“Content isn’t king. Distribution is king,” he told Peter Kafka on the Recode Media podcast.
On a recent episode of Recode Media, hosted by Peter Kafka, music industry expert Bob Lefsetz held forth on why streaming services are good for musicians and why you should never buy an advice book penned by a celebrity.
You can read some of the highlights from Peter’s interview with Bob at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.
If you like this, be sure to subscribe to Recode Media on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.
Transcript by Celia Fogel.
Peter Kafka: I am here with Bob Lefsetz again. Bob, this is not the first time we’ve talked.
Bob Lefsetz: When we did it, we had a technical glitch. Even in the digital era, shit happens, and it happened to us — but we’re here, getting another bite of the apple.
Thanks for coming back. And I saw you last night at a fancy party: You were in the center of the party, people were swanning around you, they wanted to get a bite of your apple.
I love the way you tell the story irrelevant of the truth, but that’s good.
Well, we’ll gloss over it a little bit. Many people who are listening to this will know who you are. For those who don’t, I’m going to describe you as a newsletter writer, a music industry critic … can I call you an entrepreneur?
Sure.
You built your own business.
Sure.
So you write — it’s called the Lefsetz Letter, right?
Lefsetz Letter, that’s it.
And I can get it via email. That’s probably the best way to get it, because if I go to the website I’m going to get the old stuff.
Well, you’ll get everything, except for — I do a lot of compilations of email I get. You’ll get 95 percent, but email has immediacy. You know, the funny thing about email is, I stumbled into that at the beginning of the century and everybody said, “Go to the blog format.” And I was against that, because at the time, a lot of the people I reached, people in the music business, were not that web savvy. The irony is [that] everybody’s web savvy now, but because of noise in the channel everybody switched back to newsletters.
Email’s the new-new thing.
Exactly. So, I was always there.
Everyone does a newsletter. We’ve got a big chunk, I think, of the Recode audience [that] reads us probably exclusively on a newsletter, which maybe means they’re old? Actually, that’s not true either, because there are new properties aimed at millennials that are …
Well, you’re bringing up a big issue. Listen, if the media got it so wrong about Trump, what else are they getting wrong about habits and millennials? They will tell you that email is dead. And also, if you read the media, they’ll go on and on about Slack. If you don’t work at a corporation, are you utilizing Slack? So, I haven’t been in college for a long time, but everybody does have an email address, certain stuff is disseminated via email, just like certain stuff is disseminated by Facebook having nothing to do with traditional social networking: “Let me tell you about our life.” And therefore it’s hard to usurp that.
It’s true that there’s an elite, liberal, coastal media bias, and there’s the same bias for those same media organizations toward Slack. They think everyone uses Slack. I have very mixed feelings about Slack. Let’s have a separate Slack podcast, though. Let’s talk about Bob Lefsetz.
Well, but also, these are things I cover. It’s like Snapchat. Is Snapchat the end ... with all these social networks we realize they are peaks, they’re way stations on an ultimate journey. So people have to watch content — forgetting the issue with Snapchat of evanescent content — I send you a picture and it evaporates — but now it’s a media platform. Does media need to be on Snapchat? No. It needs to be somewhere. So I don’t think, necessarily, Snapchat is the last stop. The key is, it’s about negotiating and continuing to reinvent and march into the future, which Facebook has done a relatively good job of by buying Instagram, WhatsApp, etc. But everyone who’s doing hosannas for Snapchat, there’s a long road. The valuation, I don’t believe exactly.
Well, before we get there, and I’m happy to talk about Snapchat, let’s talk about why you are someone who feels comfortable talking about technology and the state of where things are. You came out of the music business, you were a music lawyer for a couple minutes. We talked about that in the last podcast. And you created this business for yourself as sort of a critic and sort of bomb thrower in the music industry, for a long time, right?
Absolutely, 1986.
You started off printing newsletters. Mail these things out.
Until the year 2000, absolutely.
And remind the people who don’t know how you got your start. How did you start a newsletter business?
Well, what it was is, as Peter said, I was a music attorney. I never really wanted to be an attorney. At the time all the major record labels were run by lawyers. That is not the case presently. And I saw it as a good background, as someone who grew up in the suburbs in Connecticut and did not have an entree.
But I had varying gigs. The last gig was running the U.S. office of a company called Sanctuary Music which, subsequent to my time, went public and became a big enterprise and crashed. But when I worked there in the ’80s, it was basically Iron Maiden and this band Wasp. I lost my job there, which is a rabbit hole I would go down but really has got nothing to do with the long story, and ultimately, after working in a few movies, I ran out of money and I was reading Billboard one night and I said, “This is terrible.” And a synapse fires and, “I could do this myself.”
That’s a classic entrepreneur story, which is one, you’re out of work or you’re out of options, and two, you see something that you’re already interested in and go, “I can do better than this.”
Absolutely. And those holes still exist. This is another thing going back to media, as I’m on my soapbox subsequent to the election. I have to read in media, and even in social media, about every week’s “SNL.” I’m old enough to remember the initial “SNL,” the first five years. It took a while to get its footing, okay? But then it was a cultural event. Most of the skits, for the last 25 years, are unfinished. I was talking to a songwriter last night — Dan Wilson, who wrote Closing Time and some of the Adele hits, whatever. It’s that little extra 1 percent that makes a difference. And if you get that 1 percent, especially in today’s cluttered world, then people are interested, okay?
So when the newsletter began, it was primarily tips. And traditionally, “tips” in the music business means these are records, where are they going up and down the chart. I’m not talking about that type of hit, I’m talking about business advice. I was the only person doing that, okay? When the year 2000 hit, I had a free subscription to AOL from the early ’90s as a result of having a relationship with Warner Brothers Records, and I was very web savvy, I was online, Napster hit, I was a lawyer, and then that’s when the real transition of my business went online.
So you started this business, printed newsletters. You moved on to email. And then, for you, the start button really happens in a Napster era, where you’re a guy advocating on behalf of Napster and digital media …
That’s when it blows up. “Outliers,” Malcolm Gladwell, whom I’m really disillusioned with based on his podcast, for those of you who don’t listen, and on some level you should buy, another level you shouldn’t in that he does these very highly produced podcasts.
I think that’s right.
And I would consider him somewhat of a friend, but he waded into financial aid and college, and got it so wrong, via subterfuge to boot, and then doubled down on his wrongness, that one has to reevaluate everything. Having said that, if you read his book “Outliers” — “The Tipping Point” is a very quick read and excellent, but “Outliers” has some amazing points — and they talk about right place, right time. That you can be doing the same thing and starve, but 30 years later someone can be doing something identical and be very successful. I did not see the internet coming and say, “Oh, I can reach people around the world, I’m gonna jump here.” It just kind of happened, right place, right time.
And what was the thing that ... Because as I recall, in ’99 - 2000 there was obviously a big entrenched group of people who worked in music labels and said, “This Napster’s terrible, it’s going to destroy our business.” They also sort of hoped it would go away, and they deluded themselves into thinking it was a fad. I remember talking to Doug Morris saying …
Well, Doug Morris was delusional and out of the loop and still is. But that’s okay.
This is worth getting back to later, but I remember him telling me, and I think he meant it, he said, “I think people really enjoy holding CDs.”
These people, I mean, these are the same people who are still fighting streaming. They’re just Luddites we should wipe from the map.
Right, and we can talk about this. I mean, a lot of people who are in the media business today are no longer Luddites. They get the problems they’re facing, they don’t want to grapple with them or can’t grapple with them, it’s a separate thing.
But there was another group, and there were a lot of them — the people who worked in technology, people who wrote about technology — [who] said, “This is obviously the future. Get out of the way, media.” You were in that group, and you were sort of railing against the established media, and that’s where you got your footing, where people started responding to you in a bigger way and also responding to you outside of the music business. Am I getting that right?
That’s good, I’ll go with that.
And this is why I think even today, on Twitter, you’ll see various venture capitalists or entrepreneurs picking up on your stuff, people who don’t have a direct connection to the media business who respond to what you’re talking about. They see analogies between what you’re talking about and music and media and other businesses. So this has become a business for you, but it’s a free newsletter. You make money how?
Well, there’s two issues. It’s about reach. And if you have a private event and you’re making money, fine. But in terms of reaching more people, that’s difficult. We have a very challenging era we’re living in right now where there’s so much noise that it’s difficult for anybody to gain an audience and sustain it. It used to be that albums were over in a weekend, now they’re over in a day.
I was talking to someone at Spotify, and they knew that the Lady Gaga album was a stiff in an hour because they’d never seen skip rates like that. Okay? So the audience has an amazing shit detector. If we go back to your earlier question, I went down the rabbit hole. I was not computer savvy, I got a Mac and a Laser Writer, etc., in ’86, and I spent all my life on that.
I lost a decade online in the ’90s. And as a result, I was at the bleeding edge of a lot of stuff. I’d go places, people would have no idea what I’m talking about. You know, the online sexual world, the online hate world, you’re at the front lines. You know, Jimmy Kimmel’s doing hate for famous people reading hate tweets.
Mean Tweets.
When that first started to happen to me, everybody you talk to, they have no idea what you’re talking about. So I would say by raw experience, that gives me an expertise and a voice in these areas outside of music.
In terms of making money when you reach everybody and you’re the authority, a lot of opportunities arise.
So you’re not going to tell me how many people read your newsletter …
I’m not going to tell you because I’m a very honest guy and I’m not going to lie, and everybody lies. So I’m just going to tell you, anybody and everybody in the music business reads it. If I write about anybody in public life, whether it be a musician, a politician, whatever, they read it.
There’s truth, right? You end up in fights with Irving Azoff who’s also, I think, a friend of yours. Kid Rock. You had a Taylor Swift fight.
But I’m not friends ... I’m friends with the other people, I’m not friends with Taylor Swift.
But she wrote a song about you.
Yeah, that’s true.
That’s a pretty good resume item. So you make money because people pay you to come talk to them. Is that right? Is that the model?
To reuse my material and then also to come speak with them at conferences. And then some other various and sundry items.
So you’re on the luxury circuit. You don’t want to call it that, but that’s …
That’s part of what I do, absolutely.
And that’s a business you’ve built up by giving away your content, right? In some ways, a tried and true, in both internet and business, model, but there’s a lot of media businesses built on “get exposure for free for one thing, charge for something else.”
Yes. This bleeds into the old music business paradigm: Give the music away for free and make it up on the road. I don’t want to debate that, especially since music is really no longer free. Even YouTube pays and stealing is de minimis. But first and foremost, you must have an audience. Without an audience ... This is why distribution is superior to content. People always say content is king. Content is never king. Distribution is king. No matter how great something is, if people do not have exposure to it, it doesn’t get amplified, nothing happens. So yes, I’m a big believer in focusing on your mission and reaching people first, and monetization second.
You are making a comfortable living, you’re not rich. You’re just somewhere in between?
I don’t have a private jet.
You’ve been on private jets.
Of course I’ve been on private jets. I mean …
Of course.
Okay, just to tell a ....
Now you’re rolling your eyes.
I’m going to tell a private jet story. I go to this conference in Aspen and I’m going to go in a couple of weeks. Now you say, “Oh, big high falutin’ guy,” but we’re in the bus going back and forth to Snowmass and we want to get back for the meeting. I’m with a friend of mine, Marc Reiter, who’s part of the Metallica management team. And I was telling him [about] when we went to Jazz Fest and we flew NetJets and on the way back, you know, they scramble everything and we got a larger plane than our group required and it came with a flight attendant.
I really kind of fucked up this story, but I’ll go ahead. What happens is, I’m anxious about making the meeting. Wheels-up was at 4:15. And he says, “Oh, oh, oh, listen to you with the private jet talk.” And then I proceed to say, “Let me tell you, we were in New Orleans, we got the NetJet with the flight attendant,” and he says quite seriously, “Don’t they always come with a flight attendant?” [laughs] Because when you’re Metallica and you’re renting a jet, it comes with it.
Some of the other private jets you got to roll your own, you got to serve your own nuts.
Exactly. You order the food in advance. Listen …
These are good tips.
… This is a perk. If I want to be a real prick, and many people hate me already anyway, that’s a dividing line, whether you’ve been on the private jet or not, not whether you own one, not whether you have a NetJet account. But if you have not been on the private jet, chances are you do not know the movers and shakers. Which is a completely different issue than the private jet whores.
We’re using this as a signifier to indicate your connection to the industry.
Well, some of these people are not in the music industry, who I’ve flown on their private jet. My point is, as I dig the hole deeper …
Yeah, keep going.
Yesterday, Megyn Kelly’s book came out. Because I’m overwrought at the election results, I have a love/hate relationship with the media such that I switched from Howard Stern back and forth to the TV channels which are on the Sirius stations — I have to remember why I’m telling this story.
In any event, I’m listening to Fox where Megyn Kelly proceeds to promote her book on her own station! The fucking book came out, okay?! You’re Megyn Kelly! Isn’t that enough?! You have to work ... everybody is selling again and again.
Distribution.
That’s not distribution, that’s sales. That’s marketing. It’s a different thing. Your book is available on Amazon 24/7 if people want to buy it.
Speaking of …
Wait, wait, wait, let me try and finish the point. What I was trying to say is, [the] book she wrote, I listened to that woman talk about it on the radio, this is advice ... do not buy the famous books of people for advice! They are completely different people from you! The only way you can make it is if you dig down deep and find out what’s special about you and go have a lot of losses.
There’s one alternative, which is [that] you can become a computer engineer, or you can go to an Ivy League school and work for a bank, and you can make money. Other than that, all bets are off. When people are telling you what to do, do not listen to them.
Having said that, a lot of the people everyone has contempt for who run all these companies, since they had to run the gauntlet and establish it, they’re brilliant people. Sometimes educated, sometimes not. Sometimes book-smart, sometimes street-smart. And those are the people who will give you incredible wisdom. And ironically, when you’re on the jet, because those are the people who have the access to the jet and you have that private time with them, you will learn things you would not learn in two years of business school.
So step one, get in a private jet; step two, listen to the person who has the private jet, because they may know something.
Right, because they know where the sharks are, where the stones are buried, and they made it, so they have insight. They can see the landscape. The problem with the people below is their head is not above water. They cannot see what’s really going on.
I’ll give you one ... They used to call me all the time from CNBC and Fox Business about Blackbird. I said, “It’s over! It’s going to crash!”
I love that cliché. They were talking to some rich person who lost all his money, he goes, “How’d you lose your money?” He goes, “At first very slowly, then all at once.” That’s [how it always] goes. And I would say, “It’s over, it’s over!” But they were too deep into the hole to see what was going on. Whereas people at the top of the enterprise, first of all, they had to kill a lot of people to get at the top of the enterprise, they can see what’s going on.
Yes, and then I would say a lot of them, at some point, then build up these walls that prevent them from seeing out, and/or they don’t want to see out.
Yes, but every industry is different. First and foremost, did you start the company? There’s a friend of mine who’s a concert promoter …
Listen, I was at a conference that we hosted where they had the BlackBerry guys on. It was about a year or two into the iPhone. And if you had an Android phone at that time, you could tell where things were going, and someone held it up and said, “These are much better phones than you have,” and they were in 100 percent denial. Their phone was better security, it was reaching people in India, they had a whole list of reasons why. And I think they believed it. They had an incoherent argument, but I think they believed it.
But that’s “The Innovator’s Dilemma.” If you listen to those guys ...
But these are the guys that built the business.
No, but one of the big things they said when they immediately bought the iPhone, they got their hands on an iPhone when it came out, they said, “This will never fly because it chews up too much data.” Okay?
It chews up too much data, it doesn’t have cut and paste, it’s a bad phone.
Okay, but the point is if you go back to “The Innovator’s Dilemma,” which is the definitive book on innovation and disruption, the thing that disrupts you is never as good as the product that is selling big. So the fact that these people were blind, I agree. That’s the nature [of things].
Look at what ... Apple is teetering as we sit here, okay? But the people who have survived, especially when they started independently, not the people who worked their way up in the corporations, sometimes they have interesting things to say, but people who started independently, maybe their company ultimately went public, they have to navigate so much that they sleep with one eye open. I believe they really can see the landscape. Everyone eventually gets plowed under, but some people are more worth listening to than others.
Speaking of business model, going back, the way we make money from this free podcast is we have excellent sponsors who give us money to bring this to you. So we’re going to hear from there right now and we’ll be back in a minute with Bob Lefsetz.
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We’re back here with Bob Lefsetz. What did you learn about Lenovo, Bob?
Okay, wait, send me a free computer. I know a lot about Lenovo. It used to be IBM and then they sold their hardware division.
And now we’re talking about the cloud, Bob.
Okay, but everyone has to expand. IBM started that paradigm going into cloud services. But I want to go back one chapter.
Yeah, go.
I realize as I’m sitting here during the break, I sound pretty hateable. But what you have to understand is most people who have some sort of profile interface with the public have been managed, stage managed, they’ve had media training. What bugs me the most is I’m reading the New York Times on Sunday, they always have the profile of somebody, what books they’re reading. They’re not reading those books! They’re worried about their image!
So when I split the hairs and I don’t give you hope, okay, and you say, “Oh that guy’s an asshole, blah blah blah blah blah," if you can beat my system, if you can stay and you’re the one person who runs the gauntlet, fantastic. But I’m not going to be like all the other people online praying on your hopes. “Oh man, you can make it! Look yourself in the mirror, just wake up!” You know, and tweet five people a day and do that. No, it’s almost impossible to make it. You have to work around the clock. That’s why Trump got elected, because too many people were left out of today’s system.
This is one of your themes, right? You’re the truth teller.
Absolutely.
You’re the character from Network who’s mad as hell and you’re not going to take it anymore.
I’ve been reading you for a decade, I think more at this point, and you’re consistent and then you’re also inconsistent but your inconsistency is consistent. So you’ll flip back and forth and say, “I hate this kind of song, I hate this …”
No, no, I am willing to change my mind — unlike politicians — but these are very nuanced issues. And a lot of times, you know, I’m not going to explain myself to all the people who email me. I’m not going to answer all that email. First, because 10 percent of the public is insane and you don’t have any idea which 10 percent it is. And I’ve had too many bad experiences.
But if you sat with me, I don’t believe they’re inconsistencies, because I have to explain. But you can’t constantly have a running commentary explaining where you’re coming from. That would take ... it’s a full-time job.
It’s kind of what you do though, actually. You’ll hit the same theme in your newsletter over and over. You’ll go back to it over and over.
Certain themes I do. Yes, I’m writing a lot, you’re correct.
Which is good. And when you talk ... if you haven’t read Bob’s stuff, when Bob talks it’s kind of like when Bob writes.
Absolutely.
It’s ... I don’t think you’re drafting these things a lot. I’m assuming a lot of this is just ...
Well, I do it very differently. I mean, once again, these are a lot of the clichés people talk about [with] writers. You make a cup of coffee, you sharpen the pencils. And all the writers say the same fucking thing. My goal is to write a page a day. One of the writers from the big newspapers was tweeting, “How long does it take” — this was right after the election — “How long does it take you to write something?” He says, “I can write 150 words an hour.” Fucking Trump won, you got to be able to say it right away!
That was Farhad, I know exactly who that was.
Exactly. As they say, that guy’s too intellectualized. Once you have that mental filter, no. The No. 1 thing I do, and I’ll own this, I write in a very readable fashion. And unless someone reads it, it doesn’t matter what the content is.
I get the impression it’s like the end of those Steven Bochco shows where you just type and then pfft, instead of throwing it out, you hit send and it goes out.
Let me tell you exactly, I write on inspiration. I don’t sit there and say, “It’s 3pm …” I have to write something when I have an idea. And when I do have an idea it comes out very quickly. And then I reread it three times. I’ve been doing this a long time.
So you will reread it? You’ll go back and ...
Of course! First and foremost you’re going to make minor errors. But the point is, I know not to change anything because you fuck it up. So you correct for grammar or things that are incomprehensible.
But it’s still “first thought, best thought” for the most part.
Absolutely.
Given the velocity of stuff you’re putting out — and you’ll put out multiple things a day sometimes, and you’ll go a couple days without publishing — what’s the one you want to get back? The one you wished you hadn’t hit send on?
Not a single fucking one.
Not a single fucking one!
If you’re not willing to lay it out there ... Do I hit send and occasionally shake? Do I hit send — and it’s always the haters coming in first — do I hit send and have some regrets? But I don’t write about anything I don’t know about. This is what I ... people call me all the time from the straight media. They’re trying to get the story, they never get it right. I don’t weigh in on the value of the British pound, okay? I don’t talk about copper mines. The stuff I talk about, I’m living that 24/7.
So it’s the type of thing where no, it’s coming straight to it, and as I say, I’m not doing this ... What people don’t understand about me, they say if I’m this intense in writing, then in real life I must be a motherfucker. That’s one thing you also have to realize. Most people being nice to you, especially in the entertainment business, many of them are playing incredibly devious games behind the scenes. That is not me. What you see is what you get.
You’re wizzywig, as they say. Used to say.
Right.
I don’t think they say it anymore.
Right, they used to say it back in the days of the Laser Writer.
There’s a whole school of people who are very successful by not being truthful, right?
Most everybody’s not truthful. Whether they’re successful or not is another issue.
I think we don’t like to think that, right? We like the idea that what you say is what you mean. And even there we’re faced constantly with evidence to the contrary; it’s hard for us to get that cognitive dissonance, that the person who’s talking to me in person or on the television does not mean what they say. Even if we think reflexively, that’s the case.
Well, one of the stories to whip out is [about] a friend of mine who is a pretty good friend and one of the most trustworthy people in the music business. I knew him, he ran a label. And the other guy knew the manager for a long time, the manager’s pitching an act. And one says to the side, he goes, “Oh, that manager thinks I’m going to sign that act, that’s never going to happen.” Okay? Even though they’ve been to multiple dinners and flown him here and there or whatever. It’s like hey ...
Yeah, I find myself telling people, “Did that thing that you want to happen happen?” And I was like, “Well no, not yet, but I think it will.” Watch their actions.
We spent an hour last time talking, we did not talk nearly enough about the state of the music industry. So let’s not make that error. You’ve been a longtime advocate of streaming. The industry kicking and screaming has finally come around to saying streaming is the future, it’s the present, this is where we’re going. Beginning ... the first half of [2016], the U.S. labels I think said sales were up 8 percent.
Correct.
First time anything like that [has happened], really, since the Napster era. Do you feel like the business has turned around or are we still at a place where it could go backwards again?
Oh all those cunts online going on and on saying, “Oh no, the bottom’s still going to fall out!” Forget that. There are multiple issues here.
So you’re an optimist? We’re going forward. Into the future.
Well there’s the business, there’s music and there’s distribution. The music business was the canary in the coal mine. Maybe because the files were so small, unlike movies and television. But the music business is the only one that has it figured out. A, we live in an on-demand culture. B, all of the wares are in one place for one low price. The Wall Street Journal, Joe Morgenstern their movie reviewer, every Friday reviews a new movie and says like four old movies to watch. Okay? I’m paying a million services, they’re not on there. I’m already paying Amazon. I’m paying Netflix. I’m $200 into the cable system.
By the way, the music industry didn’t want to do this. When they originally got into streaming they had one service, they had one service that had two labels and one service that had three labels and those were non-starters.
No no no, that’s an inaccurate read of what was going on. Rhapsody had everything.
No no, Press Play and Music Net.
What you’re saying is, the enterprises that were begun by the people in charge, i.e. the labels, they fucked up because their interests were divergent with the public. And they really were not ... they didn’t even start, okay?
The reason we have this YouTube problem — assuming you believe it’s a problem, where people listen to music on YouTube — is primarily in the U.S. because Spotify said they would not launch until all three major labels were on board, and Warner dragged its feet for almost two years. In that window, and then once again no one could see this happening, YouTube became a big force in music and it’s nowhere near as large in the rest of the world where Spotify had launched earlier.
But back to where I was asking you, in terms of the business, you think that not only has the industry turned around, it’s going to accelerate.
Wait wait, if we’re talking about recorded music revenues ...
And the model we have of paying 10 bucks a month on average of all you can eat ...
Okay, what we have done, A, it has killed piracy, okay? And to fight about piracy, to fight about free music, you completely missed the memo, okay? So, what these people should be doing, if you look back, the previous change in the music business was MTV.
What did they do? They got all the stars to come on and say, “I want my MTV,” so get on the system. If the recording artists were smart, and they’re dumb, they would say, “Sign up for streaming, then I would get paid.”
If you want to get into the nuts and bolts, we have the transition from the end of CD sales and the end of file sales. Am I going to guarantee that every quarter from here on out will be in the plus category? No. But as a general trend will it continue to go up? Absolutely.
Next level down, so if you run a music label, if you own a big catalogue of music, that’s good. For Spotify, Pandora, YouTube maybe.
Whoa, whoa, too many enterprises there.
But we’ll just bracket them in the businesses. What if you make music for a living? What if you are a songwriter, a musician, a composer?
You have to face the truth. The game changed. It used to be about getting a label deal. Almost nobody got a label deal.
I remember when people started to freak out when there were 5,000 albums a year. There used to be 2,500 albums, okay? I did this conference in Syracuse six years ago. There was a guy who was a hero, he was the guy who played everywhere in the ’70s. Never got a major label deal, I’d never heard of him, okay? And talented musician. So there was a real dividing line.
Then, if you got the major label deal, they kept you alive. It wasn’t like today. Most of the deals were five or seven records, usually two guaranteed, they paid you cash, you got your shot. In addition to ... there were a few items and we were all addicted to radio and print press, people were aware of your record. And you’d also jumped the hurdle, so chances are you had a certain level of quality. Today the barrier to entry is literally nonexistent. You can make it on your laptop with GarageBand. You can pay a couple of bucks to Tune Corp, a little bit more than that but not much, one time and your stuff can be on the service. Most of which is not listened to. And then you can spam everybody on social media and say, “Listen to me.”
As a result of this, because we’re all inundated with messages, we are gravitating only to the largest quality. Now, break all this down. So the people who are starting today, that is the battle they are fighting. But you have the oldsters, okay? The oldsters, they say, “Oh, the system’s all fucked up.” You lived in an artificial system ...
They’ll say, “The system is fucked up, I used to get paid x amount for CD sales, I’d get x amount of royalties, I would get paid x amount for having the music played in various places.” All those numbers have gone away.
Whoa whoa whoa, no no no, ask BMI, you’re making more money than ever. That’s good. Believe me, publishing money is all good. Publishing is not a big enough slice of the streaming pie, but that didn’t change. In addition, you’re getting paid for internet radio for the record, which you did not get paid, you got paid for the song in the United States. But, what happens, you were known and you could have an audience. Now you’re competing with everybody.
So these acts, when there are 5,000 records, their stuff’s available on the streaming service, turns out not that many people want to listen to it. If you go to the U.S. top 50, on the desktop version of Spotify, if you hover over the furthest-most right-hand column where you see a few dots, it will give you the plays, okay. Most of the top 10 have multiple hundreds of millions of plays.
But you will have Katy Perry or David Byrne — granted, there’s a big wide range there in popularity — and you’ll see it, it’s a recurring thing. Artist so-and-so will say, “My song …”
David Byrne is delusional! I’m not going to listen to him.
I said there’s a big wide range. The point is you’ll have a popular artist say, “My song was played this many times, I made this much money, it doesn’t seem fair.”
Well, there are two issues there. The people who were on hit records, they are so fucking dumb!
You just blew out everyone’s eardrums.
Let’s go back to that statistic that more money was made on vinyl than was made on YouTube. That’s just fucking wrong. They took a gross number on vinyl, okay, as opposed to a net number on ...
If you’re still listening, he’s referring to something the RIIA put out earlier this year because that’s part of their YouTube jihad.
The point being that this is business. So a lot of people have bad deals. If you’re an independent artist, and I hear from these people all the time, and you make a deal with Spotify, you get 70 percent of the revenue. Whereas if you were at a major label, you might be entitled to 10 percent, which you won’t get, because you are in arrears.
Don’t you have some sympathy for the disconnect between an artist who says, “Well, I used to make this much money from music, and now it’s down”?
No.
Meanwhile, the guy who owns the platform, whether it’s Google and YouTube or Daniel Ek and Spotify ...
Daniel Ek’s better than most of these artists.
“He’s now a billionaire, or the company’s worth 6 billion or 8 billion, and they’re building it off my product, by the way I didn’t have a choice …”
That’s a little complicated, I don’t want to go there.
But the point is, you’ve got these guys saying, “And by the way, this is all going to be good for you, just wait until the business builds up and it’s going to be better for everyone and many flowers bloom …”
Let’s not generalize. First and foremost, all these businesses like Spotify, there’s an investment from the major labels, there’s an upside. They say they’re going to help out the artist, we all know that whatever it is, even if they do it, it’ll be small, okay?
You talk to any of these people who have household names, they are making more money than they ever made in their careers. First and foremost, if you start with the hit acts, they’re making more money in adjusted dollars than everyone ever did. They’re not making as much money as Mark Zuckerberg but live business is through the roof, endorsements are through the roof, etc. So if you’re talking raw dollars, which you can now make, it used to be a musician was as rich as anybody, but you are competing with everyone, so ... Bruno Mars put out a new track, it only made it to like 50 million streams on Spotify. The audience decided they didn’t want it. In the old system, radio just would have played it, MTV would have played it, then they say, “Oh, this is a hit!” Now, we find out that most of the people don’t want to listen to it. So it’s a very competitive market.
You know, I’m a big left-wing liberal, but this, you know, part of the NEA. I believe the government should be involved in the arts, but you have a lot of people that nobody wants to see and nobody wants to do that are taking the money. This is where all the stuff ... I’m a free market guy. It’s like, okay, do people want to see you or not?
Yeah, I was going to try to make an analogy with your newsletter — but you give your newsletter away, so we can’t do that correctly. Spotify broke open the market for streaming, it had been around in the U.S. and the world …
Because of a free tier, let’s be very clear.
But they broke it open, and once they did, now we finally see Apple has come around, Tidal is doing something. And one of the things that’s happened as Spotify competitors have shown up, we’ve had this now ongoing debate/fight about having windowed music and having exclusives. And Apple is paying Drake for exclusive rights to his record. If you’ve read Bob’s stuff, you know where Bob comes down on this, and you’re very pro-Spotify. But tell us …
No, I’m very anti-exclusive.
And you’re also pro-Spotify. You think they’re great.
No no, I’m pro Spotify primarily because Spotify is the only one of these services that said, “We will not do exclusives.”
So far.
So far in terms of what?
They, I mean ...
They’ve gone on record. They could change, I don’t work there.
Yeah, they could change.
They could change, but so far they’ve been staying on message.
Yes.
They have not gone different from that.
So you think it is a bad idea for both the music business and, I think you’re saying, for the artist as well, to do an exclusive deal with Apple or Tidal. Why?
Let’s be clear: It’s all about the money. So what these artists want is to get paid by Apple, and they want the exposure that Apple gives. But since there’s so much noise in the channel, if we looked at Kenny Chesney, who I happen to be a fan of, know him about a very tiny amount as I say, he took the money from Apple. He got the ads and the TV show, etc., etc. When it hit Spotify the next week, crickets.
Now in this particular case, country has not totally ... that’s one of the last markets to go to streaming, but it works against the artist. Frank Ocean, he was exclusive on Apple. Once he got to Spotify, nobody cared. It’s not about the money, it’s about the years.
There is a caveat here right, which is that once you do an exclusive with Apple and you go to Spotify a couple weeks later, Spotify does not work very hard to promote your stuff.
They will not admit that, but we all believe that to be true.
They’re not going to exclude you, their fans ... if a Spotify subscriber wants to find Frank Ocean, they can get it, but [Spotify is] not going to push it up front. Spotify is taking out ads for A Tribe Called Quest right now. I would not be seeing those ads if that was an Apple exclusive.
Yes.
If this is such a clearly bad idea, and you can see it, why do you think Apple’s doing it, why do you think Amazon’s doing it, why do you think Tidal’s doing it?
Well, Tidal’s time-stamped. Either someone buys it or it goes out of business. Apple is the gang that couldn’t shoot straight. They have a bad model and bad service. Amazon has a deeper pocket than most and is in this sphere, whatever. So Apple is trying to gain market shares, it’s just that plain and simple. And as I say, we have a business that’s completely flipped over which is solely about the money.
The example that I always use: About four or five years ago, Jay Z did a deal with Samsung where they paid him $5 million, they gave away a million free apps with the music if you registered, and they had ads in the NBA playoffs. He said, “Great victory.” Okay, what did we learn here? The album completely stiffed, okay? He said he made $5 million. Well, Samsung at the time — it’s larger now — had a billion dollar advertising budget. But if Jay-Z had written an anti-Samsung song, all hell would have broken loose. That is the power of an artist.
You can make as much money as Lloyd Blankfein, okay? But you can speak truth to Lloyd Blankfein. You can make it so that Lloyd Blankfein doesn’t sleep at night. (He’s the head of Goldman Sachs.)
Or these other people you think are doing something wrong. Okay, musician, you can play the private [gig] or you can say something about a politician or a fat cat — most of these people have a lot of, you know, dirty laundry. But you may not get the private gig. But the audience will be on your side and it will pay dividends.
But culture is not like that. The music business was built on a middle-class culture. Now, it’s a lower-class culture, because anybody with a brain is not going to go into music where the odds are long. They’re going to go where they can make money, because bills are high.
I’m going to rewind again. People seem comfortable with the idea that if you want to watch “Game of Thrones,” you get HBO. If you want to watch “House of Cards,” you watch Netflix. And the idea is that you pay different services, different fees, and you get access to different stuff. Why doesn’t that work in music?
Well honestly, do you think that’s going to continue? On TV?
On TV? It has for a long time.
Nooo, they’re crashing.
You think there’s going to be one uber service?
No, look, ESPN subscribers are cratering, okay, which affects payments to sports leagues, etc. Most people believe that most of the cable channels will literally go out of business. We’re done with the turmoil in the music business.
No, but you’re saying the bundle is going to go away. I’m saying that people seem comfortable with paying different ...
No, they’re never comfortable! That’s why there’s huge theft in television.
There’s 50 million Netflix subscribers who are paying on top of whatever they’re paying for TV. Most of them have pay TV.
But first and foremost, Netflix is a) cheap and b) generating content that people want to see.
There you go.
“Stranger Things” was the show. I do not see the direct analogy, maybe I’m not understanding the question you’re asking.
I’m saying, why is it crazy to think that, all right, I want to hear the Prince stuff so I gotta get Tidal, and I want to hear the Drake stuff so I gotta get Apple.
Okay, I think it’s a bad model for the television business. I’m not subscribing to Hulu. I watch TV an hour a week. So when I hear a show is on Hulu, I go, “No, I’m not giving them money, forget it, I can live without.” This is what the creators don’t realize. I can live without watching your show!
So you don’t think there’s a difference between movies and television or video and music, you just think that’s a bad model that’s going away, the music guys in this case have it right.
Absolutely.
That is one of the very few times people say that about the music business, where they say the music guys have figured it out.
Because they’re fucking idiots! The music business has been through the whole turmoil! Of course they have it right! You know, the great thing about music is — and we’re in a bad era right now — but generally speaking, the most anyone can say about music is, “It had a good beat and I could dance to it.”
The people who make it, most of them can’t read music, whatever. You put a five year old in front of a TV show, they can do with prompting in 10 minutes: “Oh, the plot wasn’t believable, I didn’t like the characters.” So the people in the content business in movies, in television, they think they’re the act!
Oh, we have an opinion. In the music business, that’s one of the problems, executives are too involved. But they can’t make the music, okay? There’s a huge division and that’s better. So you have these puffed-up people in the movie and television business, they don’t know. Come on.
So you’ve been at this a long time. You grew up in ’60s music, ’70s music. I’ve noticed over time you’ve spent a lot of time sort of getting your head around EDM. Are you doing that intentionally,A because you say, “This is the future and I’ve got to figure it out even if I don’t like it”?
No, no, I don’t believe in that. We all live our lives 24/7, there are too many points of stimulation. You have to do something that you like. In this particular case, a concert promoter said, “What are you doing the night before Halloween?” This is about seven or eight years ago. He said, “You’ve got to come with me, there’s something you’re not going to believe.”
“I’m going to blow your mind.”
He didn’t say that because that’s not how he talks. It wasn’t over the top, it was like, “Let’s go to dinner, I’m going to take you, and you’re not going to believe what’s going on.” So I went to Hard Halloween down at the USC campus, and I didn’t believe it.
The funniest thing was, later in the week I ran into regular people who went to the football game at USC and they started telling the story. “You’re not going to believe we were there! And these people were in these outfits, we were walking by! What was going on?!” I said, “I was there!!” “You were there??” [PK laughs]
And then you have a lot of old farts inured to the old ways, so as a result of writing about it, all these people follow me and I got an opening and I could see once you go to Ibiza and you go to the clubs, see what’s going on, you’re aware of the scene.
But this wasn’t you saying, “I’ve got to go see what the kids are up to.”
No. Not whatsoever.
And you don’t have that same impulse again, like go figure out Snapchat.
No, some of that stuff, all of the digital stuff, that’s the culture we live in. What is it? you know, we can go all the way back to the internet, back to the phone, etc. There is a natural curiosity. The more interesting point is, what is the stop point? Okay? Do I need to figure this out?
Because if we go back to the beginning of this interview, you said the reason you were able to get ahead is because you were doing all this stuff and you were out before other people.
First of all, I’m a cultural critic. I hate the herd mentality. So you have the Snapchat account and you figure it out and you basically say, “Okay, we went from Myspace to Facebook.” Facebook has the youngsters moved on.
We had to hear about Twitter and stuff. People have a need to congregate somewhere, but it doesn’t necessarily have to be at these sites. So the best example here is Amazon, which is constantly reinvesting. By the same token, being supported by their cloud services. But you hire enough people and you get lucky, someone comes up with an idea. So it’s out of a Bob Dylan song. “He not busy being born is busy dying.” If Facebook didn’t buy Instagram and Whatsapp they’d be up shits creek.
But you don’t feel ... I’ve got to be the one who can tell you, “No, you know what? Snapchat’s over and I know it because I found the next thing.”
No one is ... we are so overloaded that there are no gurus. We all take the temperature, we all depend on different people. I do not want to set myself up as the expert because whatever it is, I’m looking at a paper bag, I guaran-fucking-ty you there’s somebody online who’s the paper bag expert, that’s all they’re into.
It’s like I have friends who build houses. They start talking about door handles. I can’t believe it. And then there’s these companies, you look them up online, so if I want to say, “All I do is Snapchat,” okay, and, “All I do is 24/7 …” I’d probably be the expert. I would say maybe I know more than most people my age and whatever, but I’m always getting more information. But the more important thing to me is not how Snapchat works but where it is in the culture.
So I think I know the answer here, but a lot of people are spending time trying to figure out virtual reality, augmented reality, which model’s going to work, who’s going to win. It seems like something you’re not going to spend time on.
No, no, they’re all delusional, okay?
Because?
Because they don’t understand what is selling the product. Okay, if you tell me you’re going to sell virtual reality games, or a new experience, I’m interested. I’ve lived through a lot of failures, okay, CD interactive, etc. Whatever.
But you hear constantly, “This is going to be the new add-on for the live experience.” If you have a sense of history, and no one seems to have one, the company House of Blues Concerts, which was build off the original House of Blues and is now owned by Live Nation, the big concert promoter, had a whole division filming concerts.
Failure. Allman Brothers sold concerts. Failure. Phish. Very small audience. I went to see Luke Bryan at the Forum two months ago. You’re there with the people and where they’re coming from. That is an experience you cannot get in VR. Everyone wants to be closer to the act.
So you’re saying the VR concert experience is not going to work.
Yes, I am saying that.
You know who also believes that but won’t say it out loud, I think? People who work at Live Nation.
They say it to me.
Yeah. It makes sense to me. I mean why would you ... if you’re a hardcore fan of a thing, you might want to watch it at home on TV, but you’d rather see it in person. It seems pretty obvious.
This is the first one of these interviews I’ve taped post election. I’m glad we’re talking because I know that you spend a lot of time talking about the ties between music and politics and culture. Conventional wisdom is that music basically became apolitical sometime after Woodstock, roughly. Do you think that changes now?
No. The No. 1 thing we’ve realized is we haven’t had a new sound since the Napster era. Things used to be turned over every three or four years. Grunge got rid of hair bands. Grunge was eclipsed by pop. That hasn’t happened. I believe it all goes ...
You mean we’ve been sort of in pop and hip hop since then.
Right, right. So I believe it all comes down to income inequality. If you come to the American music revolution — which was subsequent to the U.K. revolution in the mid ’60s, but leaving the U.K. aside for a second and just going with the U.S. — it was all middle-class people. No one ever wanted their kid to be an artist, but if that was their pursuit, fine. They were a middle-class person, they had middle-class values. We have Jefferson Airplane up against The Wall, motherfucker. Now, there’s very little middle class left.
But if you are someone who has the benefit of an education, you know how hard life is. You’re not going to become a musician. Odds are long. The sidewalk is littered with people who are unbelievably talented and never made it. Okay? So, you’re going to play it a little more safe because in an era where many people graduate from college and are living in their parents’ basement, you don’t want to take three years ...
I was a ski bum after I graduated from college. No one does that anymore. I mean, I still going skiing. They’re immigrants or they’re Australian people out of season. There are no people who graduated from college who are working minimum wage jobs. You can’t make it. If you go back to reality TV’s golden era, I’m talking about subsequent to “Real World” and “The Louds” in the ’70s and “American Family,” we had “Survivor” and “Big Brother,” those shows are on TV. Everyone who was on the first season of that show, both those shows, felt that they were now a star.
And they were for a minute.
They were all trying to make it. But they didn’t know. They thought they really had a career. Then we hit the “Jersey Shore.” The people involved, they know this is temporary. I’m going to do this, I’m going to make some money, I’m going to open some clubs, then I’m going back to Poughkeepsie.
Do you think there’s some part of the culture that is going to change in response to Trump?
I believe the culture’s going to change unbelievably, but I do not believe ...
I’m talking about the people who make art.
No, I do not, because these people love corporations, they love making deals. And the people are the handlers. Don’t forget, if you’re an act, what people don’t realize, the business people stay forever. So when they tell you, “Take the endorsement,” they can always find a new act.
The best story, this is Billy Squier, he made a video where he danced on a bed in a pink shirt and it ruined his career overnight. Capitol Records didn’t go out of business, Billy Squier went out of business. So you have all these business people saying, “Oh, do this, do that, whatever, blah blah blah.” So they say they want to make money.
So you need a truth teller. I’m not saying it’s impossible, but the Iraq war, we had a lot of sign posts. I was talking to you know, famous songwriters last night. Their contemporaries who wrote the music that everyone listens to, they are afraid. I’m trying to convince them otherwise, it’s possible that I might be able to do it, but the odds are long.
Do you think some of this is also just the disconnect that we’ve had that’s between culture and music? To me the classic example is the Trump rallies, right, they play “You Can’t Always Get What You Wa