My friend from high school and fellow CA transplant Mike Byrne tagged me on Facebook with one of the viral notes that has been going around, and this one inspired me to post.  There was no way I could limit it to just 10 albums.  Enjoy!

1. KISS – Destroyer:  3rd grade in 1977, the first real rock and roll I got into

Detroit Rock City

2. The Beatles – Sgt. Pepper’s Lonely Hearts Club Band:  LOVED The Beatles in grade school

With a Little Help From My Friends

3. Led Zeppelin – Houses of the Holy:  Hearing The Ocean for the first time blew my mind

The Ocean

4. The Grateful Dead – Cornell ‘77:  Its not an album, but it sure is awesome.

New Minglewood Blues

5. Bob Marley & The Wailers – Rastaman Vibration:  My Dad somehow owned this great record – I’ll never forget being curious and digging it out in 5^th grade, dropping the needle and hearing the dub groove for the first time.

Positive Vibration

6. Dire Straits – Alchemy:  Straits!!Strictly speaking this video isn’t from Alchemy, but Knopfler played the same notes every night so it might as well have been.  Knopfler melts Clapton’s face for a few minutes starting at 4:30 and then at 8:00.

7. Pearl Jam – Yield: One of only 4 or 5 cassettes I had when I drove around Europe and Turkey for 3 months in ‘98, their most underrated album and still my favorite.

No Way

8. Thelonious Monk – Monk’s Music:  One perfect melody after another with Hawkins, Monk and ‘Trane trading jams. Purchased in Providence in a bargain bin, played 1000 times.

Epistrophy

9. Joni Mitchell – Blue: well, you know

California

10. Drive-By Truckers – Southern Rock Opera:  My favorite rock band reaching and making anthems work – a masterpiece

Ronnie and Neil

11. The Stooges – Fun House:  Missed this one growing up in the Aerosmith, J Geils, Boston dominated Northeast in the late 70s, discovered it later, now a lot of other things make sense

T.V. Eye

12. Ryan Adams and the Cardinals – Cold Roses:  No artist gets more airtime on my stereo the last few years – this is the record that drew me in.

Easy Plateau

13. Howlin’ Wolf – London Sessions:  Introduced me to the Blues when I found it at age 14 – without that where would I be?

Built For Comfort

14. The Allman Brothers Band – Live at the Fillmore: (hon. mention Derrick and the Dominoes at the Filmore, Band of Gypsies at the Filmore, Santana at the Filmore, and Bill Graham)

In Memory of Elizabeth Reed

15. Bob Dylan – Blood on the Tracks: My favorite album by my favorite artist

You’re Gonna Make Me Lonesome When You Go

16. Steve Earle and the Del McCoury Band – The Mountain: The greatest bluegrass album ever recorded, and nobody knows it.  The mandolin intro on The Graveyard Shift is precision awesome.

Harlan Man

17. Neil Young with Crazy Horse – Everybody Knows This is Nowhere:  Still thrills me to cue this one up, the soundtrack to a lot of wild times in high school on the tape deck of my ‘78 Pontiac Catalina.

Cowgirl in the Sand

17. Bruce Springsteen – Greetings From Asbury Park, N.J.:  A lot of Springsteen albums could be on this list, but this one stands the test of time – the Boss was my guy in the musical wasteland of the early 80s.

Spirit in the Night

18. Miles Davis – Filles de Kilimanjaro: We all wish we were cool, I wish I was Miles.

Frelon Brun (Brown Hornet)

19. Kimmie Rhodes – Love Me Like a Song:  I heard Love and Happiness on public radio late at night in my car, searched out the album, then searched out Kimmie in Austin and became friends. Alec and JJs favorite lullaby, and for that I’ll always be greatful.

Love and Happiness For You

20. Tom Waits – The Heart of Saturday Night:  “Love needs a transfusion, let’s shoot it full of wine – fishin’ for a good time starts with throwin’ in your line.”

New Coat of Paint

21. Tom Petty – Damn the Torpedoes:  A nearly perfect rock and roll record that I never tire of listening to.

Even the Losers

22. Stevie Ray Vaughan and Double Trouble – Soul to Soul:  I saw SRV 6 times in concert before he died during my junior year in college.  I had tickets to his final show but I passed on the 3 hour drive from South Bend to Wisconsin because I had just seen him the month before.  The first time I saw him was at a Jazz festival in Massachusetts touring for this album the day I got my driver’s license.

Ain’t Gone ‘N’ Give Up On Love

23. Brian Eno – Music For Airports:  An original Sam-leg (burn by my brother-in-law Sam), this album and red wine has gotten me through that last hour of the JFK-SFO, ATX-SAN, SEA-LAX more times than I care to count.

2/1

Posted: February 24th, 2009 under mp3blog, social networking.
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The intellectual output coming from Peter Strauss’s cabana is truly impressive.  It must be the water.  In Jonathan’s latest post (with graphs!) he makes a compelling argument that introduces the “Piracy gap” that exists between a passive/defensive online content strategy and an online aggressive strategy.   The theory clearly illustrates what happens in the space between trying to lock your content down and embracing the future in which all content is ubiquitously indexed and freely available.  I would tweak the graph slightly (see below) to account for Ian Rogers’ attention scarcity theory so the gap becomes defined by both piracy and people moving to the next most marginally valuable piece of content on the infinite playlist that is the internet.  I.E. if you make your content a pain in the ass to use people will either steal it or consume something else.  Which makes Jonathan’s point even more salient (piracy is better than no eyeballs at all!).

Jonathan’s excellent post does however repeat a somewhat faulty point of view that is shared in countless articles, blog posts, and music industry forums about the state of the music industry and just how wrong the labels got it.  It is *not* true that investors value the long term survival of the company over short term profits.  They actually value the net present value of all future cash flows – classical Finance 101 is about trying to predict what those cash flows might be and correctly assign a present value to them in order to make investment and management decisions.  So as the CEO of a company (both public or private) you have a fiduciary duty to your shareholders to try to maximize that number within the constraints of myriad other variables.  I find that critics often make this mistake when breaking down the recent history of the music industry.  Put another way:

Sometimes the most profitable/ethical course for a business is one that sets it on a path to obsolescence.

One of the best 5 or 6 classes I took at Anderson was a Business Ethics course given by Bill Cockrum (a legendary finance/entrepreneurship professor at UCLA).  The framework he taught for ethical problem solving was essentially one in which we identified all of the stakeholders for a given issue and detailed the outcome from each point of view.  So a hypothetical problem involving gender equality in the workplace would be looked at from many points of view:  shareholders, male employees, female employees, residents of the local community, etc…  Interestingly, one common theme that came from our casework is that managers often incorrectly overvalue a company’s survival at the expense of creating shareholder value.  Most executives try not to work themselves out of a job.

To oversimplify, consider a case in which a CEO has to choose whether or not to create a new product that will require expensive-to-the point- of-bankruptcy new R&D and marketing.  All of his analysis tells him that the product’s probability of success is a binary coin flip:  50% of the time it will be incredibly profitable and increase earnings 5X, 50% of the time it will put the company out of business.  Given those odds the right answer from the shareholders perspective is to green light the product – they’d gladly flip a coin to risk $1 to make $5.  But from management’s point of view its not such an easy decision.  Heads I get some kudos and maybe a bonus, tails I lose my job in disgrace.  This ethical problem is pretty much why companies like to compensate their executives with stock and stock options, and also why big companies are typically not good at taking risks (its one thing to bankrupt a startup with a few dozen employees, quite another a big public company with 100o’s of employees).

Now lets take a look at what happened in the music industry.  Say you could wind back the clock to the Napster era in 1998 and provide the heads of the labels with perfect clarity about their probability weighted expected returns for 3 courses of action.

1. Lock It Down and Sue Your Customers:  If you follow this strategy, you slow down the death of your existing CD sales line of business to the greatest extent, but you alienate your customers and allow smaller nimbler players to take all of the future online profits, putting you out of business in 10 years.
2. Hybrid: You drag your heels somewhat, slowing down the rate of cannibalism of the CD sales business and developing alternate forms of business that allow you to fumble your way into an evolved but less profitable business model in 10 years time.
3. Open It Up and Survive:  You clearly embrace a customer-centric view of the future, and rapidly develop long-term winning strategies for content consumption that hasten the demise of your existing business but put you on a long term path to sustained profitability.

Now lets calculate the net present value (discount rate=10%) of your hypothetical expected cash flows.

Clearly, given this spectrum of expected returns, the best course of action is the one in which you drag your heels into planned obsolecence.

NOTE: I’M NOT SAYING THAT THIS IS WHAT DID HAPPEN OR WHAT SHOULD HAVE HAPPENED!! IT’S AN OVERSIMPLIFICATION.  The labels did not act rationally in possession of omniscient foresight, just as the other media companies actions wrt Boxee etc. are not likely profit maximizing.

In most cases profits are maximized by reinvesting profits from cash cows into evolved business models that strike a balance.  The intended take-away is that in the case of killing highly profitable cash cows, its incorrect to argue that all decision making should be predicated on long term viability as a business.  Sometimes the most profitable (and correct) course kills you.

Posted: February 23rd, 2009 under digital entertainment, digital music.
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Hulu’s content partners are have asked Hulu to ask Boxee to remove Hulu from it’s product.  This makes no sense.

If you haven’t used Boxee, its an interface for media based on the XBox Media Center (XBMC) platform.  You can install it on your Mac and it’ll scan all your media folders and give you a browsable interface thats compatible with the little white Apple remote.  It also does a good job with streaming content sources (like Hulu, Comedy Centtral, etc) and it is social (you can make friends and see what they are watching, etc.)

But what really had people excited was that you could install Boxee on AppleTV and access all the same functionality on your living room on your sweet HDTV with your home stereo etc.  I’ve been following this space for a long time and it seemed like just maybe someone had finally cracked the living room media center code, which has seen hundreds of millions of dollars in flame outs.  Why?  An open architecture that would work on any living room based linux box with a good mix of streaming vs. owned media and a nice UI and some lite social networking.  No DRM, no prepackaged content deals with a locked partner set.  And a small company with a moderate burn rate that didn’t need to become a behemoth to be successful and provide a good return to its investors.  Success would mean that the streaming/caching models that are developing on the internet would work on your best media-watching screen.

And Boxee has been going about their business the right way.  They preserve the Hulu interface, preserve its commercials, don’t allow stream ripping, etc.  Its basically the same experience you can have right now on your PC.  Any Macgiver with some duct tape and some patch cables can already put Hulu on their TV.  Boxee just made it easier.

I don’t actually use Boxee a ton, but it’s great for what it is.  I NEVER watch live TV, I always time shift so I never watch commercials in my living room.  The only exception being on Hulu on Boxee on Apple TV.

So if you are a media company and you’ve already come to terms with putting your content on Hulu, why on earth would you not want entrepreneurs to figure out ways to get that content on more screens?  Of course this means that existing models and franchises (like Sat TV and cable TV esp.) are threatened, but that was the case before Boxee.  And as Mark Cuban has so elequently (and correctly) argued the internet is a long way from being able to replace satellite and cable for breadth of on demand HD content in the living room at a mass market level.  Companies like Boxee are exactly the kind of companies you want innovating for you, because if the innovation doesn’t happen there its all hacks and hackers and torrents.  Plus if they start picking up steam you can buy them and have them help you evolve and live to fight on.  Its like our experience with the music industry all over again.

The living room TV is a screen, just like my phone and my computer screen.  Captive media audiences are a thing of the last century, you can’t lock down the content and you can’t completely control distribution.   If you can’t figure out a way to create loyal followers with great user experiences, your content is useless.  Pissing off early adopters is a horrible way to go about evolving your business.

UPDATE:  check out Jonathan Strauss’s Boxee logo with a black eye.

Posted: February 18th, 2009 under digital entertainment, portable devices, social networking.
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