Op-Ed: Predictions – By Bob Lefsetz

1. Ticketmaster and Live Nation Will Merge

After public outcry lasting a week, people will move on to tracking the exploits of faux celebrities and the two companies will get down to trying to improve their bottom lines. Which will depend not so much on fees, but the artists in the Front Line stable.

Expect innovative merchandising and distribution deals. The ability to stream concerts at home. And a ton of data delivered to acts that will allow them to enhance their careers.

Will this be enough to improve Live Nation's anemic bottom line? Will Ticketmaster be able to demonstrate growth? Unclear at this time. In a business where the lion's share of the revenue goes to the acts, it's hard to grow. But this is their challenge.

And if you want to compete with the behemoth, you've got to deliver more.
And better.

Independent concert promoters must do more than pay an advance and sell tickets. They too will be forced to go high tech. Government conditions will allow independent ticketing agencies to flourish, but will they? Or will we learn that Ticketmaster does a good job (which Live Nation's ticketing debacle proved). Or will it all come down to money. How much new agencies will kick back and how little they're willing to profit.

2. Major Labels

History!

Well, that's not exactly accurate.

The behemoth will be TM/LN. What does the act need the major label for when they get can almost all these services from TM/LN and retain the lion's share of revenue from selling the music they do?

Expect major label rosters to continue to shrink. The majors will focus on winners. Broad-based acts that garner radio and TV airplay. However, these acts tend not to be winners in the live arena, so those slices of live revenue and merchandising in the 360 deals are worth little. And, the more people you try to reach, the blander the product. And this business has always thrived on cutting edge product. Which the major label won't sign, because it doesn't know how to expose it and doesn't see instant revenue.

In sum, a bad recipe.

Best to spin off new artist development to a third party and turn the major into a licensing house. Thrive from the catalog.

3. Independent Labels

Don't have 360 deals and don't have cash. If someone is telling you they're staring an indie label, laugh. Unless that someone is a manager and already has an interest in 360 degrees of revenue.

Suddenly, you're your own label. You get all the money, but you're doing all the work. Which artists are historically poor at.

So expect a roll-up of new acts.

So far, TM/LN is not in this business. And Red Light has a lot of acts, but little traction.

Some smart cookie, much younger than the players of today, will build a hit act. The old-fashioned way, slowly, via a lot of touring, employing new technology to spread the word. The success of this act will draw other new acts to this person. And out of nowhere, suddenly, you're going to have a brand new powerhouse.

These will be acts the oldsters want no part of at first. Because they don't see enough revenue. That's how new players always get started. By finding that which few are interested in and becoming the new mainstream.
These new acts will be music focused. They won't even think about Top Forty radio. They'll put the fans first. But, they might just end up writing a ubiquitous track. Which is built by the people, not the industry.

4. Acts

Will focus on their niche instead of world domination. It will be about making a living more than earning a private jet lifestyle. These new acts will not be bitching that music is free, they'll be giving away their material, just hoping that you pay attention.

But don't be surprised when one of these new acts suddenly becomes ubiquitous. Because despite the balkanization of the Web, it also allows a story to be universally known, overnight.

5. Terrestrial Radio

A dying medium for music.

The stations are overleveraged, or already in bankruptcy, and they're cutting back infrastructure and banking on twenty plus minutes of commercials per hour. You're supposed to double down, innovate in a crisis.
But terrestrial radio has done just the opposite. It's dying, and it will never come back. In a world where no one experiences a commercial they don't want to, do you really expect people to listen to what you tell them and be sold to every third minute? You're dreaming.

Terrestrial radio will be about news and talk, those elements that are immediate. Music's been recorded previously, there's no urgency to sit through the b.s. to hear what you want to.

6. Satellite Radio

Has the benefit of being in automobiles, but a bad image. Will stay at the twenty million subscriber level unless the model is changed and the service becomes free. Don't expect that to happen.

7. Pandora

A winner. I find the service tedious, requiring way too much effort to hear what I want. Slacker is superior. But Pandora is winning.

All because of Tim Westergren. Who kept his company in the public eye. Who aligned himself and his company with the public, not the government or the powers-that-be. Yup, Tim kept rallying his troops, telling them to write to their representatives in Washington, to keep the service alive. To the point where Pandora got name recognition. To the point where it thrives not only on computers, but mobile phones. And is supposedly on the verge of profitability.

Learn Tim's lesson. Keep yourself in the public eye. Don't condemn your customers, rally them.

And know that the best service does not necessarily win.

8. Piracy

Will no longer be the focus of discussion. It will be about signing people up to subscription music services. How long will this take? The cards are held by the rights holders, until they play ball, innovation will be stifled.

Ever notice that Google search is free? That people clicking on ads support the service for everyone? This is the essence of a freemium model. Those paying for music subscriptions will subsidize those employing a free version, albeit with limits…i.e. advertising.

Until you've got the free version, you've got no incentive.

Once people have free streaming services on their desktops, they'll pay to have them on their mobile devices. Because first and foremost, all the data will synch, you'll have convenience and you'll save time. Furthermore, you'll get what you want, all your music on the go. And you'll pay for this.

Makes no sense to try to accumulate a library of tracks. Especially when the health of the business depends on experimentation, getting people to listen to new tracks. This process must be easy. Sure, hard drive space keeps getting cheaper. And broadband connections get faster. But it still takes time to steal

and catalog all that music. So, if someone does it for you, will you pay a small price?

Of course.

Starting with small.

It's about regrowing the revenue stream. Not figuring out how we get back to the numbers of yore, but delivering a service people want for a price…and slowly raising that price, like every other service in America.
Get 'em hooked first, then make your money.

Traditional labels may rail that music is being devalued. But savvy artists will realize it's about exposure. And that there's more ways to make money than recorded music. Which, of course, should be paid for, but should not be seen as the main way to earn your bread.

9. Music Video

Will be what it originally was. A way for fans and potential fans to experience the act, not a mini-movie. Vevo, if it ever works right, will not experience exponential growth because new acts will not make videos like those of the eighties and nineties, and will not be aligned with Vevo anyway.

Just like Vevo's videos are hosted by YouTube, so are the wannabes'. They can be embedded anywhere. Google/YouTube gives all artists this power. The majors/Vevo have no monopoly on distribution.

10. Retail

Already it's hard to find vast inventories of CDs. This will only get worse. Sure, diehard indie stores will survive, but Wal-Mart and Best Buy will continue to shrink floor space for music, down to essentially nothing.

But the big story will be the decline of the iTunes Store. Sale by track has always been death. You need to get more than a buck a track from a customer to survive. You need the higher price point of a subscription, that is still low, but so desirable that many people buy it.

11. Music

Will need to reclaim its rightful place as the most powerful art form. This will be done by innovative acts, not aligned with a major.

Today's audience sees music as background, not foreground. Aural grease in a club, not something you sit on your floor and listen to again and again as it fulfills your soul.

In order to turn the ship around, we'll need a plethora of artists who can sing, write and play. The new technological tools allow you to fake it in the studio, but it's much more difficult to fake it live. You may point to lip-synching divas as contradiction to this point, I'll say those are productions, whereas real musicians, playing live, sans effects, sans canned backup, touch the audience in a wholly different way, which bonds fans to them, which makes people want more.

Yes, we're going to experience a return to basics. Don't be distracted by the vast gobs of crap, whether it be the wannabes on MySpace or the no-talents on Top Forty radio. The growth will come from those who pay their dues, who rely on their talent.

None of the oldsters believe this. They point to grosses of jokes. They point to dollars as opposed to emotions. And that's how we've gotten to this godforsaken place. Until you focus on the essence, the music, motivating people to come to the show based on the sound alone, you're screwed. The shows will start smaller. They'll be cheaper. But the acts will be better. Because when there's less money involved, you don't do it for the fame, but the love.

12. Conclusion

The music business is going through a wrenching transition. Which will continue and may not solidify in its new form until the end of this new decade. But, when the new destination is reached, most of the old players will be extinct and music will thrive.

We need to separate the wheat from the chaff. This will be done online.
Someone like Arianna Huffington will roll up tastemakers and distill information for those not willing to surf all day to find what they want.
Wannabes will be seen as that. Esoteric blogs will complain that they host the real music, that they are the true keepers of the flame, but the more we let today's shoegazers' voices be heard, the further we are from the destination.

Sure, all genres can succeed. But let's not confuse the marginal with the mainstream. And there's nothing wrong with being mainstream, if that means more than your family, your friends and your college buddies like you. You can get plenty far without compromising. As long as you're good.

Sure, you can post your wannabe music on the aforementioned MySpace, but we're going to ignore it. The same way we ignore your second grade diorama, or your high school talent show.

Chaos will fade, solidification will emerge. A new breed of acts not beholden to the old business mind-set who can play, who have something to say, will dominate. It's coming. Not as soon as we want it to, but it's coming.