New York City: CE Week 2014 Day 1

New York City Day 1

I arrived in New York City early yesterday morning. I actually managed to sleep through most of the midnight flight from Los Angeles to Newark. Then a bus, a train, a couple of subway rides and I made it Brooklyn and the apartment where I’m staying. It was beautiful day in Manhattan, which means tourists especially at Rockefeller Center overran the place. The iconic gold statue is in front of me and a huge flowering sculpture of a cartoon character looms behind. It’s a stereotypical early summer scene in midtown Manhattan. Nice.

I had my first meeting with a licensing executive at Warner Music Group (they right next door at 75 Rockefeller Plaza). I finally put a face to guy behind the emails that we’ve been exchanging for the past 8-9 months. It was a great meeting and laid out some of the things that I’m going to have to do to get a solid deal moving forward. It’s all about numbers. The folks at WB and the other labels want to see numbers that clearly demonstrate that it will worth their time to engage with me in a relationship that is distinct from the existing HDtracks and Acoustic Sounds deals. It’s going to be challenging. As you might guess, money talks.

The reality is that they and others should be focused on delivering exactly the right end user experience rather than concern themselves with short-term gain. I get it. The ability to find newfound sources of revenue is what it’s all about. The high-resolution audio download marketplace didn’t exist 5 years ago. David and Norman Chesky pushed the labels and established without a doubt that there are audiophiles that will pay premium prices for tracks from their catalogs. The people at the labels were blown away and have fostered new relationships in the same market.

But I think they’re reaping short-term rewards without looking at the long-term picture. I don’t have a crystal ball but something tells me that high-resolution audio is not a growth industry. Currently, it’s a niche market and is completely unknown among the masses…and among the engineers and producers that are generating new releases. They may think they know what high-resolution means by quoting numbers and sample rates but at the end of the day, the records still sound the same. What we need is to introduce a real paradigm shift in the mix. Demonstrate to the labels, the engineers, the artists and the producers that there are benefits to delivering better sounding music to consumers.

The hardware people are riding along. The devices are certainly available but where is the content?

So my dilemma is how can I structure a deal that essentially guarantees a certain upside to WB or other labels in order to try the experiment that I want to start? How can I target 10 albums to release AND ensure that there will be enough return to make the licensor happy. And how can I do this against the existing backdrop of competing high-resolution download sites?

I’m got some thoughts but it’s not going to be easy.