(Hypebot) — As antitrust laws weaken and business consolidation continues, nearly every corner of the music industry is now controlled by a handful of companies, whether it’s streaming, writes Will Meyer Or live music. Here, he explores why these monopolies must be taken seriously.
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Guest Poster Will Meyer of cash music
At this point, everyone agrees that much of the music industry is dominated by a handful of companies.
Take streaming services, for example. Just a few years ago, business commentators were praising the healthy competition that existed among services like Pandora, Rhapsody, Tidal, Google Play, Spotify and Apple Music. Today, however, this “competition” has essentially become a two-horse race between Apple Music and Spotify.
The live music industry is no different. Live Nation and AEG have overwhelming control over North American venues and music festivals. (Live Nation owns House of Blues and Lollapalooza, and AEG just acquired Bowery Presents.) The same goes for record labels. Three of them – Sony, Universal and Warner – control 80% of the market.
Most of these companies are also vertically and horizontally “integrated,” meaning they own other companies that are tied to their financial success. For example, Sony, Universal and Warner are all part owners of Spotify. Live Nation, meanwhile, owns Ticketmaster and is involved in venue sponsorship, artist management and promotion. Spotify is also getting into music news and playlist “curation.”
Because of the integration, the platform is not neutral. Ticketmaster will facilitate Live Nation events. As Liz Pelly points out at Watt, Spotify’s playlists are owned and controlled by the major record labels.
The list goes on.
Of course, there’s a word for it all: monopoly power.
Antitrust laws give the federal government the ability to break up monopolies or at least reduce their power. However, in the 1980s these laws were weakened (more on this later).
But as the legality of Facebook, Google, and Amazon’s unprecedented market dominance is put on trial in the court of public opinion, musicians and other cultural producers need to start taking monopoly power seriously—and maybe even do something about it.
Why? Because we should have a say in who we work for and the conditions under which we work.
The first step is to understand the history of monopolies and the changing perceptions of who they threaten and what they threaten.
Breaking up monopolies was a demand of the populist movement led by debt-ridden farmers in the late 19th century. In those days, monopoly power was considered unfair to producers—the people who made things. The idea is that in order to ensure political democracy, governments must ensure a level playing field for economic democracy. In other words, economic power within an economy must be distributed so that producers can choose where they want to work. For example, musicians shouldn’t just have to choose between Spotify or Apple Music—their terms and royalty rates are determined by the Big Three.
The Populist movement helped influence passage of the Sherman Antitrust Act of 1890, the first antitrust legislation at the federal level. Then came the Progressive Era, when politicians demonstrated a real desire to control power. President Theodore Roosevelt sued 45 companies under the Sherman Act. Soon after he became president, more antitrust legislation was passed that expanded the scope of the government’s ability to regulate business. Large companies such as Standard Oil were broken up or forced to sell parts of their businesses to gain an unfair advantage. The Clayton Act of 1914 fought against price fixing and remedied other anticompetitive practices—today’s examples include Ticketmaster promoting Live Nation events or Amazon touting Alexa ahead of other surveillance bots in search results.
However, by the late 1970s, antitrust laws, originally designed to protect producers from monopoly power, shifted to protecting consumers. During Reagan’s presidency, the Justice Department’s antitrust division began to focus not on the consolidation of power but on low prices, essentially clearing the way for the consolidation of power in the music industry and further exacerbating the antagonism between artists and shareholders. .
Of course, the industry has undergone dramatic changes over the past few decades. In the 1990s, independent record stores were swallowed up by chain stores. Then there’s piracy and online sales. Now we have streaming services. These changes all occurred during the merger of the six major record companies into the Big Three.
Changes in technology often trump political conditions in our view of how the music industry, and the larger economy, works. The power of corporate monopolies in the United States depends on the political climate in which it operates. Whether it’s the Progressive Era, the Reagan Eighties or today. In order to escape from this bleak power relationship, it is important to understand and exploit the framework of monopoly power.
Consolidation in today’s music industry poses a threat not only to musicians and their ability to make a living, but also to the principles of political and economic equality.
