 % Chg.
1,198 1,003 19.4%

TOTAL ALBUM SALES (01/02/06 - 12/31/06)
(INCLUDES CD, CS, LP, DIGITAL ALBUMS - IN MILLIONS)
UNITS SOLD 2006 2005 % Chg.
588.2 618.9 -4.9%

Thought of that, but that's not why people byt bottled water.

i don't think it matters why people buy bottled water. i think it only matters that they do, even though they don't have to.

Total units moved does not give you a financial picture. Even a 20% increase comprised mainly of digital single songs does not offset a mere 5% drop in album sales. And that's just one year.

People buy bottled water for:
1) oft-imaginary safety reasons
2) ease of portability
3) impulse needs
4) ease of access

Sound familar?

and 5) good packaging and marketing.

which is exactly what a certain four multinational distribution companies have always said they're especially good at.