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).
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.