Tuesday, January 1, 2019

2019 | Lefsetz Letter

Will be a year of transition. Expect the chaos to continue to rule. But by the end of 2019 the future will start coming into focus.

2018 was the year of streaming. Yes, Spotify launched in the U.S. nearly a decade ago, and YouTube before that, but it took that long for the public to catch up with the new paradigm, never mind the business. Remember how long it took CDs to become the standard? At first they were overpriced and rare, then AOL was giving them away and there was only one good track on a disc and Napster happened. But do not expect disruption of streaming. Streaming represents on demand, once you’ve reached it there is nothing after. Furthermore, in the future, we will own less and less, millennials live in smaller places, if you’re all about ownership you’re a Luddite left behind, did you read Dan Neil’s piece Saturday in the WSJ? He said not to buy an internal combustion engine automobile now because it will be worth nothing in five years. Argue with me, that’s fine, but Neil is the automotive guru and he’s behind a paywall, otherwise I’d give you the link. That’s another thing 2019 will continue to bring, haves and have-nots online. If you’re not willing to pay, you’re going to be left behind.

Terrestrial music radio will continue to fade in importance. It won’t be terminal this coming year, but in five it will be. Major labels are preparing by cozying up to streaming services, relationships and a continuous stream of product are everything. Then again, it’s easier than ever to find out whether a track is sticking or not. But expect continued consolidation on the major label front, as in they will control an ever-smaller piece of the pie. They’re signing little, because of the opportunity cost and lack of demand for genres other than hip-hop, they’re like movie studios making superhero movies who were disrupted by…Netflix. There’s a giant opportunity here, the barrier to entry is so low, expect the vacuum to be filled by new players. Then again, there isn’t that much money in music, relatively speaking, and the odds of success are low, which is why big spenders are staying out. But expect millennials to make inroads in music production. The label gives you a bad deal and owns the product and provides less than ever before and chances are they don’t want to sign you anyway. Now is when majors should be investing, altering their model for the future, but they are not. They should have 50/50 deals, ownership should revert to creators, especially after recoupment. By avoiding change labels set themselves up for disruption. If you’re not inventing, you’re losing.

But the demise of the power of the majors will not be evident in 2019. Because radio still means something and too many acts want a check, but watch this space.

Also, 2019 will see the end of hip-hop dominance. It will take at least another six months for those in alternative formats to stop bitching about streaming numbers and get their act together. There are many ways to make money in music other than with recordings. Be thankful recording is cheap and distribution is nearly free, at least you can play! But the story of hip-hop embracing the internet and dominating is long in the tooth. Now we’re at streaming and everyone knows the internet is where music lives. So, other genres will get a push. First and foremost from the audience, which is going to see these acts live, and ultimately the streaming services themselves, which will be embarrassed by the focus on hip-hop and see money in emphasizing other genres.

Once again, if you’re an anti-streaming, physical product person, not only will the revolution pass you by, you’re hindering its furtherance. CDs are not the only thing you can sell at a gig, and no one’s got a player anyway. Think souvenir, not music.

But young acts that embrace streaming but not beats will make inroads in 2019, and word will spread about them. This is a good thing. As for old acts, embrace the present or die.

As for touring, the story of 2019 will be the financial recession. Expect some soft numbers in touring as a result of people not having enough money. The stars will have no problem selling tickets, all others..? And those who put tickets on sale early will dominate. It’s anti-fan, but get your show up soon or be left out later, people will only have so much cash.

Also, MTV died nearly two decades ago, why acts see it necessary to perform their shows just like the video is a head-scratcher. If your career is based on touring, spice up the show, change set lists, have nothing on hard drive. Don’t say the audience expects it, that’s tripe. The audience wants a unique experience that no one else is privy to. Live is about tangible, real. Hard drives and autotune and other sweeteners are about fake. Sure, phenoms can get away with it, but the tide will be turning, more people will see music as the core, the penumbra will be irrelevant, the audience will start to turn on TMZ shenanigans. Sure, you want a steady pipeline between act and fan, a flow of information, but if you’re creating non-musical news on a regular basis the joke will be on you.

Music is far ahead of other entertainment genres. Distribution has been figured out. But the last couple of years have been about a steady flow of new acts the press and the industry cannot keep up with. This is the true internet disruption, the plethora of acts, more than Napster/Spotify. Now that everybody can play, who deserves attention, how is the word spread, what are the metrics that determine success?

Certainly the “Billboard” chart does not, it’s an anachronism. Like Nielsen publishing TV ratings without Netflix. But a new chart would not be about the singular number one, but the group of acts deserving attention. The new playlist will be the best of all genres. We get it, we get it, hip-hop is streamed most, but by just focusing on the most in that genre, not only are we leaving other music out, but their fans too, as I stated above.

Not that hip-hop will die and rock will revive.

Hip-hop is innovative, rock is too derivative.

Rock can only have a renaissance when it features great vocalists with something to say. We’re waiting for someone to fill the mass rock hole, and it ain’t Wilco and Greta Van Fleet is only a harbinger of things to come. We let rock slide for so long, that vocal fans trumpet second-rate material and non-fans ignore it.

Mass will continue to be important.

But mass is relative.

If you can make a living on the action provided by a few thousand streams, more power to you.

But really we’re interested in those with millions of streams, tens of millions of streams, that demonstrates demand. And right now, a good number of non-hip-hop acts have those numbers, but most people are unaware of these tracks, while the media too often focuses on those who few want to listen to.

It is a business. It’s not a museum. Traction, response and momentum are important.

But the great thing about music is although those are difficult to achieve, anybody can do it. You don’t need a degree from Yale, or Berklee, you don’t have to know how to play that well, you just need inspiration.

We’ve got a whole world waiting for your inspiration. But we’ve got so many other options, your inspiration will be ignored if it’s not truly great. But 2019 will be the year other genres get recognition and traction.

But there will not be a new chart, there will not be clarity until 2020.

The music industry has future shock. As do old fans. But youngsters are figuring it out, and they will lead us out of the darkness. Right now it’s like looking through steel wool, but in time the view will get clearer, the next paradigm will come into focus.

And not a moment too soon.

[from http://bit.ly/2k9aO1A]

No comments: