It's like the old aristocracy days except for instead of the elite owning physical property and renting it out to the peasants, the elite own intellectual property and rent it out to the peasants.
Feudalism is one of the standard memes of history, as per David Brin.[1] The essay is well worth reading, as well as the thesis that a new meme ("otherness") arose within Western Liberalism. In my mind Otherness is a saddle point, and worth investing in to protect.[2]
Western Liberalism increasingly seems to just be a system by which you establish global feudalism. I guess it's good for a few generations. Hard to argue it's even good now though because even though we're wealthier than ever we're increasingly unhappy and mentally ill.
If you have a billion dollars in the U.S you can park it in treasuries and make millions and outsource the income generation to the government's tax collectors. Meanwhile, in China, the government just prints money electronically when they need it and billionaires have to be clever about where to park their billions to earn a decent return. That need to be clever contributes to creating useful capital that increases the wealth of society generally instead of just adding to the interest bill on the national debt.
> instead of just adding to the interest bill on the national debt.
the billionaires are lowering the interest bill as they compete to purchase treasuries. (the money is borrowed from whoever will accept the lowest interest for it. see https://www.treasurydirect.gov/instit/auctfund/work/work.htm under "Bidding".)
> Meanwhile, in China, the government just prints money electronically when they need it
The only country in the world that just prints money when they need it is USA. No other country can do it — it'll just cause hyperinflation. China is not an exception. They can't print US dollars. And if they would print more Yuan, it doesn't mean that China billionaires would be able to buy more houses in LA - the exchange rate of Yuan to dollar will simply drop and they will be able to buy exactly the same amount of goods in US as before.
USA can print almost unlimited amount of money because they control almost all the world and bend most of the governments to buy US treasuries. This is why there're US military bases in many countries and if some country decide to stop accepting US dollar for foreign trade, the next day it's invaded by US military.
Although many people predict that this uncontrollable printing of US dollar will cause US economy to collapse sooner or later. You simply can't do that forever.
That we're somehow wealthier than ever is a great misconception.
GDP per capita and even GDP per capita adjusted for PPP is also misleading because it uses the wrong basket of goods: focusing on things that dont matter.
People forget, wealth is not money. Wealth is the things you buy with money. Wealth is when you can afford the essentials of life: Shelter, food, water, medical insurance, education and transportation (with the costliest ones being Shelter and medical insurance). Consider the number of working hours the average person needs to expend to afford shelter and compare that to 500 years ago. I think you'll find that there hasn't been much improvement. In fact, in CA and bay area, I think you'll see that we're working even longer hours to afford basic shelter than 100s of years ago.
> That we're somehow wealthier than ever is a great misconception... I think you'll find that there hasn't been much improvement.
Of course we're wealthier. The shelter you get to enjoy today is leagues better than the shelter you got to "enjoy" hundreds of years ago. The net worth of humanity has gone up. Significantly. We have more advanced technology than ever before. Whatever GDP is measuring probably doesn't consider the fact that we have compounded knowledge and given ourselves things our 100 year old ancestors could not even imagine.
I'm so glad I'm alive at a time further into the future. I may not know how glad I am, because I may not be able to fully comprehend the loss of all of the things that I have today that were simply non-existent back then.
> Of course we're wealthier. The shelter you get to enjoy today is leagues better than the shelter you got to "enjoy" hundreds of years ago.
Those that argue we're no better off than we were 200 years ago are pretty unpersuasive these days.
I'm more worried about the next 200 years though. It took several thousand years of civilization to create the industrial revolution, and that was quickly followed by the information revolution. Both dramatically improved quality of life.
But what if this is the end of the exponential? What if Moore's law is dead, and breakthrough technologies like quantum computers or new propulsion systems aren't just "5 to 10 years away", but decades or centuries away?
There is a lot of evidence today suggesting that the industrial and communication revolution was a blip, closer to a step function in human development, preceded by slow linear growth and possibly followed by slow linear growth.
I'm not certain that this will indeed happen, but if it does, our entire society and world is in for a complete shock.
What passed for shelter 500 years ago wouldn’t attract any tenants these days, even if it was legal. No heating, plumbing, sewage, not to mention the fire code violations.
In a basic sense, that's what all wealth is. Income generating property. Debt produces interest. Company shares produce dividends Real estate earns rent. Capital produces revenue. It's all quite interchangeable.
The most famous rant on this is Marx & Engel's manifesto. Chapter one explains how history works, making similar comparisons from their day to older days. The second chapter describes communism's aims. It's also (largely) a rant about the bourgeois.
Anyway, like most Marx, it's hard to translate to concrete terms. One unambiguous line stands out though. "..the theory of the Communists may be summed up in the single sentence: Abolition of private property." - Communist Manifesto
In the very next paragraph, ambiguity re-enters. Even in theory, it's very hard to flesh this out. ...It's especially hard in the context he's most interested in: urban industry/society. Replacing all property with a "commons" is easier to imagine in a rural/village context. Rural commons exist.
I think Marx got the idea from a rural context. Formal and informal privatisations of agricultural commons were part of his stated inspiration, iirc.
Anyway, I think the basics are trivial. Property is effectively income generating by definition. If aristocracy is immoral, then property owning is immoral.
To me, this is a reductio ad absurdum for fundamentalist thinking... kind of like the monty python witch trial.
Intellectual property didn't used to be rent seeking. It's a relatively recent phenomenon where you can no longer buy-to-own, you can only subscribe-to-use.
Virtually every company is moving toward this model - Microsoft, Adobe, Disney, etc. That's my main complaint.
Liberal economists use this term the most, they usually mean large companies trying to get goodies from the state. Lefty ones tend to mean something like "profiteering."
X-as-a-service businesses models aren't exactly new in intellectual property. The patent/copyright systems explicitly assume licensing and royalties. But, I agree that subscriptions are pretty new in consumer-land.
But we need a different term rent seeking already has competing usages.
Rent seeking [0] typically means exploiting a captive market without providing value. I don’t think that fits either of your definitions. The key piece is they basically squeeze without proving value. So buying IP and then upping the rent fits that.
A very large number of early economists railed on rentiership (Adam Smith, Herny George, of course Marx).
With regard to intellectual property, "ownership" is effectively monopoly because nobody else has the right to produce the good. There might be "inferior" or replacements goods with pop music, but maybe not even that when it comes to things like patents.
However I disagree with your assertion that wealth is income generating property. If I store $5mm under my mattress, I have wealth without generating income: the wealth can be used to purchase a large amount of services over a sustained period of time, but it is not generating more wealth.
The argument about "private property" is not hard to understand, it is just confusing for many people because of the way we use the term in modern language. It is not only to be compared with public property, but also personal property: for example, the apartment I live in, or the comb I use to brush my hair. Interestingly, personal property is almost by definition a form of wealth which does not produce income/accumulate value. Here's a good explanation:https://en.wikipedia.org/wiki/Personal_property#Personal_ver...
There are all sorts of practical exceptions, but it's still all backed by income generating wealth.
That $5mm under your mattress is backed by bonds, income yielding bonds. That's why it's worth $5mm. If the country or bank that issues those bonds were defunct, the money would be worthless because the bonds would no longer be income generating.
You could say that gold is nonproductive wealth. Adam Smith sorta argued that gold isn't wealth. You could use a sack of grain as an example..
These examples are theoretical though. IRL, the majority of wealth is equity, bonds, real estate, etc. The value of that property is determined by the income it generates for its owner. If you really had that $5mm, it would probably be in equity, bonds, real estate, and generate a yield... like most wealth in the world.
No, the millions is not backed by bonds. It is a complex topic, but Brazil stopped their inflation by issuing a new currency and implementing price controls.
Much of economics depends on expectation, there is nothing inherently logical about any of it.
With regard to any property, ownership is a monopoly or oligopoly, so long as more of identical or equivalent good cannot be easily produced. Ownership of land, or natural resources, is the same in that regard.
>If I story $5mm under my mattress, I have wealth without generating income.
This isn’t true. The $5mm is merely representational. The social dynamics that maintain it’s exchange value, i.e. security, is circumstantial. The security is exercised by way of capital.
>personal property is almost by definition a form of wealth which does not produce income/accumulate value.
This is ahistorical. In a capitalist society, personal property is a means to produce value all the same. Capitalism comprises relational circumstances that deem your toothbrush, comb, computer, school supplies, and your quiet home all as means to produce value.
Seems that's the way society ended up being structured. Perhaps we will all end up selling houses to each other and no one will have to make anything at all!
I swear, even the Aztecs had a less destructive system.
We need about 1% of people to grow the food and perhaps 9% of the people to make stuff we need.
The other 90% then have to convince the 10% that do the actual work that they are worth the time to produce a surplus for. IP barriers are one way of doing that. Even farmers like pop songs.
Close. About 1.4% for farming and under 13% for all other tangible goods.[1]
Take a close look at that table. It's really important.
Growth areas: Health care and social assistance, educational services, leisure and hospitality, and construction.
That 90% does not live on IP, they live by offering medical care, police service, education, roads, reservoirs and aqueducts. By transporting those farm goods, inventing new tractors and efficiently managing all these things.
And while pop songs artists may deserve compensation, society does not crucially depend on someone collecting royalties for generations after the guy's death.
On the farmer analogy (and inspired by the recent .org tld acquisition), if one really wanted to extract rents, simply acquire the land they work on and set them all to sharecropping.
That assumes the amount each individual person "works" remains the same. Why not full-time employment at 15 hours a week, with 30% of people making stuff we need?
Most of our efficiency gains are presently being funneled into a glut of overproduction of nonsensical "goods" (eg overfinancialization and overadministration) rather than direct quality of life improvements of everyone being able to work less.
That assumes fungibility and substitution. The reason we have 1% of people making the food is because that is the specialisation we can't eliminate by mechanisation and automated processes.
The "Spreading the unemployment" argument is a bit like saying we don't need all those violin players in the orchestra, just ship a few unemployed people in and give those violin players Thursday and Friday off.
Sure, abstractly. But to continue the analogy - there is presently a glut of violin players and other musicians, and everyone currently making up the orchestras have no time to do anything else.
And yeah, the "best" orchestra is going to face an insatiable demand for their specific time, and likely enjoys performing as much as humanly possible. But these conditions are exceptional, rather than the situation faced by basically everybody else.
I was saying what the numbers would change to at the same level of technological progression, but with policy changing to make the work more evenly distributed.
Obviously the long-term goal is ever-more automation. But current economic policy is based around creating full full-time employment, which is fundamentally at-odds with ever-less needing to be done due to automation. Hence the proliferation of anti-productive "bullshit jobs" where people ultimately aren't ultimately helping to produce anything (eg the entire medical billing system), but still need to cling on and go through the motions so they can eat.
It's actually kind of brilliant. Mercuriadis et al are getting some of the rights to well-known intellectual property through the presumably underpaid, behind-the-scenes contributors. His competitors say he's paying too much, but is that just because they've been paying too little?
I was biased against the guy when I started the article, but if the status quo ante was other execs paying pennies to songwriters for their rights, and then doing little to nothing with them, maybe Mercuriadis is onto something.
When you hit 40 you start to see in real time how valuable those old songs are. Your friends and other people in your age group hate the new music so they only listen to music from when they were young. All of the commercials play music you thought would never be used in a commercial. Walking through the grocery store or waiting in an elevator you start to bop your head because one of your favorite songs from high school is now elevator music. A popular song has a lot of long tail value, sometimes you have to wait a generation to start to see the returns.
"Your friends and other people in your age group hate the new music so they only listen to music from when they were young."
Young people hate a lot of music made these days and listen to older music. It's not just a 'when I was young' thing anymore.
There's something very profound that comes from artists who make music, as opposed to a producer who makes some licks, a mediocre singer who belts it out, and a label that brands it.
When the brand/hype/marketing of the 'current flavour' dies down, what is left?
Music older than 4 years has to compete on its own merits, and most of it is forgotten, the better stuff hangs around.
Because music is ever more produced and less created, a lot of the stock today just stand the test of time.
When I was young you'd hear 50's music in the grocery store. Now you hear 80's music. But I think in 30 years we're still going to hear a lot of 80's music (and 60's, 70's and other eras) but the ratio of 'recently contemporary' to older music will be a lot lower.
You will always have some young people who like an older sound. But no, those songs that you think people will hate will be called classics in 10 years time. As a former DJ I have seen that cycle over and over again. When I go to grocery stores I hear mostly 90s music. Most of the commercials I see have 90s or 80s music in it. And when 20 year olds get in their 40s it wil be the same pattern.
There was a "classic rock" radio station playing in the store where I get my morning coffee, and it was playing the same songs as 25 years ago, from the 70s or 80s. By now shouldn't they be playing music from 1995-2005?
Old songs have greater surface. Many more people have heard it over something popular today which 20% might have heard of. New music is usually much cheaper. Even within the same artist. Would you lic. Bieber's Baby, baby O or something new. More extreme example would you lic gangnam style or anything newer by that artist?
Not really its why TV shows have to be careful with the budget for licences - though this can work very well "sinner Man" as used in an episode of Person of interest.
It's not just than new ones are pumped out, it's that people lose interest and move on. Taylor Swift will do better than someone less popular, but people still listen to "Blank Space" more than "Love Story." Going back further, kids these days are less likely to know the Beatles.
You are correct, Piketty provides empirical evidence that supports this theory in "Capital in the Twenty First Century". Essentially the return on capital investment is always greater than labor. He also suggests this rule and feature of capitalism threatens capitalism itself as long as wage earners make no efforts to themselves invest their wages. There was a brief period post war where wage earners did invest their wages but that fad has ended, now we spend all our wages plus some. The 'plus some' is often at interest rates the mafia would be proud to charge. Any salary increases earned are generally spent to pay off this debt while incurring more debt to enhance our lifestyle. The dollar will collapse eventually, maybe not in the lifetime of anyone reading this, but it will happen.
He’s considering launching a songwriter’s union, something akin to the Screenwriters Guild, that would give songwriters more leverage to extract better deals from the industry’s power brokers.
This new moment of marketization is interesting to observe from the sidelines.
I'm a musician but I've never gotten paid for making music and don't want to be. This way, songwriting and playing music can remain something I do purely for the intrinsic joy of it. And it's not really so long ago that, if you wanted music in your house, you had to play it yourself.
I have nothing against recorded music or professional musicians, but it's interesting how much we seem to collectively forget that buying music isn't the only way to have access to it. Not everything we need has to be obtained as a commodity (still less through a monthly subscription).
I mostly agree with this sentiment. However, even in the pre-recorded music times there was a pretty clear separation between the music people would play themselves at home and the music they would actively seek out to hear in a more professional environment (churches, concerts etc).
When first recording mediums were invented, people were really excited specifically about being able to preserve and listen to the greats, not just any music.
Before music was recorded, copyright cops chased people playing songs or trading sheet music, bootleg player piano rolls, and fakebooks. Recording didn't change much - the people playing the music get far less protection or benefit than people who get the songwriting credits and the publishing.
Sure. And the pleasure you would get out of this would depend in part on your skill in the relevant medium.
But I think there's a significant difference: with music, as you play it, you are also experiencing ("consuming") it. And that's what also brings a lot of the pleasure to it.
With writing and videography, meanwhile, the act of production is usually a lot more decoupled from the experience of consumption. I happen to think that producing writing and producing video are also fun activities in their own right. But they don't fit into social life in the way that playing someone a song does.
I have experienced this with many other physical activities. To ride a twisting descent engages your brain more deeply than to look at the same road or trail. To climb a boulder engages your brain more deeply than to look at the line.
Climbers pantomime the moves before climbing just as aerobatic pilots pantomime their routine before flying. Physical motion engages the brain a certain way that simply thinking, listening, or watching does not.
The pleasure of listening to music with your hands begins when you first make a single satisfying note happen. It is not necessary to be able to play what you would like to hear.
I think it's harder to get to this point with e.g. writing, but it is possible. There have been more than a couple times I've thought to myself (while writing), "wow, this is actually what I had imagined in my head." Which is not to say that anyone else would be impressed with it. But there is definitely a certain satisfaction (and even in the moment, not just afterwards when you read it) in being able to tell your story instead of endlessly reading others' stories.
I'm not sure it's enough to keep me going by itself (honestly, I still like to think someone else may be able to enjoy it, eventually, even if this is probably unrealistic). But it's definitely a factor.
I play music too and derive a lot of pleasure from it, both as a performer and a consumer. However you seemed to be claiming that DIY-ing music was a viable alternative to consuming professionally produced music. Depending on one's aesthetic standards this is most likely not the case.
If they are accessible, then yes, and I don’t see why that would be controversial.
Normally enjoyment of the art making process for amateurs is just that, enjoyment of the process. If I want to enjoy literature, I’ll read the work of professional writers. If I want to enjoy the task of writing, I’ll write myself.
For most people, art making as a hobby is occasional, simply by the time & resource limits of regular jobs, family obligations, etc. While consuming art is much more accessible.
Some other things can be closer to a gray middle area. For me, that is cooking. I expect myself to be able to make really world class food even in my crappy apartment kitchen with limited time and a normal grocery budget. So when I can’t do that, due to time constraints generally, I won’t whip together something quick just ‘cause.. I’d rather simply transfer the grocery budget to restaurant budget and eat better made things.
Thankfully, since most of the very best food is found at cheap or medium end restaurants, and not too much at five star expensive places, this is fairly easy without changing my budget. But compromising to make a mediocre thing myself, either purely for the sake of cooking or to allegedly save money, is not interesting or useful to me.
I could imagine people feel that way about a lot of things.
>If they are accessible, then yes, and I don’t see why that would be controversial.
The simple answer is that it completely ignores how the world works. Things don't decide to be world class. They are labeled world class after they have existed and were compared with other things that are not world class. If you decide to remove the non world class things from the ranking (because they were not worth doing) you will realize that the number of non world class things has increased.
I personally would have a not so great food with room for improvement everyday rather than to eat similar delicious food every day. Improvement makes a mundane thing not-so-mudane while no improvement makes a not-so-mudane thing look mudane. Anyways, different people have different preference.
You and only you decide if a thing is worth doing. If you want to learn Mandarin, so what? You will probably never be a best-selling or critically acclaimed author of Mandarin books. You are unlikely to be the next star in a Mandarin-singing boy-or girl-band. You will not be a TV host reading the news in Mandarin.
What of it? Does learning even a little Mandarin give you pleasure? Do it!
It’s insane to judge everything in your life by whether you are going to be in the top one tenth of one percentile. That is a recipe for constant stress an unhappiness, for forever judging yourself by impossible standards and coming up short.
Obviously that's because you'd have to be doing it after spending your primary energy in your current 40-60hr job and plus you don't have money to hire professional editors and screenwriters. I guess we'll never know if you lacked the talent or not.
> This new moment of marketization is interesting to observe from the sidelines.
I don't see what "marketization" has to do with things.
There have been plenty of "busy beavers" over the years organizing all the music recordings on various non-commercial services at a scale that surpasses most similar commercial services. If anything, "marketization" has prevented them from making these collections even bigger than they have been.
Those collections are thus better seen as a resource for people who want to play music themselves, rather than as a consumer substitute for musicianship.
A compact disc is, for practical purposes, indestructible under normal use (compared to vinyl and tape, which degrade in playback) Rip it lossless and use good backup discipline, even more so.
It's never going to say "our business model requires you pay 20% more to keep listening to me", or "we're going to stop working on your favourite playback device because we changed the DRM and expect you to buy a new one."
There’s a market. Not what it once was, because what was once the recording market was born out of necessity as much as anything else.
I, like a lot of other people, am definitely interested in the ephemera. I like owning records. There’s a tangible ritual to putting a record on, and there’s really something to be said for the sound. Even dirty records with their occasional pops and scratches. It’s a visceral appreciation for the medium, to be sure. That said I also buy a lot of paper books.
There’s also something to owning a copy. I use Apple Music these days when I’m commuting or on the road and it’s great. I can hear most anything I want for the price I pay each month, but I even still buy copies of albums I really love because they’re mine. It won’t go away if Apple decides to kill the streaming service, or if I decide to unsubscribe (which will be the case at some point because the stacking up of subscriptions wears on me).
On the whole? I don’t know. I’m curious about the data, too. But who is buying music? A lot of people! There is still a lot of people who don’t just see it as a commodity.
On that last note I’m not a great trend-chaser, so I probably have a certain lens I see the whole thing through—but I’m not the only one.
All the music I'm listening to nowadays is the songs I buy on Bandcamp, and I'm far from being a hardcore music fan. I do see music as commodity, and that's why I don't mind limiting the selection available to me. I download the songs I buy to my laptop, and stream them to my phone via Bandcamp app. It has bugs and imperfect UI, but so does every Subsonic or Plex client I've tested.
The main problem with streaming off Youtube is that, unless you stick to popular songs (>100M views), it's just a matter of time before some songs in your playlists become unavailable ("video is not available in your country", or unofficial upload gets deleted). I've been using NewPipe (Android) and Ivory (iOS) to play YT videos in background, so I'm not as annoyed with that as I would've been if I had been paying for Youtube Music, but it's still a deal breaker. Meanwhile on Bandcamp, some songs I bought have been deleted since that time, but I still have them in my library and can stream them in the app (I can't share link to these, though, as it's 404 unless you're logged into an account that has these in the library). Of course I could have been downloading YT videos to my PC, and stream them via Subsonic, and I was doing exactly this for many years, but I kept having weird issues with that (and it's metadata hell).
If I were to switch to Spotify, I would have to leave my music collection behind, as the songs I have on Bandcamp are not on Spotify, and vice versa. But I don't see a reason to, as Spotify would also be more expensive option vs buying 1-2 $2 albums per month. And the money I would be paying to Spotify wouldn't even go to the artist I listen to afaik, since the only thing that matters when it comes to Spotify payouts is the total number of times your songs have been played, which is determined in a large part by what the recommendation algorithm has been recommending to hairdressers and drivers, as well as what the current mainstream trends are.
Avid music fans do. And also it's easier to manage a vast digital collection any way you see fit than going through streaming options that offer next to no organizational capability except creating playlists, and maybe a master list of all artists you follow.
Yeah and you know, thank god for that. As a musician I thought I would be interested in reading this article, but I kept finding myself fiddling, doing other things, looking at other tabs, even playing 2048 at one point. I guess I will always be a peasant, because this guy and everything in this article is FUCKING BORING. Why would I do any of that when I can play music anytime I want? I "have" music in a way they never can. If I write one song right now, that's 1/0 = infinity percent more than he's written. I respect this guy about as much as I respect someone who pays for sex.
Yup, my 4 year old sings in the car whenever we're on a trip. Only problem is, you don't get to pick what's playing and there's NO volume control. lol.
I invested in this interesting investment trust back in February last year when it was featured the investors chronical and late last year when they had an offer for subscription at 100.
I look at it as an alternate bond like investment that is not corelated with traditional bonds - target yield is 5% I think
Since it says his favorite band of all time is Pink Floyd, it is fair he is using the name as Storm and Hipgnosis designed all their major album covers. Hopefully he paid for the name...
I think the goal is to launch the next ASCAP/BMI/SESAC and basically charge astronomical rates for songs people want to hear. Songwriters will love it and artists will have no choice.
This is pretty much a confirmation: "Along with owning a bigger chunk of the publishing market, he wants to continue altering it. He’s considering launching a songwriter’s union, something akin to the Screenwriters Guild, that would give songwriters more leverage to extract better deals from the industry’s power brokers."
It's a public company. I might want to buy some stock in it when I can.
One can turn that around. There is a lot of good music and talented people around but the machinery around music media and distribution and life style is such that most people end up listening the same few composers and artists world wide.
So it might look that the composer or artist themselves are somehow unbelievably special.
The talent shows for example have produced quite many popular artists here. One could see that as "see, anyone can be successful!". Or one can see that the machinery can choose which talented and hard working people they make "successful".
The journalism around music is especially naive. They constantly mix up people, phenomena, music, promotion and popularity happily.
People to a surprising degree like what they think they are supposed to like.
> I think the goal is to launch the next ASCAP/BMI/SESAC and basically charge astronomical rates for songs people want to hear. Songwriters will love it and artists will have no choice.
In US, for mechanical royalties, the rates are set by government. So yes, they could charge whatever they want for live and synch, but that would have much smaller impact on the general population.
I believe negotiated rates are often lower than compulsory rates, for a variety of reasons I couldn't begin to fully comprehend except in the abstract.
This may be less true in the digital streaming realm, but it's hard to tell through all the rhetoric.
Makes sense given that making new music is easier than ever before—the people who do it for the love of music are probably already making good-enough recordings on a shoestring. Just look at Vulfpeck: they've had massive success just doing everything themselves.[0]
What have the labels got to compete with talented artists with a few grand of equipment in their bedroom? A bunch of commercially-minded manufactured acts pumping out me-too crap while countless layers of expensive executives and expensive "experts" polish away anything human from the art? Labels used to be successful because making recordings was expensive. Then it was because they held the keys to distribution and radio. Now it's... what?
There's a couple of BIG qualifications on your comments.
1) Vulfpeck slid through the YouTube music window about 2010-2012 that has since closed (that also produced Beiber, Jepsen, Psy with "Gangnam Style" etc.).
2) Vulfpeck were the backing musicians for Darren Criss who was very much a product of the standard system.
3) They are probably the antithesis that making new music is easier. They save a LOT of money because they can get away with doing minimal production because they are SOOO smoking good.
If you have to be at the level of Vulfpeck to make a living making music, then basically nobody is going to be able to do so.
I only mention Vulfpeck because they're at the pinnacle of their genre, not because they're the threshold. There's plenty of opportunity for anyone. Look at akageorge. (If you can—previously known as George Barnett, he seems to have reset his identity and thrown away much of his earlier material.) He's a self-evidently brilliant musician who can write and perform every part of a radio-ready hit. To the extent anyone makes money in music, he could make it if he bothered.
That guy is talented, but those songs aren't radio-ready hits. In large part because the music/recording is nowhere near the major part of what makes a radio ready hit. Radio hits are the result of advertising and marketing, not music creation and production.
Expensive marketing is effective for established acts that already have an existing audience—whether that be international superstars like Coldplay or relative newcomers like London Grammar.
But it's also true that traditional marketing is becoming increasingly less relevant for new acts. New music discovery used to be driven by radio, media and advertising. Those gatekeepers are now being challenged by algorithms and social media—and there's no sign of that trend slowing down yet.
———
To my original point: making music is now an order of magnitude cheaper than it was just a few decades ago. And venues where an act to break out are more accessible than ever. I'm not saying the industry is now or ever will be perfectly egalitarian, but the distance travelled is monumental.
I don't know why this is being downvoted, this is an excellent question. it's commonly known that companies/stocks are priced using all available information thus an advantage the company may have is already priced in, hence why some highly successful companies trade at very high PEs.
Replace “market” with “herd” and you already have an advantage over them. If EMH was really a thing, then everyone would stop investing period and index funds would rule the world. Clearly they’re not.
I like the concept. I believe the value of back catalogs will only increase. As they increasingly corner the market, there should be a corresponding value increase in stock. What's not to like?
The thing not to like is the current stock price, because everything that you like about it will have already been analysed in deep detail by the market, and priced in.
By investing in a public company, you are saying “I think the market is wrong about the potential for this company”, and I’m curious to know why you think that having read this public piece, you think the company is currently undervalued? The shares are at £109 — what price do you think they should be really?
Very similar to the attitude I take with sports betting (legal in my country). You don't bet on who you think will win, you bet on who is paying odds that don't reflect your view on the event. I only bet relatively small sums and I don't bet very often (since I don't often find odds that seem poorly priced) but I've won way more than I've lost.
If you see a coin on a street aggressively patrolled by hundreds of people whose fulltime job is searching for dropped coins, you’re better off assuming it’s not a coin
It's delusional you think you are the best person in the area at something you haven't put any effort into. Especially when the area is the whole world economy.
>everything that you like about it will have already been analysed in deep detail by the market, and priced in.
This sounds like some religious creed, with dogmatic status. You do realise that The Market, hallowed be its name, is just people, and people are (often) wrong. The recent high profile news about wework should be a great example of this, or indeed any regular observation of our world.
He just thinks the stock is going to go up in the future, based on his observations. What's so strange about that?
Boring. The word is boring. Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. Usually they sell things like toilet paper, soap, electricity or other boring everyday things. When it comes to long term investing, boring is good.
This analysis is definitely wrong, it's discussed in textbooks too. You need to seriously, properly consider the risk of the investment, and if your model of the stock price is that it gently drifts with the market while yielding 5%, then that's just wishful thinking on your part.
> Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. ... When it comes to long term investing, boring is good.
The S&P 500 has pretty consistently had yields of 10-15% over the last 100 years. It makes more sense to invest in a "boring" ETF that follows the market making 10% than a "boring" stock that yields 5%.
> I like the concept. I believe the value of back catalogs will only increase. ... What's not to like?
Termination rights. In the 1970s, a new copyright bill was enacted that said that 35 years after the creation of a work, the ownership of that work automatically reverts back to the original creator. The idea behind the proposal was to give artists control of their works later in their career, when they may no longer be a pop sensation, kind of like a retirement account.
For example, Lady Gaga may be super popular right now, but roughly around 2050, she will automatically regain the rights to her original recordings. She can then resell those rights to someone else, generating an additional bit of income later in life.
So as an investor, if you buy up the rights to a bunch of works, you need to know that your ownership has an expiration date.
Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright.
> Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright.
Lady Gaga almost certainly sold all of her rights to her label, a corporate entity, when she was signed. However, because of termination rights, 30 years later, that contract will lapse, reverting the rights back to the original artists. If 20 people created the Lady Gaga song, then it will revert back to all 20 of them jointly, and if a label wants to buy the rights, it will need to make deals with each one individually.
So if I'm reading this correctly, this guy is saying that traditional labels put too much time and effort into album sales and completely ignore the money available from licensing and performance royalties (if they don't own the rights to a song why would they care to)
So by buying up the rights he has the incentive to push hard to sell licenses to that music and can build up teams of salespeople to do only that. What songwriter wouldn't want to sign up if they don't like the burden of managing those opportunities themselves and don't trust that labels will put the effort in.
In Canada what you’re talking about is managed on behalf of artists by SOCAN which acts kind of like a performers union in that they’ll go to bat for you and have health insurance plans, etc.
From the article he's dedicating marketers to synch rather than mechanicals. I quoted the explanation of all three revenue streams for people like myself who don't automatically know which is which.
With Hipgnosis Songs Fund, Mercuriadis bypassed all of them. Songwriters are able to generate revenue from three sources: mechanical royalties (the sale or legal download of a song), performance royalties (paid every time a song is heard in public, whether it’s a live performance, on TV, or in a movie; played in a bar or restaurant; or streamed), and synch fees (song licensing for use in movies, video games, and commercials). Mechanical royalties are the only stream with a set rate; performance and synch royalties are negotiated percentages. Synchs are often more lucrative for the songwriter, since they generally split 50% for the writer and the artist, with the label taking its cut from the artist’s piece of the pie.
Synch is where Hipgnosis Song Fund could make them money, as Mercuriadis explained to the 177 hedge fund and private investors he pitched between 2015 and 2018.
For people curious about synch rates, a friend just licensed the music (not performance) to an unknown song for promos for a major streaming production with A listers for $8000 on a two month license. This was with the assistance of an entertainment lawyer.
On the flipside, we now have Discovery Channel refusing to use music with sync licensing costs (ie licensed through ASCAP, BMI) and demanding composers sign away their royalties if they want their music on the show:
That's quite ironic in a sense, because "the publishing" is the very thing where there's a huge amount of perfectly-serviceable music that's totally in the public domain, with zero "rights" or "royalties" to contend with. And it's not just 'boring', classical pieces, but music in popular styles too. This whole setup is ripe for a "disrupt from below"/"commoditize your complement" play where someone purposely brings those old 19th century (and before!) songs from IMSLP back in style as the perfect troll move.
Heck, the record labels might do it at this point - after all, they'll still have the rights to the actual performed audio ("the master").
He raised $1B of others' money; he hasn't spent anything close to that yet, even in aggregate. The article is extremely light on details of why this guy thinks he can turn a bigger profit off these song catalogs than the traditional publishers can, but I guess he's cutting a lot of fat compared to the big publishing houses? This seems positive to me because it's shifting more money towards the artists:
"In the music industry, paying for assets at a 10x multiple is considered top dollar. Mercuriadis is reportedly paying up to 20x, making it impossible for others to compete."
Could end up exiting through the launch of a Music Royalties REIT. Liquid assets that trade always get a premium over illiquid limited partnerships. Could be an interesting asset class for diversification that's relatively uncorrelated...
Think the killer point is making "synch managers" responsible for far fewer songs than traditional publishers.
They're effectively treating each song as an artist with its own manager, so naturally that manager is gonna be much better able to see how and where to place "their" songs.
From one perspective, this looks like economically useless activity. And it could be. But it isn't necessarily so.
Historically, content creation and distribution were bundled. Distribution further bundled the content per se and performances. This was all an artefact of the up-front cost of manufacturing and distributing physical media.
With digitization, there is no reason a content creator shouldn't be able to essentially freelance. Make good content. Get paid for it. No requirement to promote yourself on social media, no need to perform for audiences. One could still do that. But it would be a vertical play, not the default.
A financial vector such as this one, which identifies good content, buys it, and then works out distribution, is one way to solve this problem.
The article makes it sound like he's only buying proven songs, meaning they already have distribution. Also, as Napster, Pirate Bay and now Spotify have shown, distribution really is trivial - what he's buying is the right to restrict legal distribution.
> as Napster, Pirate Bay and now Spotify have shown, distribution really is trivial
Spotify is a multi-billion dollar company. I’m not sure what it does is trivial.
On buying proven content, that still increases competition on the buy side for that content. The decoupling of distribution and content acquisition still happens, and makes the top end of the market pricier. That, in turn, means more money to the lower end, et cetera.
I’d actually argue the opposite. The way it is trending in with digitization, the owners of the commodity distribution channels decide what consumers prefer, through algorithmic manipulation, seeded content and artificial scarcity.
It essentially allows the distribution channel to dictate terms both ways. If you’re an artist, you can accept a pittance to produce things the distribution channel approves of (through algorithmic selection or explicit curation), or else you can make all your money from concerts and merch.
But if you “make good content” that the actual end users actually monetarily value, it won’t succeed except for the concert and fame cultivation route. Because the distribution channel is going to be a buzzsaw mowing down your created content on the way to whatever it decides to force feed the masses. It takes free will entirely out of content selection on the part of the ultimate paying customer. They pay for what they have been manipulated to think they chose.
The alternative is something like Bandcamp where the artist just posts music and the world decides to buy it or not. But through license & regulatory capture, catalog hoarding, etc., big distribution channels can easily use non-market forces to crush these things, and what’s left is such a low volume so as to not matter at all.
It’s a certain kind of irrational exuberance / maniac grab for stock returns that we lavish ridiculous overvaluations on media delivery businesses that empower them to build these types of moats, essentially de-risking themselves from having to participate in a market by delivering a market valued product by algorithmically manipulating the consumer to eat what they’re given so the distribution channel can have all of the negotiation power.
Frankly the same is true for app store distribution and tv distribution, delivery food distribution and many other things.
Just such destructive behavior by investors (both VC and everyday) who are bidding up these kinds of “delivery capture” businesses.
Yes, financially this is similar to being good at picking credits. Some firms will default, some will not. Buy the ones that won't. Or another related analogy is convertibles, which are a sort of bundle package that is separable. That's not an economically useless activity at all.
The big question though is why does he think he'll be better at this than others? Or rather, for his investors, why will it be better after his fees?
He's got a first mover advantage by the looks of it. It takes some balls to buy a team with music experience to do this new thing. Of course you have the issue that some other guy will just do the same and compete with you, just like umpteen financial businesses (eg Private Equity).
I wonder why this guy thinks that the rights to a successful song are an "uncorrelated" asset. Wouldn't strong economic growth mean that people are far more likely to spend money on these things? Especially for 'sync' rights which mostly come up for things like ads, or derivative mass-marketed media (e.g. successful song X ends up in the soundtrack of movie Y)? Just seemed like a weird claim to me.
Uncorrelated probably means to the stock market. The US market was up about 30% in 2019, but I doubt the value of any particular Taylor Swift song increased by that much.
I’m sure there is some correlation to general GDP growth, and you would actually want that. It’s the specific stock market correlation that you tend to not want.
While everything may be influenced by macro trends, there will still be movies, Super Bowl Ads, radio and Spotify playlists which rely on music licensing. It may dip in bad times, but the bet is that they will do better than other investment types.
Concentration naturally builds in competitive markets. As each competitor is slain, you get the stuff they owned and add to your power. Nothing stops it except pressure from below. Allowing one man to own huge swaths of our cultural heritage is absolutely mind boggling insane, like a feudal king dictating what culture the peasants are allowed to have.
Its not a physical object. Songs are not going to be locked in some room and taken from society. Its just investment from his side and that seems totally OK in my book
If that is really what it would cost, then for 0.1% of the cost of the Iraq war, we could have had free culture, unencumbered by copyrights. I guess for 1%, the whole century's music production released in the public domain?
Surely, it would have made more for everyone's life comfort than the operation Iraq Freedom did?
Has he never heard of the Hunt Brothers and their attempt to corner the silver market? Supply & Demand dictates that prices can go higher than you are liquid.
> “We turn down 70% of what’s offered to us, and oftentimes we make the first move in finding writers whose catalogs aren’t publicly for sale,” he says.
> Ultimately, his goal with Hipgnosis — which went public on the London Stock Exchange in June 2018 — is to own 15% to 20% of the overall publishing market.
That's more like someone buying up the silver mining rights across large but carefully picked swathes of land. Then he rents those rights to miners for a fee he can use to buy even more mining rights.
> With songs though, they'll generate revenue while you're sitting on them.
How, exactly? I'm fairly certain most of a songs revenue is made by the first year. To go beyond that, you've got to get your song back in the public mind.
> Silver doesn't do that.
You can certainly borrow against the value of the silver to fund low risk investments.
> How, exactly? I'm fairly certain most of a songs revenue is made by the first year. To go beyond that, you've got to get your song back in the public mind.
Bass player with a 70s pop star who's still working and making music here.... I know that his hit songs still generate a significant amount of income for him (I'm not giving figures, but I would be more than happy if I had that much coming in for a full time income, let alone as passive income 50 years later). The songs get airplay, and get used in adverts and so on, and that generates income that I'd certainly be very happy to have. (I don't, I'm just a hired hand, very late to the party!)
That's kind of my point. Getting airplay and being in adverts helps keep his song in the public mind which generates income from the song. He may see it as passive income, but people are doing things to keep that income going. I'm also guessing he didn't start out eight figures in the hole by purchasing his songs from someone else.
Sorry, I should have been clearer about my point - his songs have had a 'long tail' - most of the money wasn't made in the first year.
He didn't start out 8 figures in the hole, but he has spent a LOT of time getting the money he was owed due to being ripped off by managers doing dodgy deals - every story he tells me is jaw-dropping and you just can't believe people would act like that, but they do. Repeatedly!
Passive income typically refers to whether the owner of the income-generating asset needs to put in a significant amount of regular effort to generate the income, not whether anyone in the value chain does.
The question wasn't about whether anyone in the value chain gets passive income, but whether the songs generate revenue 'by sitting on them.' If you're going to invest in either silver or songs with the intention of doing nothing, which are you going to invest in? The experiences of a 70's pop star getting royalties are not equivalent to what Mercuriadis will have to do to produce revenue from his investors' investments.
>He may see it as passive income, but people are doing things to keep that income going.
That's literally what passive income is. For example, if I rent out farmland to someone, most of it's value will probably come from the fact it can be farmed. It still requires effort to farm that land, but not my effort. For me, it's passive income.
Same thing with music, whoever rents the rights must put in the effort to make it worth renting.
I'm not sure how to respond to your post as you've made my point: The songs Mercuriadis has purchased the rights to are not passive income for him. See my response to your sibling poster.
Picture it this way - Mercuriadis has bought a bunch of houses. Just like any landlord, he will have to invest some money and effort into repairs and marketing his properties. Some will rent for more than he expected, some less.
But once he gets renting, it's passive income. The problem is, can he make it to that point or did he buy houses that weren't sufficently rentable?
I don't know where you're getting your loans, but around here the cost of interest on the loans is going to be higher than my return on low risk investments.
I don't think you can really corner the market for songs, people can just make new songs. Also if you don't have a lot of media clout besides owning some pop songs IP there's nothing you can do to keep the popular taste aligned to your music portfolio.
This kind of posturing is nauseating but I find it to be bizarrely common.
I think if you are not an overly literal person it makes more sense though. It's social posturing which is meant to mean "I don't like the most extreme elements of consumer culture like designer belt buckles and luxury automobiles". To many people "believing in material things" means that and not what they are literally saying.
It seems like many people find this type of exaggerated speech to be really charismatic which I find really annoying.
Essentially, the summary of this article is that this dude thinks he can leverage these song catalogs better than other investors. He's literally a music fund manager for music.
His firm is "overpaying" for these back catalogs because he's essentially putting together a collection that might command more revenue than other "fund" managers, and possibly set up something of a targeted monopoly, and he's betting that they can extract more value than less competent managers and record labels.
It wasn't directly addressed in the article but I suspect that the general strategy is to own the majority the sorts of songs that are more suitable for generating Synch fees. A big corporation is going to look around for a collection of songs that tend to do well in a TV commercial, for example. Perhaps they find that Hipgnosis happens to own all of them, and now they have to pay a higher rate, and all of a sudden the high price paid for this catalog doesn't seem like overpaying.
What's to say he's not trying to provide an innovative service? It'd be interesting to be at least able to license most pop music from one place, not that this is an ideal way to get there. If he prices pop music out of the culture, then less popular music becomes a viable alternative.
and of course this guy is trying to associate his effort with the English art design group Hipgnosis[1] that specialised in creating cover art for many famous bands.
all this means is that musicians need to find a way to own their masters. You will never see Chance The Rapper sell his masters for the very reason this guy is buying up rights.
They’d need to acquire more and more music as the years go by because they are always competing with other hits and the more that hits the market the more competition they have that cut into their returns. It depends how good they are at squeezing dollars from each music.
It took me a while to realize I was basically reading a really long advertisement that wasn't even intended for me. There should be little flags on stories that indicate it's basically a junket for someone's start-up.
I feel like there might be a parallel to when an older person is lured into taking out a second mortgage on their house. Are these songwriters jeopardizing their own future by taking a quick buck now?
The issue there is that new songs ans creativity destroys value of old songs and so this way of treating copyright plus no entries to public domain means that old songs will be pushed forward all the time whereas new songs have no incentive at all to emerge. Especially if distribution is consolidated between a few actors.
Oh how I totally disagree with you...
I thought I'd never move on to listen to "what kids listen to these days" and "most of it is crap".
And then a cousin (with similar music taste) pointed me to "Post Rock" genre.. Mogwai (yes from the movie), Bloc Party, Sigur Ros, God is an Astronaut, 65daysofstatic..
I now split my time between good old classic heavy metal (Iron Maiden - Iron Maiden)(anything after 7nth son is junk imho), Metallica (up to Justice..), everything Sepultura, basically eveything rock/metal up-to-early-1990.
I get it that for new musicians it's hard to find their place in the world/market, but go start your own cafe/bakery/what-have-you and face competition.
Strange to see Block Party in this list!
Also post rock had its time in the late 90s / early 00s. Doubt we can put it in the category “what kids listen to these days”. This category today is more along the lines of Post Malone and Lil Yachty.
Haha I’m going to join the others who seemed to get excited at your comment.
This is a short, two-part doc about a small music venue I was fortunate enough to spend my late teens and early twenties frequenting. It was the closest thing to my small town that brought me a lot of music from the generation you’re listing. Searching YouTube will unearth performances from the place. I’m in one of the group photos they put up somewhere in this. I miss the place.
Some of Tim and Scott's stories are entertaining and worth the listen.
those are fighting words, my friend. Fear of the Dark and Paschendale are just two examples that came after Seventh Son and are rightly played often by the band at their concerts and immensely popular.
heh, talking about dogma (I just did), and my favourite IM singer is Paul, NOT Bruce. Although Bruce has a better/richer voice, I like the punk-tone of Paul's voice. I have this "fight" with my mates everyone we go to see IM live :)
New songs do have an incentive to emerge - it’s just human creativity.
In the last 2 decades distribution has been massively democratized, the opposite of what your fear is. Anyone can distribute their music online to billions of people for free (YouTube, SoundCloud, etc).
I hope he succeeds and makes "every pop song" so expensive to license that pop music just dies a natural death, yielding way to musicians who can actually play instruments and singers who can actually sing. The current situation is kind of absurd.
In the current world, it seems the "artist" has taken the form of a hive mind (artists and songwriters) while the "instruments" are the mechanisms of production and distribution - and monetization: microphones, pickups, mixers, autotuners, amplifiers, filters, mastering artists, distribution companies, Logic Pro, digital-to-analog converters, headphones...
Unless they're seeing a live symphony or literally sitting in the recording studio with an artist, the vast majority of people (99.999%) aren't hearing music performed by the named artist. They're hearing music recordings generated by teams of people and performed by a computer.
Local musicians (the main source of music for people earlier than about 150 years ago) just cannot compete with the supranormal stimulus of pop/rock/soul written and performed and mastered by students of psychology and music and distributed by capitalists.
It's kind of like most of the stuff in a US grocery store. It's overprocessed and it's not really food, but people buy it anyway because their TV told them to.
This doesn't bother me one bit. I think he's making a mistake though.
Taylor Swift, Timbaland, and Bruno Mars are all arguably homogenous music made by marketing groups for middle American focus groups. They are endlessly replaceable, rather forgettable, artists and will be lost to history by the 'next big thing' that sounds just like it or very similar in a year or two. It has more in common with pop fashion than originally expressive art.
Music made by marketers for middle America focus groups commodifies music so that the next thing can easily replace the current thing.
Who remembers blaque, or 3LW, or All-4-One or the train is boy and girl bands from the past?
This is just the music business cannibalizing itself.
Truly expressive, original, personal, music will always be timeless in my opinion, because its irreplaceable, the style is non reproducible, and it's pretty much unexplainable how it's created.even by the artist...see led zepp, Beatles, Billy Corgan, Mozart, etc. etc.
That's my thoughts and what music I think what he should be focusing on.
This gives me the impression that you didn't quite get what the article was about, and I'm not supposed to suggest that you didn't read it but let's just say I have my suspicions.
This company is often buying songwriter's catalogs, not just specific public-facing artists that come and go.
And while you may not remember the artists names, these songs often end up in commercials and other adaptations that generate revenue, even if they're not actually the original recording.
If a commercial plays the song "Whip It," do you remember that it was performed by Devo? I sure didn't, but I've seen it in a heck of a lot of commercials, like this one: https://www.youtube.com/watch?v=VqnPciNhQXU
The rights holder to that song undoubtedly made money from that commercial, even though the lyrics have been changed.
The importance of the songwriter over the artist has been growing, all of this was mentioned in the article.
> The importance of the songwriter over the artist has been growing, all of this was mentioned in the article.
That has always been the case in the USA.
The band's songwriter buys a mansion, and the rest rent apartments.
The Go-gos (writer Jane Wiedlin), Twisted Sister (writer Dee Snyder) and Smashing Pumpkins (writer Billy Corrigan) broke up over that, and prolly a majority of other bands.
What's interesting is that above even that is owning publishing rights, pioneered by Frank Sinatra. He produced his own albums, then after he mastered he shopped for a distributor.
Almost no US musicians bothered to retain publishing rights, aside from Steve Vai, Frank Zappa and a few other hard-asses. I tell Youtubers to "own your publishing."
This comment is very focused on your point of view of what timeless music is. Plus your examples of who remembers are all artist or groups who were big for a song or two. Middle tier artists. There is a difference as far as staying power between the first set of artist (Swift, Timbaland, Bruno Mars)you used as an example and the second set (Blaque, 3LW, etc).
