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Penny Fractions: 'Rockonomics': Music’s Deep Inequality Problem

Hi everybody! Before hopping into the newsletter, I want to lift up another survey. The group Art + M
Penny Fractions
Penny Fractions: 'Rockonomics': Music’s Deep Inequality Problem
By David Turner • Issue #95 • View online
Hi everybody! Before hopping into the newsletter, I want to lift up another survey. The group Art + Museum Transparency, who earlier this year did a massive public survey on wages within the art world, is doing a new one that centers on internships at cultural institutions. I know many readers are beyond the point in their careers for internships but I wanted to share it with younger readers and raise awareness towards a more fair system for treating interns across the arts. Okay, let’s dive into this week’s newsletter.

Earlier this year I came across the title Rockonomics: Backstage Tour of What the Music Industry Can Teach Us About Economics and Life by Alan B. Krueger, an economist that served under the Obama administration as the Assistant Secretary of the Treasury for Economic Policy and the chair of the White House Council of Economic Advisers. The title alone sold me on the book but as I read further I became even more hooked. Krueger’s thesis in the book is pretty concise: the American rise in inequality since the early 1980s is even more acute within the music industry. 
He cites how the top 1% of earners in 1980 within the United States owned 10% of the wealth, but that ballooned to 22% in 2017, which was the worst level of inequality since the Great Depression. However, the numbers are more comical in the music industry where the same tiny sliver of top performers accounted for 60% of the wealth. Rockonomics surveys many parts of the music industry (streaming, live concerts, etc) but keeps seeing that same pattern repeated. 
Still, that basic argument—to juxtapose the American economy and the music business—fascinates me. The economic issues of working musicians aren’t completely unique in the broader market. The core difference I see is the decline of unions and the brash corporate deregulation, but Krueger simply doesn’t point a finger with my vigor. That fundamental disagreement kept me on guard while reading the book, even when I found myself in agreement. A big reason is that the book falls into a trope that plagues most writing on music business, which tends to center on rock and roll.
Music Began In 1950s
The topic of music streaming arrives later in the book and Krueger falls into sharing a rather frustrating perspective. He writes: “The music industry has been upended by new technology about once every decade. Faster-playing 78s gave way to long-playing (LP) albums and 45s in the 1950s and 1960s…” The name of the book is Rockonomics so I do not expect a ton of discussion of the music industry before rock and roll’s creation. However, this common reading of music history limits the depth of analysis that one can provide. 
Contemporary music business dates back to the mid-19th century, when song publishers, through the selling of sheet music, were the original firms to profit from the labor of artists without fair compensation. Krueger does take that large step back when discussing copyright and how over the decades those methods of calculation became increasingly convoluted. That is an important history to know in understanding the messiness of royalties, but he never explores the economic system that fueled popular music before the 1950s. 
This oversight completely ignores the nationwide strikes put on by the American Federation of Musicians during World War II, prior to the big postwar strike wave. The initial 1942 strike lasted for over a year and forced radio stations to play older recordings as musicians refused to record new music, since they were fighting against the fast-recording technology that was pushing them out of performance jobs. Eventually, record labels bucked under the strike and the AFM secured a fund created by record industry profits to help finance public concerts and support the artists who were between gigs. 
Hazel Meyer, in her 1958 book The Gold in Tin Pan Alley, describes the deal: “The settlement had two major effects, aside from lifting the ban: Musicians would presumably be better off in the future when they were out of jobs or sick; and the royalty paid out by companies was tacked onto the price customers paid for records.” I mention Meyer’s book because it was written before the narrative of rock music was put to paper and discussing the history of the music business required, even if in passing, a discussion of the powerful union of which thousands of musicians belonged. 
What Krueger’s book lacks, by never stepping back a few years prior, is that many gains won by the AFM were never passed onto a new generation of artists. The concerns over record deals and business dealings done in isolation weren’t preordained to be the norm. Most rock-centered writing turns a blind eye to this history and misses the connection to the deeper point of how record labels hold so much power of musicians because of the lack of uniform labor rights that were eroded over the 20th century.
Now That’s A Good Idea
I’ll admit few popular music business texts ever connect all of the dots I just mentioned, so I won’t hold too much against Krueger, who offers strong points in nailing down the contemporary moment. He leans heavily on blaming Napster and piracy for costing the industry billions of dollars, though much of the academic research is mixed on that assumption. The economist does challenge the idea that internet access alone would spark an artist revolution that would topple the major label system. The fact such a reality hasn’t transpired yet makes what was a common thought in the late 90s and early 00s harder to conceive. 
A company that gets mentioned more in this book than I would’ve expected is Patreon. Anyone’s that’s grabbed a drink with me or received a slightly overly-detailed email from me knows I think a lot about how Patreon could step towards a far more equitable music industry. Krueger connects Patreon’s model of a direct-to-fan subscription with Radiohead’s pay-what-you-want offer for In Rainbows back in 2007. Now with enough hindsight, the band’s decision to break away from traditional release methods could’ve really set a new path forward, and it certainly influenced a site like Bandcamp. However, these kinds of models remain uniquely underdeveloped within the major label music system. 
I was saddened to learn that the author Alan B. Krueger committed suicide earlier this year prior to the release of the book, as he clearly dove deep into an industry that many people hold close to their hearts. Thus, my biggest praise for Rockonomics is that even if I disagree with some finer points, it offers a softly critical eye on an industry that could always use a bit more poking. 
Unheard Labor
The Baltimore Symphony Orchestra remains locked out and a recent audit of their finances shows a rather dire situation for the musicians. The stand-off remains with Maryland Governor Larry Hogan still refusing to offer more state funding. The BSO management attempting to slash orchestra salaries despite the reporting shows their own mishandling of money. Now, here is the second part of my interview with Daniele Yandel, whose band Guache just released their newest record, A People’s History of Gauche:
I’m always interested in hearing where that sort of falls in with people because I guess I’ve always been smidge critical of playlisting. 
Are you kidding me, it’s essentially payola! It’s payola for a new generation. I’m sure that will go away once it gets properly regulated, once people see Spotify as the new radio and as a public platform that everyone uses to access music. It would be great if it could be regulated the way that radio is right now. 
Did you have any further thoughts on the idea of the regulation of music platforms? 
When Priests put out our new record, we decided to put it out on our own label but we knew we needed more infrastructure. We decided to sign a distribution deal with Secretly Distribution. SD is a group that distributes many labels, which essentially means they store our catalogue in a nice warehouse and ship it out to stores around the country and sub-distributors around the world, and because a bunch of labels are banding together, we save money on shipping. SD also digitally distributes our catalogue and again, that’s because a bunch of labels have banded together in SD and SD in turn banded together with other groups into a bigger group called Merlin. [They] have more lobbying power than we did when we were just doing it ourselves through platforms like Tunecore [or] CDBaby, where you’d pay a one-time-a-year fee, and it’d perform how it’d perform; no one is pushing it. You could get lucky, but you probably won’t. 
Through Merlin, we can lobby for digital platforms to pay attention to and spotlight our upcoming releases. This gives us a little bit of the type of access to DSPs that big labels like [a] Universal, Sony, and Warner. Some artists will get lucky and blow up because the right playlist finds them and then another until you have a domino effect. That’s what happened with Snail Mail, and I’m very happy that happened. But for artists that are on big labels, they have people pushing their music all of the time, they have special backroom deals with Apple Music, Spotify and they can get financing to make videos if they’re willing to say, ‘People can only see my video or single for a week on your platform and you’re going to give me a bunch of money to do that’ and that’s the deal we make. 
We’re starting to get access now that we’re part of Merlin but we still don’t have access like Sony, Universal, or Warner do. And having that backroom access, if Spotify continues in the trend that it’s moving right now and becomes the only way that people listen to music, can really make or break an artist. The backend access on something like Spotify or Apple Music is so fucked. It’s crazy how crooked it is and I say that as someone trying to get a piece of the crooked pie. I’m trying to not get my artists fucked. I’m trying to get my artists enough notoriety that they can tour and make money. And to do that, I have to play this crooked game and even then I’m a peon in that pie. 
What would regulation do to help this situation do? 
There are historical analogies; that’s why I bring up payola. Radio stations were big taste-makers back in the day and the primary means through which listeners discovered new music, much like the big playlists are today. You know if you look at someone who’s super young like…
Billie Eilish? 
Billie Eilish is a great example of someone who had industry backing. You know their audience is huge because they have all of this muscle behind them and what was happening in the 50s was that artists would break cause these big national DJs would play them. It was all through bribes on the backend, it was all people being like, ‘You have to talk to me, I’ll pay you to play this’ and to me, it’s essentially the same thing, except that rather than bribes, it’s about who has the biggest money and the most leverage. The same way that labels in the 50s got radio access through bribing DJs. Then Congress stepped in and said that the radio waves are a public utility and you can’t be paying to get on them. These are supposed to be curated by people’s tastes or what’s popular, and they made it illegal and outlawed the practice. 
Could you say a little bit about the upcoming record that y’all have coming out? 
Sure, the Gauche record is called A People’s History of Gauche, it’s kind of weird because these songs were recorded two years ago and we were just in mixing hell for so long. But through the genius of Don Godwin over at Tonal Park, we finally got it done. Then our friend who works at Merge, Dave, was like, ‘Can I show this to Mac and Laura?’ and we were like, ‘Sure’ and then they were like, ‘We wanna put it out’ and we were like, ‘Yay, that’s amazing’. 
It’s like amazing punk music that’s just about the stuff that bothers us in our everyday lives. I think that everyone who plays on the record is a total shredder making beautiful music, and I think it’s fun to listen to. I think a lot of punk music can be dogmatic and preachy and the strength of Gauche is much more the idea of ‘If you can’t cry about it, dance about it’. The catharsis is through joy and expression, and I don’t think it comes across as angry even if the catalysts made us angry. That’s essentially the content of the song and the formal mode, the medium, is this is a much more joyous, cathartic, dance-oriented kind of thing. 
Corrections
In last week’s newsletter I incorrectly called the Genius video series On The Record, it’s actually called For The Record. My bad!
6 Links 2 Read
This story by Axios is boilerplate American xenophobia directed towards China. I’m putting this here because my issues with TikTok are in its repetition of advertising-based capitalism. Criticism of TikTok that specifically focuses on its Chinese origin is xenophobic and dangerous, and I would hope the music industry is aware enough not to fall for such nationalistic rhetoric.  
This is a great summary of the current conversation happening within the more critical end of music streaming. I guess my next question is a bit simple: If we know the problem and are trying to imagine a solution, then what’s next? 
The idea of streaming undermining the ability for producers to sell music is unnerving. My only hope is that perhaps this could be the catalyst to start thinking through potential ways of approaching digital music marketplaces when it appears that most companies value their own bottom lines over artists. 
This is lovely and further re-affirms my deep, deep skepticism towards Spotify’s ability to pivot into an audio company. The U-turn I wish Tim sighted was around Spotify’s previous statements in the early 2010s about hosting individual song downloads. 
The headline really says it all. I must give some credit to Live Nation for finding new ways to remain the slimmest company in an industry built on truly craven methods of exploitation. 
Typically, music outlets report on an artist being broken by a streaming service after the fact; where MBW caught the public relations story happening in real-time. I can’t wait to see which service will claim victory in a game everyone can watch.
The Penny Fractions newsletter arrives every Wednesday morning (EST). If you’d like to support it, check out the Patreon page or follow it on Twitter. The artwork is by graphic designer Kurt Woerpel whose work can at his website. The newsletter is copy edited by Mariana Carvalho, with additional support from Taylor Curry. My personal website is davidturner.work. My current job is Curation Analyst at SoundCloud, so all thoughts here represent me, not my employer. Any comments or concerns can be sent to pennyfractions@gmail.com.
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