Your “idiot nephew” comment has me thinking about something that may be banned in California that arguably has helped children of both of us — legacy admissions at Stanford. You have a take on that? (I got knocked on my Facebook class page for my position on this.)
Someone close to me recently got into film. Everything about it sounds like it was run by the mafia. Like - working without a contract or even negotiating your wage up front; all the time sheets are made up; the union is a powerful behemoth that seems to control everything, but you're still working 72 hour weeks; the hours your worked don't even count towards getting you into the union because they're lying about your title... From what I've heard, there's no nepotism at this company - it's more about the cronyism.
Near as I can see, artists will put up with anything to work in their field so management's stacked with experts on exploiting that. The arts is the one field where people would still be at it even if they were paid nothing, which, given a hierarchical corporate culture obsessed with getting more for less from workers, it becomes all they can think about to the detriment of every other aspect of their businesses.
Business strategists could gleam a lot of ideas from studying how music is created and produced. How melodies and lyrics come about. How songs are tracked and mixed, how improv jazz is played live. So many great metaphors to grab. This is in part why I subscribe to the Honest Broker and have bought subscriptions for all my adult children. Ted is such a masterful storyteller.
Can’t wait for your strategy consulting lessons-learned post.
Reflecting upon my own experience, I suspect that the US healthcare industry now (at least for management and functional roles) works much like the music industry did if you look under the hood. :-)
Most businesses , like the retail food business I am in , go about the same modus operandi as well ; how much they can squeeze production out of an employee for less and if you go over your scheduled shift/ hours you have to cut so its basically the same . Don’t get me wrong , the lessons I learned from working here are essential for what I believe I am going to do in the near future so it helps
I picked my college because it had a 10,000-watt FM station. I went there my first day at school and ended up becoming the music director and then program director. I joined a band I had seen only one time--when I hardly knew how to play the guitar--by calling up the other guitar player and saying I could do whatever the other guy had been doing. At the first "practice" the drummer didn't even show up so we sat in the van and talked. I ended up spending the next ten years touring the US and Europe and eventually ended up with a record deal at one of the biggest "indie" labels. Thirty years later I still have an active band!
Thanks. Lots of time to experiment over 30 years of playing music. Just recorded a new Ssold record, working on the mixes now, should be out in the next few months.
Awesome. Thank you so much. I don’t listen to a ton of punk but I was listening to Rites of Spring the other day and it reminded me I should listen to more. And I really liked Pleasure Forever. It reminded me a little of The Calm Blue Sea.
That’s cool 😎 DC is my birthplace tho I didn’t live there that long once my parents split . So not familiar with these bands but will definitely check them out 👍👍
Along the lines of these bands, make sure to check out Fugazi. In On The Kill Taker is my favorite album of theirs. The song Waiting Room (from a different album) is probably their most popular song overall.
Reading this made me think of the old adage, “if you’re not sure, then it’s a NO”. As a recovering people pleaser, learning to trust oneself isn’t easy. Thankfully, it gets better with time and experience. I overthink. I need less information and more action moving forward. I tend to use procrastination and imposter syndrome as a crutch. I am so done with it! In my honest journal, I recently wrote my new life chapter inspiration as: “Nothing to Prove”.
Thanks for sharing this! 🎶🎶🎶I’ll always be a singer at heart.
This one cracked me up. I'm about four years younger than you are, Ted, and I always wanted to work in the music business. I have a few funny stories about how the music industry wasn't very interested in a Harvard College graduate with a concentration in economics. I got my chance, though, a few years after I graduated through a Silicon Valley start-up called Personics. A number of the people who started Personics came from BCG: Charlie Garvin, Greg Ballard, and Bob Zider come immediately to mind. Interestingly, I was coming from a consulting firm, as well (Marakon Associates). To say the music labels were flawed is one of the biggest understatements one could make! Watching them get their lunch handed to them time and again has never surprised me after my Personics experience (we of the not deep pockets who were doing things fairly and trying to bring the labels into the modern era...). Unfortunately, as is so often the case in the music business, the artists are the ones who lose out. A lot!
Please continue providing your insight into the music business, especially with an emphasis on how artists can be fairly compensated for their work (says the guy who uses his Apple Music subscription for checking out a lot of different music, but who buys a lot of CDs - preferably on Bandcamp - because that's one small way an artist can earn a fair royalty for their work).
I plan to write about Personics in the future. I knew all the people you mentioned (and I'm still in sporadic contact with Bob Zider), and I even had some personal involvement with Personics at the early pre-funding stage—not as an employee but doing research to support the business plan. The major labels handled this situation very foolishly, and this was a learning experience for me. Some of the criticisms I target today at the music business are informed by the industry's wrong-headed response to Personics.
I think people would find the Personics story to be a very interesting and insightful one, for sure.
I was one of the first 10 or so employees, and would be happy to share my experiences and thoughts, if you're interested. I led all consumer research, developed internally-facing product developments plans as well as outbound marketing (one tv spot, radio ads, point of sale materials, record store launch materials, etc.), and was hands-on in all new market launches (starting with the installation of our second beta system at the Sam Goody store in the Tanforan Mall; market launches were an all-hands on deck effort that involved training store personnel, putting up point of sale in stores, etc. etc.).
One of my favorite work experiences of my career - which ultimately focused on start ups and emerging companies across a variety of industries - was launching the L.A. market, where at any point in time five or 10 of us - including Charlie and Greg - and his wife Lucy - might be staying at the condo we'd rented in Marina del Rey (lol).
We were fortunate to have some very special people at Personics, some of whom I'm still lucky to be in touch with to this day. If the labels were smart, they would have created a joint venture to acquire Personics, maximized the short term opportunity of in-store sales of music distributed electronically, and beaten Apple to the punch with respect to electronic distribution of music over the internet. To this day, they should be embarrassed that they didn't. Because then came Napster - a model built on not compensating artists nor the labels - and the labels could only think so far as to fight a legal battle and not create and execute a long term strategy to properly own the electronic distribution of music.
I'll stop there. My days were from March 1988 to December 1990, but it still seems like yesterday. And, even though I'm lucky to have wonderful memories and friendships from those days, it still stings that Personics didn't see its full potential.
I remember you sharing the idiot nephew story with Derek Thompson. It's definitely one of the reasons why the NorCal is crushing SoCal in the California civil war between tech and entertainment.
I know you believe the future is the microculture. Could the entertainment companies have won out against big tech if they were well run? It's obviously a counterfactual based on the myriad evidence of mismanagement you've given us. I'm just curious.
I could give many examples of how the record business could have triumphed over Silicon Valley, but I'll share just one. The record labels beat Napster in a huge lawsuit—because, hey, litigating is how they roll. At that point they could have taken over Napster and turned it into a legal digital distribution platform owned completely by the record labels. They could have operated in total independence of Silicon Valley and controlled their own destiny. But they never figured that out.
Excellent example of their technological inflexibility. I do wonder if the pay per song download model would have generated enough revenue. There are obviously legendary albums that I listen to from beginning to end. But most good albums have 1-3 good songs, 2-5 decent songs and 5-8 filler songs. Much like the cable bundle, the music industry thrived for decades on forcing people to pay for stuff they didn't want or use. The internet was going to destroy that business model regardless. I don't know if they could have made enough money on single song digital sales and stopped the streaming Moloch.
The major labels should have taken over Napster (which they could have done almost for free after winning the lawsuit), and started with an iTunes type model—selling digital downloads. They would have had a huge head start over Apple. They would also have a huge cost advantage versus Silicon Valley, because they already owned the rights to the music. Then they could have built a streaming platform on top of this business. This was all doable, and should have been obvious to the major labels—but the only thing they knew was litigating.
Let me add this: The record labels could still defeat Spotify and tech platforms today, but they lack good leadership. So it won't happen. But they absolutely don't need Silicon Valley—who are just middleman distibutors. They should have bypassed those techies ages ago, but never had either the courage or vision (or maybe both).
I know this sounds harsh, and I get pushback from industry insiders. But sometimes the truth is painful to hear.
Music companies are also easy to buy off. I gather Spotify pays Sony a flat fee of tens of millions a month plus a pittance from streaming which gets split with the artists. Maybe Sony could have done better, but then they would have needed to build tech infrastructure which is expensive. Instead, they rent out their library and screw the people who create it.
From my personal experience, this is totally accurate. My only nit would be that, given the composition of music sales at that point in time - still largely store-based and, believe it or not, on cassette tapes - it would have been best for the record companies to have created a joint venture to acquire Personics. Personics would have provided a platform for in-store sales (either cassette or on CDs, with the latter requiring completing an already anticipated product enhancement to the Personics System), created a well known brand for electronic distribution of music, and then seamlessly moved into electronic distribution over the internet. The record companies would have had maximum leverage over Apple, Spotify, Tidal, et al. Forever.
Strange thing, choices. I chose my university, my college on the basis of my chemistry teacher’s advice, an old scot. ‘You should go to Merton College -magnificent fire-escapes…’
Regarding record companies: Back in the early ‘90s, I worked as a temp in the President’s office of a major record label, based in NYC. I was asked to place a number of phone calls to the Los Angeles office. So I asked the secretary I was reporting to how to place those calls. Other companies I had worked for had trunk lines or 800 numbers or a log-in number to place long distance calls; whatever discounts they had negotiated with the phone company. The secretary looked at me in astonishment: “Just dial the number!” Ok. During the course of my assignment, I placed hundreds of phone calls to the LA office, for full-price, daytime rates from Ma Bell. I couldn’t believe it, but, hey, it wasn’t my dime.
By the 1970s, there was something that might have been called OutWATS. WATS meant wide area telephone service, and having an 800 number was called InWATS because you negotiated a good rate for incoming national calls. OutWATS was like InWATS except in reverse. If you worked for a big company that knew its ass from a hole in the ground, they would have one of those deals and you'd just dial. Since you were working at a record company, they were probably paying full price.
In 1984 I applied to Wesleyan, which I'd never heard of, because one college guide described the dining hall as being like "a cathedral from The Jetsons." I went, and indeed it was. RIP MoCon.
After 5 fun, inspiring, laughing and well paid decades in the music industry, I told my son all the doors I went through are now closed, or don’t exist. He went to Berkeley, majored in math and works on an entertainment project for PWC and hates it. My street is populated with Harvard / Stanford nephews that don’t laugh much. Most music people I’ve known had made it before grad school age. There’s no formula. And nobody indeed knows anything but I regret I wasn’t more Ted-like in the spontaneous decisions category. Then again, why regret?
Really had a laugh at this one, Ted. I was somewhat in the same boat, thinking I could land a job in the movie business, certainly because I graduated with a BFA in Film. I was politely told by a wonderful doc filmmaker and teacher that only 1 percent of film students ever get hired in the movie business, and this was in the mid-70s. I targeted a few film distribution companies - Paramount, Warners, Columbia. All the people working for them in Dallas, where I started, had been with these companies forever. I only landed my first job as a film booker at Paramount because the guy I replaced had died. The first week I was called into the district manager's office, a guy who could've been Clint Eastwood's brother. He told me 1) don't tell anyone you went to college, 2) you have one week vacation a year, and I advise you not to take it, and 3) if you're not getting sued, you're not doing your job.
None of the people there was even interested in movies. They might as well have been selling shoes. I was sued all the time, had my own lawyer in NYC, and luckily never had a rattlesnake placed in my mailbox as did a colleague. I did once, however, get a theatre owner to deliver a 35mm print on horseback. I helped set up Paramount's first computer terminals, a really basic IBM system, and was able to check out P&L statements for all the companies films 'since the beginning of time.' It was just shocking to see how many well-known 'hits' had profits of just $5. Probably this was my first introduction to the fine art of double-entry bookkeeping.
Dear Ted, I can relate to your story because I wanted a job in the movie business (reason why I wrote a dissertation titled “Filmed entertainment business: definition, strategic analysis and marketing planning”) and instead I ended up in a consulting firm.
Idiot Nephew Theory would be a great name for a rock band.
Well, Lance Nephew was one of the characters in the Mixerman Saga.
Your “idiot nephew” comment has me thinking about something that may be banned in California that arguably has helped children of both of us — legacy admissions at Stanford. You have a take on that? (I got knocked on my Facebook class page for my position on this.)
Someone close to me recently got into film. Everything about it sounds like it was run by the mafia. Like - working without a contract or even negotiating your wage up front; all the time sheets are made up; the union is a powerful behemoth that seems to control everything, but you're still working 72 hour weeks; the hours your worked don't even count towards getting you into the union because they're lying about your title... From what I've heard, there's no nepotism at this company - it's more about the cronyism.
Near as I can see, artists will put up with anything to work in their field so management's stacked with experts on exploiting that. The arts is the one field where people would still be at it even if they were paid nothing, which, given a hierarchical corporate culture obsessed with getting more for less from workers, it becomes all they can think about to the detriment of every other aspect of their businesses.
Business strategists could gleam a lot of ideas from studying how music is created and produced. How melodies and lyrics come about. How songs are tracked and mixed, how improv jazz is played live. So many great metaphors to grab. This is in part why I subscribe to the Honest Broker and have bought subscriptions for all my adult children. Ted is such a masterful storyteller.
Can’t wait for your strategy consulting lessons-learned post.
Reflecting upon my own experience, I suspect that the US healthcare industry now (at least for management and functional roles) works much like the music industry did if you look under the hood. :-)
Most businesses , like the retail food business I am in , go about the same modus operandi as well ; how much they can squeeze production out of an employee for less and if you go over your scheduled shift/ hours you have to cut so its basically the same . Don’t get me wrong , the lessons I learned from working here are essential for what I believe I am going to do in the near future so it helps
I picked my college because it had a 10,000-watt FM station. I went there my first day at school and ended up becoming the music director and then program director. I joined a band I had seen only one time--when I hardly knew how to play the guitar--by calling up the other guitar player and saying I could do whatever the other guy had been doing. At the first "practice" the drummer didn't even show up so we sat in the van and talked. I ended up spending the next ten years touring the US and Europe and eventually ended up with a record deal at one of the biggest "indie" labels. Thirty years later I still have an active band!
I want to listen to your band!
You say that now...
https://angelhair.bandcamp.com/album/insect-immortality
https://thevss.bandcamp.com/album/nervous-circuits
https://pleasureforever.bandcamp.com/album/distal
https://rabbitusmaximus.bandcamp.com
https://ssold.bandcamp.com/album/passionate-horse
Very diverse albums that you guys have made. Liked the song Spinny Grins off the Passionate Horse Ep (SSOLD) the bass was gritty , drums mixed well
Thanks. Lots of time to experiment over 30 years of playing music. Just recorded a new Ssold record, working on the mixes now, should be out in the next few months.
Awesome. Thank you so much. I don’t listen to a ton of punk but I was listening to Rites of Spring the other day and it reminded me I should listen to more. And I really liked Pleasure Forever. It reminded me a little of The Calm Blue Sea.
Rites of Spring and the other early DC bands were a huge inspiration.
That’s cool 😎 DC is my birthplace tho I didn’t live there that long once my parents split . So not familiar with these bands but will definitely check them out 👍👍
Along the lines of these bands, make sure to check out Fugazi. In On The Kill Taker is my favorite album of theirs. The song Waiting Room (from a different album) is probably their most popular song overall.
Reading this made me think of the old adage, “if you’re not sure, then it’s a NO”. As a recovering people pleaser, learning to trust oneself isn’t easy. Thankfully, it gets better with time and experience. I overthink. I need less information and more action moving forward. I tend to use procrastination and imposter syndrome as a crutch. I am so done with it! In my honest journal, I recently wrote my new life chapter inspiration as: “Nothing to Prove”.
Thanks for sharing this! 🎶🎶🎶I’ll always be a singer at heart.
I find myself wanting to support indie films, small businesses, and local musicians more and more. Academia has corruption, too.
This one cracked me up. I'm about four years younger than you are, Ted, and I always wanted to work in the music business. I have a few funny stories about how the music industry wasn't very interested in a Harvard College graduate with a concentration in economics. I got my chance, though, a few years after I graduated through a Silicon Valley start-up called Personics. A number of the people who started Personics came from BCG: Charlie Garvin, Greg Ballard, and Bob Zider come immediately to mind. Interestingly, I was coming from a consulting firm, as well (Marakon Associates). To say the music labels were flawed is one of the biggest understatements one could make! Watching them get their lunch handed to them time and again has never surprised me after my Personics experience (we of the not deep pockets who were doing things fairly and trying to bring the labels into the modern era...). Unfortunately, as is so often the case in the music business, the artists are the ones who lose out. A lot!
Please continue providing your insight into the music business, especially with an emphasis on how artists can be fairly compensated for their work (says the guy who uses his Apple Music subscription for checking out a lot of different music, but who buys a lot of CDs - preferably on Bandcamp - because that's one small way an artist can earn a fair royalty for their work).
I plan to write about Personics in the future. I knew all the people you mentioned (and I'm still in sporadic contact with Bob Zider), and I even had some personal involvement with Personics at the early pre-funding stage—not as an employee but doing research to support the business plan. The major labels handled this situation very foolishly, and this was a learning experience for me. Some of the criticisms I target today at the music business are informed by the industry's wrong-headed response to Personics.
I think people would find the Personics story to be a very interesting and insightful one, for sure.
I was one of the first 10 or so employees, and would be happy to share my experiences and thoughts, if you're interested. I led all consumer research, developed internally-facing product developments plans as well as outbound marketing (one tv spot, radio ads, point of sale materials, record store launch materials, etc.), and was hands-on in all new market launches (starting with the installation of our second beta system at the Sam Goody store in the Tanforan Mall; market launches were an all-hands on deck effort that involved training store personnel, putting up point of sale in stores, etc. etc.).
One of my favorite work experiences of my career - which ultimately focused on start ups and emerging companies across a variety of industries - was launching the L.A. market, where at any point in time five or 10 of us - including Charlie and Greg - and his wife Lucy - might be staying at the condo we'd rented in Marina del Rey (lol).
We were fortunate to have some very special people at Personics, some of whom I'm still lucky to be in touch with to this day. If the labels were smart, they would have created a joint venture to acquire Personics, maximized the short term opportunity of in-store sales of music distributed electronically, and beaten Apple to the punch with respect to electronic distribution of music over the internet. To this day, they should be embarrassed that they didn't. Because then came Napster - a model built on not compensating artists nor the labels - and the labels could only think so far as to fight a legal battle and not create and execute a long term strategy to properly own the electronic distribution of music.
I'll stop there. My days were from March 1988 to December 1990, but it still seems like yesterday. And, even though I'm lucky to have wonderful memories and friendships from those days, it still stings that Personics didn't see its full potential.
I remember you sharing the idiot nephew story with Derek Thompson. It's definitely one of the reasons why the NorCal is crushing SoCal in the California civil war between tech and entertainment.
I know you believe the future is the microculture. Could the entertainment companies have won out against big tech if they were well run? It's obviously a counterfactual based on the myriad evidence of mismanagement you've given us. I'm just curious.
I could give many examples of how the record business could have triumphed over Silicon Valley, but I'll share just one. The record labels beat Napster in a huge lawsuit—because, hey, litigating is how they roll. At that point they could have taken over Napster and turned it into a legal digital distribution platform owned completely by the record labels. They could have operated in total independence of Silicon Valley and controlled their own destiny. But they never figured that out.
Excellent example of their technological inflexibility. I do wonder if the pay per song download model would have generated enough revenue. There are obviously legendary albums that I listen to from beginning to end. But most good albums have 1-3 good songs, 2-5 decent songs and 5-8 filler songs. Much like the cable bundle, the music industry thrived for decades on forcing people to pay for stuff they didn't want or use. The internet was going to destroy that business model regardless. I don't know if they could have made enough money on single song digital sales and stopped the streaming Moloch.
The major labels should have taken over Napster (which they could have done almost for free after winning the lawsuit), and started with an iTunes type model—selling digital downloads. They would have had a huge head start over Apple. They would also have a huge cost advantage versus Silicon Valley, because they already owned the rights to the music. Then they could have built a streaming platform on top of this business. This was all doable, and should have been obvious to the major labels—but the only thing they knew was litigating.
Let me add this: The record labels could still defeat Spotify and tech platforms today, but they lack good leadership. So it won't happen. But they absolutely don't need Silicon Valley—who are just middleman distibutors. They should have bypassed those techies ages ago, but never had either the courage or vision (or maybe both).
I know this sounds harsh, and I get pushback from industry insiders. But sometimes the truth is painful to hear.
Music companies are also easy to buy off. I gather Spotify pays Sony a flat fee of tens of millions a month plus a pittance from streaming which gets split with the artists. Maybe Sony could have done better, but then they would have needed to build tech infrastructure which is expensive. Instead, they rent out their library and screw the people who create it.
From my personal experience, this is totally accurate. My only nit would be that, given the composition of music sales at that point in time - still largely store-based and, believe it or not, on cassette tapes - it would have been best for the record companies to have created a joint venture to acquire Personics. Personics would have provided a platform for in-store sales (either cassette or on CDs, with the latter requiring completing an already anticipated product enhancement to the Personics System), created a well known brand for electronic distribution of music, and then seamlessly moved into electronic distribution over the internet. The record companies would have had maximum leverage over Apple, Spotify, Tidal, et al. Forever.
Probably because they figured that, since they owned the IP, they didn't need to change their business model.
Standard monopolist behavior.
Strange thing, choices. I chose my university, my college on the basis of my chemistry teacher’s advice, an old scot. ‘You should go to Merton College -magnificent fire-escapes…’
Regarding record companies: Back in the early ‘90s, I worked as a temp in the President’s office of a major record label, based in NYC. I was asked to place a number of phone calls to the Los Angeles office. So I asked the secretary I was reporting to how to place those calls. Other companies I had worked for had trunk lines or 800 numbers or a log-in number to place long distance calls; whatever discounts they had negotiated with the phone company. The secretary looked at me in astonishment: “Just dial the number!” Ok. During the course of my assignment, I placed hundreds of phone calls to the LA office, for full-price, daytime rates from Ma Bell. I couldn’t believe it, but, hey, it wasn’t my dime.
By the 1970s, there was something that might have been called OutWATS. WATS meant wide area telephone service, and having an 800 number was called InWATS because you negotiated a good rate for incoming national calls. OutWATS was like InWATS except in reverse. If you worked for a big company that knew its ass from a hole in the ground, they would have one of those deals and you'd just dial. Since you were working at a record company, they were probably paying full price.
Those idiot nephews are one of the reasons why nepotism is now frowned upon in business.
In 1984 I applied to Wesleyan, which I'd never heard of, because one college guide described the dining hall as being like "a cathedral from The Jetsons." I went, and indeed it was. RIP MoCon.
After 5 fun, inspiring, laughing and well paid decades in the music industry, I told my son all the doors I went through are now closed, or don’t exist. He went to Berkeley, majored in math and works on an entertainment project for PWC and hates it. My street is populated with Harvard / Stanford nephews that don’t laugh much. Most music people I’ve known had made it before grad school age. There’s no formula. And nobody indeed knows anything but I regret I wasn’t more Ted-like in the spontaneous decisions category. Then again, why regret?
Really had a laugh at this one, Ted. I was somewhat in the same boat, thinking I could land a job in the movie business, certainly because I graduated with a BFA in Film. I was politely told by a wonderful doc filmmaker and teacher that only 1 percent of film students ever get hired in the movie business, and this was in the mid-70s. I targeted a few film distribution companies - Paramount, Warners, Columbia. All the people working for them in Dallas, where I started, had been with these companies forever. I only landed my first job as a film booker at Paramount because the guy I replaced had died. The first week I was called into the district manager's office, a guy who could've been Clint Eastwood's brother. He told me 1) don't tell anyone you went to college, 2) you have one week vacation a year, and I advise you not to take it, and 3) if you're not getting sued, you're not doing your job.
None of the people there was even interested in movies. They might as well have been selling shoes. I was sued all the time, had my own lawyer in NYC, and luckily never had a rattlesnake placed in my mailbox as did a colleague. I did once, however, get a theatre owner to deliver a 35mm print on horseback. I helped set up Paramount's first computer terminals, a really basic IBM system, and was able to check out P&L statements for all the companies films 'since the beginning of time.' It was just shocking to see how many well-known 'hits' had profits of just $5. Probably this was my first introduction to the fine art of double-entry bookkeeping.
www.jim-frazee.com
Or possibly double book entry keeping. I'd be amazed if they only at one set of books.
Dear Ted, I can relate to your story because I wanted a job in the movie business (reason why I wrote a dissertation titled “Filmed entertainment business: definition, strategic analysis and marketing planning”) and instead I ended up in a consulting firm.