The Winter Sun
My Dinner With Grubiss
2007 Predictions

1. CD sales will continue to tank

Sometime in the next twelve to eighteen months CD sales are going to decline
so precipitously as to cause the major labels to rethink their digital
strategy. With the iTunes Store no replacement for discs, they¹ll be forced
to authorize a new method of distribution, just to maintain their bottom
lines.

You¹ve seen this movie. With film. For fifteen years seers predicted
digital would eclipse the old format. This finally happened a year ago,
when Konica Minolta exited the camera business and Nikon essentially stopped
making film cameras. Same thing is going to happen in the music business,
with CDs, it¹s just a matter of when. The most interesting point is how the
usage of music will change. People shoot MANY MORE digital photos than they
ever did film ones. People will own MUCH more music than they did in the
physical era. This is good.

2. Rhapsody will still have no traction

When people tell you subscription is the future, they¹re right. But it¹s
not rental. Not for a long long time. Yes, eventually people will have no
need to own the product, but that¹s closer to ten years out than five, and
I¹d say more like fifteen. Call it human nature, people want to OWN things,
call them their own, have them forever.

Rhapsody IS an excellent service, it¹s just that Real doesn¹t have enough
cash to market it properly. Most people have no idea how it works. If they
did, it would make inroads. As for NapsterŠgive me a break. Maybe they can
sell the name to the new legalized P2P service!

3. Snocap/MySpace

Irrelevant. Most people don¹t want to pay for this crap, and those that do
don¹t want to pay this MUCH!

4. EMI

Heading for disaster. Either this fiscal year, or next, the financials are
going to tank, and then so will the stock.

Gross mismanagement by those in power. Anybody with private equity money
and a brain would snatch this company up in a minute. Because in the
future, the catalog alone will be worth MANY billions. Because believe me,
people will pay for music in the future, we¹re in a temporary lull, where
those in the know don¹t know how to leverage their assets.

5. Apple

Any other CEO would be fired. But canning Steve Jobs would be like firing
Tiger Woods from his enterprise. Steve Jobs IS Apple Computer.

Apple will introduce sliver-like notebooks that you¹ll be dying to own.
They¹ll probably introduce a phone in the next ninety days. They¹ll
continue to have a stranglehold on per track downloads and hand-held music
players. BUY STOCK!

6. Rob Stringer

Will not have long enough before the business implodes to save Sony. Looks
like BMG is gonna rule this empire in the future.

7. Bono

Will continue to wear those phony sunglasses and try to save the world,
sliding into irrelevance all the while. This is a band that needs
experimental music released sequentially to regain its cred. But they¹re
too busy satiating their fortysomething audience, giving them exactly what
they want, to matter. It would be like the Beatles releasing "Beatles For
Sale" over and over and over again. How about another "Achtung Baby",
babies?

8. Live Nation

Don¹t focus on the acts, the ticket counts, the grosses, this is a WALL
STREET PLAY! Michael Rapino has convinced the money men that he has a way
of maximizing revenue. We don¹t believe it, we don¹t see superstar acts in
the pipeline. Then again, if he knocks down TicketMaster fees, and
continues to tape and broadcast shows, and sells chazerai to ticket buyers,
just maybe he can make the numbers work.

9. XM and Sirius

A merger would be terrible. For you¹ve got two completely different
cultures and Mel Karmazin would be in control when the deal was done, and
all Mel knows is advertising, and that¹s the one ace in the hole satellite
has, its LACK of advertising.

XM was caught with its pants down by Scott Greenstein and Mel¹s star
strategy. Actually, the worst mistake the Washington, D.C. company ever
made was NOT doing a deal with Howard Stern, that would have killed Sirius
once and for all and XM would have emerged triumphant. Instead, XM has now
overspent trying to compete with Sirius and its financials suck and there is
PRESSURE to merge with Sirius.

Sirius has got the image and the mo.

XM has the better service, both musically and technologically.

The way this fucked up world works expect the two companies to get together
and for the resulting company to be like Sirius. And, to paraphrase John
Lennon, then the dream would be over.

Two different cultures. Two different incompatible technologies. Does this
sound like fertile ground for getting together? But don¹t ever forget, Wall
Street is in control here, and what the Street wants will happen. And just
like with Live Nation, the Street is ignorant.

XM should stay the course. Improve its image. Play the underdog, even
though it still leads in subs. I believe it can emerge triumphant. As for
SiriusŠ I don¹t know one person who doesn¹t complain of dropouts, no matter
WHAT they¹re airing.

10. Zune

Already dead.

Play by the rules, and you¹re history.

Squirt a track to another, if you can FIND another person with a Zune, and
it expires in three days, to satiate the RIAA. What if you¹re squirting a
college lecture? What if you¹re squirting the track of an unsigned band?
REMEMBER, if you play by the RIAA rules, you¹re DOOMED to failure.

Zune will limp along. Then again, Dell killed its DJ.

11. Dell

Will never recover from its bad press.

If your customer service sucks, if your PRODUCT sucks, it¹s only a matter of
time before someone will establish a Website revealing this fact and your
image will be trashed, probably PERMANENTLY! The old paradigm of selling
crap via marketing is DEAD!

As for Dell, it is being killed by the commoditization of the PC business.
People would rather just go down to Staples and buy an HP off the shelf,
having it IMMEDIATELY! Dell will continue to own the corporate sphere, but
the company has hit a wall. DON¹T BUY THIS STOCK!

12. "American Idol"

Will continue to have solid ratings, which will decline a bit with every
season, just like "Survivor". Fox will make a fortune. But the records of
these actsŠwill not rule the sales chart in the future.

13. What WILL sell

It¹s 1967. Just before underground FM radio started to gain traction. By
1970 nobody hip was listening to AM. And by Œ73, AOR ruled.

In other words, that SoundScan chart with the albums of acts with hits on
the Top Forty??? It¹s gonna look completely different in the future. That
paradigm won¹t die, but it will diminish in domination. It will be about
the outside, the cult, the LESS THAN HYPED! Invest in your future by
finding an act that can write and play, and then develop it SLOWLY! Say no
more than yes. It¹ll help your cred. And if you don¹t think it¹s about
cred, you probably haven¹t seen the photos of Britney Spears¹ pudenda.

14. Soundtrack albums

Dead.

Oh, now and again one will sell a million. But if you¹re a label, offer
almost NOTHING as an advance. The movies suck, why should someone want a
shitty souvenir? Movies ruled in the nineties and the early part of this
century, now they¹re a joke. If you¹re building a soundtrack with a music
supervisor looking to have the new "Footloose", I¹m laughing.

15. MTV

Will be less and less about music. The old days are NEVER coming back. And
Fuse doesn¹t matter. Video¹s on the Web now baby.

16. YouTube

What Napster was, before you had a high speed connection and knew the JOYS
of excavating rare tracks by your favorite bands.

If YouTube can be legalized, then so can music P2P.

17. "Billboard"

Will get thinner and thinner. Everything in the magazine worth knowing can
be distributed on the Web, there¹s no reason for this magazine to exist.
Expect more conferences as they try to keep the company afloat. Eventually
it will just be a Website, but not soon ENOUGH!

18. Managers

More important than they¹ve been in fifteen years.

Yes, for the last decade and a half the LABEL was oftentimes the manager.
DICTATING the selling of the act. But now almost nobody¹s WORKING at the
label. The superstar managers are not interested in developing acts,
there¹s almost no MONEY in it. They¹d rather service the superstars and
cherry-pick those newbies that break through. The landscape is ripe for a
young Œun to develop new acts and own them. Yes, a new Irving Azoff is in
the offing.

19. David Geffen

Done.

20. Dr. Dre

Just as powerful as ever.

But hip-hop is not.

Hip-hop will never go away, but it has peaked.

21. Pitchforkmedia.com

Won¹t become any more powerful, but some company doing a similar thing, much
more trustworthy because of a more singular/policed voice, will emerge and
be the bible. It¹s all about filters. They¹re coming. Maybe not this
year, but soon.

22. Rolling Stone

Irrelevant.

23. Celebrity news

If your act is a celebrity, you¹re fucked. Because celebrities are to be
made fun of, they¹re entertaining for BEING celebrities, not for anything
they¹ve done. Just check out perezhilton.com or egotastic.com if you doubt
me. You don¹t see Jim James or Sufjan Stevens on either of those sites, and
that¹s just the point.

24. Social networking sites

Just the latest manifestation of the AOL chatting phenomenon of ten years
ago.

People are isolated, and lonely. They want to connect. The Net is a tool
for this. But it¹s only a tool. Most of the connecting is done amongst
those you already know. Therefore, it¹s important to be a member of a
group. To get e-mailed tracks, forwarded news, to be kept in the loop. If
your group is made up of people you¹ve never met who you talk to online,
you¹re a loser.

25. SXSW

Will continue to be the preeminent circle jerk, promoted by established
players and the mainstream media as important even though those truly in
touch know that by time it reaches Austin all those with a clue ALREADY
KNOW!

26. English music

Still won¹t break through, even though much of it is better than American
pap.

It¹s a cultural thing. In the U.K. there are numerous outlets, and people
follow the acts like sports teams. Here there¹s just Top Forty, and we
don¹t want any fops. In other words, there¹s no ROOM for English acts on
today¹s mainstream radio formats, and therefore they can gain no traction.
Will someone with dedication try to break great English acts from the ground
up, via hard work? I don¹t know, but that¹s the only way to do it.

27. The blues

Blues rock is coming back. Maybe not this year, but within three. After
all, all those kids listening to Zeppelin, they want something NEW to hang
their knit caps on. And those acts you hate, Nickelback and Hinder, they¹re
closer to what¹s coming than Justin Timberlake.

28. The Grammys

Will continue to mean less and less.

29. Jimmy Iovine

The days of record execs as stars peaked with Christopher Moltisanti
noticing Tommy Mottola outside a New York club in "The Sopranos". Even if
he was hot, nobody would care about Jimmy Iovine anymore.

Once again, all the recognition you can get as an exec is from your peers.

30. Coachella and Bonnaroo

Scenes, not the mainstream.

If you think either of these clusterfucks is the future, you¹re sadly
mistaken.

We¹re not in the age of Aquarius, but cacophony. There WILL be a new
mainstream, we just don¹t know what it is right now. AND, it will not be as
dominant as the OLD mainstream. And astride the mainstream will be a bunch
of narrowcasted worlds. Where Coachella and Bonnaroo reside.

But no one will tell you the foregoing, because those PROMOTING Coachella
and Bonnaroo need to be big swinging dicks, need to be dominant. This
constant braggadocio will be undercut by the we¹re all in it together ethic
of the younger generation. You¹ll know progress has been made when the
youth squeeze out the old farts at the top, holding back the future, not
only in the recorded music sphere, but the live music arena as well. The
old rules don¹t fit the new world. A kid has an MP3 player, and WANTS MP3s,
not copy protected tracks, which he gets from his buddies. This same kid
doesn¹t understand the TicketMaster fee and the facility fee and all the
other bullshit of the live experience, and until ALL of these are gone, we
can make no progress.

31. Respect

The key to the future.

And we haven¹t had that spirit since 1969.

It¹s a more close-knit society. Everybody¹s equal on the Web. If you¹re
not concerned with the experience of your customers, you¹re doomed to death.
Give people something that touches their souls for a fair price and they¹ll
give you ALL their money. Rip them off with shit and they¹ll tell everybody
they know and decimate your enterprise.