The Parable of the Tuileries – Pt. 1 The Law of Diminishing Marginal Utility

Yesterday in Economics of Entertainment, we were introduced to a concept coined by the (right-winged) French newspaper Le Monde. They released a short animated video clip that aims to support the public funding of Culture through three basic concepts of economics: the law of diminishing marginal utility, the principle of positive externalities, and the multiplier effect. However, one could easily argue that this video was pieced together in a rather simple, if not unintelligent manner that shows elements of syllogism through hasty shortcuts and overly general conclusions.

Have a sit through the video, after which you might find yourself convinced because of how much it ‘makes sense’.

Now, let’s run through the first of the three economic concepts illustrated in the clip. I must warn you though, this is purely an exercise in contradiction,

The first one I’d like to talk about is the Law of Diminishing Marginal Utility. It introduces the concept that as an individual increases consumption of one specific product, while keeping the consumption of other goods at a constant, he will experience a decline in the utility or perceived benefits that he or she can draw from the product.
You might want to think of it as gospel if you’re running an ‘all you can eat’ buffet-type restaurant because indeed, each additional plate of food the customer helps himself to will inevitably provide less satisfaction than the previous one. That is due the finite nature of the space available in a human stomach.

It might be a futile attempt for me to try and put this in perspective, but intellectual masturbation never hurt anyone. Le Monde puts it clearly, this law applies to ALL types of goods but one. And how convenient is it that the exception is Culture? It even goes further than that and assumes that in ALL cases, the more you increase your consumption of cultural goods, the more you’ll retrieve exponential satisfaction from it. As if listening to the same Schubert piece for the 40th time were to be more exalting than the second or third. You’d believe that an outer-body experience would occur on the 41st, but anyway…

The video claims that the more you listen to Schubert, the more satisfaction you’ll get from it, and the more eager you are to listen Beethoven, then Brahms etc…
Wait! Some of you might have realised that they’ve just switched from considering the marginal utility of one specific product (lemonade/one Schubert piece), to a whole category of goods (classical composers).
That’s literally comparing apples and pears, no fruit pun intended, but one’s mind is capable of great leaps when it comes to serving a purpose. So I ask, would the benefits perceived from drinking lemonade not turn an individual on to consuming more freshly squeezed juice in general? whether it be orange, apple etc…

Is there even a point in furthering this conversation? Let’s carry on, just for the heck of it…

I could also easily argue that the more I listen Schubert, the more nauseating it gets because Schubert has no emotional resonance with my childhood, or even brings back traumatic experiences of a totalitarian music teacher. Who knows…? Since we’re mixing up categories, I could even argue that the purchase of a Macbook would create incentive for me to purchase an iPhone and then an iPad etc… And trust me, the satisfaction of going on a shopping spree for that kind of products does not diminish with repetition.
Therefore, one could argue that high-tech ecosystemic goods are impermeable to the law of diminishing marginal utility, contradicting the first premise of the video that Culture is the only good to which the concept doesn’t apply. Unless of course I’ve missed the point that Apple products are encompassed in the realm of Culture. In which case, should they too be publicly funded?

Please let me know if you were able to follow some (if not all) of the arguments highlighted here or if I’m just rambling. Probably the latter…

I’m really curious to see if I’ll gather the motivation to write parts two and three of this series…

Here’s a brilliant Snarky Puppy tune, in the Brazilian style of Forró bound to get you rid of the mid-day Thursday blues:

Lawyers in the Music Industry

Seeing as we missed this class due to the Mama Event, (a great cause no doubt) I figured I’d take matters into my own hands and learn/blog about something I’m personally interested in. Maybe those of us who were in Paris can get the gist of what we missed.

First things first. Not common to popular belief, lawyers are wonderful, compassionate and charitable people in the music industry. I’m not very good at being sarcastic in writing yet but nonetheless, I suppose that could be true if personal incentives aren’t taken into consideration. Unfortunately, we live in a time where these bastards are truly needed in practically every aspect of an artists career, (and anyone else in the industry for that matter) and boy do they know it. I say unfortunately because this makes them extremely valuable and necessary and it always sucks to be that dependent on something. Even so,  what is always important to remember is that the lawyer works for the artist, not the other way around.

With that out of the way, the point is that hopefully after reading this you won’t be able to justify their existence, but rather you will definitely be able to understand their purpose. How’s that? Off we go!

What does a lawyer do?

The most obvious role of the lawyer is to be involved anywhere that an artist is potentially generating income. And anywhere an artist is potentially generating income, there will be a contract or an agreement needed. And when a contract or an agreement is needed a lawyer should be involved. So as you can see from the lovely circle of reasoning here, they exist because they are needed and they are needed because they exist.

Other than negotiating contracts and working with you and literally every other member of your team they (the good ones) also act as reliable A&R persons for labels. Lawyers are involved with everyone in the industry, so they know everyone in the industry, and that means they have some clout that, in the early stages at least, the artist probably doesn’t. A good lawyer promotes the acts that he/she truly believes in, to the labels and actually wants them to be successful. Why do they do this? Quite simply because the more successful the artist, the more successful the lawyer.  In other words they want the artist to do good, so they can make more money from them. Labels know this so it is easy for them to seriously consider the acts recommended by lawyers. Lawyers won’t just submit any shitty band to a label because that devalues their judgement in the eyes of the label. If a lawyer only submits artists that truly have potential, the label will love them and take every recommendation seriously.

The lawyer can also play an active role in putting together an artists’ business team which brings us to the next point.

When is a lawyer necessary?

Many people think (at least I did) that lawyers don’t come into play until much later down the road in an artists career but that isn’t necessarily the case. Lawyers can be an important member of the band’s team during it’s initial formation (so basically, when the band should be dealing with the band agreement).

Furthermore, since lawyers have so many connections it is often the case that a band hires a lawyer before they even have a manager, let alone any other member of their team. Hiring a lawyer before agreements with these members even exist makes sense because a lot of the time it can be the lawyer that finds the manager, agent, business manager, and so on for the artist in the first place. Look at it this way, an ethical label won’t let an artist sign without a lawyer. Even if you have a manager, but no lawyer, they won’t sign you. And if they do they are probably assholes that are trying to take advantage of you in a deal, so be wary of that if you are an artist.

Alright, we have established that it can be a good idea for an artist to hire a lawyer early in their careers. But good lawyers have the power to be selective. So in a weird way in order for the artist to have a good lawyer, they need to deserve one. Because of the role that lawyers play in A&R the good lawyer must be interested in the band, as I mentioned earlier, he/she must believe in the bands potential and work ethic. This means that once the artist has some stable ground under them in terms of songs written, demos recorded, and a small promo package, it can be a great time to get a great lawyer. I know this sounds contradicting to the statement of getting them as early as the band agreement, but you can always hire a lawyer on an hourly basis to deal with the band agreement, and have no other involvement with the band until the band feels they are ready enough to go for a great lawyer, or at least hire one full time.

How can an artist find a great lawyer?

The simple answer is look for one. Talk to local bands that seem to have their shit together. Find a band that you like and look inside their album to find a name that has ‘Esq.’ after it. Look for them online as there are several legal directories available. Most importantly, interview them. Ask them what experience they have in the music industry specifically, and if they foresee any conflicts of interest with other clients. Finally ask them how, and how much they bill you. Which leads us to the final part.

How does a lawyer get paid?

This is one aspect where they can get just as creative as any of the artists they are signing! I’ll briefly and simply try to outline the four main ways they like to take their money.

Hourly – usually $150-$600 per hour. The extremely expensive ones are usually only dealing with big acts and even bigger labels.

Percentage – 5%-10% of income generated from the deal they worked on/negotiated. When dealing with percentages the lawyer takes the money from the net artist share, not the gross money received. ***This type of billing is very common. It can technically be paid by the label through the artists’ personal advance; which makes it recoupable against artist royalties.

Hybrid – At first they charge a (relatively) low hourly fee and then take a percentage later once things get going. I recommend this way ideally, for a beginning act.

Value-Billing – This one is pretty abstract. It is based on this: the more “value” the lawyer helped you get in a deal, the more they get paid.

At they end of the day it all comes down to the fact that the more money the artist is making, the more money the lawyer is making.

Final Note

It is in the best interest of the artist to have the same lawyer for as much of their career as possible. You get to know them and yes, can eventually build trust. As an artist always remember the lawyer works for you, and at the end of the day they can be the only ones who can save your ass. Anyways, I hope you learned something from this post.

Love them or hate them, lawyers are not going anywhere fast and they play a massive and distinctly important role in the careers of anyone and everyone involved in the music industry.

Phillip Richard

Sources and Further Reading:

All you need to know about the music industry by Donald Passman.

http://d83mezhuhqi17.cloudfront.net/76/05/57/3956967?Expires=1353662961&Signature=Eln4vmkeSHIlfD8LGdxv6-wMGOsp5oPLPx8~HiqDkeB23z3gr-N9IezlzFsklm~7KWDuhFofBXb9tlqcKhMt~5~DwzUZk8DYQiArSX76FQ3RMaQzjDFnPSlxSe38weiJJc6-csCUPw-EEdS70rARvE~r8CrWigGqlmfXpH-D3YQ_&Key-Pair-Id=APKAIVZN4AJ762UIENTQ

What’s in a Name? – A Story of Greed

“I’m not a businessman. I’m a business, man.”

– Jay-Z

“Shut up Jay-Z, you’re going to poison your daughters mind god damnit.”

– Phillip Richard

Disclaimer: This blog post contains light, but frequent profanities. Don’t read if your offended by the english language. Also don’t read if you are a big fan of Beyonce and/or Jay-Z. Actually you know what, never-mind. Read it, it will be good for you. I honestly like their music too so whatever.

Well folks, it’s starting to get ugly out there. This is a story of people all over the place taking advantage of each other for personal profit. I don’t really know who wins, at the end of the day I guess they all do because the mind of innocent baby girl is left protected but as you’ll see it’s a crazy ass ride. I don’t know how to start or to even get my points across exactly, so I think I’ll begin by writing a script about a conversation that likely* happend (or at least something like it anyways) between the biggest couple business partnership in music around last January…

~  SCENE-1  ~

Jay-Z: “Holy shit Beyonce, this kid could be a bigger cash cow than all of our albums combined!”

Beyonce: “I know I can’t wait to exploit the hell out of her, but where do we start?”

Jay-Z: “Well, I suppose we turn her into a product A.S.A.P. ya dig? I mean we need to trademark her name/identity before anybody else does.”

Beyonce: “Genius! Let’s do that right meow. I’m going to milk this for all it’s worth. I’m talkin’ ‘Baby Blue Ivy’ bullshit all around: Baby Carriages, Baby Cosmetics, Baby Bibs, Chairs, Dolls…”

Jay-Z: “Hell even as insult to injury to all of our fans that will blow their entire paychecks on this crap, even if they don’t have kids, we will throw in some Diaper Bags!!!1 ‘Let your baby take a shit in our babies brand name shit.’ How’s that for a poetic metaphor?  No wonder we are multi-millionaire artists. Nothing can stop us now! hahahahahahlol

…or can it?

 END SCENE 

Well, if you didn’t follow any of that Beyonce and Jay-Z got the, (clearly in my opinion) tasteless, but smart business idea to trademark the name of their daughter Blue Ivy, to begin a line of beguiling baby products.

Unfortunately for them and fortuneatly for their daughter they weren’t able to trademark the name. I mean the girl is going to grow up in the most superficial environment possible already, with her mom being, to many, the most attractive woman in the world, and with too much wealth to possibly know what to do with. She’s right on track to being a spoiled shitty self-entitled materialistic itch-bay. Quite frankly having her own million dollar franchise before she even knows how to avoid vomiting on herself is a step closer to everything nobody wants Beyonce’s and Jay-Z’s child to be.

Anyways, they go to their lawyer and are all like, “Blah blah blah trademark my kids name.” And the lawyer is like “Sweet, ok. Give me too much money.” But the lawyer soon finds out he can’t do this because somebody else already has. Well, ladies and gentleman as you can imagine at this point shit hit the fan and this overindulged couple didn’t go down without a fight. Nine months of court cases and I’m sure millions of dollars coming off of trees for I.P. lawyers later the case was lost to Veronica Alexandra, a small Boston based business owner. Her company is called Blue Ivy and they plan weddings for people. How nice.

Let’s take some time to reflect. So far we have Jay-Z and Beyonce taking advantage of each others fortunes, then we have them trying to take advantage of their first and only daughter so far, then we have the lawyers dragging an expensive court case over a nine month period and we also have, which I have yet failed to mention, fashion designers already trying to trademark the name before them. Some douche-bag fashion designer by the name of Joseph Mbeh tried to trademark the name “Blue Ivy Carter NYC” four days after the kid was BORN. Someone else tried to trademark the name “Blue Ivy Carter Glory IV” for a damn fragrance. What on earth would that have smelled like? Petroleum jelly and baby powder!? You people sicken me. Finally, and most importantly we have Veronica Alexandra of Blue Ivy Events who is happily soaking in the publicity and increased business like a parched sponge. Seriously though, take a look at the front page of her website. http://www.blueivyevents.com

Seriously click it. Did you see that? I know right? It’s like the main feature on her front page. Look at all the sparkling stars and shit coming off of that once in a lifetime promotional opportunity. Damn. This small wedding planning company is probably going to explode so big that by the time it’s little Ivy’s turn to get married she probably won’t even be able to afford the damn service. Owell at least Veronica has the decency to admit that she is using and abusing the whole circumstance: “I can’t be frustrated with something I think is going to bring me to produce and define my brand even more, which is financially exciting in itself and intellectually exciting as well. It’s like they caused me to create more opportunity for myself.” However, as sad as it is, everyone has their price and Ms. Alexandra is still open to the possibility of a buy out.

Anyways this whole thing is both sad and hilarious to me. While most parents spend their time thinking of a name or a small gift or how wonderful it will be to watch them grow into happy contributing citizens, the Carter family is going through a trial to turn their daughter into a labelled, branded product.

People, especially Berklee students seem to be in a constant desire to live and lead the life of Beyonce and Jay-Z, or any other super star for that matter. We must remember that while it is important to brand yourself and your artistic work, as artists there is a fine line between your business and your personal life. Once those lines get crossed things can get all kinds of fucked up. Sell your products not your souls ladies and gentlemen.

Phillip Richard

*This means it almost certainly didn’t happen, please don’t sue me.

Sources and Further Reading:

http://www.forbes.com/sites/deborahsweeney/2012/10/22/blue-ivy-trademark-name-a-no-go-for-beyonce-and-jay-z/

http://www.bostonherald.com/business/general/view.bg?articleid=1061168659&srvc=rss

http://www.washingtonpost.com/blogs/reliable-source/post/blue-ivy-the-trademark-feds-move-fast-on-rights-to-beyonce-and-jay-zs-babys-name/2012/02/03/gIQAOTDGnQ_blog.html

http://uk.eonline.com/news/355945/beyonc-and-jay-z-lose-trademark-battle-for-blue-ivy-but-get-good-advice-from-president-obama

The Birth of a Criminal

It is a great week for lawyers in Japan. The Worlds second largest market for music is hungry for more and has figured it is a good idea to expand on their initial plan that made piracy illegal in 2010. Instead of this issue remaining a civil matter, it now turns everyone that downloads or uploads illegal copyrighted content (which is apparently a shit load of people) into criminals that could potentially face up to 10 years in prison with a 10 Million Yen fine. Pretty classy stuff. A study in 2010 revealed that the laudable music loving people of Japan illegally pirated about 4.36 BILLION music and video files, while ONLY legally purchasing around 440 million. It seems like they are trying to shut down a pretty damn good potential market here. But will it work?

This is history repeating itself. (Prohibition of Alcohol, Marijuana etc…) People demand their freedom, but it is shut down by a few corporate interests (who in this case happen to be record companies falling apart like a cheap suit grasping at anything they can to save themselves). However will these legal threats actually do anything? Will they actually save the music industry? No. Because the music industry they are trying to save exists only in the old stubborn “in denial” minds of these record companies. Here is a neat quote from Naoki Kitagawa, Cheif Executive of Sony Music Entertainment Japan on the new laws:

“This revision will reduce the spread of copyright infringement activities on the internet.”

I highly doubt that. It might scare a few people but not for long. All this does is take innocent people, turn them into criminals, and then punish them. It does not stop the activity. According to the International Federation of the Phonographic Industry (IFPI) one in four internet users around the globe regularly access unlicensed services. Looks like Japan might need to invest in some extra prison cells.

The music industry is slowly progressing towards a universe where record companies are not needed. They know this but refuse to acknowledge it and are waging war on the freedom of information that they can not control anymore. I think they are so pissed off they are literally trying to drag everyone down with them. Unfortunately they are letting themselves dissolve through focusing their efforts in the wrong ways. Forget about piracy, you won’t get rid of it, you wont stop it, you will only promote it.

Every time there is an article in the media about the pirate bay, or bit torrent, or some other file sharing/torrent hosting service, the traffic on the websites significantly increase. It’s like a sore tooth: stop poking at it cause it will just get worse.

At the end of the day all this will do is screw over a few Japanese citizens that have an apparent love for music (remember 4.36 billion illegal downloads) and wont benefit record companies, artists, fans, or anyone else for that matter that isn’t a lawyer. What a waste of time.

Phillip Richard

Additional links:
http://www.npr.org/blogs/thetwo-way/2012/10/01/162096387/japan-introduces-stiff-fines-jail-time-for-illegal-downloads

http://www.bbc.com/news/technology-19767970

http://torrentfreak.com/japanese-bittorrent-user-avoids-virus-but-not-the-police-100720/

Black and White Makes Grey

“When you hear a riff similar to your own, your first feeling is ‘rip-off.’ After you’ve got over it you think, ‘Look at that, someone’s noticed that riff’… Imitation is the highest form of flattery!”
– Paul McCartney

Chances are this is old news to a lot of people, but I just heard about it yesterday so I’m betting there must be some people out there as oblivious as me. In 2004 a man by the name of Brian Burton, or more commonly known as DJ Danger Mouse, released an album called the Grey Album. There are a few remarkable things about this album I would like to outline in this post.

Content

The Grey Album is a mashup between an a capella version of Jay-Z’s iconic Black Album and the Beatles’ timeless White Album. The Grey Album is more than just a slovenly thrown together mash up of the two albums, it is a complete breakdown and reconstruction of the music that creates something completely unique and different. Doing something like this is not easy, it takes enormous amounts of vision, skill, and talent. When listening there are parts where it is hard to believe that what Danger Mouse is creating came from only the two albums and no other outside sources or samples.

Context

Danger Mouse has done something in 2004 that I believe is still far beyond our times even today. What is essentially being proven through this album is that recreating is in fact creating something new (hence black and white makes grey). And even further by that notion, that computers can be used as a tool to create music. Another way to put it would be that computers are valid and useful musical instruments that through mash-ups can most definitely be used to “promote the progress of useful arts.” Though the a capella version of Jay Z’s Black Album was released with the intention for it to be remixed, Danger Mouse did not have permission to use the work from the White Album. Within the context of copyright law this album was illegal and due to its popularity and hype, EMI ordered its distribution to be terminated. This album is ahead of its time both technically and in context with the legal boundaries it crossed. What I mean by that is that in the very near future, it is my belief that those legal boundaries will not exist. After all, the album did “promote the progress of useful arts”.

Concomitants

The album left a legacy.  It influenced some controversy with the law through an event not directly affiliated with Danger Mouse that was known as “Grey Tuesday”. On February 24th 2004 an activist group by the name of “Downhill Battle” organized an online protest. This was a protest against EMI’s attempts at halting the distribution of the album, as well as a general act against the structure of the music industry. Several free copies were released on over 170 websites to promote the idea that artists should be free to sample. Over 100,000 copies of the Grey Album were downloaded that day alone. Even more pertinent to creativity, the Grey Album inspired musicians all over the world to create several new mashups of Jay-Z’s music with artists including Radiohead, Metallica, Weezer, Wu-Tang Clan and others alike.

Whether or not record companies agree with sampling and remix, it is a large part of the future of music and it is important for music intermediaries to understand this. Changes in the law are most likely right around the corner and this means a world of both difference and opportunity in management, publishing, promoting and especially lawyering.

Phillip Richard