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

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A company mired in the past that is unable to develop new products within that constantly misfires in the future. A major label or Google?

This is a Google failure. If it weren’t for search/AdWords, Google would be on suicide watch. The vaunted Android? They bought it. Maybe if they bought Google Music, it would work better.

But not everything is technology. Business always comes down to people. And we can speak of the intransigence of the record companies, but somehow Apple manages to get deals done. Google and Amazon do not. Not that I want to excoriate Amazon. The retailer is always looking to the future, always investing proceeds, building infrastructure, knowing that if you sleep, your lunch will be eaten by someone you didn’t even recognize in the rearview mirror.

The record industry is losing this battle too.

Having lost its distribution stranglehold, major labels needed to reinvent themselves. Only selling Top Forty wonders is not the future, for Top Forty radio is not the future. Having ceded almost the entire landscape to indies, the major label future is bleak. Instead of starting with a clean piece of paper, they insist on holding on to the old crumpled one.

Clayton Christensen got this right almost fifteen years ago, with his book “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail”. When confronted with a disruptive technology, you’ve got to build your new business across the street and when the time is right, close the old building and move into the new. This is what Netflix has done. They were renting DVDs by mail and one day they announced they were a streaming company and subscriptions are over twenty million and arguments are now about rights and bandwidth as opposed to postage rates. With DVD sales tanking, the movie industry must do business with Netflix or its competitor. With CD sales tanking, what is the major labels’ plan?

We’ve got to go to subscription. It’s the only model that works. Getting a little from a lot. Hell, people don’t have a problem with buying Netflix subscriptions now, even though so much is unavailable for streaming. Which is why Spotify is making a mistake thinking it needs all four label groups to launch. That’s no longer true. Lead, and the rights holders will follow you.

Netflix proved that people will not only embrace the rental model, but new technology.

Hell, if you’ve got a RAZR you’re laughable. Everyone wants a smartphone. But the labels are still selling CDs?

And wireless companies keep coming up with new price points, to entice customers, lowering the price to get them hooked and then raising them when they get addicted.

You can pay per text. But eventually you get a subscription.

When is the music industry going to hook the public on subscriptions? You can always raise the price, isn’t that the American way?

We’re selling a drug here. And the problem is the public has never taken the first hit. That’s the magic of Spotify. Give it to people free and they’ll become addicted.

And it’s all about the hand-set. With today’s subscription services, not only Spotify, 2,000 plus tracks live on the hand-set, so there’s no streaming/bandwidth charges at all!

But no one knows this because no one uses them.

This is the Apple paradigm. Get people to use iPods and iPhones and then they’ll buy Macs and iPads, everything you sell. But before the iPod and iPhone, most people had never tried an Apple product, they had no idea how good they were.

No one’s gonna try Google Music. It’s just about incomprehensible. Kinda like Google Wave. Huh?

Apple will get the deals done. Like a great A&R man, they know how to close talent.

But cloud access is not the future, subscription is.

You just don’t know it yet

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Visit the archive: http://lefsetz.com/wordpress/

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Category: Music, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Google Music”

  1. wally says:

    Subscription is the future? I don’t think so… I think you are the one longing for yesterday.

  2. daemon23 says:

    I’m a little baffled–can you explain how Google Music is a failure already? I mean, even subscription won’t be the future once the entirety of all music written by anyone ever is portable and transferrable in a matter of seconds.

  3. Patrick Neid says:

    Despite having my music collection stored on a Macbook Pro, a Dell, two iPods with north of 11,000 songs and a 500 gig external hard drive I only sleep good at night because I own and continue to buy the underlying cd’s–the original hard copy. These I have stored on multiple Sony ES 400cd jukeboxes that I listen to at home. The software on these boxes, from the 1990′s, is still better than what is on an iPod–especially in shuffle mode.

    I’m sure Mr. Lefsetz knows what he speaks but please keep selling your used cd’s on Amazon so I can continue to buy them at pennies on the dollar. Meanwhile please handle them with care!

  4. kfunck1 says:

    Have you even tried it yet? Jesus, please don’t let this guy write again. This is as bad as SAI’s million posts about why LNKD is properly valued at everything.

  5. hayek.von.mises says:

    Speaking as someone who currently uses Google music, it is a great product. Everyone that uses their smartphone to listen to their music will inevitably move towards storing those songs in the cloud. Saves space, and is a stunningly beautiful easy to use mobile app. The features will only get better over time…
    Once the beta is over I believe android users will be flocking to it…