Downward is Heavenward, but how we got there i don't know

C: i think you should talk about the corporate takeover of artists catalogs. 

B: i don't disagree, but that's a tough one to tackle because both sides have legitimate arguments, and neither choice is a good choice. 

C: what do you mean? 

B: how could i possibly say Bob Dylan or Stevie Nicks are wrong for choosing to cash in their chips and settle for the current monetary value of their music? They aren't wrong, it's their music and their choice. You can't afford to buy Bob Dylan's publishing rights, can you? 

C: well no. 

B: who ever inherits them is just gonna sell them anyway. Regular people don't have the education and experience to make sound investment decisions as a legal business. At least this way they don't get tricked or robbed out of those future royalties. Now, i don't for one second believe Bob Dylan wants his music selling cars or funding the pet investments of UMG execs, but what other choice does he really have? You and i can't buy Bob Dylan's catalogue from Bob Dylan. His songs are his capital and he decided to cash in their current market value rather than continue to use them as collateral to fund the next project he isn't going to make. It sounds morbid, but Bob Dylan is going to die soon. 

Conversely, what does the giant grab for total rights from the aging demographic of rock stars do to the larger music economy? A few potentially possible goodish things if UMG wants to act like a proper steward of his legacy, but a whole lot of not good things for everybody not mentioned in Bob Dylan's will. 

They are investing their money in old music at the expense of new music for the profit of UMG. Will any of that trickle down? Will the royalties from 10 million Bob Dylan streams be used to fund the next record from that band you like, or will they use it as leverage to jack license fees higher, sue independent labels into their own control, or shut down artist access to streaming platforms all together? Will they just pull all his music and we'll never hear it again? Will they reissue some of those albums? Will they upload 'em to the highest bidding database as a simple value swap? Flagging videos on youtube and dictating which platforms consumers must use to access it? 

This isn't an exploitation problem so much as a question of UMG's larger economic intentions. It matters what they actually do with the music as an asset. The problem is what they aren't paying for, they aren't paying younger generations to make more music, they aren't searching for the new voices of new markets, they aren't supporting arts education or supporting retail, they are instead aggressively buying up the assets of artists who will soon die in order to profit from the capital gains when they do. The result is a bigger lottery economy at the mercy of huge corporations. It's a bit like wanting to be a baseball player, but getting traded to a new team every other year. 

My lament is obviously the loss of record stores, but there are two sides to that coin. Heads, there is the inherent fluctuation of recorded music as a form of entertainment. That's just life. Tails, no one can afford to buy in to the old-school distribution system demanded by the physical media. You and i can't afford to open a wholesale account with The Orchard or The Beggar's Group, or any of them because that investment is well above any reasonably practical foot traffic (physical or internet based). That's the same problem facing agriculture. You can't afford a quarter million dollar tractor, patented seed, and the land lease. Same problem with cars and houses. All the honest farmers i talk to will tell you, at the end of the ledger you're looking at living your life on the same 20-40k as everyone else no matter how many millions your harvest or crop insurance actually generated. It's not magic or a fluke of nature, the total economy tends toward equilibrium based on the per capita national debt (aka money supply). It's a zero sum game, meaning all pluses have corresponding minuses in the real world. Every loophole has an equal and opposite gotcha. 

The basic problem with all the flavors of capitalism is that they require infinite growth, an endless supply of new labor and an equivalent amount of money to pay for it. To use the familiar idiom, the interactive birth and death rate of consumers determines the amplitude of market volatility, but there is no actual net gain. All profits are equivalent losses. All Dylan did was take a fair exchange for the value of his assets. That's what you do every time you file an insurance claim or withdraw money from savings. That's completely different from Jesus and Mary Chain or Chavelle or any other band who took out a confusingly worded business loan at highway robbery interest rates. 

As i implied, the scenario can go any direction UMG decides to go. The troublesome part is that UMG decides that, not the artists. It's not a certainty that this will happen, but as these high profile catalogs get increasingly taken over by large corporations there is a real possibility that they then attack the fundamental concepts of copyright and public domain. UMG could decide that they do in fact have enough liquidity and market share to electively liquidate all assets, take the money and run. That would be an even nastier blow to the economy as a whole. That doesn't mean "go out of business" like you might think, it means that all revenue is allocated in a static internal flow under the control of UMG. The same way the government can be interpreted to threaten the private sector by printing new money UMG can dictate supply and logistics based not on consumer choice, but on advertiser preference. It's not what you want that matters, it what we can sell. 

We can't answer these economic questions. These questions can be easily answered, the data very much exists, but it exists inside the impenetrable force field of UMG the private Firm. That's where it gets political. UMG knows exactly what their holdings have been paying for, they know exactly what they think any particular asset is worth and whether it's over or under valued and how they intend to manipulate and reassign those revenues. The real question is whether or not they are in fact intentionally running a Ponzi scheme. 

The Ponzi scheme is often misapplied to any dividend based payout, legitimate or not. The defining characteristic is not generically using new investments to pay off older investors (the common complaint against social security), the scheme is not actually investing any money in anything at all; meaning you aren't actually doing what your business plan says you are doing. You're just signing up new investors, handing that money to older investors, and fabricating your internal portfolio of activities because very few people actually look at or understand their financial statements. They see a plus sign and are perfectly happy. Back to social security. Our current system of social security managed at the federal level did not grow to its current proportions as some nefarious plot, it grew out of increasing failures of scale: from Civil War pensions, to company pensions covering about 15% of the labor force but barely paying 5% of them because they couldn't find a good reason to deny them, to state pensions that failed because they simply didn't implement them, to the current Social Security Administration which does actually implement the system with the occasional hiccup and rapidly changing eligibility requirements. Ancient Greece had an olive oil based welfare system, for contrast. 

So, the real question is what happens when the music business itself cuts out new music altogether? Investors are using the back catalogs of famous artists to buy more back catalogs of famous artists to pay for what? We don't know because they aren't reinvesting those profits into new music, so you end up paying your manager until he has enough to generously hand you back your own money? He loans you money so that you loan him money to buy what he already manages for you? You can see how this logic eats its own tail, the money comes from no source and disappears into nowhere. 

We end up owing more future money than we can feasably generate, but lack the ability to back down. For artists, however, they never really get those rights back because they were forced to transfer those rights to their publisher in the first place. 

From an investment perspective it makes total sense. People like the music they grew up with more than anything happening right now. They just do. I'm not people, i like new stuff and when i do want something old school i'm perfectly happy to buy a scratchy $4 used copy. I actually enjoy that more than a brand new copy most of the time. I still haven't opened those Hum records or even the stuff i wrote about 2 weeks ago. Their potential commodity value got to me and i'm working up the adrenaline necessary to let Sandra's boots do the persuading. But nope, here i am listening to it on youtube instead. I don't feel guilty for doing that because i bought a copy and you're looking at it in the photo. I've supported what i like in the way i'm allowed to, but i feel a deep sense of terribleness when i think about just letting it sit on the shelf until i can turn a profit from it. I don't like how it feels to be a capitalist in that respect, i can't do anything to help the guys from Hum other than tell you all how much i enjoy listening to their music. I enjoy it very much. 

Still, a part of me wants to be real, a part of me desperately wants to turn my love of music into influence for profit i'll turn around and hand to my friends in the form of funding their projects with only the brick wall of student loan debt standing in my way. Such is the conundrum of existence, i'm afraid. I can't crack it, only shrug and walk in a different direction. Anybody want to buy a hand made copy of a p(nmi)t EP? I've got a theoretically infinite supply of those.