Saturday, April 2, 2016

Lucian Leaves Universal

That’s right, starting July 14th Lucian Grainge will be working at Amazon.

Screw the French, Lucian’s sick of carrying the company, growing Universal’s market share yet still having little to show for it. He wants to make the big bucks, he wants some real power, so he’s moving to Seattle.

Well, not really, he’ll still be based in L.A., relationships are king, and Jeff Bezos is counting on Lucian to make Amazon Music a powerhouse.

That’s right, you’ll get everything Spotify offers for free. Well, not really, it’s just that it will FEEL free, which has been the goal since Napster. It’ll be baked into Amazon Prime, which gives you short shipping and video and so many perks. Furthermore, Amazon is on the cutting edge with its Echo, you can call up a song right now, they just need someone with music business expertise to show them the path forward.

Lucian never bought the canard that there would be competitors on the retail side, Lucian knows that online one player ends up with 70% market share. And during this run-up to subscription, now that Spotify’s got 30 million paying, and Apple 11, it’s time to double-down and go for the big money.

There will be a sunset on free. Even YouTube is going that way, did you notice that Peter Chernin’s Fullscreen is gonna charge $5 a month for ad-free content? That’s the future, you’re gonna pay, you just don’t know it yet. It’s just a matter of when. And rather than be hampered by the shortsighted artists and the small margins and low cash reserves of Universal, Lucian believes he can have a larger impact and get it right with Amazon. (...)

The rumor that Amazon will buy Spotify is untrue. It’s not Bezos’s style, he likes to grow products in-house, and after the failure of the Fire phone not only has quality control improved, but Jeff is now hands-on, sure, he cares about rockets and the “Washington Post,” but not as much as his baby. Amazon Web Services drives the bottom line, but on the consumer side, it’s free shipping and entertainment that bring people in. Bezos, unlike so many techies, understands the power of music. After all, he single-handedly tried to bring Layne Staley back from the brink.

You didn’t know that, but that’s how Bezos operates. One day you’re clueless, the next day you’re addicted to whatever Jeff is selling you.

So Lucian went for the power and the stock. He who has cash is king, he has leverage. And although Apple has deep pockets, Tim Cook is so busy with financial shenanigans Steve Jobs abhorred, selling bonds and granting dividends, that insiders joke that Apple is toast, there’s no cutting edge there, just endless variations on previous products.

And the abomination known as Apple Music. Which is so counterintuitive as to be nearly unusable. Amazon’s got 1-Click, Steve Jobs licensed it for the Apple Store, Bezos knows that usability is king, he won’t make Apple’s mistake. Furthermore, it appears that voice control will drive listening in the future and Echo is on the bleeding edge, it’s the market leader, it made Sonos blink, Lucian got a demo two years back and has been secretly meeting with Bezos ever since.

by Bob Lefsetz, Lefsetz Letter | Read more:
Image: Tumblr