This is what happens when CEOs have no investment in the company, never mind any firsthand knowledge or experience.
Dick Parsons blew out Warner Music for $2.6 billion, supposedly Jeff Bewkes was behind the divestment, and where is Bewkes now? OUT OF A JOB!
The music business gets no respect. If Bewkes knew his corporate history, he’d be aware that the Warner Music Group BUILT the Warner cable system. That’s how ginormous the profits were. That’s why Steve Ross compensated executives like Mo Ostin so handsomely, they were running cash cows!
And it only got better. The seventies rock boom was followed by the MTV era, wherein acts became worldwide superstars and then revenue was hoovered up with the sale of overpriced CDs.
But no, there’s no future in music!
So Napster comes along and those who run the major labels are not tech-savvy, and since the business is run by the equivalent of Mafia families they believe they can hold back the future, never mind keep royalties opaque. So what do they do? SUE! First Napster, then their customers themselves! If the product they were releasing was not so desirable they’d have gone out of business.
And then Warner itself refused to license Spotify in America, delaying the launch of the service, allowing for YouTube to become the de facto streaming service, something the industry has regretted ever since, even though it forgets this history and blames the problem entirely on the Google company.
But today, YouTube has been superseded by paid streaming services.
And who do we have to thank for this? DANIEL EK!
Oh, the guy you hate because he’s a billionaire today.
But he wasn’t always.
Ek put in the hard work, jawboning executives, sleeping in the back of planes while he flew all over the world to convince them that he had the solution to piracy. AND HE DID! With his free tier. Funny that the business didn’t immediately get this, because it’s the dope paradigm, give ’em a taste and get ’em hooked and then charge them, and the music industry, at least its artists, run on dope, even to this day, can you say JUICE WRLD?
But executives can’t control music. It’s not like movies and TV, where the execs believe they’re the big swinging dicks who have input, can change the art itself, if you want to call it “art.” No, music is best when it’s created hands-off. Which is how the majors lost control of new music production in the past decade. Creators posted their tunes on Soundcloud, majors just cherry-picked that with traction. Proving once again that the majors are inept. In a world where more people are making music and more genres are flourishing they only want to release Top Forty stuff, hip-hop and pop, ignoring the rest.
But they didn’t used to.
Which is why they have these huge catalogs that will generate revenue forever, or at least until their copyrights expire, which never seems to happen. Physical had inherent limitations, you had to manufacture, ship and stores had to stock, and there was no way a retailer could carry all titles, even if they were in print, they just did not have enough room.
So streaming comes along and you can listen to everything.
The marginal artists propped up by the old system, sucking at the tit of the label, back when the goal was to just get a record deal, don’t like this, because it turns out people just don’t want to listen to their music that much. But those with streams…they’re making bank, more than in the old days, and you can do it with one track! Yup, the album became superfluous, which is one of the reasons writers are crying, they used to get paid for all those filler tracks on a CD, but it turns out no one wants to listen to those online, so there’s no bucks.
And, of course, the writers/publishers should get a bigger share of the streaming pie, but the labels are not coughing up any points. As for the streaming services themselves, ignorant oldsters consider them the devil, not knowing the lion’s share of the revenue goes to rights holders. And streaming music does not scale, the more you take in, the more you have to pay out. So, if an artist is not getting paid, no one is listening to their tunes or they have a heinous deal with their label or both.
Meanwhile, streaming makes available all tunes everywhere. So, your career is not limited to where radio plays you. Word spreads online, where listeners can hear your tunes instantly.
But it gets even better. Once recorded music revenue went down, acts scrounged to get paid, and finally they raised the price of concert tickets to fair market value and got rich. Furthermore, there were more opportunities in branding, with sponsorship and privates and clothing and perfume lines.
And since the labels were greedy and the acts ignorant these companies took a share of said touring revenue and ancillaries, helping their bottom line.
So it’s no surprise that Warner Music is burgeoning. It could stop creating new music and still be worth many more billions than Time Warner sold it for.
Meanwhile, music is the hottest artistic medium extant. It speaks to people’s souls, they need to listen constantly, they can’t do without it. And while the film business struggles to get people to leave home and go to the theatre, with streaming and smartphones you can take your music EVERYWHERE!
Sure, the music itself is not in its best space. But it will only get better. As terrestrial radio, with its endless commercials and dated material, becomes ever less important and the media focuses on more than the streaming hits. Hell, look at concert grosses, people want to see much more than the Spotify Top 50, and in a world where everything’s digital, people are looking for real life experiences, which concerts and festivals deliver to a “t.”
What did that old song say, “the future’s so bright, I gotta wear shades”?
This ain’t no dotcom company, this ain’t no VC-funded fluke, music is forever. I can’t tell you whether investing will be profitable because we don’t know what the stock will be priced at, but one thing is for sure, Warner Music will never go down to zero.
So, once again, the music survives. All the naysayers were wrong. They said if music was free no one would make it, but the problem today is too many people are making music, the scene is chaotic. They said no one would pay for music, but Spotify has over a hundred million paying subscribers alone.
But music still gets no respect.
But music, unlike so many art forms and enterprises, is forever.
You’ve just got to believe.