Private Equity Is Using Copyright To Cannibalize The Past At The Expense Of The Future
from the pennies-for-dollars dept
Walled Culture has been warning about the financialization and securitization of music for two years now. Those obscure but important developments mean that the owners of copyrights are increasingly detached from the creative production process. They regard music as just another asset, like gold, petroleum or property, to be exploited to the maximum. A Guest Essay in the New York Times points out one of the many bad consequences of this trend:
Does that song on your phone or on the radio or in the movie theater sound familiar? Private equity — the industry responsible for bankrupting companies, slashing jobs and raising the mortality rates at the nursing homes it acquires — is making money by gobbling up the rights to old hits and pumping them back into our present. The result is a markedly blander music scene, as financiers cannibalize the past at the expense of the future and make it even harder for us to build those new artists whose contributions will enrich our entire culture.
As well as impoverishing our culture, the financialization and securitization of music is making life even harder for the musicians it depends on:
In the 1990s, as the musician and indie label founder Jenny Toomey wrote recently in Fast Company, a band could sell 10,000 copies of an album and bring in about $50,000 in revenue. To earn the same amount in 2024, the band’s whole album would need to rack up a million streams — roughly enough to put each song among Spotify’s top 1 percent of tracks. The music industry’s revenues recently hit a new high, with major labels raking in record earnings, while the streaming platforms’ models mean that the fractions of pennies that trickle through to artists are skewed toward megastars.
Part of the problem is the extremely low rates paid by streaming services. But the larger issue is the power imbalance within all the industries based on copyright. The people who actually create books, music, films and the rest are forced to accept bad deals with the distribution companies. Walled Culture the book (free ebook versions) details the painfully low income the vast majority of artists derive from their creativity, and how most are forced to take side jobs to survive. This daily struggle is so widespread that it is no longer remarked upon. It is one of the copyright world’s greatest successes that the public and many creators now regard this state of affairs as a sad but unavoidable fact of life. It isn’t.
The New York Times opinion piece points out that there are signs private equity is already moving on to its next market/victim, having made its killing in the music industry. But one thing is for sure. New ways of financing today’s exploited artists are needed, and not ones cooked up by Wall Street. Until musicians and creators in general take back control of their works, rather than acquiescing in the hugely unfair deal that is copyright, it will always be someone else who makes most of the money from their unique gifts.
Follow me @glynmoody on Mastodon and on Bluesky. Originally published to Walled Culture.
Filed Under: copyright, music business models, private equity, streaming
Comments on “Private Equity Is Using Copyright To Cannibalize The Past At The Expense Of The Future”
The labels are the biggest problem. A few companies gate-keep popular music and force horrible contracts on artists. An artist can sell a million records and still be in the red, while the label makes a killing.
I’d encourage people to buy via alternate sources in ways that fund musicians more directly. I was a big fan of Bandcamp but it got gutted – maybe it’s still decent – not sure. If there’s another similar source for music, please post it here.
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Half a century of privatization and trickle-down economics is the biggest problem.
A lack of public healthcare infrastructure is entwined in that.
They started selling our communities and our futures in the 80s and never looked back. In that time span, we’re back to gilded age levels of wealth disparity.
All of this means a desperate worker pool too busy to engage in the arts.
Thank God for shitty high school punk bands.
OK, you showed your work on the “cannibalizing the past” part, but you forgot to support “at the expense of the future” part.
How exactly does a venture capital firm buying up old songs hinder the creation of new ones? It certainly doesn’t hinder distribution — independent distribution of music has never been easier.
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Consider the following: Even though making and distributing music is easier than ever these days from a technical standpoint, making money from music is much harder thanks to vulture capitalism ensuring that only corporate-backed musicians can ever become truly successful. Sure, maybe someone makes a few songs to sell on Bandcamp as a hobby and that’s good for them, but no one is going to become the next Taylor Swift or Beyoncé without someone with a shitload of money putting some of that money behind that artist (in exchange for a huge chunk of the royalties from their music sales, naturally). And that’s not even getting into how making music is becoming harder from a socio-economic standpoint thanks in part to inflation, noise ordinances, and a growing lack of “third spaces” for people to practice/jam out/whatever. Fewer people making music because it’s just not economically and socially feasible means less music overall—i.e., vulture capitalists cannibalizing the past created our present at the expense of the future.
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Fair enough, but it’s still not clear to me that these private equity people or any of the other stuff you mentioned is hindering the creation of music. That’s not necessarily a function of how easy it is to make money, nor is that the stated goal of U.S. copyright law: “to promote the Progress of Science and useful Arts”.
Compared to 1970 or 1990, for example, I imagine it’s much cheaper to create and publish albums: everyone’s already walking around with a recording and mixing studio in their pocket (if not quite at a professional level), and it’s easy to put stuff online (again, maybe not as a “profession”). So I’m not sure “inflation” is a big concern, nor am I sure the disappearance of “third places'” has a huge impact: it’s long been a trope that bands have difficulty finding places to practice without annoying the neighbors.
So, what do the actual numbers look like? Is there actually less new music available today that some decades ago?
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Again: From a technical standpoint, making music is easier than ever, but from a socio-economic standpoint, making music is getting harder—and less rewarding—unless you have a shitload of money backing up your efforts. Private equity (in the form of the record labels and their investors) makes things worse by taking more and more royalties from sales and streams of albums/songs, which makes selling music less profitable for the musicians, and that makes monetary success all but improbable for any musician who isn’t backed by private equity.
Private equity (and the market in general) making music more expensive to make and less profitable to sell means people who would make music if they could afford to make it might stop making it if they can’t make money from it.
That’s what I meant when I said making music is easier from a technical standpoint: Many of the tools to create and distribute music are more widely available than they’ve ever been. But that doesn’t mean the hardware for making music (including computers/phones) is less expensive.
That’s my point about noise ordinances and the lack of “third spaces”: With fewer options for places to practice/jam out/whatever, people who would make music might stop trying to make music because they lack a place to go where they can hone their skills.
A fair point: I would wager that there is more new music available today. But discoverability is hampered by the glut of music available today and private equity’s ability to concentrate attention on big-name acts (including already-successful acts), and the lack of profitability from streaming won’t encourage musicians who aren’t already backed by private equity/their own fat bank accounts.
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What’s changed, though? You could probably watch a 50-year sitcom and see a wannabe band being kicked from garage to garage as their parents get annoyed. Wikipedia’s “third place” page lists “churches, cafes, bars, clubs, community centres, public libraries, gyms, bookstores, makerspaces, stoops, parks, theaters, and opera houses”—but which of those is no longer available and was important for the popular bands of the past? (Perhaps churches, if choirs led to bands.)
For now, I’m still in agreement with Dan that “at the expense of the future” hasn’t been convincingly argued. Yes, there are difficulties, but most of those have little obvious connection to private equity. And record companies have been enshittifying the task of making music for most of their history. There’s a reason we talk about “starving artists”.
The idea of “selling music” was basically invented by the type of capitalists you’re blaming. Technological progress starting around the 1970s has caused it to become less and less sensible, to the extent that the word “sale” is now a pretense and often outright fraud.
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If I can’t eat and pay my bills, why the fuck should I have a hobby, or even try to enjoy life?
After all, the only thing that matters is economic “progress” and the fucking cogs should not complain, lest we all become Marxists.
That’s what you are saying. You are implicitly saying that hobbies and the creative arts are for the rich, and by extension, private equity.
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i know your trolling cuase of your Marxist claim
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Who knows? Maybe you’d enjoy music-making more if it were a non-productive hobby after a day of more conventional and boring work. Maybe putting people in bad situations actually leads to better music (what would become of country music and blues without broken-down pick-up trucks and cheating lovers?).
But the question isn’t about the way things “should” be, it’s about what’s actually happening. If private equity’s role were increasing, and private equity caused people to avoid making music, we’d be seeing a notable drop in new-music availability. But saying it causes “blandness” is tricky: how do we measure that, and do people even agree it’s happening?
The problem runs deeper than some recent “private equity trend”. U.S. policy has always involved all kinds of financial measurements, and pretty much zero measurements of happiness. One optimizes for what one measures; and, to quote Wikipedia,
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I’d enjoy having hobbies if I could find decent work to do.
Not having to look forward to having to work towo shitty fast-food/supermarket jobs with the possibility to not make ends meet.
And even then: I was raised to consider hobbies as mere distractions and that if I had idle time, I should be throwing myself into the rat race and destroying my sense of being to make a fucking line go up. (Escaping from one’s culture is harder than it looks)
The issue isn’t new-music availability (there’s plenty of that, even in the 1940s or earlier), it’s a matter of future new-music availability.
Music, or any other creative art, isn’t formed fresh from the mind. This is what you assume.
Creative arts are formed from the influence of the world on someone. Which includes music, drawings, even writing.
The involvement of private equities will lead to the locking up of a lot of these creative works, the effects of which we can see RIGHT NOW. Disney “vaulting” their older works for a future “limited edition release”, Taylor Swift having to rerecord her best hits, to use 2 examples.
Now, imagine that sort of nonsense extending to ALL MEDIA. Because I sure fucking LOVE seeing Neal Stephenson’s Snow Crash Or Sir Terry Pratchett’s life’s work locked up, never to see the light of day. Or worse, old news articles under a fucking paywall and I need those articles to write
a report or something.
If you’re okay with a life and future where your entertainment and information is dictated by a bunch of brunchlords and their paid-for politicians, be my fucking guest.
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Who said it’s okay? Copyright should be abolished—lots of us have digital copies of Snow Crash we’d then be able to post openly—but not because people have stopped making music or publishing books.
You’re still missing the point. I’m not assuming it. I and Dan are asking for evidence as to whether the hypothesized negative effects are happening. Stephen gave several good reasons about why one might think they’d happen, but that’s not quite the same thing and there’s no obvious link to the “brunchlords”.
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Your point is “people can still make music, and it’s easier than ever thanks to the Internet and whatnot.”
That’s from a technical and distribution standpoint, which, unfortunately, you are right there.
However, from a legal and economic standpoint…
Why create if everything is gatekept by the brunchlords, and anything you consider “original” will eventually get you sued at best, or in a fucking jail cell at worst depending on the country? Why make anything when at least 60% of your net sales gets siphoned off into the brunchlords’ pocket, if you happen in live in a country that embraces copyright maximalism to its intended outcome?
(The legal nonsense is very, very well-known. The money you have to pay to the RIAA/MPAA/brunchlords via, ahem, “royalties”, less so.)
The effects ARE happening. It’s called “the current copyright regimes”. And yes, it’s been going on for as long as music got in bed with corpos.
Now, if you want to talk about blandness…
I keep up with videogame news from both the industry side and the, ahem, paid-for adverts and propaganda masquerading as news side. The “blandness” is pretty damn apparent on the brunchlord side of gaming. Activision remaking the same fucking CoD, EA remaking the same Battlefield, Ubisoft remaking Far Cry 3 at least 3 times and the inherent crappiness of Skull and Bones…
Hell, even Nintendo’s games are slipping in quality. Square-Enix is trying fucking NFTs.
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No. My point, like Dan’s, is simply that there seems to be no strong support given for the idea that the private equity “brunchlords” are “cannibalizing the future”. I could brainstorm a hundred reasons why that might be true…
While that’s a great question, it seems to me that more people are “creating” than ever before. The shit people have to put up with on Youtube (for example)—takedowns, people “claiming monetization”—is absurd, and yet they stick with it, even continuing the use the copyrighted materials that get them into trouble. “Why?”, indeed. Wouldn’t it be great if they decided “fuck the MAFIAA, we’ll make our own original stuff”? Alternately, “fuck copyright; we’re not gonna pay for copyrighted stuff anymore, and we’re gonna lobby for copyright repeal”.
(I have no idea what you’re talking about when you say original work would lead to a lawsuit or jail. What basis would there be? Lots of people put original stuff online—serial stories like “Worm”, all kinds of podcasts, independent music on mp3.com way back when.)
Your points about video games seem valid, but I’m not sure it can be blamed on private equity. And I can’t help but recall that the first game I owned an official physical copy of was Super Mario Bros. Three, way way back in the 1980s (at which time my parents were complaining about Hollywood re-making the same movies over and over, though of course they were new to me).
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Making music for me is more of a side hustle than an actual career. My music is Creative Commons: Attribution-Noncommercial, and it’s distributed everywhere, bandcamp, streaming, iTunes, everywhere. While I occasionally get a purchase from bandcamp, I find my revenue goes up gradually from streaming (to wit, my CDBaby backend). The difference between bandcamp and streaming to me is the difference between slow dollars and quick nickels.
government politicians established a phony ‘Property Right’ to abstract, non-physical, infinititely duplicable human “ideas” such as Music, text-arrangements/writings, etc — stuff that can never be legally managed as hard economic “property”.
Mass legal confusion, financial exploitation and public harm are the predictable result of special-interest political meddling in basic economic functioning.
“Intellectual Property” is political nonsense
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““Intellectual Property” is political nonsense”
Think of it like gender. Idiotology. It is on a spectrum…Just think how long copyright will last once AI starts applying for it.
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Those are going to be interesting times, watching content creators advocating for stronger ownership and harsher penalties frantically backpedal when the same overarching rights they demand might be going to someone else. Or something else.
"Their" works?
It seems almost self-contradictory to say “theirs” while admonishing copyright. Before sound-recording, music was always “ours”; a common activity, not something to be owned. So what would “theirs” and “control” mean in this context? Why call out “creators” as a group separate from the general public?
Re: Because of economics
“Art is not an angel whispering in your ear; it’s hard work” to quote the late Stephen Sondheim.
If you want to, you try making music. When you’re done you can set it to public domain or any copyleft license all you want. I’m not being sarcastic, I really do encourage you to try it, there’s tons of open-source music making programs out there like Audacity.
When you’ve come back, I hope you see the amount of investment it takes to start doing a lot of specific fields in art. I’ve got music theory textbooks that I couldn’t get through; that’s why I’m not a musician today, despite occasionally still jotting down melodies. I’m current working through a mechanical drafting textbook; it’s taking me months of applied effort to just get started. And I’m just a programmer by trade.
As in Error 402, an article on this very website, quote “information wants to be free and information wants to be expensive”; the first unit of information requires work, and the question is how to compensate for that unit so that it makes economic sense to produce more units of it, because we live in capitalism and people need to eat. Copyright is a 300 year old bargain that’s essentially a limited state-enforced monopoly on an idea. I don’t necessarily know if the state should even be granting state monopolies in this day and age, but nonetheless, this is how the current system works.
If you want something, you have to pay for it, one way or another, either through advertising eyeballs, copyright, patronage, or something else, but I do hope that it should be Econ 101 that as Price of a product goes down, Quantity Supplied also goes down.
The answer *was* Patreon
The Death of the Artist by William Deresiewicz, which came out in 2020, makes most of these same points, and points out that artists today mostly have already transitioned to other revenue sources.
Artists have mostly shifted to Patreon and related platforms now. Problem is, of course, since everybody is doing that these days, the pool of available money is mostly finite since most people don’t donate. But Patreon has been the one bright spot in these industries so far.
And of course, there’s always commercial and branding deals; the current generation of artists are rather less coy about being a “sellout”, which is probably a sign of the current financial climate. This is probably a welcome change; I always felt like bailing on money was like shooting yourself in the foot.
Wow
I have read many dumb articles about private equity but this is unquestionably the dumbest. If I am reading this correctly, the author is trying to blame the private equity industry for negatively impacting music by buying the rights to an artist’s catalogue?? So a willing buyer (PE) negotiatingan arm’s length a deal with a willing seller (the artist) is somehow characterized as bullying / cannibalizing behavior?? First of all, the vast majority of these deals are for existing catalogues which have absolutely no bearing on anyone’s ability to create new music (I would argue that the more logical conclusion might be that the buyer may make these catalogues less accessible in the future by increasing the royalties on them and hence actually encouraging the creation of new music to fill the gap). 2nd, the majority of the sellers are sophisticated parties and/or already very wealthy musicians who can afford sophisticated advisors hence the concept of bullying or cannibalization by the PE buyers makes no sense. If some rich guy like Paul McCartney wants to sell his share of the Beatles catalogue for a price, that is 100% his prerogative (frankly, this is actually a helpful service for aging musicians that are in the estate planning stage of life since they won’t be around to collect the royalties forever!). 3rd, the structure of these deals is about as basic as it comes, the PE buyer is essentially buying an annuity stream of revenue at a a “discount” that builds in a satisfactory return for them. On the other side, the seller gets a nice lump sum of cash today while the buyer gets the future revenue stream, which coincidentally implies that the buyer will probably want the music to be widely available so that they continue to generate royalties (my comment about potentially raising the royalty rates notwithstanding). Finally there are multiple buyers and sellers so this is a relatively transparent market. There is absolutely nothing dirty or nefarious about this. The copyright holder of the music is selling for a price that they are comfortable with – no one is holding a gun to their head and forcing them to sell.
As it relates to the author’s assertion that the ability to monetize one’s creativity by selling their copyrighted material in the future somehow at the same time stifles their creativity, well, you just have to read those words to realize that assertion makes no sense at all. If anything, the market for music catalogues allows artists a nice avenue to generate wealth for themselves and capitalize monetarily on their work.
None of the above has anything to do with the dramatic shift that the music industry has gone through over the last 20 years (other than to the extent that maybe some private equity backed companies were involved in developing some of the technologies that ultimately led to the creation of streaming) as streaming services have largely disintermediated traditional media formats like cd’s and cassettes (the vinyl resurgance being something of ananomaly). Many industries go through these dramatic types of shifts generally as a result of new technologies (cars replacing horses & carriages, telephones replacing telegraphs, cassettes replacing vinyl, e-commerce replacing brick & mortar retail, etc). Dramatic shifts like this often do result in some pain & suffering for those who work in the industry that is experiencing this type of rapid change until a “new normal” is achieved. Until that happens, there will be discomfort for those involved and sometimes the end result on the draconian side is that the industry shrinks or goes away. But in many cases, it just means adjusting how the industry works and that is what is happening with music. Music has not been disintermediated by any of the newer forms of entertainment that have come out over the last century such as television, cinema or the internet and music will not go away as a result of streaming. In fact, music has probably benefitted from those forms of media serving as another demand driver for music. With that said, the way we consume music has changed drastically with the advent of streaming and it definitely comes with a different economic model which does seem to make it harder for artists to make money off of just the “sale” of their music digitally than it did when physical distribution prevailed. So artists will have to adjust to compensate such as maybe by playing more live shows or creating more content they can sell.
But none of this has negatively affected the creation of music. If anything, streaming allows for much easier and cheaper distribution such that the cost to a streaming service of adding an artist is virtually zero. A miniscule amount of storage space vs physical distribution where record labels had to make significant investments into artists in order to produce a physical version of the music with no guarantee that they would generate enough revenue to recoup their costs, which was risky and therefore distribution (ie., a record deal) was extremely hard to come by. And that’s not even taking into account how many artists got scammed by their labels and signed bad contracts that paid them next to nothing.
As far as I can tell as a voracious consumer of music, streaming makes music more available to more people and how is that a bad thing?
When I was younger, there were so many albums I wanted to listen to but I was limited by the small amount of disposable income I had to spend on tapes or CDs. Today, for a fixed fee, I can basically listen to anything I want anytime I want. That may be bad for those artists lucky enough to get the small number of good recording deals but certainly gives many more artists the opportunity to find an audience and generally democratizes the music business. The downside may be less income from recorded music but I’m sure artists will adjust.
What I would like to summarize now is that I just wrote about basically two different topics only tangentially related. How the author somehow managed to blame private equity for something that was more a function of advancements in technology than some sort of boogie man financial engineering ploy only served to demonstrate how poorly conceived, reasoned, and written this article was. The media has decided (against almost all empirical evidence) that private equity is out there destroying the world and it seems like there are no shortage of ill informed “reporters” willing to jump on the bandwagon!
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In the same response to the article you went from “private equity is helping artists monetize their music in different ways” to “okay maybe there is a downside to private equity enabling companies to develop technology in ways that lead to reduced income”.
Realistically, where do you think most of the money from private equity is going? Based on what you do know, do you genuinely believe most of the money that changes hands in these transactions is trickling down to benefit the average person?
Possibly not at world-destroying levels, yet, but again the question remains – where do you think most of the money is going when Toys R Us went down? What do you think is happening when more people and families are renting, not owning their homes?
On the one hand, I don’t think you’re necessarily shilling on behalf of private equity. On the other… I do wonder what the angry chest thumping performance you’re doing on their behalf is for. Private equity firms are not nearly so helpless you have to take a bullet for the sake of their reputation.
Capitalism eats its young. Nothing to see here. “You can’t stifle the job creators.”
The free market is just another convenient fiction that enables the virtual shackles of the new indentured servitude, in the ongoing mission to grind everything on the planet into toxic, radioactive dust. Why? PROFIT, of course. Somehow nobody realizes that the shareholders will all be dead by then.
Why is this news only now? Disney has been doing this exact thing with trademarks for decades.