A strange week in music and tech, ad infinitum
Dave Allen June 2013.
Here we are and it’s only Tuesday.
Now let me be clear, this is not about Paul Krugman or Nate Silver per se. It’s actually about Bob Lefsetz, a self-styled mega-ranter on all things music and its future, who’s Zombie manifesto’s I can only read with great care and in selected doses. Krugman links to Lefsetz’ latest screed in which he conflates Arcade Fire and Nate Silver’s data analyzing prowess with the future of the music industry, ala: “Nate Silver is a superstar. He’s the model for tomorrow’s musical acts, but you just don’t know it yet.” I know Mr Lefsetz wrote his article in English, but his ideas are so garbled he might as well have written it in Latin.
What follows is Krugman’s take wherein those of you who are knowledgeable about how the music industry works will note some inaccuracies:
Over at Barry Ritholtz’s place, Bob Lefsetz argues that Nate Silver’s departure from the Times heralds a new age of journalism in which the individual journalist builds his or her own brand, and the middlemen — like newspapers — lose power. In fact, he compares Nate to Arcade Fire, who pioneered the modern indie rock movement by creating their own position rather than by relying on record companies.
I like this analogy, and as regular readers know, I love Arcade Fire. (I’m also a Nate Silver fan; I have no information at all about what his relationships with other Times people were like.) But there is a problem here.
It’s true that information technology makes it increasingly easy to carve out your own brand; I’ve done some of that myself. But it also makes monetizing information harder; I believe that Arcade Fire makes a lot of its money from live performances rather than record sales, and in any case they have not become wealthy. This is OK for music — great music can be made without super-profitable record companies — but not so OK for journalism, which relies on a substantial infrastructure of non-superstar reporters.
I have a couple of problems with Krugman’s POV. Yes, Arcade Fire has been on a few record labels, something that a quick look at Wikipedia confirms: – Merge Records, Mercury Records, Rough Trade and City Slang. I have no idea what their relationship to these companies was or still is, but they were not the pioneers of “the modern indie rock movement” as Dr Krugman writes. Many independent/alternative bands, almost collectively, could be given the same honorific. Even if Arcade Fire controls its own copyrights through decent licensing terms there’s nothing exactly unique about their circumstances either. Nor is “creating their own position” in the industry. Otherwise Krugman gets things totally right about the problem of “monetizing information,” and that “great music can be made without super-profitable record companies.” He’s also correct regarding journalism and its infrastructure of non-superstar reporters. The problem with journalism though, as with the music industry, is that the enterprise is collapsing, something I wrote about here.
The larger issue for me is that the rhetoric around the “Future of Music” is becoming more atomized by the day, and when intellectuals like Paul Krugman fall into the debate’s trap, I’d say things are in pretty bad shape. And unfortunately, PK accidently gives unwarranted credibility to the Lefsetz conflation by writing about his article.
And the week’s news grew stranger. I came across this article – Why Vinyl Is More Important to Artists than Streaming, Touring and T-shirts… It was similar inept article headlines or Google-bait topics like that, that inspired Charles Pierce to write a post recently on his Esquire Politics blog – Things In Politico That Make Me Want to Drink Antifreeze. Yes Charles, me too.
The ‘Why Vinyl Is Important…’ article could have been one paragraph long. All of those things the author lays out – vinyl records, touring, T-shirts – are important to any developing band these days. There is no single solution however she’d like to spin it. And in an odd lapse of editorial oversight it turns out that the author, Chelsea Van Bloom, works for Feedbands.com, a company that presses up vinyl records and sells them to music fans – go figure. However well-intentioned Feedbands is as a company, this article of Bloom’s can be filed under ‘native advertising.’
Over in an environment where the general rhetoric is much calmer, I suggest dropping in on Benedict Evans’ website and signing up for his weekly newsletter. Last month he was musing on the eclipse of the iPod and I enjoyed his own insights on the music and tech space, especially in mobile.
As music has moved on from the iPod, it has actually become much less important to the tech industry. With streaming and the decline of ownership, there are fewer barriers to switching service, and every device has a choice of music services, both from the platform owner (i.e. Apple/Google/Microsoft/Nokia etc) and as third-party apps. In effect, music has become a commodity. The big platform companies make sure they have it as a checkbox feature – they need to have music – but it’s not really important as a point of strategic leverage anymore. Music doesn’t give you a lock-in.
In addition, total 2012 recorded music revenue was only about $19bn – Apple made $18bn in revenue from the iPhone last quarter. When you subtract what you pay to the labels and artists the revenue left over to the music service itself is almost a rounding error in the scale of the tech industry. One could argue that trying to charge a little extra and make more profit is more trouble than it’s worth for Google or Apple (or even profit-hungry Amazon) – better to offer it at cost or thereabouts to enhance the value of the broader platform, which is where the real money comes from (advertising and devices respectively).
In other words, music is now arguably irrelevant to the tech industry, in strategic or ecosystem terms. You have to have it, but it really doesn’t give much leverage, because everyone else has the same stuff. And so the attention that music gets rather outstrips how important it actually is.
My emphasis above, BTW.
That’s it for now.