Après nous le deluge

So Tommy Mottola has been replaced by Andrew Lack at Sony Music Entertainment. It could be a case of, “The kind is dead; long live the king.” And if things stay true to course, it is likely that the king has no clothes on and no one is likely to tell him.

Here’s an interesting quote from Nobuyuki Idei, chairman and CEO of Sony Corp., who is now Mr. Lack’s ultimate boss: “His years working with Jack Welch and the GE team, together with his first hand experience with content creation, consumer habits and tastes, will be a tremendous asset to our entire company. In addition, his awareness of global issues and knowledge of distribution systems and technology will enable him to move quickly as we reengineer our music operations.”

Sounds like Mr. Lack may be Mr. Wizard. The man used to be president and COO of NBC, the network that is essentially based on the whims of Courtney Cox and her crew and not much more than that. Magical. Although Jack Welch had become something of a business paragon—at least before the reports of how his golden years really were being made golden thanks to the contractual arrangements with GE, which isn’t really appreciated in this period of raised eyebrows at some of the excesses that have been discovered to have been occurring in corporations—it is worth noting that it wasn’t all that long ago that Mr. Welch was known by the sobriquet “Neutron Jack,” named for the bomb that takes out the people and leaves the buildings. If there was tutelage of Mr. Lack by Mr. Welch, it may not bode well for the Sony lineup of artists. (In the U.S., Sony Music consists of Automatic Productions, Columbia, Sony Music Nashville, Legacy Recordings, and more.)

And the fact that Mr. Lack, according to the news release announcing his new job, “presided over. . .the creation of MSNBC, the joint venture of NBC and Microsoft,” isn’t something that ought to make too many people all that encouraged with regard to the free flow of, well, much of anything (i.e., the “paradigm” would not likely be one of openness).

One of the problems that large corporations like Sony have vis-à-vis the recording industry is that it is an industry that is based on the tenants of mass production. In effect, it is no different that the car industry or the appliance industry or any other industry with comparatively high fixed costs and low returns on investments. While the car industry has plenty of factories that are expensive and the cost of pressing out discs is comparatively trivial, the big costs for the music firms are associated primarily with marketing and distribution costs (one could throw in the signing costs for some artists, but there are so many reports of the artists coming up without even the short end of the stick make this somewhat questionable).

The mass production mindset in the music industry is one where there is a finite number of artists picked as the vehicles that are meant to support large sales, so there is a tremendous amount of investment made in making sure that the artists appear approximately everywhere before, during and after a major release. This is not unlike a new Chevy. After all, a given vehicle manufacturer has to bet on, say, that new Cavalier, because the way things are, it is cripplingly expensive to change anything after the fact. In the case of recording artists, the situation is that lots of money is invested in few artists, and there needs to be a return on that investment. When this doesn’t pan out as planned, people lose jobs—people in offices, as well as the artists in question. There’s lots of hand wringing and searching for the Next Big Thing. And you’ve probably noticed that the Big Things keep getting smaller and smaller: Here today, gone next week.

At some point, someone in the music industry is going to have to figure out that the mass-manufacturing model doesn’t work anymore. Not everyone wanted cars that were black. Not everyone wants to go to their Big Box retailer to find about a dozen artists’ albums in abundance and not much else. You’d think that people would be more clever in their distribution model. For example, it is conceivable that a greater number of bands could be supported by reducing the amount of money spent on marketing and distribution for a smaller number. That way, there would be more choice among consumers. Sure, this would result in there not being any zillion-selling records (or at least fewer), but by having greater variety and greater access, it just could be that recorded music sales could actually increase.

But until that mindset changes, it’s business as usual, and the flow of bad music will continue to be a deluge.