As weakening antitrust laws and consolidation of businesses continue, virtually every corner of the music industry is now controlled by a choice few companies, whether its streaming or live music, writes Will Meyer. Here he explores why these monopolies must be taken seriously.
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Guest post by Will Meyer of CASH Music
Everyone can agree, at this point, that most corners of the music industry are dominated by a small number of companies.
Take streaming services, for example. Just a few years ago, business commentators praised the healthy competition that existed between services like Pandora, Rhapsody, Tidal, Google Play, Spotify and Apple Music. Today, however, that “competition” has essentially become a two-horse race between Apple Music and Spotify.
The live music industry isn’t all that different. Live Nation and AEG have an overwhelming grip on North American venues and festivals. (Live Nation owns House of Blues and Lollapalooza, while AEG just purchased Bowery Presents.) The same goes for labels. Three of them — Sony, Universal and Warner — control 80 percent of the market.
Most of these companies are also vertically and horizontally “integrated,” meaning they own other companies that are relevant to their financial success. For example, Sony, Universal and Warner — The Big Three — are all partial owners in Spotify. Live Nation, meanwhile, owns Ticketmaster and has tentacles in venue sponsorship, artist management and promotion. Spotify is branching out into music journalism and playlist “curation,” as well.
Because of integration, platforms are not neutral. Ticketmaster will boost Live Nation events. Spotify, as Liz Pelly pointed out here at Watt, features playlists owned and controlled by major labels.
The list goes on.
Of course, there’s a phrase for all of this: Monopoly power.
Antitrust laws give the federal government the ability to break up monopolies or at least reduce their power. In the 1980s, however, those laws were weakened (more on that later).
But as the legitimacy of unprecedented market dominance of Facebook, Google and Amazon goes on trial in the court of public opinion, musicians and other cultural producers need to begin taking monopoly power seriously — and maybe even do something about it.
Why? Because we should have a say over who we work for and what the terms are.
The first step is understanding the history of monopolies and the shifting ideas of who and what they threaten.
Breaking up monopolies was a demand of the Populist Movement, led by indebted farmers, of the late 19th century. In those days, monopoly power was thought to be unfair to producers — people who make stuff. The thinking was that in order to ensure political democracy, the government had to ensure fair competition for economic democracy. In other words, the economic power within the economy had to be distributed so producers could choose where they wanted to work. A musician, for example, should not have to choose between only Spotify or Apple Music — whose terms and royalty rates are determined by The Big Three.
The Populist Movement helped influence the passage of the Sherman Antitrust Act in 1890, the first antitrust bill on the federal level. The Progressive Era, when politicians showed real appetite for reining in power, followed. President Theodore Roosevelt sued 45 companies under the Sherman Act. Not long after his presidency, more antitrust legislation was passed, expanding the scope of the government’s ability to regulate business. Big companies, like Standard Oil, were broken up or forced to sell off parts of their businesses that gave them an unfair advantage. The Clayton Act of 1914, fought against price fixing and corrected for other anti-competitive practices — examples today would be Ticketmaster promoting Live Nation events or Amazon hawking Alexas before other surveillance robots in their search results.
By the late 1970s, though, antitrust laws originally aimed at protecting producers from monopoly power, pivoted to the protection of consumers. During Ronald Reagan’s presidency, the antitrust division of the justice department began focusing not on the consolidation of power, but on low prices, in essence clearing the path for the music industry’s consolidation of power that further pits artists against shareholders.
The industry has experienced big changes over the last few decades, of course. In the 1990s, independent record shops were gobbled up by chain stores. Then came pirating and online sales. Now we have streaming services. These changes all happened while six major record labels consolidated into The Big Three.
Changes in technology often overpower political conditions in our perceptions of how the music industry — and the larger economy, for that matter — functions. Corporate monopoly power in the United States is contingent on the political climate it exists within. Be it the Progressive Era, Reagan’s ’80s, or today. It is important to understand and use the framework of monopoly power in order to move beyond such bleak power relations.
The consolidation in the music industry today is a threat to not only musicians and their ability to make a living, but to the principles of political and economic equality.
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