Rap Coalition

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Thursday, August 06, 2009

And more Lefsetz from Lefsetz.com....

Maybe we need to let Ticketmaster and Live Nation merge to pave the way for what comes next.

What killed the major labels was radio consolidation. With Clear Channel owning so many stations and populating them with twenty plus minutes of commercials per hour, people started tuning out. Conventional wisdom is Bill Clinton fucked up, he never should have let these mergers take place. But if terrestrial radio hadn't gotten so bad, would Pandora have flourished? In other words, is it fruitless to prop up the past? Does it only delay the coming of the future?

I hate to quote the "Wall Street Journal" editorial page, but today's lead opinion piece, "The Antitrust Anachronism", caught my eye.

You see Peter Paterno is vehemently antitrust. Peter's not a right winger, but he is a free-thinker. Most music business attorneys are not attorneys. Oh, they can make you a deal...but understand the legal underpinnings? Foresee what will happen in a crisis? Peter never leaves out the law. And has been very successful being a maverick. (Yes, there was that stint at Hollywood Records, but unlike all other attorneys who left practice to run labels, Paterno's been able to rebuild his legal business after the fact.) So I pay attention to what Peter has to say. And he's truly gotten this dyed-in-the-wool leftie thinking...is antitrust good for the people?

The merger the WSJ is speaking about is last week's big deal, between Microsoft and Yahoo on search. How long will it take the government to give its stamp of approval? Or withhold it? Months, at least. Does government ever work at the speed of technology? And diving into the details, the author of this piece, L. Gordon Crovitz, references Google's triumph over AltaVista and Excite. I still occasionally use the former, does the latter still exist? Sure, Microsoft dominates the office apps market, but when apps move to the cloud, which is inevitable, will the Redmond company still dominate, will it even be able to charge? Will the apps be free, but service the key?

I don't know. But I do know that Congress and D.C. regulatory bodies know little about tech. And almost nothing about the concert business.

Google doesn't search Twitter. Bing has made an attempt. Real-time searches make spider-crawling results look like last year's baseball scores. Will Google dominate in real-time search?

If Ticketmaster and Live Nation are prevented from merging will the public truly benefit?

Those challenging the merger most vehemently, Seth Hurwitz and Jerry Mickelson, are not newbies, they've been promoting for years. They're fiercely independent, cut in the cloth of their progenitor, Bill Graham, but are they truly where the innovation is coming from? Sure, JAM promotes concerts on baseball fields, and Hurwitz does festivals, but could the revolution be coming from people much younger, with no investment in past relationships?

The concert business is not a paragon of health. Live Nation says 40% of its tickets go unsold. This is the summer of papering. And few superstars are being developed. This system is not working.

And it's not making the public happy. Hell, that's why there's such an uproar. Ticketmaster is more hated than North Korea! Is prevention of this merger going to solve the add-on crisis? Azoff says that he'll lobby for all-in ticketing when the merger takes place, and controlling both acts and promotion, he's got a good shot.

But maybe he'll fail.

Live Nation is burdened with debt, and has razor-thin margins. Ticketmaster is not Apple, rolling in profits with a surging stock price. So maybe the two companies merge and we get a disaster. Isn't that good? Doesn't that pave the way for the future?

Or maybe by merging, whatever the result, new opportunities are created for upstarts. The more the major labels merged, the more opportunities grew in the indie sphere. The majors want to sell millions. The indies can make money on fewer sales, having less overhead. And now you've got no cred if you're on a major, you almost can't make it in the KCRW world unless you're on an indie.

And maybe the Ticketmaster/Live Nation merger results in the new Google. Maybe what Irving says is true. That he'll be able to get all the rights in the hands of the artists, that the artists will make all the money, not the labels. Is this a bad thing? Certainly not. Should we stay in a past where you search in AltaVista and rarely get what you want? Unless you know how to use Boolean logic? So only the brilliant can get the results they need, the same way only the rich and connected can get good tickets?

Stopping this merger certainly isn't going to make things better.

Sure, it could make them worse.

But maybe, like with radio consolidation, they've got to get worse to get better.

Don't have a knee-jerk reaction here. Concerts have become an overpriced, once a year event. Maybe they're imploding under their own weight, maybe the public is mad as hell and isn't gonna take it anymore. Maybe the future is small scale shows by virtual unknowns, niches on steroids. Will Live Nation be the king in that world? I wouldn't think so. That would be like Warner telling Wall Street that it's found the key to success, from now on the company's only going to sign acts that sell fewer than one hundred thousand copies!

That would make Warner's stock tank. The Wall Street game is about tonnage. How do we generate more more more from less less less. Major labels aren't signing more acts, but fewer, in a world where anybody can make music and distribute it. Are they really going to rule the future?

Sure, concert promotion involves real estate. But look at the failure of malls. They raged for decades, now few want to shop there and they're stumbling.

The past doesn't go on forever. Unless you use all your power to prevent the future.

The future can be bleak, but only by going through the rough times can you get to the good.

No one's preventing a ticketing company from establishing a better service than Ticketmaster. No one's preventing anybody from being a concert promoter. Sure, Ticketmaster and Live Nation look dominant now. But the Walkman was eclipsed by the iPod. Samsung rules flat screen TVs, not Sony. Wii is the gaming superstar, not PlayStation. Sony's lost its cred. Because it took its eye off the ball. Should we have prevented its failures? No.
Let this merger go through.


A reprint from Bob Lefsetz at Lefsetz.com:

Now the concert business is imploding.

It's not like promoters, managers, agents and acts couldn't see this coming. They just didn't want to believe it. They're just as ignorant as their major label brethren. It's just that their comeuppance is occurring a decade later.

How long did you think it was going to last? Did you really think people were going to want to overpay to see the Stones, believing this was the last tour, when that whisper campaign began TWO DECADES AGO?

Do you really have to go see Aerosmith? Sure, they outlasted their seventies contemporaries, had hits in the MTV era, even played the VMAs year after year, but you don't even want to hear those lame Geffen hits, you want the Columbia classics, and you've been able to hear them year after year. So, you say NO MAS!

It's not only Aerosmith that's having problems selling tickets. AC/DC is papering stadiums. Paul McCartney is essentially giving tickets away. Springsteen's tour is a joke. Come on Bruce. You're on a closing buildings tour? Just call it what it is, a going out of business tour! You're just so greedy, you want to get the money before it evaporates.

Ticket sales are not in the dumper because of the economy. That's like saying major labels are in trouble because of piracy. Sure, piracy put a dent in the Big Four's bottom line. But what about the fact that people hate the crap they're purveying, and where they're purveying it most people aren't paying attention anymore? Sure, the economy is hurting ticket sales. But that's just the cover-up. The true story is the business has broken very few superstars, and the old ones are on overpriced tours, blaming Ticketmaster while they scalp their own tickets.

You say the labels should have seen Napster coming. That they should have authorized P2P. When is the concert business going to have an all-in ticket price? When is greed going to be put aside for the long term health of not only the promoters, but the acts themselves? Do you really think Live Nation can overpay forever? Look at the company's financials. And no new entity is going to line up to overpay guarantees.

We've got to start over.

But the live business, like the recorded music business, doesn't want to start over. It just wants to raise prices in order to assure growth.

Hate to tell you, but music doesn't drive the culture. Because all the big acts are tied in with corporations, and are fearful of speaking the truth for fear of being Dixie Chicked. Used to be the artists were beholden to no one, which is why the business blew up. Artists lit the way. Now techies lead.

You've got to start small, charge little and build an audience. Which you nurture over time. Trying to break a new superstar overnight is like GM believing it can save itself with a new Malibu (it didn't, in case you weren't paying attention). GM drove itself towards a cliff with no consciousness of the future. People want mileage and longevity. GM provided neither.

Concert attendees want music. Sure, Madonna might be able to survive selling spectacle, but how many successful circuses exist? There's Ringling Brothers and...

And a night at the show must not break the bank. Broadway overcharges because it's seen as a once in a blue moon event. You've got to go to New York City... It's like selling tickets for a U2 show on the moon. You can charge up the yin-yang for that!

As for U2... They don't sell out either anymore. Maybe because they're no longer seen as vital, they're the new Stones. U2 could possibly rehabilitate itself, by releasing a string of singles, one every month. By releasing a live album from the tour in progress. Instead, playing by the old rules they topped every mass media event with their lame "Get On Your Boots" and no one cared.

Just like no one cared about Springsteen's album after the Super Bowl.

Maybe no one cares to the equivalent of a multiplatinum level anymore. Maybe the live business has to give that paradigm up. At least for a decade, until new acts are grown.

We want music that resonates. And we want music. Lady GaGa is outfits. Katy Perry is so second rate she's third rate. The future looks more like the Kings Of Leon. A band that's been around for years that finally breaks through. And doesn't break the bank when it sets ticket prices.

Screw lawn tickets at a discount. That's like listening to music on your neighbor's stereo. How about getting a ticket for a developing artists show when you buy the ticket for a star. We've got to get people sampling, we've got to get people coming to the show on a regular basis. Now we've got a business of extravaganzas. We're like North Korea, trying to blast rockets into the stratosphere, but usually failing. To the point we're a joke.

Last minute concert tickets hot items in recession: http://www.reuters.com/article/musicNews/idUSTRE56T6VZ20090730