Cheapest Online Business Degree

(lighthearted music) - good afternoon or evening, and welcome to this our third edition of berklee online live, abiweekly interview series in which you the listeners get to ask

Cheapest Online Business Degree, our amazing guests the questions. i'm here to facilitate, or atleast do my best to facilitate and to get answers to what you wanna hear. upcoming on this show wewill be pleased to welcome

more amazing guests suchas the legendary bob ezrin, dweezil zappa, maril garvis, and ableton ceo of gerhard behles. i hope i'm saying that right, with many more guests tofollow and to be announced. i'm your host. i'm benji rogers, and i'm afather, recovering musician, a coffee drinker and frequent flier. additionally to that i'm a berklee alumni

and current teacher of the digital trendsand strategies course for berklee online school,which is an amazing course. what we're doing here isgoing to be part of it. i founded pledgemusic. i'm currently ceo of the dotblockchain music project, as well as a proud member or member of the future music coalition. we're not here to hear about me.

we're here to hear about my amazing guest. it's my great honor tointroduce mr. tim quirk. tim, since i despair ofhaving my biography read, tell us a little bit about who you are, what you do, and how wegot to be talking today. - all right, well youset a high bar there. i feel like as you were listingall your different things, like god what am i? i guess i'm a music fan,

i'm a musician, i'm a critic, i'm a technologist guy sort of by accident. my friends and i in highschool formed a band that basically playedclash covers in the 80s, and we forgot we were theonly people in our town who knew who the clash were, so we figured if people were gonna boo us, they should boo our own stuff,

so we started writing our own songs. that band was called- - [benji] wait, who were these people who were booing clash songs? - well they were booingour pathetic attempts emulate the clash. - [benji] okay, okay, all right. - they were booing us,not joe and company. we started writing our own songs.

that band was called too much glory. we soft released our first record in 1987, got picked up by an indiein san francisco in '88, made a record for them. that got picked up bywarner brothers giant, so we were touring and recording as professional rock musiciansfor the rest of the '80s and about half of the '90s. then as the band was winding down,

we never officially broke up, we just stopped playing really and sort of moved onto other things. i kinda fell into music journalism, and in the late '90s, youknow there was lots of stuff to write about happeningin the online world. i was gonna write a columnabout this new company called listen.com, which was basically the first music startup, thefirst dot-com that i'd seen

that made any sense tome and they were hiring. my daughter was just aboutto start kindergarten, and one of us, my wife or i had to go back to work full time. i sort of fell backwardsinto the dot-com world, joined listen.com. we eventually built and launched rhapsody, which was one of the first on demand music subscription services.

that went through variousweird corporate permeatations. we got acquired by real networks in 2003. we turned rhapsody into a joint venture with viacom mtv networks in 2007, and then spun it off again as an independent company in 2010, at which point i had become completely like the proselytizerthat music was no longer a discreet product thatyou bought and sold,

in little plastic units, and instead was becoming aservice where people would pay or hopefully pay, for accessto whatever they wanted whenever they wanted, wherever they were. it was also clear to me by 2010 that, that space was gonnacome down with the big boys. it was gonna be apple, and google, and maybe amazon, and maybe facebook. google at the time wasgetting into online music

so i went over there. i was one of the first peoplehired within the android team, and to help build whateventually became google play. my role there went beyond just music. it was head of global content programming, so i was responsible forbasically the merchandising of all the digital content at play, so apps, and games, andbooks, and magazines, and movies and tv shows, as well as music.

i was there 'til 2014. the main reason i leftwas that i was watching the four years i was there, one of my jobs was sitting in quarterly business reviews with all their digital content partners. the labels i had beenworking with forever, but now i was sitting inquarterly business reviews with book publishers,and movie and tv studios, and most importantlyapp and game developers.

the mobile game developers were making gobs and gobs of money. i'd been watching the music industry which i considered my industry just crater over you know 10 years, 11 years. at the same time the gaming industry was absolutely exploding. as far as i could see, wewere selling the same things, digital entertainment products.

the gaming companies had figured out how to make money doing that in a way that the music industry hadn't. i spent the time i was at google trying to figure outwhat do those guys know that we haven't figured out? i was egotistical enough tothink that i figured it out, so in 2014 i left. i teamed up with a goodfriend of our, brian calhoon,

the founder of a company called preform, which is basically building aplatform to make mobile apps for musicians for labels thatwill distribute music content. they could do any digital content. we're just starting with music, and we'll basically, i hate this word. am i allowed to curse on this, or do i have to watch my-- - keep it medium, on them.

- okay. i hate the word monetize. i sound like a douchebag when i say monetize, but i haven't found abetter word to replace it. basically free formats, tryto monetize music using. we're not gamifying music, we're just taking all the lessons of free to play mobile gaming, and how they actually make money,

and seeing what lessonsfrom them can be applied at the music space. - gotcha. - now i'm a tech startup guy. - awesome, and how's it feel, being a tech startup guy? - well i don't know about the tech part, but the startup part feels amazing. we were just talking about this

before we went live, you know. i think i've ruined myself. i don't think i can workfor anyone else ever again, because even when i screw up, you know something's going wrong, it feels much better when i'mthe idiot who made the mistake than when i'm responsible forsome other idiot's mistake. i don't know why that is, but it's a fairly profound feeling.

- definitely, so i want to goback to something you know. you've shared a lot there,which is extraordinary. i want to ask one question. what's your first memory of music? what's your earliestmemory that kind of like when you go back and likemusic was to me this? do you have a recollection on that? - yeah my earliest memory,my parents had a turntable, and they would have cocktail hour

when they both got home from work. we'd sit in the living room, and the let me pick the records. i would put records on the turntable, and you know, they had likeneil diamond and arbor. this was the '70s, andi would almost always pick a neil diamond or an arbor record, but i found that they sounded better when i put them on 45, than on 33,

so i would basically putmy parents records on and speed them up. that to me was like what music sounded, when music sounded the best. when punk cam along, wheni first listened to the, you know when the needledropped on the first track of the us version of the clashes debut. that to me sounded likewhat i'd been waiting for, what i'd been trying to get to

by playing arbor records too fast. - that's amazing, that's amazing. one of the things i was goingback through old articles. i remember there wasthere's a couple questions on this but you said somethingthat really affected me when i first read about it and you got hell for it. i think it was actually an fmc summit, where you basically said

you cannot devalue music, it's impossible. what i think was being missed was you were workingfor google at the time if memory serves. there was this perceptionthat the digital services which were paying out 70%,80% of their revenue sometimes to the rights holders were somehow that artists were getting screwed that it wasn't working for them.

what are your thoughts on that now? do you think that music has been devalued or or do you think accessingmusic is been devalued? what's the thought? - let me see if i canarticulate this less. it' a bit of a minefield here. the weirdest thing to me about my career that i just outlined was,you know i'm pretty sure i've been consistent throughout it.

i'm the same guy, all right, but things sound differentwhen the front guy from you know fairlysuccessful punk rock band says this thing, itresonates a lot differently than google executives says this thing. one can sound totally mundane and fine, and the other soundslike oh my god you know get the pitchforks, so iapproach this as a musician when i was in too much joy,

you know back before mp3s and everything i was happy when i went to a record store and saw our cd in the used bin, right? because i knew, i justhad this understanding that someone was way more likely to take a chance on me for $9.99 than they were for $18.99, and i wasn't gonna see any money from them buying either of those records

no the matter what, right? if they bought the recordand they liked the band they probably buy a ticketto the show hopefully. maybe i could sell them a t-shirt. more importantly i get them into my sphere and they become a fan and stickwith me for the long haul. so that's the way i'vealways approached it. in that fmc talk, thepoint i was trying to make is basically you know.

i ended up leavinggoogle to found a company based on the principles in that talk. when i was in the band everything we did was a commercial to getpeople to buy the album, you know back in the 80s and 90s. the music video on mtv was a commercial to get you to go buy the record. the concert, the show was a commercial to get you to buy the record.

every interview we did was a commercial i think when people areslowly sort of waking up to in this century is thatnow the record in a way is a commercial for the artist. it's a way to bring youinto the artist's universe. what i think has happenedwith digital distribution, it's not good or bad, it just is, right? in that fmc talk i wastrying to say wasn't, it is good that this is the way things are

and things were bad in the pastand now they are wonderful. what i was saying is things have changed and i didn't say this in the talk, but it was clear to me gaminghad figured out this change. i think what's happened is music industry is undergoing this transition that the gaming industry sortof embraced wholeheartedly, and the music industry hasbeen trying to push it away. you can't, you just have toaccept it and adapt to it.

what is is, is that iwatched when i was at play, the mobile gaming industry shifted. when i got there in 2010, there wasn't really suchthing as a free game. all the games were paid,and when i left in 2014 like 93%, 95% of thegames were free to play. i watched the entire industryin the space of two years do a complete 180 on their business model and start making more money as a result.

what they woke up to isthat in the 21st-century free doesn't mean promotion anymore. free means distribution. they literally give their stuff away and monetize after the fact and they recognize and accept, hey only single-digitpercentage of the people who access our content for free are ever gonna give us any money.

if we focus on the 3% rather than the 97% you can literally make $1 billion. kenny crusago made abillion dollars a year for at least two ifnot three years running and the crazy thing aboutthat is 97% of the people who installed that game nevergenerated a penny in revenue for the developer, and 70% of the people who installed that game and played it to the very last level.

the most engaged customersthey could possibly have never spent a penny. basically 3% of everyone who installed it, and 30% of everybodywho played it to the end generated a billion dollars a year. the music industry sortof has this backward, so we focus on thepeople who aren't paying, rather than the ones who are paying. going back to that quotethat you were talking about

that's the way i always felt about it. what i was trying tosay is don't feel like-- songs are not worth, are not inherently worth 99 cents right, or $1.29. albums are not inherentlyworth $10 or $12. they're worth differentthings to different people at different times in a different context. what digital distributiongives us is this new sort of amazing ability to say,

oh you want to give me morethan $1 for for my music. by all means do so. you know lots of differentthings in my career sort of led to this understanding. one of them goes wayback to 2001, 2002, 2003. jay, the guitar player had too much yoy, and i had a side projectcalled wonder lick, which mostly just a studio thing. we were doing it for fun not for money.

we were basically is like the first time i launched too muchjoy website it was like oh i don't just want thisto be about the past. there should be something new here, so jay and i got togetherand recorded the song and threw it up on thewebsite as a free mp3, and sort of as an afterthought, we thought like oh, here'sa little paypal tip jar. if you want to keep this recording,

you know donate some money to the cause. we made more money in 24 hours giving that song away for free than i ever had as a warnerbrothers recording artist. it sounds like amazing. all that means is i made zero dollars as a warner brothers recording artist. i made lots of moneypublishing as a composer literally made zero penniesin royalties from warner.

as we made our firstdollar i made more money, but there was enough forus to record basically, you know we put up a song amonth and at the end of the year we had a full album and asingle label in san francisco came to us and said, heywe want to put this out. we're like nah those are rough mixes. we need like five grandto mix and master it, and so we came up withthis idea on the website. we said, hey this isgoing to become record

but it's not done yet would you like to preorder it? we figured there were acouple thousand people who would preorder it, and that would get usthe five grand we needed. we said, you know if you preorder it, you can name your own price. you can pay literally anything. here's an idea, anyonewho winds up paying more

than whatever the averagedonation turns out to be we'll put your name in the liner notes. the amazing thing by doing that is nobody paid below cost. the lowest anyone donated was $5. some people gave us $500 right. the average, if i averagedit out across all the people who preordered the album,the average was 30 bucks. i never new in a millionyears would've had

the chutzpah to say myrecord is worth $30, right? the thing is, it's not worth $30. to most people in the universe my record is worth zero dollars,or less than zero dollars. i would have to pay them to listen to it, but there was some set ofpeople who cared enough about me and my past and the potential future, that just to be a part of it, they wanted to give me more

than i would've thought to charge them. the whole notion of the free-form, what was in that futuremusic talk was just saying there's a pyramid, right? the scary thing about digital distribution and music wants to be free and everything, is that everybody focuseson the bottom of the pyramid where basically yourmusic is worth nothing to the majority people on the planet.

for them the first thing you want to do is get them to listen to it. you will actually pay to make that happen. you're not asking them for money, you're asking them for theirtime, for their attention. then the next level up is youknow there's fewer people, but the subset of all thosepeople on the first tier who will actually giveyou little bit of money. maybe they'll play your song on spotify.

maybe they'll buy a single. then there's a subsetof them on the next tier who they really like you andthey'll give you more money. maybe they'll spend$10 to get your record. then the tier above them,you know there's fewer, there's the subset of themthat will come to every show. then the top of the tearis you know the superfans. the thing about thatpyramid is on every tier there's fewer people butmore money per person.

what mobile gaming is expert at is pushing people up that pyramid, basically identifying the people who will spend more and more money and giving them ways to do so, that don't feel like ripping them off. i think you know with this transition the music industry is going through. and i'll stop this novel of an answer.

- [benji] that's all good, it's all good. - is you know in the 20thcentury we were focused on you know you measured successby how many units you sold. that metric doesn't apply anymore now the metric for success is really average revenue per user and growing that over time. global gaming has figured that out. the music industry hasn't,and so what i've focused

you know the last coupleof years of my life on is basically building a platform, a tool set that will give musicians, and labels, and managersthe tools they need in order to basically maximize their average revenue per user, and figure out what thatis and how to make it grow. - definitely, so i want to spin back on aa couple thingsthat you said in there.

i mean so ryan lessee, who iwas interviewing last week, on this, he said the same thing. we're selling units any more. you have to get that sideof things out of your head. as a question she posted from nora terrell who put this in, youknow about this kind of "why does google play's tim quirk "show such disdain for musicians?" i think that's not a fair portrayal nora,

to your question. i think tim covered that,but why did musicians get it so wrong? because you know i begin every talk with when it comes to technologythe music industry has finished just ahead of the amish. that's stan corand's quote right? why do you think musiciansgot that so wrong and are you encouragedby what you're seeing

in terms of musicians saying well hang on a minute,there is something there? are you kind of like whyare they stuck in the past? what is it? why do you think that itwas perceived that way at the time, and are you seeing sort of an inflection point now where it's moving towards what you what you originally thought then?

- honestly, i think weretrenched a little bit in the wrong direction. i think that was more optimism in the otts than there is in the teens. i don't have a simple answerfor why musicians get-- i'm gonna answer thisquestion sort of sideways. i was at an earlierfuture music symposium. i mean i went almost every year, those things were amazing.

i always loved to participate. there was one early on andthis was like 2002 maybe, 2003, where there's this massivedebate about sampling. sandy pearlman was there, and he was like just raging against it,and people in the audience were just raging against it. to me, like sampling is just like, it's like trying to copyrightthe color blue right? if someone made a soundand you take that sound

and transform that sound,and make it something new. that to me, it's just like it's a tool. like you know musicians work with sounds. i've never understood this notion that sampling is stealing, right? if you look at old records like say, paul's boutique, or all the first couple of public enemy records, they were creating amazing new works

just taking all these things. it was like walking down a city street, and you hear like asaxophone out of this window and some thumping bassout of the car going by. it just felt alive, right? part of the fun was saying like, oh that's the theme song froma cartoon i used to watch on saturday mornings. it was just all these cultural references

being sprinkled throughout songs, and somehow, and afterthe biz markie decision. you know, this judgeliterally quoted the bible saying, "thou shalt not steal." this terrible horrible decision that basically endedsampling as we'd know it in the late '80s, early '90s. ever since then thesampling that you get is like oh it's so expensiveto license a sample.

now people just take thehook from an old song and make it the hook of the new song. basically, accidentally,they created the world they were afraid of. this sounds like a tangent, but i'm gonna try to tie it back. at this future music policy summit, i was talking to jennytoomee, who at the time was the executive director of the fmc.

i was like, "why iseverybody so up in arms "about this thing?" she goes, "oh, well i thinkwhen you're a musician "you just feel that you have so little bit "that is your own. "you're taken advantage ofby promoters, by publishers, "by labels, by fans, you know, "and it's so hard to make any money. "the feeling is that allyou have is your music.

"as soon as you feel even the one thing "that you personallycontrol slipping away, "you know there's this sort of knee-jerk "reactionary reactions to it." i think that's part of why musicians, and i won't even saymusicians get it wrong. i would just say there are so many people that take advantage of musiciansin so many different ways, it's entirely appropriate to be skeptical

of some douche bag googleexecutive standing up there saying don't fantasize the past, right? that's why i think i got that headline. i mean frankly i got the headline because it's a click baby headline and it's a it's a lazy way of thinking and a lazy way of framing it, but it's gonna make bunch ofpeople read the article, right? i said what what soundedlike a terrible thing

coming from a google executive. maybe coming from a musician it sounds a little bitmore nuanced, hopefully. also what happened is thearticle that the guardian article was responding to wasin digital music news. they published the first half of my talk where i basically said,"hey this is the past. "let's talk about the future." they didn't publish thesecond half of the talk

when i went on a greatlength about all the ways at google play i wasmaking money for musicians using the lessons fromfree to play mobile gaming. they just left all of that out. anyway i think there's a liethat's been told to musicians for years and years and years. it's this sort of romantic notion that you're the genius. you can't be bothered withbusiness and other stuff,

there's all these other people that will take care of that for you. they'll just put youin this cloistered room where you just commune with your mews. you know anything elseis selling yourself, and don't worry about that. there are so many peoplewho want to make music that you know, you're gonna get the lowest possible marketrate for your stuff,

no matter what. at least in the oldmodel you were going to. there's this entire networkof middlemen cropping up just figuring out how toget how to get their cut. - [benji] a little slicehere and there, yeah. and because they areentirely focused on business and they've sold all the creatives a lie that touching businessmakes you uncreative, so just go off and be creative,

and let us take care ofall of this stuff for you. that to me is the most pernicious thing, and that existed beforenapster, before mp3s, before an internet, right? that framework was was always there so i think it's so hardto make money making music anything that suggests like, oh you know these fewways that you knew of that you relied on in the past

now even they're out the window. that's just an inherently scary thing. - sure, okay software we're gonna switch to the inspiration/artisticquestions here. i just gotta know whatthe answer to this one is. this question from jeremy miller, "would you rather fightone horse sized duck "or 100 duck sized horses?" - that's a famous question

i always go for the duck sized horses just because i feel likei could stomp on them. - excellent. okay next question is, from eric zawanda. "i liked your series of tweets "where you discussed the first tracks "on the talking heads studio albums "and how it reflectedtheir career as a band. "how do you think the firsttracks from your releases

"reflects your story as an artist?" - oh wow, i'd have to i haveto remember what they are. - [benji] that much inspiration (laughs). - yeah, okay, i think, let' see i think you would hear us sort of, we start out basically justsounding like our heroes, and you know very poorly. like a mimeograph of amimeograph of a mimeograph. then we gradually startto figure out who we are.

then it's weird though,because on our record three, that's when we got $150,000from warner brothers to sort of make the record of our dreams. then we still sound like this garage band but like an overproduced, andi use that not as a jordo, we wanted to be overproduced. we kept telling our our producer paul fox to do all the, like get a glockenspiel. he's like, "i don't thinkthis song needs that."

we're like, "we need afreaking glockenspiel." - [benji] we can have oneso what could go wrong? (benji laughs) - then by the end, you hearus retrenching a little bit. i think early on we used to tell people we were the clash witha sense of humor, right? we got a bit of areputation as a novelty act, or a joke band, because thejokes were the only thing that we were really good at initially.

there was pathos andemotion and other stuff beyond just sarcasm in there. we just weren't any good atrevealing it until the end. my take on it as themusician, not as a critic. if i was a critic i'd beprobably a lot more dismissive of some of my stuff. by the end of our our career we got better at highlighting what was thedifferent parts of the song that were appropriateat the different times.

i think we got tighter. i would hope we gottighter and more concise and more ourselves from recordone to record six, i think. - yeah, yeah. when you think about this you know, do you do you approach yourbusiness side of things as a musician or do youapproach it as a technologist? do you have both parts of your brain, because there's been a few questions

that kinda touch on this but you know so after too much storyended from pat healy did you know for certain you wanted to stay in the music business? were you consideringoptions in other fields? sort of where does that liebetween the two for you? - yeah, so i would say it's funny 'cause in the band i wasalways the guy like insisting we get a receipt fromthe tollbooth operator

because we need it to write off expenses when we did our tax return. in business i was always looked at at least by the people above me, i was the weird creative dude, right? what success i've had inthe in the corporate world i'm pretty sure comes from my ability to explain the value ofcreative work to bean counters. i can sort of trade hats.

it makes me suspicious in both fields because when i'm hanging outwith a bunch of musicians i'm this business geek, and when i'm hangingout with a bunch of svps i'm this this weirdo. - can i ask a question? when you're being with musician hat, you're being creative. when you're in businessit's often not thought of

as creative, but my experience is i'm painting on a different canvas. i mean i made fivealbums to work for years. i never got signed to warner brothers, but i'm owed money from two labels but we ended for creative reasons. is the creation offree-form a different canvas that you're painting on? do you see it that way, orare they pretty different?

- oh absolutely. i'm talking the odds first, i was telling people i was as proud of rhapsody and what rhapsody was, before there was a spotify, before anyone else was doing this, as i am of any record i ever made. in fact i told you at one point rhapsody became a jointventure with viacom,

so we sort of mergedcontact programming teams, editorial teams, i found we'd had these two completely different approaches, because in viacom, they tookall of their editorial people and they literally just saidgo be creative geniuses, and all executives willfigure out how to make money from your creativity. whereas at rhapsody justbecause it was a dot com, we'd gone through all these downturns.

i'd had to figure out how to save jobs, like i'd become an expert i think at explaining how to monetizeeditorial work, basically. there was this suspicionfrom new york team, the viacom team, mtv'ssubscription service had been called urge. i think they thought iwas the spreadsheet guy who was more on the on the business side than the creative side.

i remember having this sortof come to jesus meeting with sort the senior team from new york and the senior team from san francisco on the editorial side. i had this moment wherei was explaining to them, i was like, "look, youknow we have this blog "it's this deep editorial blog "but in order for us tokeep paying these people "we have to demonstrate to our superiors

"that it actually makes money." i understand that my bosshad actually told me, "stop talking to the newyork team about spreadsheets, "and returns, and cost-benefit. "you're scaring them." i was like, "look i know rightnow i gotten this reputation as spreadsheet guy but let me explain. when i was in too much joy, we were doing cost benefit analysis all the time.

we just didn't think of it that way. when we got that $150,000from warner brothers, right, to make the record of our dreams there was this song youwanted a string section on. a string section would have cost $25,000, which was you know ahuge chunk of the budget. we had to decide can we get away with just mimicking it on synthesizers? is that a better use of $25,000to realize artistic vision?

you're making these decisions as an artist just as you're being creativeas a business person. - question from actuallya former student of mine named amishar, and heis a brilliant student and a super cool guy. his question is this, "isthe future of the album "really an app? "i would love to hear moreabout the vision and work "it free-formed of.

"in market with too many apps, "how is the concept of theapp album going to play out "and where might it lead us?" - i would say it is notexclusively album as an app. in fact i think album as anapp is just a stepping stone. what we're doing atfree-form with album apps it's not instead ofputting music on spotify or releasing it physically,it's in addition to. when you make your album an app,

it could be a much richer,deeper, more engaging experience than it used to be. it drives me crazy youknow in this environment where there are more peoplelistening to more music than ever before, and yetthey're engaging with it in a much more shallowway than we used to. at least when i was growing up. you know when i got a new record i would hunker down on the couch

and i would just inhale everythingthat the artist gave me. i'd drop the needle on the vinyl. i'd lay down, i'd read every lyric if there was a lyric sheet,i'd read every credit. i'd study the album cover. i'd look for secretmessages in the dead space between the end of thelast track and the labels we've lost all that now. - [benji] through the spirals (laughs)?

- you know now records are literally just disembodied audiofiles in a square shape. that's depressing, andartists are still creating all this other contentthat goes around it. they're still doing packaging just nobody's looking at the packaging. you can add back in all thatcontext you used to get. you can have credits. you can have lyrics.

you can have photos. you know all the stuff you used to have can also have stuff that wasn'tpossible in the old days. you can have videos. you can have virtual reality experiences. you can have directengagement with the artist. you know nobody's gonna want to have, i have just off to the right there i have like still 1,000vinyl lps and more cds.

nobody's gonna want thatmany apps on their phone. what we're trying todo is create a platform that lets you take all this content that's being createdanyway and just house it in a single centralized location. ultimately we want to get toa single freeform library app, where it would functionlike the amazon kindle app on my phone, where it's asingle icon on my handset, i click it, it shows me the shelves.

i've got like 40 books thati've gotten from amazon, but it also gives me accessto hundreds of thousands more. i just pull down the onei want to interact with at any given time to my handset. we started with individual apps just because it's a lot easierto get people to say like oh hey, i'm listening togez's new album for free than it is to say come getthis thing you never heard of called free-form that happensto have gez's new album.

ultimately we want them. you know this is justa way of centralizing all this content, but itstill exists for the album and putting it in a single space, and you can imagine all that stuff being revealed withinspotify or apple music just as easily as it is within these apps. or that nobody wasbuilding and said screw it. we gotta build it ourselves.

- yeah so this is a quote from you and i think this is the 2014. "i would trade in a heartbeat the ability "to start my band today versusstarting my band in 1987. "i think the opportunityis vastly superior." we still we still on track with that? you still feel that way? - oh absolutely, and i wasin a particular type of band.

we were a club playing you know left of the dial, sarcastic punk pop band. we weren't going for the golden ring. we didn't want to betaylor swift or madonna. we wouldn't have minded you know. i mean they had a nice little trajectory, sounding a lot like too muchjoy a couple years later, but that wasn't the goal. i've said this before, soi'm kind of repeating myself

but what little career we hadwas based to a large extent on the fact that we got drunkwith our fans after the shows. that formed a bond that made them literally charter airplanesto follow us around when we weren't coming to their town. that gave me the ability to have to name your own pricecampaign for wonder link, my goofy little sideproject, and the ability to virtually get drunk with your fans

on an ongoing basis given technology. it's just massive. things that i would be giving up for that, i would not i would not get a quarter million dollarpublishing advance. i recognize that. we wouldn't have been given$150,000 to make serial killers. i would happily trade those things for a slower progression.

i think i would have had alonger career as a musician and ultimately lucrative, but you know wouldn't have the massiveinjections of cash every three years that we had in the early part of our career. - so this is a question from nico novey. "i'm recording and i'm with my band. "i want to know ifreleasing the full album "is worth it, or should wereleased each song at a time

"with the video clip?" now to preface this i getasked this this question probably five times a week probably 10 times wheni was at pledgemusic because we focused on aunitive of kind of delivery, but we come in backwards for that. we have the content and and kind of been throughout the campaign. with digital transistor strategies course,

we have a lot of talkaround this concept of like the drip feed of contentversus the kind of it's about that, to which your point the point you made earlier, we're not selling units anymore so i would you advise nico novey, if i'm saying that right nico. - i would say there's not a single answer for every artist. are the reason.

i don't want to make thisa commercial for freeform, but one of the reasonswe named it freeform is we considered it a blankcanvas that people should use to express their own unique vision. what i saw happen at google when i saw the mobile gaming industry basically do that 180on the business model. you know it basicallystarted with the angry birds. rovio was doing fine gettingpeople to buy that on ios

and they could not get android customers to purchase the game, so sort of like they threw up their hands, they're like yeah we'lltry a free version. before you knew it thatversion was making more money than the iso version, thanthe paid version was anyway. as soon as you had that allthese different game developers basically started imitating that and all innovating aroundthe edges of that idea.

we want to do the same thing right? like the idea is for the freeform app, the app is free. you're not charging people for your album but what free means it'sup to the artist to define. for most people it meansyou can play every track on the album once per day. then they lock, and once they're locked you have to take some action to unlock it.

that action can be you knowclicking the buy button, but most people do that. we're looking for actionsthat customers can take that don't necessarily cost them any money but still generate revenue for the artist. again this is just what mobile games do. you could buy a lollipop hammer for $1.99, in candy crush saga, oryou can watch a commercial until you get enough credits

to acquire the lollipop hammer. either way whether you'respending money or not the content owner is getting paid. the thing is the differentcombination of content and offers to unlockthe content that work, we know they're gonnabe different in hip-hop than they are in country,than they are in metal. generally speaking whetheryou start with a single hold that you the promote withvarious pieces of content

you know one-by-one after the fact or whether you start with theindividual pieces of content that get combined into a whole at the end. you know it's six of one,half a dozen of the other. the fact is that whicheverway you go about it you can't just release itand then wait for the world to come to you. you have to be in aconstant mode of coming up with new ways of callingpeople's attention to this.

- got ya. actually this is leading to aquestion is was gonna to ask. this is from don tony mason. his question is, "360sget a bad rap, why?" as i'm thinking to 360deals, and my question to you was gonna be, what wasit like to be signed to a major label inthat for so many artists it's their ultimate goal still. if you had someone saying to you

hey i've been offered adeal for a bunch of money to 360 with warner brothers and they're gonna make me a priority and all of the things that happen. i get this all the timehonestly like this. do you look the artist in the eye and say yes that's the right move for you? no it's not. does it depend on the genre?

what's your thought? - i will give you the answerthat i gave an actual musician who asked me this question. i think it was either in 1999 for 2000. the latest it wouldpossibly been was 2001. i won't name the band, because i don't havethe person's permission, but it was a band thatended up on a major label, had some small level of success,

although they are no longer extant. the guy, i think he was theguitar player in the band you know was working not as a temp, i think he had a full-timejob at listen.com, but you know likebasically doing data entry. he was asking me, he said like, "hey, you know shouldshould i take this deal?" the answer i gave them was, it depends on what you want.

if you want to be madonna, if you want to be a global superstar, then yes take the deal because that is the only path to that. at least it was in 1999 and 2000. if you want to make a living making music and if you want to stillbe doing in this band 20 years from now, do not take the deal. that was my advice in 1999.

it's my advice today. it's not that labels are bad or terrible, it's just that you know whentoo much joy signed our deal, it felt like they were anecessity to get our records out of mom and pop storesand to get more distribution. at that at that time the labels had a lock on sort of global distribution. now anybody with a goodmicrophone an internet connection and a laptop has a globaldistribution network

at their fingertip, solabels are an option, not a necessity. you know i'd be veryleery of the 360 deal. - yeah, and can you justgive us a reason why? that was obviously thegentleman's question. what about the 360 is kind of like, i mean i feel horrific aboutthem for this sort of-- - yeah, he could wantthis what i said before in the old days everythingwe did was a commercial

to get people to buy the album. now the album is acommercial for the artist, so the idea of a 360 deal is oh, it's the label sayingwe're gonna make you famous and once we make you famous, therefore we deserve apiece of your merchandising a piece of your touring,a piece of you know any sponsorship deal you get, because we are the oneswho have made you famous,

and my response-- - do you think that labelscan make someone famous, or do you think-- - [tim] no. - - [benji] good answer (laughs). - no, and the correct response to that if you were an artist whois confident in your work is no, my freaking musicmade me famous, right? you got my work in front of people

but you can't have taken a potato and made a potato famous. otherwise it would be an all potato world. no, 360 deals are horrendous. they are sort of like the nuclear weapon of disease label thinking. saying like oh, you justgoing to be a creative artist and will take care of all the business including getting all themoney that ever accrues to you.

even the old way of doing things, a major label deal is horrifying. you know i assume todaypeople know how they work in a way that wasn't necessarilyobvious in 1988, 1989. - [benji] you would be surprised. you would be surprised, yeah. - let me just outlinethe the insanity of it because it really is nuts. the label advances youmoney to go make a product

that they own in perpetuity, so in my case let'sjust say we got $100,000 to make this record. you don't get any moneyfrom sales of that record until the $100,000 is paid back. so far, so reasonable, that makes sense. here's the catch, the$100,000 isn't paid out out of the gross sales price of the album, it's paid out, out of yourshare of the royalties.

if the album is beingwholesaled say for $10 and i'm just using even numbers just to make the math simple. if the album is being wholesaled for $8, and your share of thatis maybe like for $10, and your share of that is maybe $1. as soon as the labelhas sold 10,000 units, they have recouped the$100,000 that they gave you to make the product, thatthey now own in perpetuity.

your royalty statement saysyou still owe them $90,000 so you have to sell 100,000 albums before you have paid back the $100,000 they advanced you, at which point the label has grossed $1 million. at that point you start getting $1 for every one of thoserecords that are sold. yet, the labels, now you've paid back the money they advanced you.

the label still ownsthe work for eternity, so they have basically paid you to create a product for them and then charged you for the privilege. it's insane. - yep, yep, and i think one of the things that always shocked me was that when the 360 deals came in, let's say that you did breakthrough.

you were able to recoup. you're one of the eight artistson the earth that ever has, right, because that was the trick was there was lots of waysthat you wouldn't recoup. suddenly what you're sitting there is, let's say that you makeyour first check of $200,000 and you got an invoicewhich is like oh by the way now you need to give us backa bunch for your publishing, your tour, your merchant,and everything else

that you've done. i'm with you there, so-- (benji and tim drown out each other) go ahead, yes please. - let me just extend this a little bit. in retrospect it was goofy to me when i had that warnerbrothers logo on my album back in 1989. i felt like i was like i'd made it,

because i bought the lies. like, oh that seal meanslike i am different than these other musicians because these people havenow put their mark on me. i signed this ridiculousdeal in retrospect in order to get that, andi thought i was going in with my eyes wide open. like i recognized i wasn't going to make a penny inroyalties from the record.

but i was like hey, we hearthese sounds in our heads. we can't afford to get them on tape. this will help us do thatand we love playing live and that's how we'llmake our money anyway, if we sell a lot of tickets. that was the plan, didn'tquite work out that way. the crazy thing is i was happy to sign the warner brothers deal when anheuser-busch came to usand wanted us to do a jingle,

a radio jingle for thecrappy, crappy beer. i almost quit the band because i got outvoted three to one that we would do the deal. to me this was a horrifying sellout. it was against all ourpunk rock principles. we never should've done it, and yet the thing is i'm glad we did that because anheuser-busch theypaid us to make the ad,

and every time the adran, we got residuals. we got so much money from the residuals that we finally qualifiedfor health insurance through aftra, the singers union. i finally qualified for healthinsurance through aftra, which i hadn't through anything i'd done as a recording artist on warner brothers. that insurance basicallygave my wife and i the ability to get pregnantand have our daughter.

my daughter literally wouldnot exist on this earth if i hadn't done that budweiser ad. the crazy thing is signing warner brothers felt like making it, doing a budweiser ad felt like selling out, andyet the anheuser-busch deal was a much better deal. they'd made us money. all they wanted was to stand near us put their beer next to us

so hopefully some of our"coolness" would rub off on it. they paid us for the privilege and they didn't say like,oh, you have to pay us back for all this money we spent making this ad that we own forever. it was a much better deal. - a question on that becausei'm pretty passionate about that this this area of things. i'm always concerned about the way

that artists tell her stories, and that was a rash of bands, and i know a rash of artists right now who are like i have toget my first brand play, that's how i'm gonna get made. it becomes in the best case scenario it works with an ipod commercial. in the worst case scenarioit's a shoe company and i've spoken to multiple managers

from the katy perrylevel down to the indie and a lot of them havereported very mixed results. my concern was always, and youknow this better than anybody is the superfans i think of the ones that you have to cultivate. if you come at them with abrand that they don't like do you think there's a danger there? what's your thought on the branding play? obviously in your caseit's got the positivity

of bringing a human thatyou love into the world, but the the second face of that is, is that what was the cost do you think? - well the cost, i mean italmost broke up the band. i still to this day, i nevertouch my share of the money. i literally donate it the aclu foundation. he was blood money. i didn't want it. it was either that or buy a1,000 cases of molson golden,

the beer i actually drank at the time. my apartment was small and itwouldn't have fit them all. again, i'm gonna soundlike a broken record but there is not a singleanswer for everybody, right? there's different answersfor different people. - just let me as you, because the specific i want to get to is since you seem to feeland i think you're right which is the majority of your work

is going to be subsidizedor funded by the superfan. do you think the brandingcan negatively affect the superfan connection? therefore you have to be careful. do you do it or do you think it's just no, they'll put up with it. they'll understand youthat just need the money? - it absolutely can, and this is where i was going with that.

there's different answers,like different products are gonna work for oneband and not for another. you know there's certain folks like if neil young were to do it, like bob dillon did a frickinvictoria's secret commercial. that's so weird and so perverse like i don't think he losta single fan from that. you know whereas if neil youngwere to do the same thing, oh my god he such a hypocrite.

it's very easy whenyou're neil young to say i'm not sponsored by anybody, because you don't needto be anymore, right? i remember when i hearda snippet of a luna song in a calvin klein perfume ad and i was happy because i felt like luna was getting more out of the transaction than calvin klein were. for me and i wrote a long paper about this

that i presented at a pop conference once. it's actually on my website. maybe i'll tweet the link out afterwards. i came up with a sort of calculus which is i look at it like a math problem, right. you have to look at thepotential sponsorship and say okay who is coming out ahead in this? is it the brand or is it the band? if the brand is coming out ahead

don't do the deal. if the band is comingout ahead, do the deal. the impact that this particular brand is going to have on your superfans is one of the inputs into that equation. - yeah, and in your experience do most artists understand the difference between a superfan and a casual fan?

like are they thinking along those lines and when you when you think about freeform and the types of apps thatyou're helping facilitate here do you have a say in it? is it kind of you knowlet them roll with it or what's you're thinking on that? - i mean we try toadvise on best practices, but again the company's called freeform. it's your vision, you do what you want.

i don't think peopledo have a sense of it. i mean, i think theyhave an intuitive sense. if you're the type ofact that performs live, you know when you play live there are people at the front and there are people atthe back sort of talking. your job as a performer is to get people to stop in the back, stop talking and just starting paying attention.

then hopefully to movecloser to the stage. everybody, every performingmusician has a thing where you know there'sa magical force field at the front of the stage that people don't want to get too close. you learn early on, like youhave to break through that. you have to get people to want to be at the foot of the stage, and you want as many of them as possible.

when i say arpu, that soundslike an mba technologist talk. it's really just, it means superfan. average revenue per user, increasing average revenue per user means turning people who havenever heard of you into first you know casual making them aware of you. turning the people whonow know that you exist into casual fans and then turning as many of those casual fansas possible into superfans.

that's what increasingaverage revenue per user really means. - [benji] gotcha. - another way of looking at it is it means getting the people that were talking about back of the club to shut the hell up and cometo the front of the stage, and start slam dancing. - you've led me beautifully.

i'm gonna quote you again,'cause you are so quotable. "capturing peoples attentionand holding onto it "is the fundamental challengefor artists and labels "and their managers in the 21st-century." i just finished reading thebook on attention harvesting, you know the tim wu book, i think it is. it's a remarkable book, socapturing people's attention and holding it is the fundamentalchallenge for artists. do you still think that's true?

- oh absolutely, and can ishare an illustrative anecdote that's hilarious? - [benji] yeah, please, go for it. - i was at a conferencein norway of all places with a bunch of people you know talking aboutmusic and technology and trying to make labelsand technology companies not hate each other so much. bertis downs who had workedwith r.e.m. for years,

and years, and years was one of the people at this conference. he and i had a flight outof norway to amsterdam at roughly the same time, so we were gonna share acab from the conference. we had to leave a little bit early, and so we met and wewalked outside the school where the conference was being held. he turns to me and he goes,"oh i hope you don't mind

"but instead of calling a cab "i have an r.e.m. fanwho's is picking us up?" i was like really, and tell me the story. he's like oh this guy was gonna be you know he saw on facebook that i was going to be in norway, and he told me he wasr.e.m.'s number one fan, so i actually had drinkswith him last night. i don't know if he's their number one fan,

but he's definitely theirnumber one fan in norway. when he heard i was going to the airport, he offered to drive us. i mean it's like, "is that okay?" i'm like, "yeah, sure, it's fine." he goes, "you know we'll either get "to the airport for free,or we'll be ax murdered." the guy starts drivingus to the norway airport. he asked us what time our flight is,

and we tell him. he goes, "oh great, you have time then." he pulls off the highway at this exit. he go "i have to take you to my house." we're looking, we're in thebackseat of this guys car, and we're looking at eachother like oh my god, we're being taken to some farm in norway where we're gonna be dismembered. he pulls up in front of his house.

he goes, "come, come, come." we get out of the car and wefollow him into the house, and he literally opensthe door to his basement, and he goes, "it's down here." bertis and i look at each other. we're like do we want to gointo this maniac's basement? i don't know. so we go down, and finally we're like he's not really going to dismember us.

we down into his basement, and he's got like this shrine to r.e.m. that he just wants to show us. he just want to show us allthe r.e.m. paraphernalia that he's collected over the years. he's got five lp copies or wreckin. he's like, "see, do yousee the difference?" i'm like, "i don't." he goes, "the font is differenton this one from this one.

bertis is like, "even i didn't know that." finally you know at a certain point we started clearing ourthroat and stared going, "well we better begetting back on the road." he's like, "okay, okay, i willtake you to the airport now." we get back in the car, hetakes us to the airport. we get out and he drives away. bertis downturns and looks at me and goes, "well it really is anattention-based economy."

he goes, "the ride was not free." even more attention for the ride. - [benji] ancient merchants. - yeah, he had such a strongconnection with the band, and he wanted to sharethe depth of his love with a guy who you know he knew the band, and just driving him tothe airport wasn't enough. he had to see the collection. it was just, i'll never get over that.

- if the music industry had its way, it would send it straightto a streaming platform where he could pay amaximum of $9.99 a month. a couple more things before we can end. these are the same questions, but like, so what's harder businessor music business? - oh music business, music business. you know as a startup guyin the music business, you know

there's all the possible capital that you can raise in the world, and then there's thecapital that you can raise for a music project. there are vcs who usedto fund music companies who just don't anymore. i can't tell you howmany how many pictures i never got to give, justbecause the soon as an intro would be made to somebodywho might potentially

want to invest in the company. as soon as they heard it was music, they would say things. i always got very similar responses, which was sorry, we don't do that anymore. too many irrational actors, and that that phrase toomany irrational actors has just stuck with me, because that defines the music business.

- actually i want toask one more question, because this just came in from aron mayor. "is there still a viablemusical middle-class?" - oh absolutely, i mean goingback to that other quote, when i said i would trade in a heartbeat you know starting my band today from back then. absolutely there's a viablemusical middle class. i mean i'm trying, in fact i will again,

i don't want to makethis freeform commercial but when i did the financialforecasting for the company that i had to presentto potential investors what i explained was thisis not a superstar business. we need a couple of platform artists to demonstrate that themodel actually works. it's not a long tail business. we're building an open platform. we want anybody to be able to use it.

we don't lose money on long tail artists, but they don't make enough money for that to sustain the company. this company is based on the fact, it's based on the wilcos of the world. if you can get 50,000installs of this app. if you're someone that hasfewer than a million fans but more than 10,000 fans. if i can get 3,000 wilco'son the freeform platform,

i have a sustainable business. i'm literally putting my money, i'm metaphorically puttingmoney where my mouth is in that i am building a business based on the assumption that not only is there a middle-class,is there a possibility for there to be a thrivingmiddle call of musicians? my platform can enable that and that i will benefit as a result.

then we'll seek the world book. - awesome, can you go onfor next minute or two? is that cool? quick question, so thisone from mike king, who is one of the berklee team. "where you focus most ofyour efforts right now? "is it in the platform? "is it on partnerships? "is it marketing?"

i'm gonna hazard a guess thatit's probably all of them. - it's all of them. i mean you know one of the funny things i learned at google wasthat it doesn't matter whether you're a five personstartup or your google, right. there are always morethings that you want to do than that you can do. the hardest thing forany business at any level whether you're an entrepreneurwho's all by yourself

or whether you're part of this huge multinational conglomerate. the hardest thing to do in business is to pick the things to focus on and just focus on them. for us, i mean basicallywe've had to stop doing individual apps to focuson building the platform. we've had to deffer hiring people to build out brand partnership teams.

ultimately, in addition to the platform that let's anybody to create a mobile app very quickly and easily. you know as easily asyou create a website. we want there to be a sponsor marketplace, where there are sponsorscoming in and bidding to be in these apps. i don't know if we made the right decision emphasizing the platformover the sponsorships

but we have limitedresources, limited time. the best thing you can doand i think this makes sense in music as well, do onething as well as possible rather than five thing mediocre. - that's great advice. i have to ask a quickquestion, so google evil, a bit evil, not very evil, or i can't say? - my answer is the same for google for major labels, for anything.

there's a natural humantendency to vilify. you know the thing aboutconspiracy theories is they're comforting,they're like religion. we want to believe thereare people in control that have a grand plan and can execute it. it's mostly you know any company that as soon as you get morethan five people really, all of a sudden you haveconflicting agendas, and you have gossip.

there is no such thing as acompany that is good or evil. i do think things flow down from the top, you know you have to set some principles and actually walk them as well as just talk them. in that regard, my experience in google was majority wildly positive. - that principle of don't be evil, that's pretty, that's rock solid there?

- i mean absolutely, the thing is did hitler walk aroundthinking he was evil. i'm not comparing googleto hitler, understand. - [benji] yeah, yeah, yeah. - in my experience evil people don't think they're being evil. it is possible to walk around thinking you're doing great goodand actually be screwing up a bunch of things for a bunch of people.

generally just in terms of the way they treat their employees, you know google walks its walkas well as talking its talk. they treat employees really really well, and i've been at companieswhere that is not the case. - awesome so i'm gonnaask my final question now and this is actually one that i got asked in the future music coalition. a panel once, which was ifyou could wave a magic wand

and change anythingabout the music industry, what would it be? i'm gonna go broad here. in my experience in the music industry, there are generally speakingtwo types of people, and this goes for musicians as well as you know executives at labels. there are people whowhen they are presented with a new possibility,their first reaction

is an optimistic one. it's like oh, how canthis make me more money? how can this improve things? the other class of peopletheir first reaction is a negative defensive one which is how is this going to take away from what i already have? i think the story of thesort of stunted evolution of digital music comparedto the explosive growth

of digital gaming is largely the story of the defensive people being in control. if i could wave a magic wand,i would make all the people whose first reactionis it's a zero sum game how is this gonna take awayfrom what i already have? i would turn them into the positive people whose first reactionis oh how can this add to what i already have. - that's awesome, beautiful.

well tim thanks so much for your time. i want to thank mike king, - [tim] this is great. - yeah this is awesome. jesse borkowski who'sname i horribly pronounced last time, janet jackson,kelly kravitz, pat healy and all the amazing berkelee team. this is part of theberklee online live series, and i'm benji.

thanks again tim so much for your time. - all right, thanks everybody.

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