Tuesday, December 31, 2019

Letter To A Manager | Lefsetz Letter

(I sent this e-mail to a manager, I believe it delineates the streaming equation.)

As for streaming…

The companies give 60-70% to the rights holders. Read the Iovine interview in the “Times” to see that the problem is not the streaming services, but the rights holders, if you squeeze too much, the streaming services go out of business.

So, if you license direct… You have an incredible deal.

If you have an ancient label deal, not so good.

Many modern deals, not with majors, are 50/50. As for the majors, depends on your leverage, usually whether you’ve proven yourself with streams and followers.

As for revenue… Don’t think of it as a per track rate, that’s not even how it works. The bottom line is, how much are people listening?

And it turns out, like the rest of society, it’s mostly winner take all.

As for those who used to make money on CDs… Those days are through, the labels giving big advances and supporting artists that are not superstars. The problem is the labels.

As for recording revenue…yes, it’s down for those who don’t stream a lot, but ticket prices have FAR exceeded inflation, and there are more ways to monetize in general.

Do not believe the scuttlebutt you read online, it’s always uninformed, it equates radio with on demand, ignorant people.

Then again, if you’re _______ ____, she’s got three tracks in double digit millions on Spotify. But her ancient deal probably doesn’t pay much. ______ not as good. But the truth is, instead of records going out of print, everything’s there for everybody to discover, and especially on heritage artists, people do discover!

However, the songwriters did get a bad deal with streaming, they need more points, but the damn labels won’t give them up!

Jimmy Iovine Knows Music and Tech. Here’s Why He’s Worried. The record executive who made the leap to Silicon Valley looks back on the decade in the music business, and sees a major problem on the horizon.”

[from https://ift.tt/2k9aO1A]

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