“Jay-Z 2011” by Joella Marano — Jay-Z. Licensed under CC BY-SA 2.0 via Wikimedia Commons

Jay-Z’s Summer Reading List

After the failure of Tidal’s initial launch, it’s the perfect time for Hova to settle into his throne and read Mark Suster.

What Hova got wrong, but can still get right.

“Industry people still want something big, like a front page banner for their artist.” — CMU

When I first read that quote , I thought it must have been from some music conference in the mid 2000's. Sadly, it’s from a panel in May 2015, as Will Hope of Spotify, addressed, “the way the music industry markets its artists and releases.”

With all the fair-pay hand-wringing allegedly occurring while J, Bey & Jack (White) eat brunch, pondering the plight of undiscovered & underpaid artists, it’s mind-blowing just how far off Tidal missed the mark (and doesn’t make me all that hopeful for Apple’s pending announcements).

So, as someone who went from paying roughly $0 for music between 2001 & 2012, to casually forking over $10/mo without ever thinking twice about it, I’m hereby recommending Jay-Z spend his next weekend in the Hamptons reading every post from BOTH SIDES OF THE TABLE by Mark Suster.

Suster tells everyone he meets — Think of your video company as an:

“Online technology company that distributes video.”

Or art. Or coffee. Or music?

My C.V. in Music

I spent several years working for Dave Stewart of the Eurythmics, but my first “real” job out of college paid me $20/hr to enter information from cd liner notes into a computer.
Artist name.
Song titles.
And the small (P) & (C) info at the bottom of the jewel case.

When I finished, I placed the CD into a plastic bin on my right. You know those bins the Post Office brings with all your mail after you’ve been on vacation? These were the same… except they were painted yellow, with a big Y! smack in the middle of a purple oval.

This was Yahoo! Music and it was going to take over the world by cataloguing and streaming the world’s entire history of recorded music (and music videos).

We had albums that ranged in diverstity from stuff you’d find in bargain bins in Mexico to obscure appalachian bluegrass recorded for posterity by the Library of Congress.

The company gave us free bagels on Fridays and $25 Tully’s gift cards every month. And there was a ping pong table in the warehouse.

Most days for lunch I bought the same sandwich from a roach coach in the parking lot. (this was a few years before the food truck movement swept across America). The sandwich was a frighteningly delicious calorie bomb — a take on the the cordon bleu, with an extra fried chicken patty. It came with a side of fries that to this day I still have dreams about. I’d wash it down with two free cokes from the vending machine.

8 hours a day (sometimes more when over-time was allowed to meet quotas), I would fill the yellow bin with CDs, and then another. I’d have five or six bins stacked on top of each other. When I could no longer see the person sitting next to me, I’d carry the bins over to Marco.

Marco loaded the discs into towers that could burn 200 at a time. Most of the labels hadn’t yet embraced digital delivery or didn’t trust it. (It was 2006). So when Yahoo acquired catalogues, that meant we got physical CDs that went into a climate controlled library. When we ran out of cds we’d roll a cart of empty yellow bins into the frigid cave and check-out hundreds more. To save space, the shelves could roll and be stacked tightly together, less than an inch between them.

Y! Music Jukebox, offered free internet streaming with commercials.
$4.99 ad-free and $9.99 on mobile.

Sound familiar?

In any given month there were between 5–8 contractors like me, paid $20/hr to legally rip CDs so Yahoo could stream them, if a customer so desired. Looking back, this meant Yahoo had to acquire roughy 80 mobile customers just to offset 1 week of my pay.

So how many songs did $9.99 a month get you? I seem to recall our catalogue contained about 1.5 million songs, which sounds like a lot. But the labels still had yet to embrace streaming, so that 1.5M was not every Top 100 hit from the last 50 years. A lot of it was albums that 99% of America probably didn’t even know were recorded.

A note for any media company relying on a quality format
Good Catalogue > High Quality see: Betamax v. VHS

Y! Music did offer a lot of other ways to pull in eyeballs and earholes. Every week, 1 or 2 trending artists were in studio to record Y! Music exclusives. Artists like the All-American Rejects came to our studio to play a few songs that you could only watch if you were on Yahoo! (Isn’t Yahoo! cool! again!)

This required a film crew, and audio mixer, editors, host talent, coordinators, DJs for Yahoo radio, extra electricity & production insurance and on and on. I have no idea how many monthly subscribers needed to sign up to offset these costs other than it must have been significantly higher than 80/wk. Of course Yahoo! sold advertising and the entire entertainment division was part of CEO Terry Semel’s plan to make Yahoo, “the next great media giant.”

On paper, Semel was the prime candidate to re-vitalize Yahoo after the crash of 2001.

When Semel became co-CEO of Warner Bros. in the early 1980s, he was steeped in the marketing and distribution plumbing of Hollywood. So it’s no surprise, in retrospect, that his legacy is as one of Hollywood’s biggest innovators and risk takers. In the 1980s, it was Semel who pushed the idea of renting Warner’s excess movie-distribution capacity to other moviemakers as a way of creating a more stable income stream. Almost every studio now has such an arrangement. In the 1990s, he and partner Bob Daly financed Batman and made merchandising an integral part of the way movies are financed and marketed. During Semel’s tenure, revenue at Warner Bros. grew tenfold to more than $11 billion. — WIRED

And by 2007

Despite Semel’s achievements in Hollywood and early success at Yahoo, Silicon Valley is buzzing with a familiar refrain: Wouldn’t an executive with a little more technology savvy be a better fit?

Just two months out from the launch of Tidal, can the same be said about Hova?

Back to Suster:

“Use technology for audience development, engagement, viral distribution and subscriptions.”

It’s important to note Suster lists audience development first. Audience, as it’s used here, is a synonym for “customer.” Offering cool perks, like free tix for curating a playlist (as Z did recently), is great for existing customers. But what is Tidal doing to develop new ones? A streaming service for…$9.99.


No! But wait, there’s Hi-Fi for $19.99.

  1. “No amount of exclusive content is persuasive if basic functionality is severely lacking” — @zeeohmara

For over a decade, the high-end package has made managers and labels salivate at the thought of fans paying $30, $40, $100 for special content. And while various artists have a cohort of hard-core fans that will pay for a super-box set like Radiohead’s, this isn’t something that will scale INDUSTRY WIDE until it begins to ADD VALUE back into relationships with fans. Was the point of Tidal to pay ALL artists more? Or just a few.

You wanna get big? Get basic.
aka KISS principle
aka Keep It Simple Stupid

2. “The vast majority of music listeners DON’T CARE about quality.” — me, (c) 1983

No, I haven’t been saying this from the day I was born, but I might as well have. Wether it’s the tiresome Vinyl V. CD debate, the forgotten fretting of kbps in early napster mp3s, or hi-fi, when will Hollywood & New York realize that small differences in sound & picture quality don’t matter to the masses. (see: Betamax V. VHS)

You could make the argument that CDs moved the quality argument forward when they killed the tape in mixtape. But then, do to restrictions in format and tech, the low-quality mp3 discography (when you could trade the entire catalogue of an artist) devoured the mix cd. Of course, higher bit-rates soon found their way into the P2P networks. And rapidly, low-quality content was displaced by high-quality, which then iterated across the network to deliver good sounding, stolen, music.

And the same effects of deflationary economics happened to film & TV with the widespread adoption of YouTube.

Oh, right. Youtube. That’s killing everything for everybody, and it’s so STRESSFUL.
Let’s Blame Youtube! It’s really Youtube’s fault. Blame Spotify, AND Youtube. And Canada!

Blame Canada for sure.

The next winner in streaming is going to be the product that accomplishes this flow:

consumer → Community →NetworkEFFECT

Notice this line starts with “consumer.” Remember Consumers = Audience. Nowhere in this chain do you see the word “influencer.” Why? Because with influencers Not All Is What It Seems. Getting paid is about getting traction. And getting traction is about reaching a critical mass that will pay for your content and become its champion to amplify your message.

When this critical mass existed, even an average individual was capable of triggering a large cascade — just as any spark will suffice to trigger a large forest fire when the conditions are primed for it. Conversely, when the critical mass did not exist, not even the most influential individual could trigger any more than a small cascade.”

In layman’s terms: Just because a few famous people tell you to do something, watch something, see something, read something doesn’t mean people will.

Case in point: Tidal.

If Jay-Z is serious about getting artists more money, he needs to be thinking beyond just one layer. one product. one service.

Tidal needs to be FULL-STACK. This term, taken from tech, essentially means, “someone with familiarity in each layer, if not mastery in many and a genuine interest in all software technology.

And now we’ve arrived at the same requirements for media. The companies that will survive the next ten years will have to incorporate more than their product’s initial offering. It’s why snapchat is getting into Original Content. Why Spotify is doing video.

Consequently so will artists and their teams. Everyone is going to have to understand the differences in video between youtube/vine/snapchat/periscope, posting for instagram/tumblr/pinterest, analytics & data for marketing/pr for tours v. releases.

And now we get that $$$.

Back to Suster:

…build related types of content into “networks” that are branded and can attract loyal audiences. Think of the Internet, short-format equivalent of Discovery, NatGeo, E! or ESPN. The talent benefits as well by being clustered as newer acts can be discovered by fans who are searching for more familiar content. A laudable goal over time should be to get O&O [owned & operated] to 20%.

As an artist/label are you leveraging all these platforms to drive traffic back to the sites you own? Are you even selling direct? Probably not well.

Here’s why you should:

The important thing about O&O traffic is that these are your most loyal fans making it easier to package up ads at higher rates (10x YouTube) and sell other products like subscriptions, merchandise, music and the like. — Suster

So how the hell are you supposed to build all this yourself? You can’t, obviously. But there are other people who do know how. Those are the people you should be reaching out to. And if they tell you it’s going to costs millions of dollars, tell them they’re full of shit, and talk to somebody else.

Because, it doesn’t cost that much money to start making things anymore, wether you’re a startup, a musician or a video producer. And the one’s who still think so are dead.

“It costs millions to make a country album” — Jack White defending Tidal.

No, Jack. It doesn’t. Sure, I’ve been to Blackbird Studios in Nashville. It’s gorgeous. And if you want to pay of bunch of established songwriters and in-demand studio musicians to record & mix & master for weeks on end, it will cost you millions. And if you do, young artist, you’re never going to see a dime. It costs too much to make.

But keep in mind, what White seems have forgotten. He recorded his first album in his house. The White Stripe’s breakthrough 3rd album, White Blood Cells, was recorded in a week. The sound engineer remembers White asked repeatedly, “not to make it sound too good.”

Yeah, fine but “no one would have heard the album if the label hadn’t supported it with lots of advertising & promotion.” (Old Label Guy).

This is true.

But effective, targeted marketing, like production has dropped in price significantly. The price of every point in the supply chain, from development to distribution gets lower by the day. Spending hundreds of thousands to market a project is not only no longer necessary, it should be avoided at all costs.

The way forward is out there, on the internet for all to see.

I take you back to that first quote. The headline from the source article proclaims

The music marketing plan of the future is longer term and more collaborative

Do you want a sustainable career in music or film where you get to collaborate with super talented people? Isn’t that why you go into this “business.”

Or is it just business/politics as usual?

Please spread the word.
Hit with me your best shot @nicksterhipstar
Learn more @ Lean Content