JOHO - July 31, 2000

Skimpiest JOHO Ever!l

I have a whole, spankin' new, normally-jumbo issue under development, but it's taking me longer than usual because: 1) Technically, I'm on vacation; 2) My laptop was stolen (along with some mail from you and unentered requests for subscriptions, by the way) and I conveniently forgot to load up any HTML editing tools. So I'm reduced to doing a NotePad version of JOHO. (Actually, I'm using TextPad, which is an excellent text editor.) Anyway, I decided to dump the following on you instead of the real issue.

Bits o' Napster

When I read the news about Napster I felt a bit like when I heard that Princess Diana was dead: until then, I didn't know I cared that much. After all, I rarely use Napster, and I have mixed feelings about the ethics of sharing MP3 files ... although the mix weighs heavily on the "Napster Rulz!" side. But when I heard The Judge pronounce Napster's death sentence, a chill went through me.

I don't have much to say that hasn't already been said. (One of my favorite commentaries comes from Dave Winer at DaveNet. Another is Tom Matrullo's comments). Instead of anything coherent, here are some bits and pieces:

How important is Napster? Here are the above-the-fold headlines for July 27, in order of precedence as expressed by placement and font size:

So, apparently Napster is more important than your electric bills doubling, the Concorde crash, prisoners breaking out of death row and Camden, NJ. A 19-year-old kid comes up with a piece of software to make it easier to swap music files with his pals, the Web takes it up like pigs discovering mud, and now it's a major cultural phenomenon.

Where are the artists with some guts? And if not guts, a vivid sense of where their money's going? I mean, you're going up against Metallica on moral issues, for jimminy's sake. This is like hearing that Bon Jovi's your competitor in a Battle of the Blues Bands. You pretty much have to come out looking good.

Is it hard to figure out what's going on, or am I missing something? In industry after industry, we're seeing the traditional borders drawn around business crumbling. Manufacturing companies like Adaptec build virtual factories with their suppliers. Kraft builds marketing teams that include partners as full fledged members and that cut across the vertical lines of the org chart. The auto-makers join to build a $3 billion market so they can squeeze their suppliers. The oil companies engage in joint research. The old boxes that defined companies just don't make sense any more.

And where less so than in the recording industry? What does a record company do, besides exemplify the worst of capitalism? It identifies bands, provides the facilities to record them, and manufactures, markets, and distributes CDs. All of this now can be done better — more efficiently, more fairly, producing a more exciting mix of artists — outside of a record company ... with one exception: turning talentless teenagers into overnight mass market must-haves.

The rest of us will go with tribal music. And this will make music more important to us than ever.

Here's what the record company of the future will look like: A VC. People with enough money to back bands and enough taste to identify them as worth backing will put up the dough to get the bands' recordings made and maybe some marketing done. They'll be called music producers and we'll start to pay attention to them in a way that we've rarely paid attention to record labels. Producers will stand for something. They'll have not only taste but passion. And they'll take a modest 15%-25% cut of the money the band makes.

How will bands make money? I dunno. But we'll invent something. The infrastructure is still emerging. Jeez, we don't even have a standard way of making micropayments. And as bandwidth increases, copying an MP3 will be only the special case. Listen ten times for free, and then start paying. Special student discounts. Frequent listening awards. Subcriptions for fans. Who knows? But companies that think that plastic disks will always be with us won't always be with us.

My teenaged daughter a couple of years ago said she was envious of those of us from the 60s because we had a shared passion for music. My generation was defined by the Beatles. What they sang and did meant a whole lot more to me than what Britney Spears means to her generation. And if you scorned the Beatles, you probably did so while wearing a Rolling Stones t-shirt or while memorizing Bob Dylan's lyrics.

Since then, the record industry has cynically promoted artists as symbols of their generation. Well, their string has run out. The next generational band will emerge from the word of mouth of the distributed hard drives of global 15 years olds. Grass roots, not bottom line.

And the new generation's band is likely to emerge giving the finger to the recording industry. You don't need to be an accountant to see that you can play the music you love without compromise, sell it for a quarter of the current price of CDs and make more money at lower risk than you can now by sucking the recording industry's dick (sorry, I'm just reporting the facts) hoping that they'll decide to get you a spot on the MTV lineup, get your song featured in the latest gross-out movie, or arrange to have you die at an early age in order to improve your demographics.

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