Today’s generation has grown up with technology evolving at a breakneck pace. Much of that great technology has been created to deliver music effortlessly to the people who love it.
In the ‘80s it took a full five to ten years to convert record users over to cassette tapes. Now changes may take place and be accepted by society within six months or less. Today’s youth have grown up on tech and expect it to constantly evolve.
No more carrying “boom boxes” on shoulders. In the modern era, music lovers have access to all kinds of music, all day, all night, right in the palm of their hand, digitized, and beautifully streamed, clear as a bell.
Cue the Emperor’s March. Here comes trouble. Christopher Versace recently wrote a piece in Forbes highlighting how all this wonderful music is now at risk.
Pandora, Spotify, iHeartmedia, and others are keeping pace with the voracious appetite for music in the younger demographic, and listeners are adopting these services at breakneck speed. Yet, no service in the industry is making money, even though they are wildly popular, because the big players in the music industry have gamed the system.
That massive consumer interest draws government corruption like flies to honey. The power players in the music industry and their affiliate groups — the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music Inc. (BMI) — are living good right now, but some want it even better.
Both groups have topped the $1 billion mark in royalty payments, experiencing healthy growth. Sounds like the music business is good, and people are enjoying a fantastic product. That’s right, but it could all be about to change due a few greedy players.
The Department of Justice (DOJ) is being pressured by ASCAP and BMI as well as the industry’s biggest publishers (SONY/ATV & Universal) to change the rules to allow them more control over pricing. Currently, antitrust laws limit ASCAP, BMI, and the largest publishers from too much price manipulation via “consent decrees” between DOJ and both ASCAP and BMI.
ASCAP and BMI are both monopolists. The consent decrees allow them to maintain their monopolies, but restrict them from using their monopoly power in an anticompetitive manner. To that end, the consent decrees have allowed the market to function reasonably well for decades.
Two federal courts have said “not so fast” to the idea of granting more power to the big boys of music. However, ASCAP and BMI along with the major publishers didn’t stop at the courts. If the courts won’t help them in their quest to control the music industry even more, maybe government will?
The dominant publishers are now pressuring DOJ to change the consent decrees in their favor, or they have threatened to withdraw from the ASCAP and BMI system, disrupting the entire music licensing process. Threatening, pressuring, and forcing your will on government sounds kind of like bullying, or cronyism, or full on corruption.
Welcome to Pandora’s box (pardon the pun). If the DOJ gives in to mounting pressure, platforms like Pandora could be at the mercy of monopolies. The entire way tens of millions of people enjoy music may change forever if the powerful forces get their way with the DOJ.
And, here’s the kicker: The changes the major publishers are seeking won’t just harm digital music services. Changing these consent decrees will raise costs for millions of businesses across the country that play music publicly — retailers, hotels, restaurants, bars, and on and on and on.
This is what cronyism looks like. It doesn’t provide a better product. It doesn’t create something innovative and new. It corrupts everywhere it goes.
