David Lowery Wants A Pony

from the the-rest-of-us-live-in-reality dept

I'm kind of amazed at how many people have been sending over, tweeting or submitting David Lowery's "Letter to Emily White at NPR All Songs Considered." Everyone seems to think there's something worth commenting on there, but I can't find it, frankly. Lowery, as we've discussed before, has some nonsensical ideas about the strawman he thinks is "the new music business model" which is somehow worse than "the old music business model." He's both right and wrong. It's "worse" for some people and better for others, but there's one thing that's not debatable: it's not going away.

His letter to Emily is both right and wrong. He exaggerates what Emily actually said, and paints her as some massive pirate, despite the fact that she doesn't use file sharing networks and the gist of her blog post at NPR was basically that she and her generation just don't see the point of "owning" music any more since it's so widely available. Access, not ownership, as they say. But to Lowery, that appears to be a huge sin, because the way a few musicians made money in the past was to sell music, and thus, forever must it be the same.

Toss in some righteous indignation that some tech companies have figured out ways to provide useful services that people want to buy, a confusion over correlation and causation... and suddenly Lowery claims to have made a "moral" argument that we should all go back to paying for music in a world where many people don't see how that makes sense.

Yes, and I'd like a pony too.

Look, I spend an inordinate amount of time looking at new business models for content, because I think it's important to support culture. But my focus is on what's working in today's market, not pining for the way things used to be. As Bob Lefsetz eloquently said in response to Lowery:
While we’re at it, why don’t we save the printers’ jobs too. And bring back Smith-Corona. That company had employees…

I believe artists should be paid. But that does not mean they should be paid the same way they used to be
There are amazing new business models that work. What doesn't work is sitting around and pining for the old days or lecturing people on a "morality" that they clearly don't agree with (and its even worse when you try to make them guilty for using services they find useful). That's just not a workable strategy. Again, to Lefsetz:
To be fighting file-sharing is akin to protesting dot matrix printers. File-trading is on its way out. Because it takes too much time to do it. And you don’t fight piracy with laws, but economic solutions. It doesn’t pay to steal if you can listen instantly on Spotify and its ilk.

And please stop bitching about the low payouts… That’s like saying Apple should liquidate and give the proceeds back to its stockholders, which is what Michael Dell so famously said in the nineties. Spotify is a trojan horse. You get hooked, and then you pay for higher quality on your mobile. Facebook stock gets hammered because of its inadequate mobile strategy and you’re not smart enough to see the connection to music??? You can’t get Spotify and its brethren on your handset without paying. And you will. Because you like the convenience of having all your music at your fingertips all the time.
The complaints of low Spotify payouts are a mirage. Go talk to Jeff Price, a guy who knows this stuff better than just about anyone, and let him explain just how the streaming world is developing. There's a huge and growing opportunity here, and people who look at the snapshot view rather than the trends are missing the big picture. The innovator's dilemma teaches us that the old guard always mocks the new players for being too small or not paying enough. But they miss the trendlines for the snapshot. And when the trendlines converge, they get run over.

David Lowery can ask for a pony all he wants, but it doesn't change the reality. Let's focus on the reality of the models that are working and the opportunities to enable more great new things. Lefsetz points out that we should focus on making great music and the other things will start to sort themselves out. Price points out that if we focus on enabling more useful services (the kind that Lowery dumps on) there's a ton of money to be made (more than ever before). There's a world of opportunity there, but David Lowery wants a pony and wants to make a moral example out of a young music lover who just wants to listen to music.

David Lowery wants his pony, sees a tide to hold back, and plenty of windmills to tilt at, but the rest of us prefer to live in the real world.

Filed Under: bob lefsetz, david lowery, emily white, file sharing
Companies: spotify

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  1. icon
    Leigh Beadon (profile), 20 Jun 2012 @ 10:24am

    Re: Re: Re: Re: Re: resnikoff nails it... and you guys are bros...

    Oh please. Do you really think that Lowery gets anything right? If so, you have been thoroughly brainwashed.

    Here's a direct quote from Lowery's extensive "old boss new boss" ramblings (emphasis mine):

    This is what people do not understand. When they look at the royalties that the record labels paid artists it doesnít seem like a lot. It seems unfair. Until you consider the guaranteed advances. Letís say the artist was to be paid a lowly 12% royalty by contract. That compares unfavorably to the 61% of revenue that the independent artist gets from iTunes. But the artist is always given an advance and usually the advance assumes moderate success. But 9 of those 10 bands did not achieve great success even moderate success. It was never expected that all 10 would be successful. So the result was that the record label artist actually received a lot more than that contractual 12%. The unsuccessful artist may have received an advance that was equal to 90% of the gross revenue generated by that recording. And most artists were unsuccessful. So your average record label artist was actually receiving way more than 12%. The artist royalty rate is actually the floor. Itís the minimum share of revenue the artist will receive.

    (I know this is probably really confusing to you civilians. Am I really saying itís better to be un-recouped as an artist? Yes it is. Quantitative finance geeks will see this as selling a series of juicy ďcovered callsĒ. Being un-recouped means you took in more money than you were due by contract. You took in more money than your sales warranted. And there was a sweet spot, being un-recouped but not too un-recouped. For instance I estimate that over my 15 year career at Virgin/EMi we took in advances and royalties equivalent to about 40% of our gross sales. In other words we had an effective royalty rate of 40%, despite the fact that by contract our rate was much lower).

    Yes. He just explicitly argued that it's better to be a crappy, unpopular band that sells no albums because apparently all he cares about is scamming the system for the maximum possible percentage of sales. Indeed, by his logic, if you got a $1 advance and sold zero albums, you'd be doing great: after all, you just got an infinity per cent portion of sales!

    This is the guy you are looking to for insight into the industry? The guy who thinks that bands shouldn't care about having fans - they should just care about getting a good advance then not even worry if anyone likes their album? That they should declare victory if they only sell a handful of copies, just because they got some cash upfront? Those are not the motivations of any musician I know, even the ones who very much want to make money with their music. Those are not the motivations of any musician I care to listen to, either.

    No wonder Lowery can't understand or compete in the new landscape - he doesn't even think bands should have to be good, or that anyone should want to listen to them.

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