Rock ’n’ Roll High School

Didn’t the 2000 Presidential election remind you of high school? The debates pretty much clinched the fact that we chose between the know-it-all good boy who spends half an hour after each test showing the teacher how he is owed one more mark, and the clueless fraternity president who brings the beer to the party. Hell, my high school president won by a bigger margin than the next President of the United States of America.

This got me thinking. The mess of the music market today is starting to look more and more like high school. And just like the politicians, it doesn’t seem like anyone is, well, actually doing anything. But that’s what high school is like: a time for relationship building, rule breaking, and peer pressure.

The last couple of years saw the formation of 5 cliques in the music market:

  • renegade punk companies out to change the world, dismantle the traditional music business, and promising a digital chicken in every pot,
  • the digital best friend: venture funded companies hoping to make an clean exit by either being useful to someone someday, or just good-looking enough to get by,
  • the majors; the handful of popular girls who own all the popular music,
  • consumers: the masses. Favourite rhetorical positioning tool of the punk renegades who speak for them, but don’t really wanna hang out with them,
  • artists: everyone else wants to be Homecoming King. The artists just want to get paid.

Slam dancing can be energizing and fun. It stirs up a lot of attention. But it’s hard to keep it up it for very long. The renegade punks are pretty much gone. Scour’s dead and being kicked around. has coughed up its savings account and indie cred, again and again to stay alive and get into the new dance. Napster’s been saved at the last minute by a major partner that says “I love you, you’re perfect. Now change.” These punkers are learning how to slow dance quickly.

As for the digital best friends, there was a time when there were so many of them around, it was hard to tell ’em apart or remember their names correctly: The iCasts, the eMusics, the myplays, the epitonics and so many others. They were excited by the punkers energy and they used a lot of their same revolutionary rhetoric, but they planned to play by the rules of the popular crowd. No overthrowing intellectual property laws for them. The best friend crowd are a smooth lot. They want to work with you. They are going to provide, they are going to enable. But for whom? While the best friend crowd was multiplying exponentially, they thought they could do it the easy way. Be a player in the genre. Do one tiny little thing that no one else did. Build a great directory, or a storage system, or a player. Get your popularity, your value from your dance partner.

Now the funding for this crowd has dried up, and it looks like no one will ever fund a stand-alone digital music company again. There are fewer and fewer partners, and its couples dancing only.

So what are their options?

Well the most obvious is, go out of business, and that’s exactly what some of these companies are doing (eg. iCast, I think this will be the most common option. Soon they’ll be as distant a memory as the names of the people that went to high school with you. A few of the digital best friends have some allowance saved up, then they can make a new friend, enabling labels rather than consumers (eg. Liquid Audio), and try to lengthen their careers that way. The Internet Aggregators may work with this crowd on varied occasions, but rarely accept one of them as their own for purchase, since they realized it was cheaper and easier to make the stuff rather than buy it. Besides, the high school friends are such a fickle lot, aren’t they? The bread is buttered on the label, not the consumer side now, and any digital best friend worth his embroidered denim shirt knows that. Those who could see ahead to this inevitability (Real, ArtistDIRECT, Electric Artists), or who don’t look to music as their sole source of support have much more life in them. is now in the most interesting position of this entire group. Walking the most neutral, colourless line, it was able to get investment from everyone in the popular crowd: the majors. This means that each of the popular crowd knows that they will all equally benefit from whatever Listen is going to do. This neutrality can become extremely powerful in some situations, because it’s something that none of the popular girls (the majors) have, because they’re all so suspicious of one another. And given that Listen had a huge allowance and still has a lot of it left, it can benefit from the same kind of shopping spree that the majors and Internet Aggregators can have now that digital music companies go for the cheap.

It is now conceivable that it can actually piece together an entire package of assets and integrate them to provide that abandoned clique, the consumer, with an experience that comes close to having all the pieces. And that appears to be what Listen is trying to do with its prior acquisition of digital best friend (Wired Planet) and its bid for bankrupt punker Scour, which probably has more tangible value than the rest of Listen. While Listen says that it’s focusing on syndicating music services to other Internet Aggregators, getting paid enough cash money for that is a long shot way to popularity or even self-sufficient. It’s all about staying power for this crowd now. Because if you can last for a time, then you have a chance to see what shakes out with the majors.

After a brief punk trend, the balance of power has shifted firmly back to them. The majors have kept a legal hold on their vault of music, and are the potential source of revenue or exit for almost every digital music company.

The key to understand the majors on the dance floor, is that these companies act like the popular girl clique who go everywhere together and dance in a big clump together. They measure their popularity and success in relation to one another, and they all live in fear that someone else is going to scoop them on a fashion or boyfriend interest. You can be sure that where one goes, the others follow. The biggest punk success, napster, has only proven what everyone already knew: it’s easy access to the music of all of the majors that works for consumers.

But a couple of things have shifted due to the digital slam dancing of the last couple of years. The general consumer crowd has had a taste of a new experience, and the major’s abusive treatment of the artists has been brought out in the open. In order to keep step with the popular trend, the majors have acknowledged, in their own way, their need to be able to deliver music to consumers digitally. The pressure to answer how and when has lightened considerably since the RIAA piled up a stack of legal successes against digital music companies (, scour, napster).

But the biggest motivator for these majors is the clump factor. Once one of them moves, you can pretty much guarantee they all will. Sometimes, they all move together, as in the development of the SDMI standard, which pretty much gave them all the sensation of travelling without moving. The popular girls found a new solidarity during the digital punk years. It was a nice reprieve after all those years of those years they spent back-stabbing one another.

But then one of the majors went over the heads of the other girls and got a college boyfriend: AOL. They’ve promised to have all the others over for parties but none of them are too trusting or happy about it. Since one of them made a move, the others have to positioning as well. Berteslmann has let everyone know that she’s going to date someone even bigger, done its own kind of partnership with napster. And it’s the kind of partnership where she doesn’t have to put out if napster doesn’t change. Napster wasn’t “one of their crowd” and it positioned Bertelsmann so strongly in a new direction, that it caused some of her faithful crowd to quit. This upped the ante both inside Bertelsmann and out.

Meanwhile almost all of the majors had been settling up with the first punker to turn best friend: They were able to pick up lots of extra lunch money for the executives’ year end bonuses. And after all that slam dancing they realized they couldn’t stay in one place forever. If they were going to deal with the digital, they were going to do it on their own terms.

Shortly after Bertelsmann’s shocking partnership, the popular girl, Universal, who had been angriest with and holding out on accepting them the best friend pack, pulled out her own surprise. She was going to have her own little dabble with on a higher status basis. Doesn’t it always seem like the ones who hate each other the most, end up going out?

All her friends turned on her in anger. Universal knew the rules. All for one and one for all. If she was going to get more, then so were they. And the majors are willing to go back to the courts to make sure. But Universal says, “this one is different. It’s different when it’s just the two of us together. Besides we both really care about the artists, and we’re going to do something about them.”

Ah yes the Artists. Everyone had almost forgotten them, off smoking behind the school, going their own way. They get a paltry $25MM to split between them from their special arrangement with It’s not much, given their historic short end of the stick, but it does the possibility that their needs may begin to be openly addressed, even if only because their treatment and the controversy over the work for hire provisions provide a convenient bit of leverage for digital companies to wield over the popular crowd.

There might be a few more opportunities for that, since now that three popular girls have digital suitors, the rest will be wanting one too. Just for a back-up plan, in case their friends don’t share like they say they will. And the biggest x factor in all of this is now the new artist management consolidation play that billionaire Mark Cuban is backing (I love the way that “billionaire” is a career in itself). It’s going to be by far the most fun fight to watch after school, Mark and the popular crowd. Mark’s rich enough to not have to worry about being popular. If he succeeds, the artists—at least the most popular artists—will be able to smoke anywhere they damn well please. But it’s a bold, long-shot manoeuvre.

And the poor, lowly consumer. The masses of students who pay for everything and make the popular kids popular. The truth is that it’s a complete miracle for consumers to get what they want. Not necessarily because any of these other cliques conspire to serve consumers poorly with any malicious intent. They’re merely pre-occupied shoring up their power base. The last few years have seen new companies founded to do nothing but serve the consumer, but they still tend to move things in inches, not miles (this presumes napster loses its case). Every clique has a piece of the game, and they all have to move together for a new, stable system to emerge.

So thanks to renegade bravado, peer pressure and back-stabbing, the whole scene has moved digitally forward. But rest assured that everyone will continue to talk and talk about what is good for consumers and artists, as if that was why much of anything changed. It’s about as certain as the idea that Al Gore and George Bush really believe that everything that’s gone on in the past weeks is really about ascertaining “the will of the people.”

Big business and government. You have to love how mature these mature institutions are.

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