Transcript

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>> Hey welcome, Jeff Rick here coming to you from the home studio. Happy Friday to you. Anyway, today I wanted to change up a little bit on the live look back and look back at a TED talk. Now, often I'm telling people about certain pieces of media and certain influencers that really influenced my life, influence how I think about things. And it's really, the first thing I want to talk about is the music industry. You know, everything is going through a huge digital transformation, right? It's all the buzz. And you know, the music industry is interesting because the music industry started on this digital transformation path a very very long time ago. And I've told anyone that will listen that if you don't already, you should listen to and you should subscribe to the Bob Lefsetz Letter, an old-school letter. You sign up on his WordPress site, He sends out tons, and then the guy writes more than anyone that I know.  It's amazing. I've been following for probably 15 years or so. He writes a lot about digital transformation in the music industry. There was so much there and I think it's a really great model to keep an eye on because as somebody said, they're kind of like the fruit fly of digital transformation and that they go through generations so so quickly. And so definitely subscribe to that. And if you think back to the day we used to get our records, you know from the local record store, then eventually Tower you know, kind of became a big national brand and knocked out a lot of the mom and pops. But, you know, we all love going to Tower and getting our records. And then I think a little known story is early Best Buy days when they were competing with Circuit City and and some of their primary competition. Actually used CDs as a loss leader to get people in the store. Best Buy hasn't sold CDs for years and years and years.

But that was kind of the beginning, I think of the transformation. It's an interesting conversation just in and of itself about what is your business and, you know, for Tower, CDs were their business. For Best Buy, they were selling washing machines and televisions and other things. So to have CDs as a loss leader to get people in the door effective strategy for them, tough for Tower and the independent record stores. But then this thing happened, Napster, Sean Fenning. And I don't know if you remember the first time you ever saw Napster and were able to actually go in and see everybody else's music on their computer and via you know kind of this bit torrent thing go in and grab their music and put it on your computer and listened to it for the first time. I still remember it. It was, it was absolutely magical to think that suddenly this huge library of all these MP3s are available to you, right.

But that was early days. And then of course the big commercial reaction to that was Apple iTunes, right? 99 cents, buy the music, put it on your new iPods. And, and it was, but it was still an ownership model and there were still more evolution to come. There was still more to change and right. What did it move to next? It moved to streaming. Pandora was very early on in the streaming a very different model, but Pandora, the problem with Pandora is everything was kind of like a radio station. You could pick a genre, you could pick a type of music that you wanted to follow but you couldn't go in and watch a, excuse me couldn't go in and listen to a song. I want to listen to a song right now and you couldn't do it. And then, you know, the next thing that happened these little guys, Spotify, and again, I I remember hearing early on about Spotify from Bob Lefsetz actually in the Lefsetz Letter about this new streaming service where you could actually go in and dictate specifically the song that I want to hear right now.

And it really changed everything and this again, because it's digital, right? That's why the oil thing is not a great example because now I can take my music everywhere and Spotify is running on my devices. I can play it in my car. I could play it on my phone. I could play it in a speaker when I'm out riding my bike or I can now it's even baked into all the smart TVs. So a very different way to think about music in a subscription model. The other thing I think that's really interesting is thinking about direct connection. This direct connection between the artist and the consumer, and it's fundamentally changing distribution now and I can go out and connect directly with the artist or is it consolidating distribution, right? There's this constant yin and yang of the internet. On one hand it's supposed to be this huge democratization that we've got all this access to all this great information and all this great activity.

On the other hand, it's getting more and more compressed within the people who are running the shops still working on my OBS chops. So I apologize for that. And Amanda really touches on this in her talk. And I think it's her, her main talks about basically value trade of connection with people. And she talks a pretty interesting story about kind of standing on street corners and literally trading a smile and a flower for a gift of of money and how that trained her to really start to see the intimacy of connection. And then she had a record and she was starting to be successful and she signed with a major record label. And then let's hear what happened with Amanda.

>> And meanwhile, my band is becoming bigger and bigger. We signed with a major label and our music is across between punk and cabaret. It's not for everybody, but well, maybe it's for you. We saw an, and there's all this hype leading up to our next record and it comes out and it sells about 25,000 copies in the first few weeks. And the label considers this a failure. And I was like twenty-five thousand. Isn't that a lot? They're like, nope, sales are going down. It's a failure. And they walk off.

>> Twenty-five thousand. So it was considered a failure. Now what's interesting was her reaction to that, right? Because most music artists are really excited to get their big, to get their big deal, right. But that's where the distribution is. And it's an old school model where the publishers and the labels had controlled all distribution. They had control for discovery by getting stuff to the DJs that would play on the radio. They had the power in terms of distribution for, for making and printing records and getting them out to the distribution. Getting them on end caps, all this kind of traditional stuff, but it's not a traditional world anymore especially in music. So let's listen to this next clip from Amanda of what happened next

>> Right at the same time I'm signing and hugging after a gig, And a guy comes up to me and hands me a $10 bill. And he says, I'm sorry, I burned your CD from a friend. But I, I read your blog. I know you hate your label. I just want you to have this money. And this starts happening all the time. I become the hat after my own gigs but I have to physically stand there and take the help from people. And unlike the guy in the opening band I've actually had a lot of practice standing there. Thank you. And this is the moment I decide I'm just going to give away my music for free online, whenever possible. So it's like Metallica over here Napster bad, Amanda Palmer over here.

And I'm going to encourage torrenting, downloading, sharing but I'm going to ask for help because I saw it work on the street. So I fought my way off my label and for my next projects with my new band, The Grand Theft Orchestra I turned to crowdfunding and I fell into those thousands of connections that I'd made and I asked my crowd to catch me. And the goal was a hundred thousand dollars. My fans backed me at nearly 1.2 million which was the biggest music crowd funding project to date. And you can see how many people it is. It's about 25,000 people. And the media asked, Amanda, the music business is tanking and you encourage piracy.

How do you make all these people pay for music? And the real answer is I didn't make them. I asked them and through the very act of asking people I'd connected with them. And when you connect with them, people want to help you.

>> So many lessons in that clip. First off, what is the number? What is 25,000? We'd say it all the time. Numbers without context mean nothing. 25,000 fans paying to see Amanda Palmer to give them their money. It was a big number for her. It wasn't a big number for the record company. What was their expectation? I don't know, but it is kind of ironic that it was the same 25,000 people that contributed to the Kickstarter campaign and for her to have this direct connection with their fans. If you do the quick math 1.2 million I think over 25,000 fans is about 48, 50 bucks per fan. So these people on average are giving her a lot of money to participate in her community, to listen to her music, to support her art. And I think it's a really interesting take on the change when distribution now can be eliminated.

And it's one of these kinds of fundamental things with the internet, that if you have a voice you should be able to build an audience because you're pulling from all the six or seven or eight billion, however many people in the world there are these days that are in some internet connected that will like what you put out. What is the role of distribution now? Right back in the day when I was at Mitsubishi there was a very clear kind of the things that the distribution did for you, right? They broke, they broke bulk for the factory. They got your goods out to the local markets. They were a conduit of information about their products you did training, your channel did training, they did installation, service. They managed the relationship with the company but the products, once the manufacturer shipped them, in my case, it was televisions, had no information as to exactly what was happening once those TVs left their warehouse or distribution center.

Now it's totally different. People are directly connected with their customers and the customers have lots of ways they can get information about the company. There's, you know, it's so funny. There's so many videos on new products on YouTube now where lots of different people will do a review on the product. And most of the information like when I bought this very nice Shur microphone did not come from Shur. But it came from a bunch of YouTubers who had gotten the microphone and and tested it and played with it and had opinions on it. So this direct connection between the artist or the company and their end consumer really begs some interesting questions about the role distribution and how that's going to evolve over time. But more importantly to think about this direct connection with your, with your audience. And now with things like Patreon it's also doing the money thing, right.

Is different where before the money had to pass through often an advertising vehicle to get back to the artists, you have the artist, they get paid. Then the promotional company, or the people putting on the show then go out and get advertising and other money. And so it's this pass through where everybody's taking a piece. Now you can go directly between the artist and the consumer, and there's this direct payment mechanism. A really different way of doing things, but much more community centric and much more engaging, really right? This direct engagement with your audience. I think it's pretty fascinating. Let's get this last clip here from Amanda.

>> It's kind of counter-intuitive for a lot of artists. They don't want to ask for things but it's not, it's not easy. It's not easy to ask. And a lot of artists have a problem with this. Asking makes you vulnerable.

>> Asking makes you vulnerable. It's twice this week I think vulnerability has come up in terms of the superpower. Vulnerability is not a weakness. Vulnerability is a way to connect with people to show them that you're human, because everybody has vulnerabilities. I just love this TED talk. I suggest that you go and listen to the whole thing start to finish. There's also a book, I have not read the book so I don't really have an opinion there. And also a shout out to TED for putting their content out. The TED site, and the YouTube sites had an interesting conversation with David Pogue many moons ago, I think 2014, where he specifically talked about TED and, you know putting TED talks out into the, into the wild so people could enjoy them. And this thing has 18 million views. I don't know how many people saw it live but it wasn't 18 million. And I don't know that 18 million people would pay to see the Amanda Palmer talk from a woman who has a punk cabaret band.

But I sure enjoyed it. I'm not even sure how I stumbled across it but it's one that I reference all the time because I think it's so powerful in outlining kind of the relative power of numbers, right is 25,000 a big number or small number. It depends who you ask, and what's the context. And then reinforcing this direct connection, that now you can have with your end customer. The channel is in a very different role than it used to be, whether that's music or whether that's music or any other product. And then finally this kind of direct connection and engagement and community and trust, a lot of conversation about trust. We didn't really talk about here but she has a really kind of intimate trusting relationship with her audience that she manifests in very real ways, couch surfing and crowd surfing and you'll see all kinds of crazy stuff.

So she trusts, she trusts her community and she tells them that she's going to trust them and see if they'll respond appropriately. And generally they do. So anyway, I hope you enjoyed this live look back at Amanda Palmer's, "The Art of Asking".