The Typhoon Keeps Coming for Tidal

It’s not been an easy couple of weeks for new music service Tidal. A slew of bad press and criticism during and immediately after the service’s launch is continuing to be a thorn in the side of the company’s leadership. So much so that a major restructuring was just announced; things aren’t about to get easier any time soon.

I was first a little skeptical of Tidal during its much-hyped launch, then again when it enjoyed a spate of criticism from mainstream band Mumford & Sons, and most recently when producer Steve Albini piled on to the already bruised service. Things have just been really bad for Tidal since it emerged in the last few weeks. Now it seems that the service itself is intent on rubbing salt in its own wounds.

Business Insider broke the news today (as did other sources like Digital Music News) that Tidal was being strongly shaken up; 25+ people on the Tidal team were being fired to make room for a new direction. Of these, the name that surely drew the most attention was And Chen, the now-former CEO of the service. Maybe it’s just me, but firing your CEO just a couple weeks after your very public launch seems to say a lot about a company’s fortunes, at least in the short-term.

Former Tidal CEO, Andy Chen

Former Tidal CEO, Andy Chen

Chen’s removal will make room for Tidal’s former CEO Peter Tonstad (who was the former CEO of Tidal’s parent company Aspiro Group). In an statement to BI, Tidal commented on the impending change:

TIDAL’s new interim [sic] CEO is Peter Tonstad—a former CEO of parent company Aspiro Group. He has a better understanding of the industry and a clear vision for how the company is looking to change the status quo.

Correct me if I’m wrong, but did Tidal just admit that their now-former CEO—Chen—was basically unqualified for the job? Because that’s essentially what I heard. After all the fanfare that Tidal inundated the press with around its launch, I thought for sure that they at least had a concrete plan to try and accomplish their goals. As critical as I was at the time, I at last figured that their leadership had sufficient experience and vision to make the Tidal brand somewhat competitive for a little while. Clearly that’s not the case.

I was critical of Tidal before because I thought (still think) that they’re attempting to sell a product (service) that essentially is very expensive and not wanted by enough people to offset the expenses to provide it. I was critical because the artists who I saw standing up on stage during the launch don’t need any more money in their pockets, and it came across to me as greed.

Now I’m critical of them because changing your CEO and firing 25+ employees ~20 days after your very public launch is not a good way to start the spring. It shows both a lack of preparation for your business market, and frankly a lack of appreciation for your prospective audience and their thoughts. Actually, you come off as socially tone-deaf.

We’ll see how this progresses, but I must say, I am really not impressed with Tidal’s handling of this entire situation. This is not the way to build trust in an industry that is basically overrun with distrust, and filled with people who are used to getting taken advantage of. This is not a good start; not a good start at all.

Lending Artists Millions of Dollars Is a Terrible Idea

The Setup

This morning, Peter Kafka posted an article on a new company seeking to make its name in the evolving music industry: Alignment Artist Capital. The company, according to Kafka’s piece, wants to essentially work as a lending institution for artists who need the money. Except instead of doling out a couple hundred bucks here and there, it will have the resources to lend millions at a time.

money_bags

A Completely Outdated Business Model

This, for anyone who didn’t already think so by this sentence, is a terrible idea. It’s a rehashing of the same dynamic the record labels have had with artists for decades, sans the ownership percentages over artists’ creative material. Kafka is aware of this as well, noting that, “Alignment isn’t the first entity to advance money to artists…lending money to musicians is one of the core functions of music labels.” [1] That’s very true; lending money to musicians is one of the core functions of a music (record) label, and it’s one of the main reasons their obsolete business model is failing them now.

Don’t be discouraged, though. There’s still plenty of money to be made in the music industry. In fact, it’s on an upswing. But not in the major label space, or using any of the traditional business models of those labels. The new upswing is with the independents—that’s where I would lay my chips.

With all the tools now cheaply (or freely) available to budding new artists, the traditional artist/record label model doesn’t apply anymore (something which Kafka notes as well as “harder to justify”). The reality of the situation is that most artists can get the basic things that they need—access to distribution, access to recording equipment and programs, access to merchandising platforms, access to producers/promoters, etc.—without signing away anything. That begs the question of why they would choose to take a monetary loan if they can do most (if not all) of the necessary things themselves.

New Artists Don’t Need Millions (of Dollars)

And there’s something else: funding an artist (band or solo) like a startup is indeed a unique idea—but a misguided one. Artists don’t need millions of dollars out of the gate to be successful in today’s market(s). The sums of money are too large to apply to most of the new artists who might be interested in taking it, precisely because the economics don’t work in their favor; it’s highly unlikely that throwing a million dollars on your fire will create a lasting fanbase for you. Core fanbases are made on the road, sleeping on couches, driving crappy vans, connecting with your real fans—all things that can be done without a multi-million dollar loan on your shoulders.

In the startup world, there’s a delicate balance between taking VC money you know you’ll need to survive (to the next round), and not taking so much that you end up diluting yourself beyond reason. The same principle holds true here: the concept that new artists should take millions at a time is analogous to a startup raising a Series B when they only need a Seed investment of possibly a quarter of that.

Why Incur Debt You Don’t Need?

AAC cofounder James Diener is quoted in the article saying “We’ll give the artist and their entity financing so they can go build a record label.” That’s like giving someone financing so they can go invest in a line of new and improved floppy disks—i.e. obsolete and irrelevant. The fact that this seems to be one of the main drives behind AAC’s plan tells me that they are still mentally tied to the old model of the record label, only now they’ve decided to cut their prospective losses by dealing only with the financial side (and not the creative one).

Based on my years in the independent music arena, I see these sorts of monetary entities as having a very difficult time breaking into the independent spheres—essentially where they need to be in order to really thrive. Buying streaming services, record labels, summer homes—these are things most artists don’t care about and don’t think about. I suppose a few do, but the numbers of those people are well below anything you can build a real solid business model on. The Jay Z’s of the world are astronomically outnumbered by the independents who are on the rise, now with distribution at their fingertips.

I wrote last week that artists are becoming savvier business people, and I can see them steering clear of these sorts of institutions at all costs. They understand that injecting millions of dollars into their brand image doesn’t buy them fans—that’s a belief propagated by the major label industry. Rather, they know it has to be done by way of live shows, personal attention, and appreciation of core fans; all things which can be done on their own, and without incurring debt (remember my article on crowdfunding?). I suppose there will be some customers of course, but I don’t see this ever catching fire in the independent industry. And that’s the next growth phase of music.

So why would artists incur massive debt if they do’t have to??

I wouldn’t.

Would you?

 

Notes


[1] Notice here that Kafka used the term “music labels.” I have a friend who used to work for Warner Music who explained this phenomenon to me. The reason that the term “music” has replaced the word “record” is because the major labels have become so bloated with an obsolete business model, they need to start making money off of revenue streams that they traditionally never touched: live ticket sales and merchandise sales. Traditionally, their main revenue streams were from record (or CD) sales, hence the term “record label.” Yet in the wake of the massive disruption of their business model, they have taken to calling themselves “music labels” in order to explain their practice of now taking money from revenue streams traditionally left for the artists.

Artists Are Not “Bad Business People”

Two Differing Opinions

“Artists are not good business people; they need to be told what’s good for them.” Those were the exact words that came out of his mouth. And I disagreed with every single one of them.

But let’s back up. Last summer, I was having a conversation with an entrepreneurial peer of mine about the current state of the music industry, and possible avenues forward. He’d had some success with a small company working with a few venues, and with some other music industry professionals (who, as shall he, remain nameless). By all accounts, I thought my peer would have a positive outlook on the future of the music industry as he, like me, had experienced numerous problems that could be solved. And yet, his outlook was dreary at best; and at worst, insulting.

When we began discussing what possibilities there were to build tools to better enable artists to make informed business decisions, his response was terse, arrogant and negative: “Artists are not good business people; they need to be told what’s good for them.”

It’s All About Access to Knowledge

Immediately I knew our opinions on the evolving music industry would differ from then on. First, no, it’s not a true statement to say that artists are “bad business people” anymore than one could make the insinuation about construction workers, for example. In an industry where so much of the business has traditionally been done by a major label or other third party, artists are just now realizing that they have access to the tools to simply learn about how to be good business people, and many are taking advantage of the opportunity. No one would expect someone who’s never had access to a certain type of education to understand the intricacies of said education.

It comes down to simple access to tools and means of learning, traditionally things that have been outside the reach of most artists—after all, educating artists on the inner working of the music business never was in the best interest of the major labels. So if this is the case, why then would one criticize artists for not having knowledge of business dynamics when they have traditionally been denied such knowledge and experience in favor of a more “savvy” entity (a management firm or label, for example)?

Who Actually Knows “What’s best”?

Second, the statement that someone needs be told “what’s best” for them is beyond arrogant: it’s plain insulting. Many of the evolving concepts of business strategy that are popping up in the music industry nowadays I find are coming from the artists themselves. These are the people who are looking to new vehicles of distribution like the internet and new business models such as free or freemium as viable ways to push their careers forward. And from what I can tell, they’re getting pretty damn good at it. I find the things I learn that should have been so obvious to me many times come from discussion with artists themselves, opening my eyes to a reality I may not have previously considered or understood.

So if artists are continually researching and discovering new methods of business strategy to effectively compete in the new digital era, why is there still this pervasive view that they “need to be told what’s best for them?” Perhaps it’s just a difference of worldview, as with between my peer and myself. Whereas he appeared to see the world through a lens that was dismissive—and even bitter—I see possibilities abounding for how the industry can change with the technology available to give artists more power over their own careers. It’s arguable the in the end, the only opinions that matter are those of the artists, as they are the ones producing the material that so many other people are trying to find ways to monetize.

My Bet

Whatever the next big thing will be (and it’s anyone’s guess in this sort of fickle content market), what I don’t doubt is that artists will begin to step out from behind their guitars and amps to shape their own futures (much like programmers are being encouraged to step out from behind their keyboards and aspire to roles in management). I wouldn’t be so quick to underestimate the artists out there. In fact, just the opposite: they know what they want, and now they’re beginning to see how to successfully get it. For me, my bet’s on the artists 

 

Thanks to Mom and Dad for reading early drafts of this.

Two Stories of Sexism in the Music Industry

The kind of BS sexism we need to eliminate

The kind of BS sexism we need to eliminate

The Scourge of Sexism

With the issue of gender equality fast becoming one of the central topics in Silicon Valley (and by extension, the tech and startups industries) at the moment, I can’t say I’m anything but pleased. The problem of gender discrimination and the glass ceiling is long overdue for a solution. While I harbor no fantasies that such a solution will be found overnight, I am nonetheless pleased to see that there is a major effort being made to reform these shortcomings in the tech industry.

As a male, I can confidently say that gender discrimination hits very close to home for me; my parents both practice civil rights litigation, with a focus in employment discrimination and sexual harassment. I grew up seeing cases of blatant discrimination (and unfortunately it makes me angry to say I still do), where the the ugly beasts of intolerance and sexism were clearly visible. The latter, in particular, surprises me again and again because we are taught to believe that we’re moving forward in eradicating sexism—but not fast enough in my opinion. We still have a lot of work to do.

While the tech industry is starting to really spotlight and root out sexism within its ranks (as well it should), other industries are lagging too far behind in my opinion. The music industry, for example, is still too hampered by outright sexism for my taste, even after movements like third-wave feminism and Riot grrrl punk began to shatter the mold. It’s not a foregone conclusion by any means, and there are many within the music trenches who are trying very hard to change it for the better—to level the playing field so that gender becomes irrelevant—so that talent is acknowledged and validated by its inherent existence, regardless of the artist’s gender.

But let me provide two examples of what can be changed, and how people can step in to make the music arena more tolerant and progressive. Neither example makes me happy to share (less happy to have experienced), but perhaps that underscores their importance.

The Sleazy Promoter

The first example happened a couple of years ago, in the spring of 2013, and goes like this: I am good friends with a band whose members included a female element (the singer and drummer). The group was set to work with a promoter to book shows in their home state (which, though eliminated by name, I can say is quite a big market for independent music). The promoter made inappropriate and unwelcome advances towards the female band member(s) and the group cut ties, not wanting to work professionally with someone of such poor character quality. The promoter then retaliated by threatening to call every promoter within the state, seeking to destroy the group’s reputation, thus effectively cutting out their feet from under them. (In this particular state, I can say with confidence that there are at least seven major cities and/or scenes that they most likely split their time between).

I was in Amsterdam at the time, on my study abroad program. I woke up one day to a frantic “what do we do?? we’re going to get totally screwed by this person!” email from the singer. Even through text it wasn’t hard to clearly read her fear and anger over the situation. So her solution? Reach out to me in search of some advice.

The response I sent her was simple: I explained to her that I was behind her, and would throw the entire weight of my blog and radio show behind her and the band (and would bring in other artists I knew for support if need be). I even offered to write a letter as a professional contact (DJ and journalist) attesting to their quality as a band and professionalism as people, which they might use to send to anyone to rebuke the slanderous threats of this sleazy promoter. She seemed calmed by that offer (and most thankful, as you can imagine!) and we decided to see just how events would proceed.

In the end, the promoter never made good on his threats, and the whole situation seemed to blow over. But I never forgot that frantic email (I’m sure she hasn’t either), and to this day I’m still good friends with her and the band. The point is this: such a situation should never have occurred, and it very quickly seemed to spin out of control. But in situations like these, one needs to have the wherewithal to step up for what’s right. I didn’t do anything I didn’t think others wouldn’t do in the same situation. You don’t do it for pats on the back—you do it because it’s right.

The Sexist Tweeter

The second example happened more recently, during the Super Bowl this year. One of the Super Bowl commercials was to promote the hashtag #LikeAGirl to promote gender equality. This is one commercial I loved and supported, and I made so known on Twitter. This was the result:

The sexism problem that needs to be solved

The sexism problem that needs to be solved

I was actually staggered by the sheer sexism of the comment that I saw on my post. Someone telling me that I was sure to “get laid” for supporting “those feminists.” I was angry—actually I was seething. Not only had this person insulted the women that my comment was meant to support, but had dragged my name down too by insinuating that my motive was “to get laid.” I work with numerous artists—many of them with a female element—and I was pissed that this person had seen fit to insult not only people I work with, but people who are my friends.

The music industry is like the tech/startup industry in this respect—not perfect by any stretch of the imagination, but trying very hard to get better. And here was someone dragging us back to the dark ages. This is exactly the sort of thing that people in both industries (or any industry) need to find and root out. The people who make these comments and hold these views are toxic. It’s not (and won’t be) easy, but it has to be done. And it will be.

I for one will be on the lookout for it in the music industry, and will call anyone on it. I encourage other to take aim at sexism and gender discrimination in their respective industries which they know best. Music is my world, and I will not have it polluted with this sort of poison. Don’t step into my house and disrespect my business contacts and friends, it’s as simple as that.

Tell Me Again How There’s No Monopoly in the Music Industry

Most all of the record labels you know are owned by three major parent corporations: SONY, Universal Music Group (UMG), and Warner Music Group (WMG). Even Sub Pop, the once-famous Seattle independent label, is now owned by WMG. The only pseudo-famous label not on here is K Records, which became famous around the same time as Sub Pop for releasing off-beat alternative music in the ’90s. But for most everyone else, it’s just a question of which corporation you have pulling the strings. Tell me again how there’s no monopoly in the music industry.

(Click image for larger preview.)

The Big Three Record Labels, and All Their Subjects

The Big Three Record Labels, and All Their Subjects

SONY:

  • SONY/ATV
  • RCA
  • Epic
  • Columbia

Universal Music Group:

  • EMI
    • Virgin
  • Island
  • Motown
  • Def Jam
  • Republic
  • MCA
  • Capitol
  • Geffen
  • Interscope

Warner Music Group:

  • Reprise
  • Atlantic
    • Elektra
    • Roadrunner
    • Atco
  • Sub Pop
  • Fueled by Ramen
  • Parlophone

No, Everyone in Management Is Not a Programmer

Just over a couple weeks ago on New Year’s Day, Techcrunch ran an article entitled “Everyone in Management Is a Programmer.”

Though I’m sure that the author, Adam Evans (co-founder and CTO of RelateIQ), had only the best intentions in trying to show programmers that any of them could cultivate the skills necessary to be effective managers, I think the way he’s attempting to go about illustrating his point is limiting when examined within the greater context of tech and business.

In targeting programmers and/or coders in the title of his article, Evans, whether he means to or not, excludes from his discussion those of us who might not have the technical abilities of programmers. While I agree with Evans’ attempt to encourage tech-savvy people to step out of their comfort zones and become successful managerial material, I disagree with his implied suggestion that one must have technical prowess to become a successful manager, and by extension, a founder, CEO, or any other executive within the tech field. The concept leaves out a whole slew of professionals within the tech space who do not consider themselves coders, but who still bring to the table skills that are just as important as programming knowledge.

I certainly understand Evans’ thought process and commend it: those who identify as programmers can certainly cultivate the skills to become effective managers and break out of their comfortable and familiar role as “the tech person.” But I think the ability to better oneself comes from drive and dedication derived from one’s inner character, not from the specific function which one performs at any particular time, whether it be coding or something else. While laudably encouraging programmers and coders to step outside of their comfort zone and become managers, Evans goes to the opposite extreme by suggesting that only programmers and coders can aspire to managerial positions.

It is teamwork that builds great companies. Great managers are those members of the team who lead others, who motivate the other team members and drive the enterprise forward. Yes, programmers and coders are important players on the team, but they are not the only players. Those involved in marketing, finance, public relations, design and layout, legal, and public speaking are also members of the team, and with the requisite leadership skills may realistically aspire to become great managers as well.

Perhaps one of the best recent examples of how the “coding persona” need not be the only one in a company’s top tiers is Ruben Harris’s article “Breaking Into Startups” which was posted a few days ago. The article received a lot of attention (and rightly so, in my opinion) as it describes Harris’s transition from a finance/banking background in Atlanta to a position at a tech startup in Silicon Valley. At this point, I’ve read Harris’s piece a few times already—it’s well-written and insightful, encouraging without becoming preachy. (Truly the mark of a great writer is when the reader of the piece feels as if the piece were written specifically for them). I think my personal most significant takeaway from the article is how Harris demonstrates that it was his desire and networking prowess (and the financial/marketing knowledge he knew he could bring to the table) that led to his successful introductions and subsequent job opportunities.

Evans’ thesis is flawed for a second reason; the belief that people can be programmed the same way as a computer code is flatly false. Concerning this thought process, firstly, no, they can’t—people are not computers precisely because they can be unpredictable and do not work within the same dynamics as a programmable machine and/or line of code. It is this unpredictability and ability for non-linear thinking that creates the very pool from which innovation and unique thoughts spring. To assume that this can be contained, measured, predicted, programmed—well it’s about as predictable as Ian Malcolm’s chaos theory-dinosaur point in Jurassic Park. [1]

Secondly, to attempt to “program” a person (whether that person is your customer, VC investor, employee, team member, etc.) does not reflect well on one as either a manager or a person. Rather than a productive quality, it more than likely comes across to other people as a need to resort to forms of manipulation in order to move one’s business ahead—not a realization I would want to have if I was an investor, employee, potential partner, etc.

Evans’ article takes a good step by encouraging programmers and coders to move into managerial positions. His appeal to coders I think carries with it a deep respect for those whose work he understands first-hand, and whom he seeks to benefit by sharing his own experience and knowledge. However, not everyone in management is a programmer, and people cannot be “programmed.” Successful managers—whether or not they are programmers—are those who find ways to motivate their peers (employees, teams, investors, customers, etc.) that come across as win-win situations, not as attempts at “programming” and predicting their actions in the future.

My respect to Evans for attempting to help his fellow programmers move out from their comfortable places behind the keyboard to take more active, managerial roles in their companies. I think his intentions will serve his team and company well. But I caution against alienating those who are not coders. Rule number one of any business: never seek to speak to one portion of your customers at the expense of alienating another. Those of us who are not coders are still here, and we are still integral in the equation. We build the same kinds of companies and assume the same levels of leadership; we just do it differently.

 

Thanks to Dad for reading early drafts of this essay.

 

Notes:

[1] Dr. Ian Malcolm, the mathematician character in Michael Crichton’s novel Jurassic Park (1990), was a characteristic cynic, though no more so than when he scoffed at the idea that the park’s creator, John Hammond, thought he would be able to “control” nature. Malcolm demonstrated his cynicism mathematically through explanations of fractal design and chaos theory as they pertained to nature and the growth of life.