LEFSETZ: SPOTIFY = OCCUPY WALL STREET
You may remember the name Bob Lefsetz from when “Run MetalSucks For a Day” contest winner Justin Gosnell interviewed him on MetalSucks in September. I’ve also linked and quoted him many times before because I respect his opinions so greatly. For those unaware, Lefsetz is an independent industry pundit who writes pseudo-daily email newsletters to thousands of subscribers including industry big-wigs (I’ll bet this guy reads Lefsetz) and regular dudes in bands; he’s not beholden to any industry interests so you always know his commentary is sincere. He makes a lot of folks uncomfortable, but that’s how it goes when you’re addressing the elephant in the room and spouting a truth that no one wants to hear. Unsurprisingly, he’s a big proponent of streaming services like Spotify.
Yesterday’s Lefsetz Letter totally hit the nail on the head with regards to today’s supposed evaporating CD revenues. Rather than summarize, I just want to let you read this section and come to your own conclusions:
… everybody forgot what came before. The aforementioned overpriced CD and unreasonably high ticket prices. It was as if the rights holders and acts believed they were entitled to inflated incomes. Instead of seeing MTV and CDs as an evanescent bonus, they became an entitlement. And try taking away an entitlement, isn’t that what the debate is all about in Washington?
All of this change was brought about by the public.
Which is why when you pooh-pooh Occupy Wall Street, you’re missing the point. Whose side are you on? The bankers were overpaid because of a destruction of regulation and oversight and a thin layer of people got rich, and they used their lobbying power, their money, to institute lower taxes. And you wonder why the rank and file are pissed off?
The rights holders have done a good job of labeling the public as ungrateful thieves. But is this an accurate description? Almost definitely not. The public was fed up with past practices [overpriced CDs] and angry because they could not acquire music the way they wanted to.
The way you succeed in business is by staying one step ahead of the customer, knowing where the puck is going, not where it’s been. Streaming services are an example of this. Most people say they don’t want to stream…they’ve got so many complaints. But they’ll end up loving these services that are one step ahead of them.
And what do artists and rights holders say? WE CAN’T MAKE ENOUGH MONEY! Let’s give the public less than what they want. Let’s force people to overpay for what they do buy. The end result of which is a vast underground economy where tracks are traded/acquired absolutely for free.
Bob nails it, as always. The CD era was a spike, an aberration, and now we’re just coming back down to earth. You can’t fight the future, you can’t fight progress as some labels and rights holders are trying to do, but you can stay ahead of it.
Will you fight progress and natural evolution, or will you be ahead of the curve, prepared for the next wave?