meta-roj

for today’s music business model exploration, i think the blame goes to dave “mr blog” beckemeyer who left me a trail of breadcrumbs to follow to how to slay the riaa and the follow-up exploring the one-track mind. (this made it to the top of my to-post list because the trail of breadcrumbs is pretty thin at this stage, and it’s not a clone-of-something-with-a-twist, so there is some interesting new thought here).

introducing… the plan

to boil this one down dramatically, the concept is this: the cd is a relic of a dying breed of recording industry dinosaurs that are simply clutching to it because they fear for their very existance and it’s what they know. so let’s get rid of the cd, embrace the single, commoditize the music and watch the beasts dry up and fade away. then, joined arm-in-arm, we all cross the threshhold of the new net-enabled commodity free-music nirvana.

a few points of agreement…

right up front, i want to emphasize a few points of agreement… there is some good stuff here.

i’ve commented that it’s often about individual tracks, and gary’s model focuses on individual tracks – singles. so i’m generally down with that.

gary also mentions the desire of musicians to “get their music out and be heard.” i think this is a fundamental driver, with a long, long history that goes back to banging on logs. so yes. those of us with musical skill and just enough ego to share it want to do exactly that: find an audience.

that desire to find an audience does have an important economic repercussion, and it’s something that does become fairly obvious – weedshare even built their model around it. in order to find an audience, your music must be free, somewhere. you have to give it away and let them fall in love with it. then they will feed you.

there are a lot of ways to give it away – you can put it on the radio or on mtv, or you can busk on a street corner. you can “pay your dues” as an opening act, or you can hand cd’s to every “big label a&r person” and event producer you can find. artists are creative people, and there are a thousand ways to give it away. they’re also smart people, so they know they have to give it away.

probably the most important point we agree on is that the musicians are working “day jobs” or “odd jobs” to pay for their musical habit.

and, just to emphasize some strong points of this model, i agree with several of the prescriptions – i think studios should be flexible (but i think most of them are). i think the cost of production could be kept lower (although i use the 4-track beatles recordings as my example, and gary uses the sam phillips example).

i also agree with the emphemeral nature of music…

…and then there’s the bad news

as you might imagine, i’ve also found some flaws – both major and minor – in this model.

we begin to part paths at the success metrics in the music business. there are two big ones that a lot of musicians hang on – “we’re signed” and “we have a cd.” the former is often the kiss of death. the latter is a lot more flexible.

then the the biggest rift between us is in this plan to commoditize.

the problems with commoditizing music

right up front, gary directs us to the information technology business as a model for “how to drive an unwanted competitor out of the game.” i have a couple issues with this as a model applied to music.

first, in the business of information technology, it’s feasible to produce “work-alike” code. i don’t think such a thing exists as “work-alike music.” i stand by the premise that every performer is a monopoly. elvis-impersonators may be elvis-like, and in las vegas they probably do fall in to the “commodity” realm, but elvis is dead (or on a secret mission for the cia), and is still charting and still the #12 top earning music act of 2003. commoditize as much as you want, you can’t put elvis out of business.

second, and probably more important, if you do succeed in commoditizing something, you may strangle your competition, but you also destroy your own potential revenue from that commodity. it’s a short-term anti-competitive tactic, and one that takes substantial resources to execute. i guess the classic example is the microsoft-netscape browser war. sure, microsoft choked off the revenue stream from navigator, but they also gave up revenue from explorer. microsoft can afford to do that while netscape goes on a crazy ride of mergers and acquisitions to try to stay in business. but, ultimately, microsoft abandons the now-revenue-less business and satisfied with having wrought havoc on its competitors, turns its attention elsewhere. strangely enough, mozilla comes up and fills the gap. in the long run, it’s an interesting debate about the net effect – was value created or destroyed?

third, and this is probably where it hurts the most – i don’t think people consider music a commodity. it’s personal. it’s meaningful. it’s emotional. if you can commoditize those things, your audience has no soul, and if they have no soul – no connection to your music and your performance – then you are, fundamentally, irrelevant. let the machines make the music, we’ll just go about our business.

it’s not the cd’s fault

one point that i’ve already made is that the death of the cd is greatly exaggerated. while my crystal ball seems a bit hazy in the short-term (with the pullback on the universal price-cut), i hope i made my points in that post. what i need to add in the context of this model is that down here at “ground level” the cost of a cdr is rapidly approaching the point where even dollar-per-track distribution on cd is viable. sure, you might be wasting 600 megs of storage on a cd to distribute one track on this archaic polycarbonate platter, but the economics have always been the same no matter how much content is put on the disc.

it’s not the cd that gave us the “10-track album format,” it was the vinyl, long-playing record… the cd is an excellent medium for what it does, and it’s been tweaked and prodded along since it was introduced. it’s also ubiquitous, and aside from some copy-protection schemes that break the rules, well-standardized and interoperable. having access to that kind of distribution tool is an amazing advantage and something we can thank the recording industry (in concert with the tech industry) for creating. if you want to talk about distribution of music (or anything else, for that matter), a 650-meg chunk of data that you can take anywhere and be very confident you can read is a big, big deal.

it’s not the cost of production

this model focuses almost entirely on the production budget. to address this, i’ll refer to the hypothetical numbers put together by steve albini, simply because they’re available, reasonable and include the whole package – everything from the recording to the tour “supporting the cd.” i direct your attention to the “the balance sheet”:

Record company: $ 710,000
Producer: $ 90,000
Manager: $ 51,000
Studio: $ 52,500
Previous label: $ 50,000
Agent: $ 7,500
Lawyer: $ 12,000
Musicians (4): $ 16,125

the total net revenue from this hypothetical cd adventure – $989,125.

here’s where gary’s model shows some cracks – even with the outrageous hourly rates and insanely expensive gear, studio and production dollars only run about 15% – and about two-thirds of that is “producer.” this is what these bands are trying to do – the ability to execute anywhere near this is a whole different matter.

and, by the way, the record industry is probably happy to cut recording costs, but they also have to impress their artists while they’re taking them to the cleaners, so putting them into an expensive studio may be more about artist expectations than label accounting. the label knows that they can spend all the money they want in the studio and it’s coming out of the artists’ pocket first.

is the promotion model broken?

i love music [mov from pink martini], and i love musicians, and bless them all for taking a chance with their music. [mov from sarah mclachlan].

but, fundamentally, they are taking a chance, and they [need to] know that. it’s a confluence of skill, talent, promotion, art, mood, environment, experience and two dozen other things that bring an audience to a performer and a performer to an audience. no formula or method fits every circumstance – not even the “tried and true” promotion model gary describes and disparages.

gary rightly points out that these musicians “sign up for seminars, tutorials, conferences and programs all of them laying out the “tried and true” just as they have known and it still doesn’t work.” here i have to say that, as much as i love and respect them for getting out there and doing it, it shouldn’t always work. most of them suck. they’re horrible.

there’s also more to it than musicians that suck. there are millions of people playing guitar today. some of them are incredible, and some of them you know about, but most you don’t. even if you’re steeped in guitar lore, there’s still some girl who can drop santana’s jaw with her skills, but she’s living in 7th floor walkup in lower manhattan and has paralyzing stagefright, so nobody even realizes she exists. there are other people who take the instrument in new directions, but the public taste is fickle, and after a brief moment in the limelight, fade back into relative oblivion (albeit with an expanded group of die-hard, lifelong fans).

stanley jordan and carlos santana are amazing guitarists, both. and very different. and both were grammy-nominated – recognized by their peers. carlos had his time once, and the world left him behind for years, then finally came back with more love and money than ever. stanley had his time once too, and we haven’t come back to him yet. so even if they don’t suck, it’s not always going to work.

the “tried and true promotion model” doesn’t work for everybody, every time, but it does work for some people, sometimes. it’s not broken, it’s just not a universal panacea. that’s ok. there is no such thing.

no model is right for every circumstance. no model should work for performers that suck. even the most deserving, talented and amazing performers can pick the wrong model. and, finally, when everything comes together – talented, amazing performers with the right model and the resources to execute it – the public may have no taste for their music. c’est la vive!

breaking into distribution

i don’t want digress too far into distribution issues, but i do have to comment on this assertion: “the riaa controls the only economical means of distribution of the 10-track cd.”

i think this is only true at the hundreds-of-thousands-of-unit-sales realm. only at the top of the curve.

besides, i already touched on the power of the cd as a medium for distribution (look up 🙂 ).

why 10 tracks?

next assertion: “i’ve seen so many bands with 5 good songs that they pad with 5 not-so-good tracks just so the whole process of the cd production is efficient, which is important given the cost of that process”

here, we have a shared observation, but pick on different mechanisms to explain it. a clash of the economic theories, if you will. i’ve seen this too, but i don’t think it has much to do with production efficiencies. i think it has to do with consumer expectations, and that’s a much different nut to crack.

it costs just as much to produce, package and distribute a 1-song cd, a 5-song cd or a 25-song cd. there’s no “production efficiency” to be gained when you reach some magic threshold. but, if you’re charging $18.99, the music-buying public expects more than a couple tracks.

recording expenses are different, of course. it will cost roughly ten times as much to record ten songs, but once they’re recorded, you can distribute them in any medium. better to have the option – after all, someone might just like that crappy 8th track.

blah blah blah….

i’ve rambled long enough for now. the summary looks something like this: this model comes at music from the perspective of technology and with vengeance. some of it is valid, some of it can apply to some musicians, but it doesn’t do much to improve the economic situation of the musicians or find value in music and focuses mostly on knocking down the empire.

good luck, red leader. start your attack run…

updates (several): lots of broken links and mismatched quotes. sorry for the mess.

as i wander through the darker recesses of the net, with my eye on music business models, i sometimes find radical new things. i keep meaning to dedicate some time and thought to the more-public (and already functioning) sites – the irates, itunes, magnatunes and such…. these have already gotten a pretty solid hashing in other places, so i don’t feel as much pressure to shine my own light on them…

i definitely get the feel of a rush in this field. maybe the blame lies at the feet of apple – itunes crashed through the gates and left the field wide open after they’d been locked down tight in the wake of napster.

before the blog, i would look at these things as they managed to capture my attention, come to my own set of conclusions, and drop myself a bookmark to come back and check in periodically. now, in the era of the meta-roj blog, i feel increasingly compelled to not just dash off an opinion “ok, this sucks, it’s irrelevant to my work” – but to think longer about each approach, and ultimately, to articulate it in some coherent fashion here – and generally with a bigger picture in mind.

this is probably a good exercise for me, but it’s much, much more time consuming than my old approach. i don’t know if i’ll ever catch up.

so, i’m going to put a little call out to the faithful readers to help me prioritize things a little. if you’re waiting with baited breath for my comments on your particular favorite music model, tell me. if you think i need to go back and revisit something – or visit something new, tell me. as much as this stuff is valuable to me, there’s no ignoring the idea that someone out there might also find it useful – so let me know what you’re thinking about, and i’ll move it up in the queue.

and sometime in 2007, look for my comments on itunes vintage 2003… 🙂

oh, and yes, barry, i did get a message about itunes… i’ll get there!

just a few days ago, i mentioned lamp. it still is what it is – a creative legal (more than technical) hack.

as expected, the riaa put their hackers on the case too. and they found an upstream weakness in loudeye, which is apparently the source for the music content.

there’s a lot of coverage out there, but most of it seems to be a version of a story by justin pope for ap. there’s some other material from the boston globe, the los angeles times, and the washington times/upi.

now we wait to see if they can “hack back”…. for now, i’m given to understand that mit’s pulled the plug. now serving mit, 15-15.

update: ars technica has a bit too.

i’d never imagine i have a lot in common with “the messenger of prophecy – lyrical terrorist – the hard rhymer – the architect” chuck d, but then again, my imagination is often confounded by reality.

Really, the R.I.A.A can get the d-ck. Lawsuits against 12 year old kids for downloading music. I wish they would even try some B.S. like that on my kids. Those scare tactics are pure gestapo… duping a mother into paying a $2000.00 settlement for her kid. JACK VALENTI can get it too. Don’t these idiots have something else to do? Aren’t there bigger and more pressing issues regarding Americans? I’d like to drag them by their eyebrows in the hood. Lawsuits for downloading… ‘whatever the f-ck everrrrr’…

i’ve been beating this drum a lot lately, but lawyers make exceptionally bad policymakers. somehow, in the rarified air of the executive suite, this makes sense. to me, it looks like they’re eating their own young.

anyone is ready warm up the school bus and bring a few “music business executives” back to the street for a day? i’m up for the fieldtrip. i’ll be there. i could use the perspective.

oh, and if i ever find myself in a book-buying mode again, i have to take a tip from chuck and add greg tate to my list.

it’s geeky, it’s strange, it’s cool… it’s tuna [flash].

coming from the good people at media lab europe (euro mit people who dig music), the tuna project, which was presented [pdf] at ubicomp in october.

anyone following my thoughts on this business of music will have picked up by now that i think it’s the experience that creates value in the arts, so i think tuna has very interesting potential, if for no other reason than it expands the realm of “shared music experience.”

phil ringnalda has a vision of the music industry. it’s a nice vision and it’s attracted some interesting comments. today i’m going to use this as a hook to introduce yet another music business metaphor, and probably my personal favorite – one that’s been with me for a very long time…

there is no reason the “two systems” can’t coexist. just like there’s no reason mcdonalds and la ferme can’t coexist. mcdonalds may serve a million hamburgers in the time it takes me to type this… and philippe maigrot may not finish creating a salad. but they both stay in business and they both have a market. even better, those markets don’t overlap a whole lot, so la ferme isn’t likely to “siphon off” the critical 899,472th mcdonald’s customer.

as with food, music is a matter of taste. value is created where the sound hits your ears, or where the food hits your tongue, but it’s more than just sound or taste. it’s the environment. it’s the company (as in people you’re with). it’s the whole experience.

it’s all about the experience.

in a shocking development (ok, not so shocking, except that some time ago i was informed that mit students don’t “hang out with musicians” – that was more shocking). anyway, in a not-terribly-suprising development, the geeks of mit, home of the media lab, the toy symphony, and other cool innovative approaches to music… bring, to the mit campus, lamp.

they’re getting all kinds of interesting news coverage, but they’ll keep the list on the lamp page more up to date, so go there for what other people are saying.

16 all-music channels. college radio revived and pumped up on techno steroids. in analog. with requests. over the campus cable system. on a shoestring.

with nothing other than a decent infrastructure to work with (campus it and cable) and a few good hacks, the brains of mit have applied a machete to the legal jungle, taken a page from the bad old days of analog, and used the rules of the music business to get what they want.

nicely done.

a couple days ago, i sat down to hack out a model for the top end of the music business. since then, i’ve gotten some interesting feedback, mostly in backchannels. there is one point i intended to make, but i was apparently a bit too subtle.

i split the top end into “directed” and “organic” pieces. what i didn’t emphasize enough was that the “organic” segment has higher potential lifetime returns – for the artist and anyone who has the patience to stick with them – and with that higher return comes higher risk. the risk is picking the star that never catches fire. by the time it’s obvious a band is going big “organically” it’s pretty much too late to hop on the bandwagon. (and you wonder why they call it a bandwagon 🙂 ).

the “directed” top end almost necessarily comes with a shorter lifetime and faster cycle, and that means the lifetime earnings potential is limited. this means that the system supporting the directed pop stars has to “keep the pipeline” full and risk-manage time as well as talent.

to pick on two examples that should make the point… the dave mathews band is safely described as an “organic” creation, and kelly clarkson is certainly a “directed” creation. in a short window (say, quarterly earnings statement), kelly clarkson might outperform dave matthews on earnings, but the long term picture is very different.

i certainly didn’t mean to dismiss or suggest that the “organic” approach doesn’t make money – it does.

tim has taken a spin through my latest bit on the business of music, and asks a follow-up question: “What’s the model for the rest of the market (and the rest of us)?”

i want to see where the high end leads, so i don’t want to start another essay right now. at the same time, i don’t want to leave tim hanging…. a good part of my work-of-late is involved in answering that question, and not surprisingly, i do have a model (and one that wasn’t tossed together in a couple hours!). it’s about improving economic efficiency and expanding the segments of the curve where it’s viable to be a musician, so when and where the beatles show up again, they can quit their day jobs and get on about the business of making music.

oh, and thanks for the positive comments!

the blogologue about music business models started with a comment from tim oren about how most of the things he’s seen have focused on the low end of the curve, and he almost made a call to arms to drive a stake into the heart of the beast – to get this business where it hurts – right between the britney and the madonna.

today, i’m going to dedicate a few [more] minutes³ to exploring that end, and explain how it’s not so much different than things we’ve seen elsewhere, and things tim, among others, probably knows pretty well.

consider this a brief, off-the-cuff answer to tim’s call to arms. disclaimer: i haven’t put much thought into this end of the business. when i say off-the-cuff, i mean it. i’m putting this together in my head as i write.

the groundrules

i’ll be working within some pretty well-defined parameters here, so i need to get those on the table.

a first premise is that music is fundamental in the human experience. i don’t want to elaborate on this here because i’ll end up writing a book. just accept for now, so the rest of this post makes sense. music isn’t going away, nor are musicians.

a second premise is that the entertainment, and, by extension, music market is not dollar-constrained, it is attention-constrained. i probably should explore this in some detail, but again, i’m trying to stick to essay-length and not book-length for your safety. just suspend disbelief and play along… (you might want to check out this bit from a while ago).

a third premise, and it’s something tim and i agree on (although i forgot we agreed 🙂 ), is that there’s a social and necessary role for the pop star. pop stars create social touchstones. common metaphors. things that bind generations together even as the rebel against the previous generation (or last week’s pop star). you find them in your youth, they are beaten into you mercilessly, and they stick with you forever. and pity the poor bastards that grew up listening to air supply and john denver, eh? anyway…. we’ve all got our horrid-but-meaningful pop stars.

and finally, we need a “success metric” – and here we’re just going to say that nothing less than delivering pop stardom will do. for the purposes of this post, we’re going to call pop stars the “elite” – the “top end of top end of the curve” – not even the 165 or so artists that crack the top-40 charts, but some fraction thereof – the ones that crack the top-10 (~50 artists) or top-5 (~31 artists). (these numbers are based on the 2002 dataset i used here).

two paths to pop stardom

there’s organic and there’s directed (i’m simplifying…). bottom-up and top-down. pick your language.

once upon a time, there was a process involved in becoming a pop star. artists were “filtered up” – they “paid their dues” and “worked hard.” they became local stars, then regional stars, and finally, they stood astride the world and beheld the universe as their playground (at least until the next pop star happened along…). we can call this process an “organic star creation” and there are still some riding through the charts. these had to come first, so someone would realize that it was desirable to be a pop star.

someone did. so then came the created pop stars. when you notice what you can do as (or with) a pop star, things get interesting. you can throw a bunch of non-musicians together, and make a tv show about them. or you can throw a bunch of musicians together and make a tv show about them. or a movie. or something. eventually, you can do it backwards too – find a [semi-]talented bunch of [carefully chosen] people put them together, call it a band, drill them until they have a “show” make them pop stars – and then spin off the movie. either way, this is “directed” star creation.

i have to say that neither method is terribly reliable, and both are terribly expensive. with the “organic” process, the expenses come largely in terms of time. months turn into years on the road. two, three… or more albums produced… but, if you’re serious, and you buckle down, and you have some talent and a lot of drive and motivation, you can find an audience, and expand that audience, and if you can keep the band together and not die, that audience will grow over time until one day, it fills a stadium (or twelve).

the problem with the organic approach is that it’s not as much fun for the middlemen and power brokers. these are people who have more money than time, so we’ll focus on the directed approach, and let the organic pop stars happen where they may, since we probably can’t stop them (but we can squeeze them).

the “directed” star creation expenses are more likely cash. you throw gobs of cash at the project, polish it up as nice as you possibly can, unleash it on the world and if you’re lucky, you get the spice girls. if you’re not lucky, you’re left holding the bills and being yelled at by a bunch of prima donna nutcases that you created yourself.

what’s going on (with apologies to al cleveland, marvin gaye and renaldo benson)

as you may recall from a previous post, there’s only so much music a person can absorb. music is a linear-time thing.

if you’re creating a pop star, you’re basically trying to grab the public’s attention. media (all of it), concerts, merchandise, everything is focused first on creating an attention-winning phenomenon, and then as the attention is captured, on directing that attention toward spending money. once the public has spent their money, it’s time to jump onto a new horse and start all over again.

with more and more money going into the directed approach, and roughly the same number of “attention slots” in each person’s day, you have to push that much harder to keep your slots (that means there is less room for the “bottom up” pop stars – that’s the squeeze).

the problem of patience

if for no other reasons than the social-glue factor combined with the greed factor, there will always be britneys. the question is whether there will be room for the beatles.

if you’re using the “directed” star creation model, then a lot of people have a lot of money riding on the success of your project. one mis-step, and it’s time to cut losses. this is risk-management, and it’s impossible to escape when you’re talking about the millions of dollars at stake at the top end of the pop business. (for a quick review of how much money we’re talking about, look here.)

there just isn’t time to let you “work through” two or three albums. we need a hit, we need it the first time, and we need it yesterday. get this band ready and get them out there making dollars. if you don’t have the potential to land in the top-50-earning-bands list, or if you can’t make $10 million this year, it’s not worth considering the project. sound familiar?¹

ultimately, what we’re creating today is a huge rift between the “broad” bottom end of the music business and the “narrow” top end – and it’s something that has been happening for some time. the nice, smooth curve of the music market is ripping apart right below the level where you can finance created pop stars. once that rip is deep enough (and it may already be), the only way to fill in the gap will be to grow artists up from the low end – and who has the patience to wait for that?

sadly, there isn’t much room for the beatles in the directed model.

even worse, the directed model doesn’t leave room for innovation and new material. to minimize risks, you have to go with established formulas. if something comes in from far-left field once in a while and starts a new trend (say, a grungy trend), everyone in the business piles on until it’s so not cool anymore. when it’s over, you cut all the grungy or even slighly grungy material and move on to the next thing.

the problem of margins

as more and more money and influence gets poured into a particular pop star, the risks get higher. and these are risks people are not interested in taking. the music business is very comfortable with [relatively] fat margins and huge side deals that spawn lunchboxes and frisbees and branded socks and all the rest of the “see, i’m in” merchandising. i don’t think these margins are sustainable in any model.

created stars don’t get a career. their “career” is over when the people feeding money into the machine decided that they’re not getting a high enough return and they start feeding their money into someone else’s machine. there just isn’t a “lifetime of making music” for a created pop star. if they plan well, play the game well, and manage their money well (and how many of them do that?), maybe they can live off their pop-star-episode and make music in “retirement” at the ripe old age of 22.

the model

that’s a lot of buildup, and i know there are a few of you out there just waiting for the big secret. i know you’ve got piles of cash just burning holes in your pockets, hanging on my every word waiting for that little clue that’s going to make it all better and make us all rich. but i’m going to tease you just a bit more…

what happens when you’re in a business that is losing control of its own distribution, with end-to-end production in-house, with declining audience, market share, and overall returns, with a high cost structure, too many executives and middlemen, all of which get paid too much, serving a fickle, transient market? you break up the establishment, let everyone in the business become a specialist, and bring small, nimble teams of them together on an ad hoc basis for each project. sound familiar?²

the shot through the heart

at the top of the curve, where the pop stars live, it’s going to be about creating pop-star-ventures. these ventures will be designed like big-budget hollywood films, and they will all leave room for a sequel, but nobody’s going to bank on it. some will push hard enough or have that much talent and score the second album “sequel” – a few may even turn into pop franchises (diddy, p. diddy). and a lot of them will end up being “waterworld” flops.

this is going to be a difficult transition for the music industry, because they’re going to be going from their fat margins to something closer to hollywood’s margins. and hollywood margins are often described as “worse than leaving the money in the bank.” people get into these games because someone believes in a project. someone sells the project. someone finances the project. and, finally, someone produces, directs, edits, and releases the project.

and there is the opening at the top of the pop star business. it’s going to be about building temporary teams, with a limited lifespan… build a system that brings together a full spectrum of decent (but not overpriced) talent – producers, engineers, marketeers, managers, lawyers – with the occasional top talent for a little extra “star power” – and focus them around an arbitrary boy-band or a girl-band or a britney or an eminem, and let the team work the full spectrum of business mojo, then eat the record industry’s lunch.

let go of the album as a concept – it’s about singles – hits. it’s about working deals from day one. it’s about risk management and financial management. it’s about the whole package. think about giving away pop singles, because they’re the loss-leaders that brings this month’s pop-hungry market into concerts, shoes, shirts, socks, lunchboxes and anything else packaged, branded and wrapped into the transient, but crucial top-line revenue of today’s pop star.

in the short term, this has the luxury of existing music-business price-points and a lower operating cost structure (if the system doesn’t have a lower operating cost structure, don’t play). in the long run, as the margins collapse down to the single-digits, you’ll have more experienced people than anyone else in the new business of pop stars. keep the rolodex hot and the support systems efficient, and beat the record business to those completely cruicial attention slots. this is something that people from outside the music business are already pretty good at doing. so bring in fresh blood.

here’s the plan

build an agile, low-operating-cost system (by system, i mean a core company and a network of existing or new supporting companies) that isn’t buried under tons of standard practices, doesn’t have preconceptions about formats, isn’t hung up on particular revenue streams (as long as there are revenue streams) and take a slice of the pop star pie.

* focus, with absolute clarity, on the mission of creating pop stars. don’t get distracted and don’t diversify (and don’t try to sell some crap about how it’s about art).
* finance it well, so that it can marshal adequate resources on a moment’s notice.
* integrate where possible – both horizontally and vertically.
* don’t [intentionally] screw anyone. if someone gets screwed, do everything possible to make it right. make sure they know you tried to make it right.
* only take on the artists that can really benefit. commit, really commit. treat the artists like investments, and make sure they know they are valuable.
* be prepared to go two or three rounds before tossing them out. when tossing them out, make sure they still like you (and will still work with you).
* don’t leave anyone hanging in a contract without working their project.
* don’t take anything below the threshhold of reasonable return.
* give them a decent deal, and work hard to keep them happy, so the ones that do hit will work with the ones that are about to and the ones that missed.
* it’s not enough to be “not evil” – be extraordinary. be amazing. when talented people are ready for this level of intensity, make sure they come here first.
* try new things, be willing to accept the failures and repeat the successes.
* this is working with egos – in fact, it’s about creating huge, world-dominating egos – so be humble. let the pop stars shine.

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¹ pssst. it’s a venture threshhold/exit strategy.
² pssst. it’s hollywood circa 1950.
³ this ran a lot more than a few minutes 🙂