Streaming Jihad (RIAA Watch in the 21st Century)

 -by Bill Glahn-

I’m retiring from a warehouse job soon. It’s time to toss those boxes aside and pick up a pencil again. Looking forward to picking up where I left off, I was searching for an appropriate title for a column title more relevant to the times. Looking backwards, I found it. 

When Jeffrey St. Clair and Alex Cockburn introduced me to the Counterpunch audience all those years ago they used the term “jihad.” That makes sense. For some people money is just “god” spelled backwards. And in that respect, huge (and sometimes not so huge) corporations, and the people who run them, wage holy war.

The owner class has a different perspective on finances than the working class that toils underfoot. Some personal examples? I once worked as the managing editor for a startup weekly “alternative” magazine. Concerned with their ability to clear payroll, I inquired, “Where’s the money coming from? You hardly have any advertising.” What I learned was that the basic operating funds came from dividends paid on a butt-load of USA Today stock that the publisher had inherited. Another example? We were doing a story on a proposed new power plant that meant a significant rate hike, both for residents and businesses. A local business owner of some stature asked, “Why don’t you just buy some city utility bonds to offset the cost?” Not on my salary.

When it came to waging financial jihad on the music fans, no one was more vociferous, or out of step, than the major label’s lobbying association, RIAA. They fought every technology advancement to come down the pike. To the point of rendering themselves obsolete. As one major label exec now puts it, “I shouldn’t have sued Napster. I should have bought stock.”

Fast forward to an era where music streaming has replaced p2p file sharing as the optimum form of music distribution. Not about to make the same mistake twice, the remaining 3 major labels bought into Spotify, with the largest being Sony Music Entertainment. When Spotify’s IPO was dropped on April 3rd, Sony couldn’t wait to crow about it in a press release. 

“At the time of the public listing, Sony Music Entertainment (“SME”)… owned 5.707% of Spotify’s shares, and on the same day, SME sold 17.2% of such shares owned by SME. Due to this public listing and the sale, Sony expects to record an unrealized valuation gain (net)* for the shares SME continues to hold and a realized gain for the shares sold (net)... Based on the NYSE closing price on April 3, 2018 and the sale price, the sum of the unrealized valuation gain (net) and the gain on the sale of shares (net) to be recorded for the first quarter of the fiscal year ending March 31, 2019 would be approximately 105 billion yen in total. Because the market value of Spotify’s stock following the public listing may be volatile, Sony expects such unrealized valuation gain  could fluctuate during the period that SME continues to hold the shares, including during the first quarter of the fiscal year ending March 31, 2019.”

That’s a lot of Yen! But it pails compared to Spotify’s co-founder and CEO, Daniel Ek’s, 400 billion yen in holdings. Simple math shows that Ek, as an individual, owns four times as much stock as the whole SME corporation. But will Ek follow the same path of jihad as the major record labels did under the RIAA cartel? Capitalist history is a good indicator. Current events are as well. In Europe, where there is still some semblance of artists’ moral rights, Spotify and 5 other streaming services have formed a lobbying organization called Digital Music Europe. Mission? “To showcase and promote the success of the European digital music industry, it will serve as a resource for policy-makers, media and the digital music industry, and will advocate for policies that shape a favorable business environment for digital music”. (November 2017) Sound familiar?