Bob Lefsetz is a music industry observer, and publisher of the Lefsetz letter:


How did Apple (AAPL) become one of the most valuable companies in America?

By doubling down in a recession.

Remember the dot com crash?  Everybody in tech pulled back.  Not Apple.  The Cupertino computer company invested.  And then released a product that was supposedly overpriced and undesirable.  That product?  The iPod.

Remember when Apple was a joke?  You’re on a Mac?  They’ll be history soon.  I literally heard Al Ries, the supposed marketing guru, say this even after the iPod took hold.  You see if you listen to conventional wisdom, you’re screwed.

Conventional wisdom is the music business is in trouble.  You just can’t make any money.  But the truth is there’s a plethora of money to be made in music if you just junk the old paradigm and create the new.

Leisure travel?  It was devastated by the 2008 recession.  What did Vail Resorts do?  IT LOWERED THE PRICE!

Yes, Vail has something called the Epic Pass.  For under $600, you get unlimited ski days at all the company’s resorts, from Vail, Beaver Creek, Keystone and Breckenridge in Colorado, to Heavenly and Northstar in Tahoe.

Wait a minute.  If you give more, you should charge more!

No, the key is to charge less and get everybody to play.

Been noticing the flat sales at the iTunes Store?  Think it has anything to do with the rise in price to $1.29?  What are these companies thinking?  By trying to salvage their bottom lines, they’re ruining their businesses.  Everybody knows that we’re moving to streaming.  Now is the time to blow out tracks, because they’ll soon be obsolete!

But no…

We should get everybody to pay for music.  That’s what the Epic Pass did.  Over a million people bought it.  According to an instructor, Epic stands for “Every Prick In Colorado”.  If you think every prick in America is buying music and going to shows, you’re sorely mistaken.

So not only do we have a pricing problem in music, we just don’t understand that music is social.  It’s something that adds zest to a party, to love, it’s the main ingredient.  But we just think music is about selling tracks and concert tickets.

So Vail Resorts, to establish community, built EpicMix.  They didn’t piggyback on someone else’s efforts, they didn’t use Foursquare, they invested.  Because if you want a job done right, you’ve got to do it yourself.

But Live Nation won’t invest.  It’ll just cut personnel.  Worried about its stock price.  But if the company invested in its future, like Apple ten years ago, maybe its stock price might actually rise in the future!

This is the way EpicMix works:

Every one of your lift rides is tracked.  At every one of Vail’s mountains.  Yes, they had to install all those sensors.  Never mind write the software.

And when you go online you find out not only your total vertical feet skied, but what lifts you took at what time.  And there’s a leaderboard, illustrating who’s skied most.

But what’s most riveting is the pins.

There’s tons of them.  In excess of a hundred.  And you don’t know what they are.  Every day you track your stats to see if you’ve earned another.  I’ve now got twenty two.

I’m a member of the Mile High Club…  I earned that for being a mile from the bottom of the mountain.

I’ve got the Blue Skyrider pin, for riding every lift in Blue Sky Basin.

I’ve got the Hunting Season pin, for five runs in Game Creek Bowl.

And today I got the Great Heights pin, for covering 225,000 vertical feet so far this season.

Do you get this?  I’m engaged.  I didn’t just buy a lift ticket, I’m a club member.

And so is everybody else.  It’s all anybody can talk about, what pins they’ve earned, how many feet they’ve skied.  We check our stats and find out we were just minutes away on the lift!

And if you think this is bullshit, you never went to a gig and felt a member of the crowd.  What if that crowd could stay in contact?  Wouldn’t you be motivated to go to the next show knowing that your buds from the last one were going too?  Wouldn’t you like to earn a pin for every gig you went to?  Wouldn’t you like to be atop the leaderboard, showing you went to the most shows?

Oh, individual promoters are doing something like this.  But it’s not the same.  They’re baby steps when you need big thinking.  Small thinking is a new chip in your computer, big thinking is the iPod, iPhone and iPad…delivering what people didn’t even know they wanted and having it work so well that they’re not only elated, but tell everybody about it.

We’ve got to bring the music audience together.  There’s tons of money to be made if we just stop thinking about music as tracks and tickets.

You want to ski more to get more pins, for the camaraderie.

And you buy food on the hill and spend money to play.

It’s the same way in the music business.  We’ve got elements, but they’re just not tied together in a coherent ecosystem.

They will be one day.

Behind everybody else.

Vail Resorts did not wait for permission, the CEO just said to do it.

But the CEOs in music are old school players all about the pay.  They’re not like Steve Jobs, working for a dollar a year and the upside in the stock.  They want to cash out, they don’t want to get in!

It’s all about the rights.  Music is falling behind because the rights holders are afraid of the future.

But it’s even worse than that.  It’s a cultural issue.  Music is about winning though intimidation, about power games.  Whereas in tech the guy with the best idea wins.

We don’t even let the best music win.

The major labels are beholden to ancient gatekeepers at radio.  They bleed radio, say it’s the best way to reach the most people.  That’s like saying it’s more important to penetrate the newspaper than Facebook.

Go where the people are!

The people are online.  There’s no music community online.  Apple tried with Ping, but it fucked up with a closed system that wasn’t thought through.

But someone nimble could own this sphere.

Then again, the old fogies have scared all music investment money away.

You’ve got to spend money to make money.  Isn’t that what killed MySpace?  Fox just milked it instead of investing in it.  Who wants a creaky system when Facebook just works!

What a sad world we live in.  Music used to be cutting edge, it led.  Now it’s a second-rate medium whored out to corporations into the money as opposed to changing lives.

People wouldn’t play on EpicMix if skiing didn’t titillate like it did.

Music titillates even more.  When done right.  And when people realize this titillation leads to numerous revenue streams, that there truly is money in music, the music industry will be healthy once again.

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8 Responses to “EpicMix”

  1. TacomaHighlands says:

    Yep…buy pins, swap pins, earn pins…Olympics and Walt Disney World. They get everyone to play with lanyards and pin kiosks, etc.

  2. Jojo says:

    How old is Lefsetz? He sounds like an 25 YO with too much testosterone wired up on competition of being better than his peers at everything. I mean getting all excited about how many feet you skied compared to someone else? How many pins you collected?

    I love music (all kinds) and yes, listening to it can be social, say IF you go to a concert. But most of the people I see listening to music in public seem to be decidedly anti-social, sitting or walking around with their isolation ear buds listening to whatever while their eyes and attention are focused on reading or replying to their text msgs on their cellphones. There is no way to have any sort of social interaction with these people other than through text msgs.

  3. Sarge says:

    “Remember when Apple was a joke? You’re on a Mac? They’ll be history soon. I literally heard Al Ries, the supposed marketing guru, say this even after the iPod took hold. You see if you listen to conventional wisdom, you’re screwed.”

    Barry and I never had a doubt, did we? Ah, the late 90′s early 2000′s – heady times…

  4. Jack says:

    @Jojo: You ever see those people, mostly younger, but not all? They used to wear their ski jackets with all those paper lift tickets pinned, stapled, riveted to them. I guess it’s plastic or something else now but the key feature is: Look at me! I am a skiier! I am cool! I am sooo much better than you!

    I got the double black diamond skiing backwards while jerking off pin. Do you? No? You dork!

    Get it? This ain’t Boy Scout Jamboree stuff. This is real!

  5. cognos says:

    Cool post, seems like a thoughtful guy.

    I liked how he weaves together “Vail Epic” pass (quite meaningless in terms of world business) with iPod/iPhone (quite epic, #1 worldwide story) with state of music/TV/movie business model. The media companies seem totally backward thinking and actively stifle innovation because they fear change. Just classic big-company mediocrity.

    I also agree that iTunes should prob price songs at $0.99 and even move to lower that. However, one must acknowledge that prices have not really gone up much… And the service level including selections, sample length, devices one has around the house where all the music is… You are really getting 10x the early iPod experience for a very similar price. When the whole thing moves to the cloud this further expands the service level.

    Why aren’t TV shows on Apple TV like $0.25? I mean, they are broadcast for free! A little higher, ok. But $1.99, it’s like sarcasm.

  6. econimonium says:

    You know friends and I were talking the other day about how music used to define who you were by what “movement” you belonged to. From Disco to New Wave to Grunge to Rap to R&B it was more than music. It was clothes, accessories (my punk buttons all over my tattered jacket) and it was a group. That’s all gone and I blame Apple, actually. The iPod IS an isolating device not a group one. There’s no sharing (I remember how I used to make mixes for people and hand them out first on cassette then on CD) at all. And remember album art that tied you to music? How about albums with a concept?

    The problem here is deeper than just another website where people can post things. Music was a social medium, and now it’s a personal one, digitized and listened to on little headphones that sound crappy anyhow so the music ought to be crappy. I love music. I love the ebb and flow of styles and new genres. Remember the impact MTV had on the music scene? Who would Madonna be if it weren’t for those videos? And when was the last time you saw a musician with genuine talent or real pipes? Rhianna? She can’t sing! But boy can she look good in a dress. I once saw her sing next to Mary J. Blidge. It was embarrassing. Mary can SING and I thought “why is this other person popular?”.

    So it’s more than this. The record industry has dumbed down music the way the iPad dumbs down a computer because of the way the iPod dumbed down what it meant to listen to music. Because what we’re interested in are the sales numbers and not really the product these days. And yes, I honestly believe Apple is the Wal-Mart of technology. For heaven’s sake don’t create a device that, you know, you have to learn a bit about. Create something my dog can use because, you know, we can sell more by pandering to the lowest common denominator. Using an iPad is like what McDonald’s did to the cash register. That’s what we need here when competing on a global scale right?

  7. forestwolf42 says:

    @Jojo You called Lefsetz a “25 YO with too much testosterone” Strangely enough 25 is the number of years he’s been talking about the record industry. He’s actually a middle aged man with balding on the top of his head. If you weren’t an old man that didn’t know how to follow links you would know this.

  8. siezmic says:

    Excellent thoughts and comparison to the Vail situation.
    I see the Nokia deal now is to charge an extra 100 euro for their phones and in return provide free access to their music library for a year. But in reality all these brands are doing is attempting to maintain the idea that music and other creative sensory outputs should be treated as commodities to entice people to engage in a business model and to sell devices….this is WRONG!!!
    Creativity is at the heart of music and should be the root source of any business model which purports to foster creativity, production and delivery of music. Im no hippy or punk – I just recognise that it will take an entity focused on the creative aspect of music to make it work as a business proposition in the 21st century.
    econimonium makes a fantastic observation regarding the recent historical connection between popular music and popular culture. Music actually does continue to be woven into popular culture – it is just so intimately engaged that we take it for granted – much as a fish takes water for granted.
    The trick will be to create an offer that enables creativity, links to other products and is bound by cultural/tribal norms…sounds a bit weird?
    Just imagine a global network of recorded tunes, able to be accessed via the internet for download to whatever device standard you use. However in addition imagine in a typical small city a number of small number of shops which each align around a cultural idiom – punk. classical, metal, r’n’b, etc. these shops are run by franchisees who are expert fans in their chosen genre. they sell music mixes that they concoct, they sell clothes, coffee, sustainance etc of interest to their cultural niche. Music is the essence that connects these tribes but the range of culturally accessible products goes way deeper, and the new opportunities to value and sell creativity will also be far deeper…music will not be like itunes in the future.