Listen to the Music: Lessons for Commercial Real Estate from Disruption in the Music Industry

DOWNLOAD TRANSCRIPT

Spencer Levy
I'm Spencer Levy and this is The Weekly Take. We interrupt our regular scheduled programing for a story of disruption. A real estate outsider from the music world offers his unique perspective on doing business in an industry that was forced to make big changes. Sound like any line of work you know? On this episode, a self-professed rockonimist—rock economist, that is—on business evolution, innovation and more.

Will Page
We stared into the abyss, spent 10 years making matters worse, pivoted and spent the next 10 years making matters better than ever before. And I think so many other businesses now are staring at their own Napster moment.

Spencer Levy
That's Will Page. Joining us from London, Will is best known as the former chief economist at Spotify. But he studied and worked in the music business for more than 20 years, dating back to when compact discs were the popular standard. This year, he mined that experience in a new book called Tarzan Economics: Eight Principles for Pivoting Through Disruption. We'll talk about those ideas, lessons of a time when digital piracy endangered an industry's entire business model. We'll hear about what he saw on the front lines of the streaming revolution and how that can apply to the future of commercial real estate or any line of work. So sit back and enjoy the show, we're rocking business disruption with rockonomist and author Will Page. That's right now on The Weekly Take.

Welcome to The Weekly Take. Will, thank you for joining the show.

Will Page
Thanks. Thanks big time for getting me on. Pleasure to be here.

Spencer Levy
Delighted to have you Will. We've got you here today Will because a lot of people are talking about our sector more than others, commercial real estate and how it's been disrupted by COVID-19 and how your book Tarzan Economics talks about how the music industry sort of set the tone for disruption 20-plus years ago. Tell us a little bit about that.

Will Page
Let's go back 20 years. So 20 years ago, I was finishing university in Glasgow and I woke up one morning, went to the computer labs because nobody had laptops then and everybody was staring at something called WinAmp. In America, it would have been Napster.

Essentially illegal file sharing sites which allowed you to get all the music you wanted for free. Now, from a business model perspective, let's think about the music industry for a second. It's built on something called copyright. And there's some wordplay here because copyright stands for the right to control copying. What happens to your business when you lose that right to control copying because of something called Napster comes along? And that set in the music industry into a tailspin. They spent millions on litigation, suing consumers, suing websites, suing ISPs—Internet service providers. And they lost billions in revenue halved in size. And that was the first 10 years of a reaction to disruption was to fight change. You
 
know, if we fight change the kids will go back to buying CDs in the shop. If we fight change, the Internet will be cleaned up and policed, just like the record shop has a security guard outside forcing you to pay … if we fight change. Switch onto the second decade. And what happened was we let go of that old vine—this is where the analogy of Tarzan kicks in—that old vine that was holding the business up off the jungle floor. They let go of that business model and reached out to this new vine called streaming, which we're all accustomed to now, which was to embrace change. And ten years on, 20 years since Napster, the music industry is now showing a recovery that everyone is envious of. Instead of being the laughingstock of the business, we’re the golden child of disruption, we're the ones that you can learn from. And that's the interesting story. We stared into the abyss, spent 10 years making matters worse, pivoted and spent the next 10 years making matters better than ever before. And I think so many other businesses now are staring at their own Napster moment. Now the point here is for the consumer, in 20 years, not a lot has changed. 20 years ago, they went to the Internet and got any song we wanted from Napster. Now they go to Spotify, pay 120 pounds a year and get any song they want, too. So it's the interesting analogy of instead of fighting change, embrace it—work with the consumer, not against a consumer. And when I look at your sector and I see the shift e-commerce, I can already start seeing some tension there about will the consumers start going back to the high street? Can we get back to where we came from? That's the old vine. And you can't hold onto their old vine forever. Soon the old vine’s going to let go of you. At some point, you're going to have to make the leap to a new way of doing business, a new way of thinking about the problem.

Spencer Levy
Well, in your book, you obviously focus on the music industry and the happy ending for the music industry—how today it is finally growing again after perhaps a decade of really shrinking because of streaming. But not every industry has a happy ending. I would look at the taxicab industry and Uber. If somebody bought a taxicab license known as a medallion in New York City, they had a reasonable expectation, I think, that they would have a sort of monopoly on the ability to pick up rides. But Uber came in and changed that. Do you see a happy ending for all industries that choose to jump to the next vine? And how are these laws like medallions or in the case of music industry copyright—or in the case of Bitcoin, regulation of money—are these just laws to be changed by the next innovator?

Will Page
OK, let's stick with taxes for a second. Here in the UK, for example, the black cab drivers, the traditional incumbent taxi drivers, if you were, refused to take credit card payments for decades. That signal was there from the consumer, which is I want to get into a cab, not pull over to a cash machine, not carry cash my pocket and just pay with a card. And I would say for 30 years, black cab drivers refuse to embrace that change. They preferred the cash economy and they wouldn't take car payments. They were fighting change. And Uber saw that as an opportunity. It's all taken care of through your app, on your phone. You don't have to enter your credit card details on every ride. It made it easier to pay and by making it easier to pay more people to Ubers and more people paid for their trips. What's happened in response? I mean, is it a happy ending or an unhappy ending? The black cab drivers now have hybrid taxis, which are like a hovercraft and make no noise. You've got a clear roof, air conditioned—far better air conditioning and an Uber car—and they take card payments and they've got their own apps as well. So the incumbents fought back and said, right, let's compete for convenience. Wherever you see friction in the economy, somebody in tech is looking at friction and saying that's an opportunity for tech to get in there and disrupt. But I think the key word here is friction. Are you holding onto an old vine which is built off friction? If so, get ready to jump off because old line is going to let go of you soon. And we saw that in the taxi wars.

Spencer Levy
Let's go back to music for a moment before we get into the analogies with commercial real estate. There have been some critics, I'd say respectfully, to Spotify and streaming. Among them, Neil Young and Taylor Swift have been pretty vocal in their objection. And then I'll give you another example. My favorite band of all time is Led Zeppelin. But the reason why I like Led Zeppelin, other than their overall greatness, was how productive they were in the first 18 months of their career. They made—Will Page I know!

Spencer Levy
Led Zeppelin I-IV in 18 months. You then take a modern band like the Alabama Shakes, which I also love, and they've only produced two albums in their 10 plus years of existence. Isn't that a reflection of the change in the music business that it is all about the next hit and streaming and not about the next album? Have we lost creativity because of streaming?

Will Page
No. Let's just go back to Led Zeppelin. They made Led Zeppelin I, the actual record Led Zeppelin I in 48 hours. And I struggle to think of a rock song recorded today which has the same impact as Communication Breakdown—that’s the genius of Jimmy Page and the other three members of the band. But I think what you're seeing with streaming is firstly from the consumer's perspective, I think music's become more diverse and they're getting exposed to more. There's more seats being sold and more of those seats are taking root.

On a creative side, I think what's really striking about this—I'm pretty sure that you'll spot a parable with your sector here—is when the barriers to entry fall, anybody can get onto Spotify. Even some of your colleagues who can't sing can get onto Spotify. So that everybody can get onto there because when the barriers to entry fall, supply exceeds demand. And that's the fascinating point. And I'll give you a couple of numbers to work with on this. In the 1980s, the British or the American music industry—take your pick—released about 6,000 albums. That was the entire supply side function of music. Today, the same quantity of music—let's call it 60,000 songs for the sake of simplicity—is being released every single day. That means tomorrow there's going to be a new 60,000 songs onboarded onto Spotify, Apple Music, Amazon competing for 60,000 released today and on and on and on. So there is just so much more music. There's more subscribers, there's more money, but there's way more mouths to feed. And that supply exceeding demand point is a kind of a beautiful axiom to think for what else is happening to the economy. Give you a quick example: We're doing a podcast right now. You know that two new podcasts are being created every minute today—every minute. So in a time that you asked me that question for four new podcasts, maybe six new podcasts, have been boarded onto Spotify and Apple. That’s insane! Back to the core point: Supply is exceeding demand when barriers to entry fall.

Spencer Levy
I think the consumer is way better off with streaming than they were with buying the new form of the same album, whether it was from a vinyl record to a tape to a CD and now back to vinyl records once again. But a place where the consumer does not seem to be winning is in live music. And live music, the cost of going to a live show is extraordinarily high. Why has live music maintained its pricing power while recorded music or streamed music seems as though to have lost its pricing power?

Will Page
Scarcity and excludability. So in the star of my book, I simply try very easy to understand two- by-two matrix to ask the question, what good are you trading in? You can apply this to sheds and shops in your world. You can apply this to music in my world. And this two-by-two question revolves around is the product you're making scarce or not and is it excludable or not?

Now, if we go back to the 90s, we have Tower Records in the US. Was it excludable? Yes, there's a big, nasty looking security guard and directors who force you to pay. And was it scarce? Yes. If that's last Eagles CD on the shelf and I can get it before Spencer, that means I win and you lose. It was a scarce item. Digital music has no scarcity—I can stream 160 million songs today, they'll still be there tomorrow—and no excludability. You can go on the Internet and find whatever you want. You can pay for it on Spotify. You can probably find it for free on YouTube. There's no security guard there. Look at live music. A ticket is scarce and a ticket is excludable. So if you simply apply this two-by-two matrix, you can see how value migrates away from recorded music and towards live music. And the key transferable point here is live is scarce, live is excludable, value migrates to live.

But that area has been disrupted as well. Nobody enjoys going to Ticketmaster to buy tickets. I compare it to go into your dentist to get a root canal treatment. But you're seeing people disrupt there that sector as well. And companies like Dice.FM are kind of trying to be like the AWS of live music. Get rid of the legacy systems, get rid of that old vine of clumsy ticketing websites and excessive booking fees, and replace it all with a nice slick app that’s community based, as opposed to trying to take as much cream off the milk based as Ticketmaster does. So even that sector is experiencing disruption at pace.

Spencer Levy
You talk at great length in your book, Tarzan Economics, about emotion and the psychology of what attracts attention and encourages it to spread. I think this brings a great segue way into commercial real estate because when people look at bricks and mortar real estate as just four walls to keep out the rain, they miss the point. The point of why do people go to restaurants? Why do people go to the office? Why do people go to hotels? They're not going there for four walls to keep out the rain. They're going there for a purpose. And part of it's emotional. Do you see that same connection with what's happened with the music industry?

Will Page
Yes, I have this kind of working theory drummed up over many bottles of strong gassy lager— not drummed up of any great philosopher. But I have this thing in my head, which is people are being attracted to two things: the thrill of the bargain, the thrill of a luxury, but a complete disregard for what's in the middle. And I see it in music and I'm seeing it in your world of retail and real estate as well. So in music, keeping it simple, 120 pounds a year or 9.99 a month for a streaming service—well, firstly, it's been 20 years since the 9.99 price point was invented. So it has to be cheaper now than it was back in 2002 when Rapsody got its license. So it's a bargain. It's a straight up bargain. You can buy two loaves of bread at a posh bakery here in North London, it'll cost more than 9.99. We're saying 9.99 for 60 million songs for a month. It’s a bargain. But it's the same people that are buying vinyl records for 25 dollars a shop. And I truly believe that 90 per cent of those vinyl records being sold today haven't even been opened, never mind played.

Spencer Levy
Sorry to interrupt you, but I'm holding up a copy of The Eagles In the Long Run, which I purchased a month and a half ago out of nostalgia while I was in New Hope, Pennsylvania. So exhibit A to what you're saying.

Will Page
We got to follow this. I mean, music is a microcosm for so much more that's going around. So you bought the vinyl record. You probably listened to that vinyl record through Spotify or whatever streaming service you're using. You love the thrill of a bargain. 10 quid for every song in the world a month? That’s easy. You love the thrill of a luxury. Here, I've got my favorite Eagles record here. My pride of place putting on my mantelpiece of my friends can see it when I'm on my Zoom calls. But you have got no regard for stuff in the middle. And when you look at retail, I think something similar is happening. Low-end supermarkets are winning market share. Here in Britain, we have the German players like Aldi and LiDL coming in and stealing market share. High-end bakeries and butchers and fishmongers are winning market share because if you want to buy a good leg of lamb, you'll pay a butcher to find the best leg of lamb. But going to the people in the middle—the Tesco’s and Sainsbury's—is becoming kind of, you know, unfavorable in the consumer. And I'm seeing in aviation. Low- cost carriers, Jet Blue in the US who have done some amazing stuff during the pandemic, giving free flights to essential workers—they're winning market share. Emirates, Singapore Airlines at the top end of the market are winning market share. But if you look at Cathay Pacific, a British Airways not so good. I mean, British Airways used to be the world's favorite airline. Now it’s the world’s 19th favorite airline based on the current rankings. So, again, I see in music and across commerce, this hollowing out of the middle. People go to the extremes and they don't stick in the middle.

Spencer Levy
I think you're missing one key point. It's not just cost. People aren't pure economic actors. They are emotional actors. And that's why people buy luxury goods. But that's also why people go to restaurants and bars to have the same meal that they can make at their home. So talk a little bit further about how emotion might be the future of bricks and mortar real estate before we get beyond retail to the others.

Will Page
I'm fond of saying that the Internet can scale just about anything, but it cannot, it will not be able to scale intimacy. When you talk emotion, I think intimacy. Intimacy becomes a new currency that we're all chasing.

Spencer Levy
You bring up what may be my favorite economist in the world, Richard Thaler, in your book and behavioral economics. And because I believe that behavioral economics is the key to the future of everything, not just real estate. Tell me how behavioral economics plays into some of your ideas in your book, Tarzan Economics.

Will Page
What behavioral economics did was essentially loop in the psychology department and said, “Is there any ideas I can steal?” and dressed it up as economics. That, in my opinion, is what behavioral economics is and good on them. And I love that work, not just Richard Thaler, but Kversky, Kahneman and many others.

The example I give in the book was a feature that many of your listeners who use Spotify will be familiar with, which is Discover Weekly. Very simply, Discover Weekly says, I want to give Spencer 30 songs every Monday curated just for Spencer's taste. So all that sort of New York disco music that you love, YMCA and all those tracks—we know that, we have that in our data. So we're going to get you back to those New York discos in the 1970s every Monday with a playlist just for your tastes. So we launched that. We've launched countless playlists which try to do something similar, but for some reason Discover Weekly just exploded, whereas all other types of playlists failed. And this is told in a chapter of the book called Big Data, Big Mistakes, and that's an important expression—big data, big mistakes. Why?

Because we had all this big data to look at why it's successful, but we couldn't find the reason why we had skips. How many songs were skipped from Spencer's 30-song playlist? We had saves. How many of those songs that he saved his own commute to work playlist? We had shares, we had dwell time, we had time-of-day listening. The most common time to listen to your supper weekly was 4:15pm on a Monday afternoon. Why? Because you pulled out all your meetings, you cleared out your calendar and you just zoned out to music to get you through the end of the first day of the week.

You know, we had all this big data—dashboards coming out of our ears—but we couldn't see the reason why. That took me to Chicago, that took me to Richard Thaler. I got to work with six of his students on his MBA course and explore reasons why. And truth be told, we couldn't find out. So I had to go up in front of Richard Thaler and he said to me, so what's the answer? I said, I'm sorry, Professor Thaler, but I don't have one. So let's go through some counterfactuals. What else have you tried and failed? So we tried Throwback Thursday playlists. That bombed. We tried to Feel Good Friday playlists—that flopped as well. Nobody listened to it. Then he said, but you try to Discover Weekly on a Monday and you're telling me that you got 40 million listeners listening to 40 million unique playlists, which is going to change media forever? I said yes. He said, don't you see the reason why? I said no, that's why I've come to freezing cold Chicago to ask you. He said it's obvious. He said it's because he did it on a Monday. All the behavioral economics research shows people are receptive to new things on a Monday that they wouldn't do any other day of the week—something that's called the fresh start initiative.

As soon as he said that, Spencer, my mind went straight back to North London—Kentish Town Tube Station on the northern line. And it's only Mondays when they promote gym membership. Always has been. It's only Mondays where they promote a new yoga class or they launch a new newspaper. It's Mondays where people are receptive to new things. And that's a great example of behavioral economics spotting something that is intuitively obvious to anyone who runs a gym, this is old news. But all the data scientists with this spotty answer. I think it's a beautiful way of just trying to rebalance the addiction to big data with a little dose of common sense.

Spencer Levy
That's why most businesses that I've been involved with have our weekly meetings on Mondays, because that is something I've figured out that Monday is a good day for it. But one thing that hasn't been figured out by my good friends at Spotify is why I have both Neil Diamond and Black Sabbath on my playlist, and they're trying to figure out what my actual preferences are. So we’ll work through that issue as well.

Will Page
I think we're struggling with your mood swings there.

Spencer Levy
Must be. But let's go now to the office space, which is the area that's getting the most attention within commercial real estate today because of work from home, because of Zoom. And I want to go to a quote that you have in your book from Peter Drucker. And the quote is, “The customer rarely buys what the company thinks it is selling.” So let me ask you, Will, as a coming out of a different industry, what do you think that we as office owners are selling to our tenants?

Will Page
The intention might be to allow workspace for productivity to flourish. That is, how many people do you employ? What's your headcount? What’s your requirements? And this is your floor space. You know, I think what we're going to see as we come out of lockdown is what you're actually selling as a place for culture to flourish. I'm kind of passionate on this point.

Culture cannot flourish in Zoom calls. Culture cannot flourish on Teams meetings. Culture cannot flourish on Slack channels. I'm pretty sure you'll start to see casualties on the hard shoulder of the Internet already appearing there as people start to realize just how valuable it is for me to sit with Spencer in a room at a meeting, then walk out with Spencer after the meeting and talk to him in his ear in the corridor about something I noticed in that meeting. That intimacy—back to that word intimacy—is priceless. You can't put a price on something that's priceless. So what you're going to be in the business of selling is a place for culture to flourish.

Spencer Levy
So culture as space and I guess how we make that space as inviting as possible to create that culture. The nature of what that space is, is changing in certain ways. And one of the ways that's changing is there's a greater preference for flexibility to have some of the space that you have long terms and some you have short term. There's greater desire for outdoor amenities for wellness. There's also a greater desire for what people call differentiated product. So on this podcast about a month and a half ago, we had senior executives from a big developer called Hines, and they were talking about buildings that they're building out of wood—office buildings, cross laminated timber, which is sort of like going back to vinyl records and music. And why are they going back to wood? Because people are getting an emotional connection to the physical structure. They talked about people physically touching the building much as I'm physically touching my Eagles record today.

Will Page
That's inspirational. I often cite the Danes—the way that they tackle design is just phenomenal. When you go to Copenhagen International Airport, they have a polished wooden floor. Now, I don't do design. You know, partly I’m colorblind so I can appreciate design as well as I should. But to see a polished wooden floor in an airport, you know what? I don't mind that my flights leave for two hours. I'll stay in this lovely space with a polished wooden floor instead. No great shakes, it feels like a library. You give me a Heathrow standard floor. This gets me in a bad mood.
 
Small nuance differences in design can have a huge impact. And again, I stress I'm not a designer at heart, but Spotify had this lovely way of having themes, be it color, fabric— themes in our offices too. No matter where you travel in the world, you felt you were at home at Spotify. So I fly to San Francisco, I walk into the office, was like, yeah, I recognize this furniture. It's not identical to what I'm used to, but it's got a theme, a recurring theme to it. I might be lacking sleep. I might be feeling rotten, but I actually feel at home in this office and I can execute this piece of work. That doesn't come from a sort of stack-them-high-and- cheap mentality. Those days are over. That's an old vine. You got to let go of that. This comes from a much more nuanced view—what we're selling, though, is that.

Spencer Levy
Let's go big picture for a moment here. And in the big picture is where can we apply Tarzan Economics beyond the business context. And one thing that you mentioned in your book is climate changes is how do we tackle that? And you express that climate change is the classic common good pool or the tragedy of the commons. But does Tarzan Economics teach us any lessons that might allow us to tackle that big problem?

Will Page
Yeah, I think building off what I said last is what often happens is what matters most is being measured least. And we can measure productivity, but we don't measure the cost of that productivity. Things such as a climate are hard to measure things. Things such as gridlock because of legal complexity are hard to measure what might have happened. We don't do a good job of measuring counterfactuals. So I think weaning ourselves off the addiction to this thing called gross domestic product, this metric that we base election results upon, this metric that we base the performance of our central banks on … I think that would be a good start. Because the gross domestic product was not there to measure the impact of the climate. And in fact, if you go back to the origins of gross domestic product, or GDP for short, Simon Kuznets, who invented it in 1939—the original premise was a great measure to gauge the country's ability to go to war. Guns and butter. I can give you more guns or I can give you more butter, but I can't give you both. That was the kind of origins of GDP—that was 1939. Here we are in 2021 and we're still addicted to this measure when there's so much more that matters.

So back to that key mantra of what matters most is being measured least. And I think a good start to understand things such as climate change and particularly in the world of sheds and shops that you're in, the impact of what your business is doing with a climate— positive and negative—would be to wean ourselves off traditional metrics like GDP.

Spencer Levy
Well, interesting. I had several debates on GDP versus standard of living is standard of living. Is standard of living the right index?

Will Page
Standard of living can help, but how on earth do you normalize and measure that without invading people's privacy is my gut reaction to that one. And I'll give you one that I think that has some merit and it's featured in my book. It’s very briefly a story about the chief economist of the Bank of England, a chap called Andy Haldane—a very bright, novel, maverick, original thinking economist. And he said he wanted to use Spotify data to predict the next recession. Huge PR-like issues with this. Is Spotify giving our central bank private data? Is Spotify going to increase the cost of our mortgages? You can forget Neil Young and Taylor Swift complaining about us. Every person in the country complaining about interest rates going up because of Spotify this way. None of it was true. Nobody was trading data. It was just a flippant remark by the bank.

But we got him to explain himself. He said, well, here's how I look at the world. As it currently stands—and this is 2018—I think because of the Brexit negotiations, which weren't going well at this point, anxiety is a bigger issue. I'm more worried about anxiety among the consumers than I am about manufacturing orders based on survey recall evidence. And I'll look wherever I can for signals about anxiety before I set interest rates as opposed to chucking a survey around a manufacturing plant. And we just fell in love with it. What a beautiful thing for a central bank chief economist to say. Why can't we have more people thinking like that? Back then, all the Europeans living in Britain didn't know whether to continue living here. They were nervous and they had mortgages and they spent money. And they're driving your business with logistics and sheds and shops alike. There was anxiety in the economy. Now you can have a Ph.D. in economics, but you don't have a Ph.D. in public anxiety. That's a different discipline. That's a different vine.

Spencer Levy
Well, I will tell you how to predict when the next recession is going to come is when my playlist includes more Johnny Cash and Olivia Newton John's “Have you Never Been Mellow?” Because those are my happy places. That's when I'm—

Will Page
Spencer, here's a cash prize question for you, sir. March 13th was an important day for two reasons. One is my birthday and two it’s when Donald Trump locked down America last year. What’s the most streamed song on Spotify on March 13th last year?

Spencer Levy
Oh, boy. I'm going to take a wild guess and I'm going to be wildly wrong, but I'm going to go with something more along the lines of some kind of lovey, making-you-feel-good kind of song.

Will Page
No. It was REM’s famous hit, “It's the End of the World as We Know It (and I Feel Fine).

Spencer Levy
There you go.

Will Page
Signals of anxiety that you wouldn't find in manufacturing orders. You understand my point? I mean, it's not a joke because it actually is true. But it's very relevant to saying, you know, what matters most is being measured least. We've got to tattoo that on our foreheads. Because, you know, we get a wash of all this data thinking that's telling us what's going on. It's got nothing to do with what's going on. It's the humans/ Get to the emotion, get to the intimacy and try and understand that instead.

Spencer Levy
I'm with you there. So Bitcoin is obviously a classic example of a disruptor. And I'm going to take the counterpoint here. I'm not saying it's good or bad. I am going to say, however, that there's a reason why we have a financial system with national governments, with money, and there's a reason why we have wires that are traceable. And I think a lot of that shows up in the form of some of the very negative events we're seeing today with hacking and holding people ransom and using Bitcoin as the tool to be able to do so. So are there downsides to disruption?

Will Page
Yeah, I think there's going to be some casualties in this Bitcoin journey that we're currently on. But I do think you have to look at the old vine and say, was it really that good in the first place? So when people dismiss Bitcoin, when people dismiss some of the fintech advancements that we're seeing. Why are you dismissing it? Are you a turkey waiting for Christmas because you've got a vested stake in the current banking model now? Now I think there is something big happening in payments which acts as a parable for your sector, which is—I'm going to call it the cost-of-legacy systems. And I'll give you one very quick example in terms of ID, identification—is Spencer Levy Spencer Levy? Simple question. How long would it take me to work that out? Now if you were to set up with it let's say a UK high street bank—I won't name any names—a business bank account. OK, I would expect to own two months of paperwork before we've actually got that bank actually up and running and your business is operational.

There are companies coming, especially out of London, which is a fintech hub in the area of ID—I'll name one, iProov, fascinating company—which are reducing the time it takes to start up a bank to 20 minutes thanks to modern innovation and ID recognition. That's incredible. That's a new vine worth swinging out onto. You have to wonder, like the whole financial system, how much of that financial system is holding onto the old way and how many of those tower blocks in Canary Wharf in London and those skyscrapers of Manhattan will be needed when we come out of lockdown? Which is a new vine and fintech, which is coming out of warehouses with new legacy systems to hold it back. And I'm really interested in that as a transferable theme across all the industry, which is when is it the legacy systems which mean you can't let go and if you can't let go because of that, then you really are screwed. So there will be casualties because of that, too.

Spencer Levy
Let me end this conversation where you begin your book, you begin your book talking about how to make it safer to swim. And you talk about that you could make it safer to swim if you force people to swim—you force them to take lessons, you force them into the water. But then you quickly realize that that actually would be more dangerous than letting people make their own choices because you would force too many people into the water causing more unfortunate outcomes. How do your lessons learned from swimming apply to us today?

Will Page
You're citing the first lesson in economics my father, a math teacher, ever taught me and I was 11 years old when he taught me that. He simply said, let's imagine you're the prime minister. Let's imagine that you're faced with this terrible situation of kids drowning in British beaches and you're going to walk out of number 10 and given your policy response. Like you say, I came up with make swimming compulsory. That will stop the kids drowning. But he walked me through the problem that you're trying to solve. And the problem is that kids who can't swim don't go into water. So if I make swimming compulsory, more kids will go into water. There's more kids in water and 0.01 percent of them drown fatally, I'll have more deaths, not less, as a result of my policy. My best intentions made the problem worse. Now, bringing it full circle to where we started you know talking about the origins of music piracy, I told that story to the general counsel of the Performing Rights Society when they first started in the music industry back in 2006. How did you get into economics Will? I told the story that we just told. Now, you know what the lawyer said to me?

Spencer Levy
What did he say?

Will Page
He said, I just ban the kids from swimming.

Spencer Levy
That's one way to handle it.

Will Page
And the kids from stealing music. You can't ban the kids from swimming. You can't ban kids from stealing music. You need to build something that's better. You know build safer beaches, build a flag system, build information about which where the currents are. You'll tell the kids when going in the water is dangerous rather than letting them find out themselves when they go into deep water. Information can help. Improve the experience, work with the problem, don't work against it.

Spencer Levy
Great. Well, on behalf of The Weekly Take, I am thrilled to have Will Page here the author of Tarzan Economics, Spotify Economist. Will, thank you so much for joining the show.

Will Page
Thank you. It's been a real pleasure to be interviewed by you, Spencer. I love your show too.

Spencer Levy
Music to my ears. We once again thank Will Page for joining us and thank you as well for tuning in. For more on Will and our show, check out CBRE.com/TheWeeklyTake. Drop us a note with your feedback. Whether you stream the show on Spotify—a company Will Page helped build—or on Apple podcast, Google or another platform, please make sure to subscribe, rate and review us wherever you listen. We'll keep on rocking throughout the summer with our annual mid-year outlook coming up next week and more hits on the horizon. For now, I'm Spencer Levy. Be smart. Be safe. Be well. And rock on.