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April 5, 2007

Conversations with Lefsetz

Had a recent exchange with Bob Lefsetz about the phenomenon I noticed in iTunes. Now that I've had a few days to think about it, I thought I'd blog on the subject ...

First of all I have to say I'm surprised, honoured and delighted that a guys of Lefsetz's stature and workload repllied to me at all - not once but three times. Chris Anderson has yet to respond to anything I have sent him. And I think what Bob says is very true - if you accept the thinking in which he resides.

See, Bob's an old-industry warrior. He still thinks in terms of large volumes being the only kind of good and small, efficient operations being worthless. He parades himself as a new-age guru and extorts people to do things that will work for them in this new era - but he still expemplifies thinking from an old era, where the only thing that's worth consideration is complete domination. What's worse, his own assessments of songs, with which I mostly agree, tell a different story from his advice.

Essentially, the exchange went like this:
I pointed out the problem with iTunes' cacheing systems making it hard for small acts to be found. I asked both he and Chris Anderson what they thought abut the effect of this one the Long Tail. Bob replied:

"You know I've had that problem. Should have brought it up with Derek
I think this does impact the Long Tail... Then again, so many at the
end of the long tail are only selling ones and twos.

I argued back that this was a larger problem, since it affected many independents who are mid-range - more than ones and twos but probably not in the thousands, which is Bun Ber E's experience. This cacheing effectively obliterates those new and/or more niche entires from the inventory, which is exactly the virtue of Long Tail markets. Bob replied:

"You're assuming the iTunes Store counts, it doesn't..."

(BTW - this is the complete reply from Bob. I've not edited them at all.)

I once again replied, arguing that the problem is bigger than iTunes. If CDBaby does the same thing, and presumably Google does too, then this makes the process of entering the makretplace much more difficult unless you have capital for up-front promotion. This requirement plays very significantly into the hands of the larger operators with the capital to break through. Worse, it gives the database owners the ability to manipulate the market in favour of those who can afford to pay for a priority cacheing. This creates an artificial scarcity, which is anathema to the Long Tail. Bob replied:

"Purchased tracks are nothing compared to stolen.
So, your point is not wholly relevant.
Good luck with your thesis.

Given his final comment I declined further response, but it got me thinking. Why would a guy like Bob dismiss this obvious problem? The obvious response was to find out whether he'd ever seen any of Bun' Ber E's music in the "stolen tracks" places. I bet he hasn't. Last time I looked, there was none in Morpheus or Grokster, though that was a while ago. So stolen music is irrelevant to artists like us, but the revenue from iTunes is quite beneficial.

Then it dawned on me: Bob doesn't care about the imprtance of these services to independent artists because he doesn't give a damn about independent artists. He's still trying to think of ways that the mass-market players can use the Internet to overcome all barriers to near-monopoly - including independents competing in the marketplace. To Bob and his ilk, having a cess-pool of struggling talent is an advantage, in that it provides a large source of acts from which they can cherry-pick and offer a hand up, thereby entrenching their industrial hegemony. Long live the King!

I am significantly saddened by this but not altogether surprised. This guy still thinks like a hegemon, albeit he is comparatively enlightened in his approach to the new environment - favouring the kind of business approaches that will work for larger and/or better funded acts.

And yet the quest for a sustainable approach to independent survival goes on, and that's my job.

Posted by Hughie at April 5, 2007 5:20 PM

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