Video Transcript: Beethoven the Businessman

This was the talk and the first title I thought of for this talk, "Beethoven as Bill  Gates." Does that make sense? Maybe not. OK, so think about that. Being an  educator, I am going to tell you the story, and then you'll figure it out for  yourselves. So the second thought I had was that I would tell the story of the  history of music delivery, literally from the beginning, from pounding rocks to  pounding rock. The good news about this is the first 10,000 years just sailed by.  So for 10,000 years, if you want to make music, you literally pick up rocks, later  instruments, those sorts of things. And this goes on for a very long time.  Gradually in the West, mostly we start to get a performing class, people who  were experts, who were really good at pounding rocks. So, by the 18th century,  we're still basically doing this. We have a class of experts, professionals, who  play very expensive instruments, for the most part, things like the organ,  complicated instruments, and if you wanted to hear music in the 18th century, it  was live. You had to go to a concert. You had to go to church, you had to go to a civic event, you had to go hear somebody making music live. So, music always  involved social interaction. There were no headphones you could put on, there  was no iPhone, there was no record player. If you wanted to hear music, you  had to get out of the house. There's really, basically, no music in your house.  This goes on through the 18th century from the beginning, and then we have ...  our first disruption. These two things actually happened together, these two  disruptions. We get the piano, right? The piano was a new technology that really starts to happen in the 18th century, and then it becomes something that you  could mass-produce cheaply. So you can now have an instrument that's not too  expensive, that everyone can have one, that you can have at home. So this  allows for a kind of disruption, but it wouldn't have happened if the second  disruption hadn't happened at the same time, which is that somebody figured  out how to do cheap music printing. Remember Gutenberg and the other kind of printing? Music is a little more complicated. It took a little longer to figure out:  How do I create a cheap way to distribute sheet music? In London, at the time of the American Revolution, there are 12 music shops. By 1800, there are 30. By  1820, there are 150. So the internet wasn't the first time this happened, because think about what happens when, all of a sudden, you go from "If I want to hear  music, I've got to go hear Bach, I've got to go hear Mozart." That meant you had to actually go hear Mozart. You didn't buy a CD of Mozart, you didn't download  Mozart. You couldn't even buy Mozart sheet music, at least not easily or  cheaply. But if you wanted to hear Mozart or Bach, you had to go to Germany  and go hear them. But that's not true for Beethoven. And Beethoven figures out  that, in fact, there's a new market. Beethoven is an entrepreneur, not unlike our  other friend, Bill Gates. He's an entrepreneur that figures out, "Hey, I don't have  to actually go to London. I can actually just sell sheet music. And it can be  printed and mass-distributed, and I will be famous everywhere, and everybody  else will play my music." So that changes the experience of music for 

everybody. It changes the variety, it changes the global pyramid, it changes all  sorts of things. It creates a new class of musicians, of composers and  performers -- there's a division of labor. If you hire Bach to play for your  wedding, guess who shows up? Bach! That's what he does for a living, right?  He has no way to expand his business. But Beethoven does. Then this happens again. It happens 100 years later, so you're starting to see a theme. By the turn  of the century, it's an interesting time for music delivery; 100 years later, we get  the record player, the gramophone, the player piano. Now you could buy  Rachmaninoff sheet music, but if you wanted to hear Rachmaninoff, you had to  actually go to the concert hall. Not anymore. Now you can buy a record of  Rachmaninoff, or you can buy a player piano and a roll that fits into another kind of recording device. And later, the radio. So think about this: you're a band in  Texas; you're Doc Ross in Texas, and you've got the Texas big band market,  you've got it nailed. And all of a sudden, there's this new thing called "radio." And now everybody can hear Count Basie and Duke Ellington and Benny Goodman.  Man, the competition just sucks now. All of a sudden, the competition has gone  global, just like it does a hundred years later, with the iPod, the internet and  digital files and Garage Band, that do all of these things all over again. So now,  maybe we can talk about these two guys. First of all, both of these guys are  entrepreneurs. But second of all, both of these guys are software designers.  That's what Beethoven does. He writes software that runs on that piece of  hardware over there. That's a piece of hardware. That's a device that you can  use if you have my piece of paper. If you have sheet music, does it sound good? No, it's a piece of paper. It's like those floppy disks; they weren't very useful. You can use them as coasters, I guess. But they're not very useful on their own. So  both Beethoven and Bill Gates are software designers. What's interesting is that  they also both live at a time where the hardware is changing very quickly. Those  of you who are old enough to remember, go back to the '90s, go back to  Windows whatever, and remember your joy and your love of Bill Gates, as every time a new software package came out, you had to get a new computer. So,  guess what? When Beethoven started writing music, he had this instrument up  on top, with five octaves. This one's bigger, it's got more pedals, it's louder, it  can do more stuff. When Beethoven starts off, he doesn't have a piano that can  do this. He actually just cannot do this. He can't go -- Can't do that. So in 1803,  a French piano maker -- alright, think about how smart this is: If you're a piano  maker, into whose hands do you want to get that piano? Composers. Artists who will use the technology and make everybody else have to adopt your technology. It's like sending Bill Gates your fastest, latest computer, because you know he'll  use up all the memory. So in 1803, Érard sends Beethoven a new piano. And it  has more notes. And it can do that. So the first thing Beethoven does is, he  writes a piece that can do that. If you've got a German or a Viennese piano or a  British piano, it can't do that. So what do you do? You've gone to the music 

store. And you've bought the latest Beethoven piano sonata, and you take it  home, and you've got a five-octave piano that was the brand-spanking-new,  latest technology last year. You start playing that new Beethoven piano sonata,  and what happens? Not enough notes! You run out of room. So, in fact,  Beethoven has the same relationship with his audience that Bill Gates does.  He's a software producer, and he has to deal with the hardware. And what's  interesting about this is that Beethoven was actually smarter than Bill Gates. So  when Beethoven gets his new Érard piano, he's writing his third piano concerto,  he goes and he gives a concert, and he and uses all those extra notes. But what does he do when he goes and gives the concert? He has to take the piano with  him, because it's the only piano he has in Vienna that has those extra notes. So  he plays the concerto on the piano. It's great. But he realizes, "Oh, wait. Not  everybody has one of these latest things. So he publishes piano sonatas -- He  waits; he delays: for the next 10 years, he still publishes piano sonatas that don't use the extra notes. He actually waits, because -- This idea of Beethoven?  Everything you know about Beethoven -- basically wrong. Beethoven was a very clever entrepreneur. So the music he wrote for the popular market -- not the  pieces he was going to play himself, but the piano sonatas -- he limits himself to  the amount of keys that you have at home in some part of Southern Italy, where  you have last year's piano. So what are the effects of these disruptions in music  technology? How do composers, how do people respond? We've had three of  these things, and they really all worked the same way. We started off with  printing and the piano. The very first thing that happens is: it redefines the  product. So the product becomes sheet music, becomes a piece of paper that  you can then take home. In the 20th century, it becomes a record, something  that you then take home. In the 21st century, it becomes a digital file. The nature of the product changes. Second, there's a division of labor. If you want to listen  to Bach, you've got to go listen to Bach; there's no other way to do this. In the  19th century, we've got performers, and we've got composers, people who do  different things. We have listeners who can now manipulate music like you just  saw. It changes expectations of quality. Once everybody's heard Count Basie  and Benny Goodman, maybe you're not quite so happy with your local band as  much anymore. You've now heard ... "I want to go listen to Benny Goodman  some more." You have now a global market. You can hear things that you didn't  use to hear. Every time this happens, we take away some social interaction.  With Beethoven, you can now play Beethoven at home. You can't play Mozart at home. But with Beethoven, you can buy the sheet music, you can go home, you  can close the door and play the piano. And only you are there. Now you have  headphones that do the same thing. With each of these disruptions, it changes  the amount of social interaction. It's a new personalized experience each time. I  can play Beethoven the way I want to. I can play it faster, I can play it slower. I  can actually personalize the experience now. There's more consumer choice, 

the marketplace gets bigger. The number of titles on sale in those music stores  goes up. But there's also less choice, because in a global pyramid, you can't  always tell what you want. There's so much choice out there. How do you pick?  And so marketing starts to come in, and "Who is the flavor of the month?"  There's one more thing that's not on the list: piracy. One of Haydn and Chopin's  biggest worries is that people were going to write fake Chopin and put "Chopin"  on it. Do you think Chopin would have been comforted by the thought, "Hey, 20  percent of the people who buy fake Chopin are more likely to go buy real  Chopin"? I mean -- I don't know. But Chopin, another clever entrepreneur -- you  know what he does? He publishes his music in Italy, France, Germany and  England on the same day, because there's no international copyright, so he's  got to have everything published on the same day. And he puts differences in  every country. So if you're playing Chopin, the additions from different countries  are different on purpose, because he wanted to be able to track who was a  pirate. So, this wasn't something that Sony thought of. So, the question is ...  This new technology, it makes more choice for more people, it makes it more  global, but it also allows more piracy. It also allows for people to have a  marketing filter. They have some way to interact that's not always direct. So the  next time somebody says, you know, "Nothing like the internet ever happened."  Well, it's true, but these kinds of disruptions in music technology have happened before. And the model for these disruptions is the same as we see in other kinds of businesses. It changes the nature of the product. So if you're in book  publishing, you thought you were in book publishing because of these things  called books. Well, you can still sell novels without books. You can still be in the  music business even though you're not in the record business. You were selling  records only because that was the technology that you inherited. Newspaper  business: dead. But journalism isn't dead. And finally, schools. School is the next big horizon, because what were we in the business of? Schools used to be like  buying gas or buying food; they had to have local entry points all over the place.  But now, with the internet, we have a different distribution system. And so  schools have got to think about what we're selling. But I think that the face-to face interaction is not going to go away. There's still something of value here, as  we've demonstrated today, because we're at this thing called TED, where we  still want to get to know each other. Thank you very much.