“You have to face the truth: The game changed.”
It used to be that professional musicians wanted, more than anything else, to get signed by a major record label.
But according to music industry pundit Bob Lefsetz, it’s time to wake up and smell the coffee Spotify CEO Daniel Ek is brewing.
“You have to face the truth: the game changed,” Lefsetz said on the latest episode of Recode Media with Peter Kafka.
Lefsetz authors the Lefsetz Letter, a free influential newsletter about the music business that has documented the momentous shift from physical to digital media. On the new podcast, he said artists such as Taylor Swift who have battled streaming platforms like Spotify are waging a battle they can’t win.
“You were known and you could have an audience,” he said of the old label system, in which only a few thousand albums would see the light of day per year. “Now you’re competing with everybody.”
He argued that overall, hit acts are making more total dollars than ever, thanks to live shows and endorsement deals. And while the revenue Spotify might be less than traditional record sales, he said they offer artists a better cut of the pie: 70 percent of streaming revenue, versus 10 percent of album sales.
“What these people should be doing, if you look back, the previous change to the music business was MTV,” Lefsetz said. “What did they do? They got all the stars to come on and say, ‘I want my MTV!’”
“If the recording artist were smart, and they’re dumb, they would say ‘sign up for streaming! Then I would get paid,’” he added. “When we have the transition from the end of CD sales and the end of file sales, am I going to guarantee that every quarter here on out will be in the plus category? No. But as a general trend, will it continue to go up? Absolutely.”
If you like this show, you should also sample our other podcasts:
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