The Hot Girl’s Guide To a Monopolized Music Industry
I began writing this piece in late 2021, and let it rot for a year not thinking it would be relevant or interesting enough for publication. As of yesterday (November 18th, 2022) the Justice Department is investigating Ticketmaster’s parent company, Live Nation Entertainment, over the woefully mishandled presale of Taylor Swift’s The Eras Tour tickets. The New York Times says, “The investigation is focused on whether [Live Nation] has abused its power over a multibillion-dollar live music industry.”
I can’t stress enough how deep the web is spun within the grasps of the global music business. This investigation is only the beginning of a slow fragmentation of an entire industry, and an emergence of consumer free-will.
The Hot Girl’s Guide to a Monopolized Music Industry
Determinism is the philosophical approach that proposes that ”All behavior has a cause and is thus predictable. Free will is an illusion, and our behavior is governed by internal or external forces over which we have no control,” (McLeod, 2019). Soft determinism is a more relaxed approach, which says that while humans have some control over the choices they make, our choices are constrained by internal or external forces (McLeod, 2019).
Since Edison’s invention of the phonograph in 1877, the recording industry has made leaps and bounds. Instead of relying on music boxes or our own instruments for music, we now have the power to listen to virtually any song in the universe from our mobile devices. Technological advancements have allowed us easier access to music, but to truly appreciate the roles that music distribution practices play in our preferences, we have to understand the business side.
The three largest labels in the industry are Universal Music Group, owned by the French conglomerate Vivendi, Sony Music Entertainment, owned by the Sony Corporation of Japan, and Warner Music Group, owned by the New York-based Access Industries (Turow, 2017, p.276). Together, they have made up 80% of US music sales and 75% of global music sales (Turow, 2017, p.289). However, the real power lies in their distribution tactics. While production may be fragmented across the industry, these major labels have an advantage when it comes to distributing artists’ music. They have partnerships with major retailers like Walmart and Target, which increase physical sales, and have the power to create buzz across a multitude of media outlets because of their prestige, which in turn increases digital sales (Turow, 2017).
While independent labels may provide artists with more creative control and a larger portion of their earnings, major labels can give them more revenue outlets. This can come in the form of 360-degree deals- artist/label partnerships outside of recording which allow for sustained success in an ever-changing industry. Because streaming and internet radio platforms (which don’t offer nearly as much revenue as physical or digital sales) have taken over, artists have leaned into other outlets like concert touring and merchandise production in order to make money. That is, in part, why these 360-degree deals offered by major labels may be more appealing than signing with an independent label. A 2010 statistic offers some insight into exactly how artists make money in a monopolized industry:
“One conclusion is that a self-pressed CD will yield the most money: a solo musician needs to sell only 143 copies of an album a month (at $9.99 per album) to make a ‘minimum wage’ of $1,160 per month ($13,920 per year). But if the physical CD is released by a recording label, the calculations suggest that the artist must sell 3,871 copies a month to reach minimum wage. If the label sells the digital album via iTunes at $9.99, the monthly sales need to be 1,229. But if the label sells a single on iTunes rather than an album and the price is 99 cents, the musician must sell 12,399 a month to earn minimum wage,” (Turow, 2017, p. 287).
Another great aspect of the predetermined decisions we make are algorithms. Let’s look at Spotify, for example. Spotify uses what is called the BaRT model (Bandits for Recommendations as Treatments) to recommend relevant music based on data collected from the user and the song itself. BaRT has two modes: exploration and exploitation. Exploitation relies on the data already collected to determine a song’s relevance in its recommendation. When a song doesn’t have enough data, creating a level of uncertainty for the algorithm, exploration will recommend the song to users in order to collect data. In simplest terms, if the song is played for more than 30 seconds, it generates positive feedback, less than that and it’s negative. Spotify also uses NLP (Natural Language Processing) to analyze,”Blogs, artist websites, social media, forums, etc. In the end, Spotify can manage to observe discussions, track what’s trending, what’s new, what people like, and what people don’t like” (Marius, 2021).
Why does Spotify use such intricate models for its algorithm? Not because they want to push new artists’ work or help you expand your repertoire out of sheer love for music. They want to create a platform so accurate that consumers keep coming back. “The better Spotify understands the users and the greater the customer experience is, the more users can be convinced, converted to paying customers, and held as customers,” (Marius, 2021). The more Spotify is able to recommend music that you like, the more apt you are to keep paying subscription fees. You can’t fault Spotify for operating this way, it makes sense to adapt your business to the users. That being said, if Spotify is generating billions in profit from premium subscription fees, how is it that artists only make a fraction of a cent per stream? It hardly seems fair that the payout to the artists, who are the heart and soul of streaming services, is minuscule compared to the company’s yearly revenue.
This issue is especially prevalent given the hit artists took on live music during the pandemic. The industry lost one of its primary sources of income and relying on fans who predominantly stream their work left artists struggling. A guerilla war waged against Spotify in the US has further proven that artists need to be rewarded for their work. “Spotify paid out more than $5 billion to music rights holders in 2020… Major record labels, after contracting painfully for much of the 2000s, are now posting huge profits. Yet not enough of streaming’s bounty has made its way to musicians, the activists say, and the major platforms’ model tends to over-reward stars at the expense of everybody else,” (Sisario, 2021).
It appears that streaming is going to continue to dominate how we hear music, despite loyal fans’ efforts to purchase physical copies and support musicians in other ways. It can be a wonderful thing to have the freedom to listen to the entirety of Spotify’s catalog from your mobile device, but if the new generations of artists have to rely on streaming for income, we’re going to see a lot of failed musicians. As an artist, you may not be doing it for the money, which is admirable, but being paid your worth is important too.
Now that the world has almost returned to normal post-pandemic, live music is thriving yet again. Until this week, when Taylor Swift’s fans exposed the chokehold Live Nation Entertainment has on nearly every major artist and their fanbase.
The trouble began in 2010 when Live Nation, the largest provider of live entertainment, and Ticketmaster, the largest distributor of live entertainment tickets, merged. This allowed Live Nation to control “70% of the ticketing and live event venue market,” according to CNBC. The merger required special approval from the Department of Justice and also required that Ticketmaster, “license its ticketing software, divest ticketing assets and subject itself to anti-retaliation provisions.”
David Balto, former policy director of the Federal Trade Commission, testified against the merger in 2009, warning the Senate Judiciary Committee that this would create the monster we know today. This week he told Insider, “They were dominant before the merger, but now with Live Nation, they're in an even more dominant position because they have the largest concert promoter in the United States.”
To sum it up, there’s virtually no competition for Ticketmaster, and they abuse their power in the industry by charging consumers astronomical amounts in service fees and exploit fans with their dynamic pricing model. Taxi companies and major airlines use dynamic pricing, which means the price increases or decreases based on demand at any particular point in time. That’s why you might pay $30 to get from Williamsburg to Midtown at 6pm and $60 on the way home after a night out. When it comes to live events, dynamic pricing can cause ticket value to skyrocket depending on demand, which includes resale bots (which we saw firsthand this week as Eras Tour tickets are currently going for thousands of dollars on resale sites).
Imagine Ticketmaster and Live Nation as one giant, cystic zit on the face of the music industry. The zit came to a head during Swift’s The Eras Tour presale, where fans waited in a digital line for hours only to be met by a limited amount of tickets out of most consumers’ price range. Dedicated Swiftie and my dear friend, Jackson Giammattei, was one of the thousands who did everything right and still got screwed.
“I waited from 10am to 2:30pm to select my seats, by that time the cheapest tickets were $120 and none in my pricerange were next to eachother… Each time I would try to select [a ticket] it said someone already had that seat.” Because of the so-called unprecedented demand for tickets, Ticketmaster cancelled the general sale altogether, infuriating fans even further. “I’m pissed,” said Giammattei.
You may be thinking, “What does any of this have to do with the music I listen to?” It has everything to do with you. Because an enormous portion of the recording industry can be traced back to a few major labels, they are the ones deciding who “makes it” for the most part. They hold the power to get artists crucial radio plays, to get their work featured by Billboard, or to have their music distributed to big box stores across the country. Independent artists may be able to make more money per sale, but they don’t have nearly as many opportunities for exposure to drive in those sales. Industry executives decide what we hear and when we hear it. You might think this only applies to new music, but the longevity of bands like the Beatles is due in part to the labels they’ve signed to (The Beatles’ Apple Records is a division of Capitol Records, owned by Universal Music Group).
Every time you turn on the radio, the song has been chosen for you by higher-ups. Streaming platforms allow for more freedom in decision-making, but the artists who get featured on Spotify’s “New Music Friday” or “Pop Rising” playlists have been chosen by the same people. Algorithms work in tandem to recommend music you might like, which in turn allows the streaming platform and the label to make more money. Every time you see an artist pop up on your streaming platform of choice, industry executives and a carefully crafted algorithm (that may or may not cater to those major labels) are almost always behind it.
Back to soft determinism. In the context of music, the external forces that govern our behavior are major labels, algorithms, and monopolies, not the artists. We have some say in the choices we make, but the music shoved to the forefront of our platforms has already been determined. Our free will is limited by the gross commodification of art and the monopolization of music distribution and live entertainment.
Maybe knowing about the business side ruins some of the magic for you. Congratulations, we’re in the same boat. Ignorance is bliss. That being said, we still have the freedom to listen to any artists we like, regardless of who’s signed to a major label, what an algorithm recommends, or what we hear on the radio. I’m still going to listen to Ariana Grande every time she’s featured on Spotify’s personalized “Release Radar” playlist, even though I know she’s signed to Republic Records, owned by Universal Music Group. Maybe that choice has been predetermined by Universal and the Spotify algorithm, or maybe I just like Ariana Grande, who’s to say really? Despite the ongoing investigation, I’ll still buy tickets through Ticketmaster to see a Harry Styles concert put on by Live Nation. I don’t really have a choice in that regard. Only time will tell the outcome of the Justice Department’s investigation, but I do hope for the long-overdue downfall of monopolies in the music business.
If you’re truly interested in the nitty-gritty of the recording industry and other media outlets, I encourage you to read Media Today: Mass Communication in a Converging World by Joseph Turow. Everything we’ve discussed about the inner workings of the music business and how it relates to your preferences might have you rethinking your playlist, but these aren’t industry secrets. The answers are readily available for those who seek them. I just happened to do some of the research for you this time.
Media Today: Mass Communication in a Converging World by Joseph Turrow, available for purchase on Amazon