Independent Musicians and the Anti-Monopoly Movement (Episode 76)

Date: 11 Jul 2019 | posted in: Building Local Power, Podcast, Retail | 0 Facebooktwitterredditmail

Host Zach Freed is joined by Kevin Erickson, Director of the Future of Music Coalition. Zach and Kevin talk about the music industry’s role in the growing anti-monopoly movement and Kevin’s work at the intersection of music, community organizing and policy advocacy. They also discuss:

  • how increased concentration in the music industry has impacted independent musicians, including how major record labels use their market power to shape the marketplace for everyone else
  • organizing musicians to advocate as a collective on issues like healthcare
  • changing business models in the music industry and the impacts of recent mergers
  • how to build a media ecosystem that can better serve the needs of diverse local music communities

 

At this political moment where we have this growing, collective, all-hands-on-deck, national anti-monopoly moment, I think that there’s something really important that the music community can contribute, just because we’ve got so much direct experience with the impacts of ownership consolidation and monopolies in our own industries.

 

Hibba Meraay: Hey, everyone, it’s Hibba, ILSR’s communications manager, and I have Zach with me here today from our Community-Scaled Economies team.
Zach Freed: Hey!
Hibba Meraay: So Zach has been involved in producing Building Local Power. You’ve probably heard his name on the credits of the show, but today, he actually did the interview you’re about to hear.
Zach Freed: That’s right. I interviewed Kevin Erickson, who works at the Future of Music Coalition, which is an organization that helps do political advocacy on behalf of working musicians. We talked a lot about the music industry’s connection to our growing anti-monopoly movement.
Hibba Meraay: I really enjoyed this interview because it’s a little bit outside the bounds of the issue areas we normally work on, like energy or broadband, but still very much related, and really illustrates why concentration is bad across all sectors of the economy. I’m wondering, Zach, what inspired you to do the interview? Did you know that concentration was an issue in the music industry beforehand?
Zach Freed: Oh, yeah, definitely. So, aside from, like most people, being a lifelong music fan, I have two working musicians in my family, and most of my friends are musicians. I also help organize shows in DC and did college radio in school. So it’s a topic that’s always been near and dear to me, and definitely notice trends towards consolidation in the music industry at large.
Hibba Meraay: That’s great. I think it’s really cool to hear what inspired the conversation. I don’t have a lot of background, so I learned a lot of new things about the music industry listening to the interview. I was really shocked to hear that there are only three major record labels left today, down from six in 1995. So Kevin explains how they are really the gatekeepers, and they have the ability to use their market power to shape the marketplace for everyone else. It was one of those moments where you know something is important and it’s an issue, but I realized, “Wow, this is really bad,” and it was a wake-up call.
Zach Freed:
Hibba Meraay: Hey, everyone, it’s Hibba, ILSR’s communications manager, and I have Zach with me here today from our Community-Scaled Economies team.
Zach Freed: Hey!
Hibba Meraay: So Zach has been involved in producing Building Local Power. You’ve probably heard his name on the credits of the show, but today, he actually did the interview you’re about to hear.
Zach Freed: That’s right. I interviewed Kevin Erickson, who works at the Future of Music Coalition, which is an organization that helps do political advocacy on behalf of working musicians. We talked a lot about the music industry’s connection to our growing anti-monopoly movement.
Hibba Meraay: I really enjoyed this interview because it’s a little bit outside the bounds of the issue areas we normally work on, like energy or broadband, but still very much related, and really illustrates why concentration is bad across all sectors of the economy. I’m wondering, Zach, what inspired you to do the interview? Did you know that concentration was an issue in the music industry beforehand?
Zach Freed: Oh, yeah, definitely. So, aside from, like most people, being a lifelong music fan, I have two working musicians in my family, and most of my friends are musicians. I also help organize shows in DC and did college radio in school. So it’s a topic that’s always been near and dear to me, and definitely notice trends towards consolidation in the music industry at large.
Hibba Meraay: That’s great. I think it’s really cool to hear what inspired the conversation. I don’t have a lot of background, so I learned a lot of new things about the music industry listening to the interview. I was really shocked to hear that there are only three major record labels left today, down from six in 1995. So Kevin explains how they are really the gatekeepers, and they have the ability to use their market power to shape the marketplace for everyone else. It was one of those moments where you know something is important and it’s an issue, but I realized, “Wow, this is really bad,” and it was a wake-up call.
Zach Freed: Yeah, definitely. And Kevin really hits the nail on the head in our interview when he says that we’re at this critical point in our national anti-monopoly movement, and there’s a lot that independent musicians and working musicians can contribute.
Hibba Meraay: Yeah, that really resonated with me. I love how Kevin is helping musicians step up and claim space in the larger conversation. Also, because there’s a really clear link between local economies and musicians. They’re basically small businesses and they create value, both monetary but also cultural, so they’re a really important link to the local community and the societal fabric.
Zach Freed: That’s absolutely right, and in some ways, as Kevin points out, the individual entrepreneur kind of independent business model of many working musicians presents a lot of challenges. So part of the work his work does is help independent musicians think of themselves as a collective group, especially when they advocate for issues that have an impact on their well-being, like healthcare.
Hibba Meraay: Awesome. Thanks for chatting, Zach. We hope that gives you all a flavor of what’s to come. Let’s get to the interview.
Zach Freed: Today on the podcast we have Kevin Erickson from the Future of Music Coalition. To start us off, Kevin, why don’t you tell us a little bit about your organization?
Kevin Erickson: So Future of Music Coalition is a nonprofit activist think tank. We work to ensure that musicians and composers have a voice on all of the range of issues that impact their lives and their livelihoods. And we do that through education, research, and advocacy. We were founded in the year 2000, right about the time that the digital transition in music, in the music industries, was really taking hold. And at that moment, it became clear that if artists didn’t have an independent voice in those discussions, that all of these industry issues and changes would be framed as a battle between different commercial stakeholders, between different competing business interests. But musicians themselves, as workers, have a huge stake in those issues, and so do audiences, diverse audiences and diverse communities.
Zach Freed: Music is really special. It’s about more than celebrity and commerce and entertainment. It’s a place where community voices and needs are elevated, and where shared values are forged. It has this whole range of social and political implications outside of its marketplace value. And so one of the things that makes us unique is that we try to take a holistic view of the federal policy landscape and work on some of the issues that other organizations don’t. So, sure, we’ve worked on some of the issues that you’d expect, like copyright, and licensing, and transparency, and making sure the money gets put where it’s supposed to go, but we were also early supporters of net neutrality, for example. Understanding that issue as a freedom-of-expression issue, but also as an access-to-audience issue for working musicians.
Kevin Erickson: We did the first research into musicians’ access to health insurance and understanding the unique needs and the barriers to coverage that musicians were facing. We’ve done original research into the impacts of ownership consolidation in radio. We continue to work on that issue and work for a media ecosystem that can serve the needs of diverse local music communities. We’ve worked to illuminate and demystify changing business models, and in the face of all of the changes that are happening in the industry every day, we’ve tried to hold the full range of musicians’ business partners accountable and make information accessible.

That accessibility piece is important, because our organization has roots in the DIY ethos of the modern independent music movement, and specifically, the punk communities here in DC. Among the early important folks working at the organization were Kristin Thomson and Jenny Toomey who played in a band called Tsunami, ran an independent record label called Simple Machines, and put out a famous zine called The Mechanic’s Guide To Putting Out Records that broke down the logistics of how a record is released: “Here’s how to contact the pressing plant, and here’s how mastering works, and here’s how distribution works here. Here’s how you can get your release physically into independent record shops around the country,” those kinds of practical things.

Probably hundreds of little independent labels put out their first seven-inch record because of that zine, and then later CDs. So we try and apply the same idea to policy, that you can learn as you go. It’s this iterative learning process, that you can share what you learn, and then you also can just sort of step up and claim your space in these policy conversations. Your voice already matters and you don’t need permission from anybody in a position of authority. You don’t need anyone’s approval to claim your voice.

Zach Freed: So can you tell us a little bit about what led you to this work?
Kevin Erickson: Music has always been really central to my life. In college, I got involved with my college radio station, KWCW 90.5 FM Walla Walla. And through that, got involved in booking shows for touring musicians who were coming through town, mostly centered around the independent music community of the Pacific Northwest. And then making friends with those folks and discovering that there was just this vast networked, intersecting set of music communities all around the country. Working musicians sharing ideas and sharing what was going on in their local scenes. But there was a real gap between the way that popular media was talking about those musicians and their lives, and the reality that I saw amongst my new friends. I think this was peak MTV Cribs era. Do you remember that show?
Zach Freed: Oh, yeah.
Kevin Erickson: Okay. So MTV Cribs, for anybody who’s younger than us I guess, was this show that you got to tour the mansion of the guy from Smash Mouth or something like that. And so, everybody had this perception that musicians were just doing really, really well economically. It obscured the real conditions of labor that most people were experiencing. I think that’s changed now, but at the time, that gap was really pronounced and really deeply felt.

So, after that, I ran an all-ages venue and art space in a small town, while working a music retail job and got to understand more of the mechanics and logistics of what was happening in the industry. Got to do some organizing work, trying to make it easier to start and run those kinds of spaces and make sure that more local communities had access to live music, especially for young people. And from there, got into the policy aspects of it because… starting at the local level. To make a space like that work, you kind of have to make friends with the local fire department, and take the mayor out to lunch. And then recognizing that people are facing the same kinds of policy dynamics in different local communities, that there can be shared strategies and resources, that we’re stronger working together.

And then ultimately I was invited to come out and speak at the Future of Music Coalition Conference and met a bunch of people out here, and not long after, joined up with the team. That was like 2012.

Zach Freed: That’s really interesting. Thanks for that, Kevin. So at ILSR, a lot of the work that we do is in this space of anti-monopoly policy. Why should a working musician care about monopolies and competition policy? What bearing does this have on the lives of working musicians?
Kevin Erickson: Yeah, so I guess one way to think about it is: What kind of a marketplace makes it possible for broad participation to happen? And for markets to be structured in ways that allow for the greatest amount of participation, and for cultural diversity? Participation in the sense that music isn’t just limited to the kinds of people that have the right connections and the right relationships with the right corporations, to be able to get their music to audiences, to be able to tour sustainably. Participation in the sense of looking at all different kinds of metrics of diversity.

Historically, the industry has been exclusionary to different kinds of voices and different kinds of genres, and based on what the predominant market actors want to elevate. And I think similarly there’s this thread that’s about… that connects diversity of expression to diversity of business models. So there isn’t one business model for how you make a living as a musician. There’s always been lots of different business models, and today there are more than ever. And what’s important in the face of that is to have a range of choices to let communities and individual creators decide what kinds of business models work for them, rather than having one-size-fits-all models imposed from the top.

My first encounter with ILSR’s work was when I was living in a small town. And after I’d moved away from that small town, there was a controversy about big box stores coming in and wanting to drop a big, I’m not sure if it was a Walmart or what, in the town that I was living in. And we were thinking about, “Well, what possibilities does that preclude for independent retail, for the indie record store that I used to work at, and the impacts on the communities? And how could markets instead be structured? How could policy choices instead be structured to keep things community-centered?”

When that conversation shifts to music, we have observed consolidation in almost every part of the music industry, and in adjacent industries, and in almost every example that we can think of, that’s had negative implications for musicians themselves, both in terms of their ability to reach audiences on their own terms. And it’s had negative implications for musicians’ ability to earn fair and sustainable levels of compensation, for the working conditions that they’re operating under. And that’s in addition to other kinds of public interest harms and problems that consumers and music listeners, music fans, are facing.

The anti-monopoly piece and the idea that you want to structure markets in ways that maximize real choice and real diversity, it’s always been a thread that’s run through all of our historical work, like looking at digital economies, looking at policies like net neutrality, looking at the ticketing marketplace back when the Ticketmaster/Live Nation merger was under consideration. It’s always been a thread. But I think at this political moment where we have this growing, collective, all-hands-on-deck, national anti-monopoly moment, I think that there’s something really important that the music community can contribute, just because we’ve got so much direct experience with the impacts of ownership consolidation and monopolies in our own industries.

Zach Freed: Yeah, that makes a lot of sense.

Thanks so much for tuning into this episode of Building Local Power. Now this is the part of the podcast where you usually hear something about a mattress company issuing loans for audiobooks or something like that, but that’s not really how it works here at ILSR. We’re a national organization that supports local economies, which means we don’t accept national advertising. Please consider making a donation to ILSR instead. Not only does your support underwrite this podcast, but it also helps produce all the resources and research we make available for free on our website, like the one we’re discussing today. Please take a minute and go to ILSR.org/donate. Any amount is welcome and sincerely appreciated. That’s ILSR.org/donate. Thank you so much. And now back to the interview.

So moving from the more broad summary level, thought we could spend some time talking about different sectors of the music industry, and to break it down and make it more real for our listeners. In terms of the label sector, how has that space undergone concentration, and what has that meant for musicians?

Kevin Erickson: Yeah, so historically, we’ve talked about… People have talked about record labels as a kind of gatekeeper. In 1995, I think there were six major labels, and today we’re down to three. It’s just Sony, Warner, and Universal Music Group, are the three remaining major labels. The challenges that come with that level of consolidation in that sector is that those three companies have the ability to use their market power in ways that shape the marketplace for everybody else. And that’s especially true as we’re moving more and more into a digital environment. I think that there was… In the ’90s, there was an extent to which, if you didn’t like the way that the major labels were running their business, you could just start a little independent label and run your business differently.

You’d run into some distribution bottlenecks, and you’d run into challenges getting your record on the shelf in stores, but if their business model that, for example, that was based on moving lots and lots of units and paying out a smaller royalty rate to artists, but if it worked out for that particular artist, if they could make it up in volume, then it’s okay that the royalty rate is smaller. So independent labels in that era were able to say, “Well, we’re going to just spend less on overhead and do a 50-50 profits split. And that way, we’re not required to operate at such a massive scale.” That worked especially well, because they were often offering music that was not targeting mass audiences. Instead of just doing pop hits that had the chance to sell millions or hundreds of thousands of copies of records, you could put out records that would sell 10,000 copies, 20,000 copies, and that would one of many meaningful income sources for the artist if it was happening on a 50-50 profit split.

The word that we use in the industry is “recoup,” so you’d be able to recoup on your investment and make sure that the artists would actually earning royalties earlier. When you have a handful of companies controlling the marketplace and it’s shifting more and more towards centralized digital platforms, the market gets constructed in ways that work well for the biggest stakeholders but might not work as well for the little guys, the smaller entrants in the marketplace. And so we’re stuck with a sort of a one-size business model, at a time when these technological innovations should be diversifying the kinds of business models that are available to artists.

Zach Freed: Yeah, that’s kind of the story of platform capitalism writ large, really. And when you say platforms, do you mean like Spotify? What are you referring to?
Kevin Erickson: “Platform” is sort of a slippery word, and I think that’s something that has come out in these FTC conversations, that it can be applied in a bunch of different contexts. I think that, in terms of some of the biggest and highest profile conversations right now, certainly the structure of the on-demand, full-catalog streaming services like Spotify, like Apple Music, like Amazon’s new offering and Google’s offering, are one of the central places that battle plays out. Because they do have a kind of gatekeeper power, and more and more, it varies from service to service but they haven’t been shy about using that gatekeeper power in ways that advance their interests and limit the amount of leverage that independent creators have, especially in an environment of cross-ownership and consolidation across different parts of the industries. Everything’s turning into platforms. Ticketing companies are platforms.
Zach Freed: Let’s just take that opportunity to transition into the live music space. Do you think you could tell our listeners about some of the big mergers that have taken place in the live space and the ticketing space, and what that has meant for people who go to live music events and for people who perform live?
Kevin Erickson: Sure. So the ideal situation is you have a bunch of different promoters in a city, and you have a bunch of different ticketing partners, and the ticketing companies are all working to compete, to better serve audiences, and better serve the artists, and better serve the promoters. And the promoters are working similarly to better serve artists and better serve the communities. And so you have this healthy, virtuous ecosystem. When consolidation happens, it creates incentives to use the kind of gatekeeper power that they have in anti-competitive ways. And so it means different things in different markets and for different stakeholders, but certainly, one of the reasons that we have ridiculously high ticketing fees is because there’s not real robust competition in that space. With the merger of Live Nation and Ticketmaster, which I think is one that that merits reconsideration, especially now that the conditions on that merger are expiring, there’s powerful incentives to drive things more and more in the direction of using their gatekeeper access points. So it’s the one company that you kind of can’t avoid working with.

And so they get to set the terms of engagement for the marketplace. And so they’re able to move things more and more the direction of more invasive data practices about audiences. They’re able to use their reach across all of the different markets to create these consolidated datasets. So they are able to know how artists are going to do in different markets, then leverage that data against the few remaining small independent promoters in other markets. And so they have a kind of competitive power that only comes with operating at that big scale.

So even if the little guys are able to start collecting more data, and try and use their data about attendance to calibrate how they put on a show, and what kind of offers they make bands, and how they do the ticket price, because they’re not able to have access to what’s happening in all other markets, they don’t have the advantages of operating at scale.

I don’t want to only single out Ticketmaster here. We think in a lot of cities. We’re lucky in DC that we still have some strong independent promoters, but in a lot of cities, we have an effective duopoly between Ticketmaster/Live Nation and AEG, both in owning the venues themselves, but also on the festival circuit. The festival circuit more and more is an important, important source of revenue for artists, for the kinds of artists who can get those gigs and are playing them, to the extent that it’s fewer and fewer companies owning more and more festivals. There’s less space for risk-taking. There’s less space for actually staying in touch with what’s happening in a local or regional scene, and wanting to elevate those kinds of voices. And so the negative incentives kind of accelerate each other. You get kind of a negative feedback loop.

Zach Freed: So from the way that you’re describing sort of the transformation of the music industry, it sounds like, with the changing marketplace and increasing consolidation across different spaces — live, ticketing, labels — it’s becoming harder and harder for independent musicians and music fans to escape the sort of clutches of these large monopolies like Spotify, Apple Music, Live Nation, AEG, the four majors that are… the three majors, sorry, that are still left. So outside of the consolidation space, what other policy areas would you say impact working musicians the most?
Kevin Erickson: Well, I think a huge one is just healthcare. I think that there are a number of things that have really improved as a result of the passage of the Affordable Care Act. The essential benefits provisions are especially… The inclusion of preventative care, substance abuse and mental health treatment, that’s really important for populations that have elevated risks of substance abuse, elevated risks of mental health issues. Those things have been really meaningful. But access remains a problem. Affordability remains a problem. Whether a plan is actually affordable can still vary so much based on geography, based on whether you’re in a state that has accepted Medicaid expansion. And so, as we’re looking forward towards what’s next for the health policy debate for working musicians, I think we have to look very seriously at Medicare For All. We have to look at models that no longer tie access to healthcare to a particular employer relationship.

And that’s just because musicians are a great example of a population that doesn’t have a traditional employment relationship. There are exceptions, like a symphony orchestra player is employed by the symphony, and so they can have a traditional insurance plan or have a union-negotiated insurance plan, or… Recording artists for major labels can have access to a union health plan, which is negotiated by the union as part of those deals. That’s great. But many, many musicians don’t have access to those kinds of things and don’t have access to employer-provided care. So a single-payer approach, a Medicare-For-All approach, would just be infinitely easier and more humane.

Even the process of shopping for a plan, for people who are on the road so much of the year, can just be super-challenging. Finding a plan that covers out-of-network care. If you’re on the road and you have an injury on tour, it’s a big question whether you’re going to be able to find a provider that’s covered when you’re in Cleveland or whatever. Those are unique considerations that this population deals with. I think it’s common for other kinds of gig workers as well, but there’s things that are unique to music and that’s what’s driving us more and more towards the single-payer conversation.

Zach Freed: Mm-hmm (affirmative).

Thank you all for tuning into this episode of Building Local Power from the Institute For Local Self-Reliance. You can find all the links to what we discussed today at ILSR.org and clicking on the show page for this episode. That’s, again, I-L-S-R dot O-R-G. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. Finally, you can help us out with a gift that helps produce this very podcast, gets us great guests like Kevin, and produce original research on the way monopolies are infecting our economy. Once again, please help us out by rating this podcast and sharing it with your friends on iTunes, or wherever you find podcasts. This show is produced by Lisa Gonzales and me, Zach Freed. Our theme music is Funk Interlude by Dysfunction_AL. For the Institute for Local Self-Reliance, I am Zach Freed, and I hope you join us again in two weeks for the next episode of Building Local Power.

 

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

Photo Credit: Video Hive

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Hibba Meraay
Follow Hibba Meraay:
Hibba Meraay

Hibba Meraay manages communications for the Institute for Local Self-Reliance. She works closely with all of our initiatives to build community power and combat monopolies. A native New Englander, Hibba is a graduate of Boston University. Contact Hibba for media inquiries.

Hibba Meraay
Follow Hibba Meraay:
Hibba Meraay manages communications for the Institute for Local Self-Reliance. She works closely with all of our initiatives to build community power and combat monopolies. A native New Englander, Hibba is a graduate of Boston University. Contact Hibba for media inquiries.