THE LEFSETZ LETTER: 360 Deals

I'm freaking out. This Jeff Leeds story in the "New York Times" has
my blood boiling.

Under the guise of artist development, the major labels are spinning
this fantasy that 360 deals are good for the artist when the real
story is they're a land grab, a desperate attempt to insure the
labels' future.

At least they're giving the vaunted Paramore a thirty percent deal
instead of one for fifteen, but what did Billy Preston say, "nothin'
from nothin' leaves nothin'"?

The problem in the music business is not the deal, but the fact that
the major labels made music free, by sticking their heads in the
sand, refusing to authorize new distribution technologies. What's
even more bizarre, their poster boy for mass destruction is now Steve
Jobs, when any economist will tell you sale by track is death.

	Bob Lefsetz, Santa Monica-based industry legend, is the author of the e-mail newsletter, "The Lefsetz Letter". Famous for being beholden to no one, and speaking the truth, Lefsetz addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself. His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to music business honchos like Michael Rapino, Randy Phillips, Don Ienner, Cliff Burnstein, Irving Azoff and Tom Freston. Never boring, always entertaining, Mr. Lefsetz's insights are fueled by his stint as an entertainment business attorney, majordomo of Sanctuary Music's American division and consultancies to major labels. Bob has been a weekly contributor to CelebrityAccess and Encore since 2001, and we plan many more years of partnership with him. While we here at CelebrityAccess and Encore do not necessarily agree with all of Bob's opinions, we are proud to help share them with you.

If you're contemplating a major label, and your success is not based
on terrestrial radio play, if you don't make pop music, YOU'RE AN IDIOT!

Have you been to the major label's office recently? There's nobody
working there! They want more of YOUR money for doing less work.
You've still got to hire a manager, an agent, pay them, and also pay
the label which is doing no more than before, it's just that it can't
make as much money because the landscape changed. What's next,
subsidizing WebTV? Or, maybe you've got no idea what I'm talking
about here, which proves the point. And the point is, are we going
to subsidize outmoded businesses because we don't want to see people
lose their jobs, we don't want to see them marginalized, we don't
want to see them go bankrupt?

Why don't we start with AOL. Yup, I want all of you to sign up for a
dialup account. That's when AOL was most healthy. The company's a
shadow of its former self. Don't you care? Don't you remember when
you logged in to AOL back in '96? Don't you have any sympathy? Come
on, use your modem. Call your phone company and reactivate your
extra line. AOL needs to be SAVED!

Or maybe AOL can get a cut of Comcast's broadband fees. And Verizon
DSL. Hell, they were there first, they DESERVE the money.

Major label… You want more of my money, TELL ME WHAT YOU'RE GOING
TO DO FOR IT!

If you're just going to sit there and collect cash on my touring
income, because you can't make money selling recorded music, SCREW YOU!

And artists want to be beholden to these same assholes who tell you
what to record, who micromanage your whole life?

Either go on tour or we're gonna stop working your album. Make this
endorsement deal or we're not working your track on radio.

The oldsters, the Eagles and Madonnas and Radioheads of this world,
are never going to go for this. We need a union, to protect the
newbies. Used to be you only got raped financially in the recorded
music world. Now you're getting raped IN ALL 360 DEGREES!

The label won't put out your record, because it's not satisfied
you've got hits. So, you decide to play some live gigs to eat.
Oops, you've got to give thirty percent to the label. And you can't
get divorced, because you've got a CONTRACT! So, you're tied up for
the life of your career, unless you're a superstar and actually last
more than ten years.

Thank god Bruce Flohr went on record here. But where were the
attorneys? Oh, I know, they were afraid of pissing off the labels,
not eating themselves. Are they interested in their clients or
THEMSELVES?

Sanctuary, which INVENTED the 360 deal, collapsed. As my dear friend
Tony Wilson asked the executives, isn't it the job of the label to
steal from the act? Isn't this why its stock goes up? Then how can
you be the manager, the label, the publisher and the agent…

I'm thinking that new bands will have 360 deals. But with people you
don't know the name of, who are trustworthy! That's what the new
paradigm is based on, trust. If you trust anybody at a major label,
you haven't signed your deal yet. They'll send limos, take you out
to hundred dollar dinners, but once you've inked the deal, you're
back in your Toyota at Burger King. Ask them what happened and
they'll tell you it's YOUR money, and the company isn't only you,
they've got to sign OTHER acts! The new 360 companies won't have so
many acts. Like managers, because it will be about personal attention.

We thought we had a common enemy, the assholes stealing the music.
But no, all along the enemy has been the major label. Which hasn't
had the interests of the artists at heart for DECADES! Create a
musical haven. Give us FIFTY PER CENT of recorded income. Treat us
like brothers, not slaves. Do something new as opposed to moving in
on our territory, based solely on your leverage. Yup, want a deal,
it's got to be 360!

Utter hogwash.

The sooner young 'uns reinvent this business, the better it will be
for artists and fans. The entire music business has moved to the
Net. Where's the penetration of this sphere by the majors?
NONEXISTENT! They're forming advertising agencies, getting down with
endorsements. Wade into the wild west of the Net? NO! Unless it's
with total control, which results in fiascos like PressPlay.

The major labels didn't create MySpace. Facebook either.

They didn't invent Napster. They didn't roll up the concert
promotion companies.

They've been out of the loop on every innovation of the last ten
years. But because they ruled in the past they're entitled to rule
in the future?

Ridiculous.

Apple creates the iPod. Google comes up with software for phones.
Fox at least buys MySpace. What do the major labels do? Eat their
young. Say that since we screwed up the future, you've got to cough
up your rights.

Bullshit.

The LABEL has to give up something to get more. So far, I can't see
that they're giving up much.

Don't buy this ruse. The future will arrive. And it won't be run by
Universal or Warner. Unless you're so stupid, or so mesmerized by
the homes of Zeppelin and Cream, that you end up signing with these
entities run by caretakers who weren't even around when the great
music was created.

It's the artists' move. Want to make a deal with your computer
genius buddy down the hall? Someone who will go to every gig? Be my
guest. Throw in with the establishment because they WERE the
establishment… You're ignorant.