Disruption By, Bob Lefstez

Posted on March 16, 2016 by

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Enterprise topples when it does its job too well.

And right now the major labels are doing an exceptional job, especially for themselves.

Forget the old turn of the century construct, that the labels were doomed because of the internet. Turned out when chaos reigns he with the most infrastructure and relationships wins. If you’re not on a major, it’s nearly impossible to get noticed. And despite recorded revenue being down, most labels now share in ancillary income, from live to merchandise. The labels have adjusted.

By only releasing pop music, that which can instantly sell.

The labels are not stupid, they’re helmed by brilliant, experienced gentlemen, who realize the investment in money and manpower it takes to make a hit. So, they’ve gravitated to only that which will hit. If you make music outside today’s hit paradigm, which is primarily pop and urban, you can’t get signed.

This blind spot will be the death of them.

The same way it was the death of Geffen Records.

That name is still in use, but the company itself has been eviscerated, because Geffen refused to sign rap. And then rap dominated and the company folded.

Can today’s majors fold?

Look at publishing. The inroads made by Kobalt are remarkable. Because Kobalt provides the one thing traditional publishers do not, transparency.

Since inception not only have record labels given artists bad deals, they haven’t even paid on those deals. You can’t get an accurate accounting, and the deals are written to ensure that you don’t. But with Kobalt, you can access all your info on a regular basis.

Transparency is coming to the recorded music side. As well as fairer deals.

But it will require a few outliers to sacrifice their careers for it.

Curt Flood was an exceptional baseball player. But today he’s known primarily for opening the floodgates of free agency. Used to be owners made all the money, franchise holders were not bitching about losing cash, the players were indentured servants.

But not after Curt Flood.

Who will sacrifice themselves for the good of today’s music industry?

Well, unlike sports, there’s no league, the barrier to entry in music is exceptionally low. However the ability to get noticed is nearly impossible.

But there’s a huge swath of listeners who reject the pop and urban tropes. They’re looking for something deeper, new and different, who is going to satisfy them?

Probably not the acts already in existence. The truth is the outlier triumphs when it becomes exceptional, and we don’t have a plethora of acts ignored by the mainstream despite being world class. We’ve got a lot of fans saying they’re world class, but the music itself? Most people can take or leave it, mostly the latter. But what if there’s a sound everybody wants?

The majors are not in the incubation business. They want you to prove success before they’re interested. But what if you proved success and refused to sign? What if someone opened the floodgates and a bunch of acts poured through.

It will happen.

Because it happened before, many times.

There was the British Invasion, the San Francisco sound, the Philly sound, the Seattle sound, the hip-hop revolution. But each time the winners signed with the majors, what if they don’t?

Like I said, the forebears will probably get screwed. But when the leader of a new sound breaks down the walls, a lot of players could come through.

Kind of like in EDM. A scene dominated by indies, Live Nation paid quite handsomely for its foothold in the business. Today that’s where outsiders start, live. You generate sales and the big boys come ‘a knockin’.

But EDM’s penetration into mainstream recorded music has been minimal. Influential, but minimal.

Furthermore, we haven’t had a musical revolution this century, just endless refinements of the same damn sounds, pop and hip-hop. Do you think this will go on forever?

Of course not, but the major labels will not institute the change, outsiders will.

The majors have no incentive, they’ve refined their business practices, they’re engines of profit and success.

Whereas startups are engines of starvation, with many blind alleys.

You don’t start outside as a supernova, you evolve there, via trial and error. But today’s acts don’t want to do this, they’re inured to the instant rich and famous paradigm, whether it be Bieber or Kardashian, they want some of that. The music is secondary to the celebrity, the Fortune 500 foot the bill.

But chances are the corporations will want nothing to do with the breakthrough artists, who are in it for the music and are not only talented and experienced, but have something to say.

The corporations wanted nothing to do with the Beatles, they were too scruffy…and then everybody wanted a piece.

Major corporations ran from hip-hop, now they embrace it.

If you’re looking for instant acceptance, you’re not a rule-breaker who will break the hegemony.

An individual has incredible power. A scene can be monolithic.

In the new era the musicians will not listen to the labels, will not collaborate, will not rewrite. That’s what the majors now use for insurance. But it sands off the rough edges of art, and it’s always the rough edges that hook us. We’re looking for originals with a viewpoint, not automatons fronting for old men.

So the founders of the new enterprises will be incorruptible, you will not be able to tell them what to do, both the acts and the companies. And the companies will be more partner than enemy, trust will reign, and transparency will rule.

It’s only a matter of getting started.

Tech has been the story in music for fifteen years.

But that story is over. Streaming won, piracy is a non-issue. Sure, data is important, but art cannot be quantified.

Now the focus is on art.

And this is the major labels’ blind spot. You expect them to sign you because you’re good, not realizing they only want moldable talent in the framework of that which has already hit which will be instantly successful.

The new and exciting is not instantly successful. Personal computers were offered for two decades before most of the public embraced them to participate online, mostly on AOL.

And then…

The software became more valuable than the hardware, internet companies were built, the unforeseeable became real.

The public has no loyalty to the corporation, only the sound. And people are always intrigued by that which is new.

But now, it takes ever longer for the new and different to get traction.

But it will.

And the majors had better watch out.

P.S. The majors could prepare themselves for this by signing that which is innovative and great but not obviously commercial and investing in it over a period of years, accounting fairly all the while, but they won’t. They’re giant corporations reporting to shareholders, they’re beholden to quarterly reports, it’s anathema to their business model…but it will be the death of them.

Posted in: Bob Lefsetz