Thursday, July 14, 2011

Music industry and the value of content

Some battle piracy, some also wish to believe their valuations on their content are much higher than they are. Furthermore, content producers at the elite level controlled the entire media landscape boxing out small artists for many years. You all recognize the deflationary price implications of unlimited downloads, but you need to also understand that the same falling rate of profit tendency applies to the production side too. There are WAY more good content producers now than ever because of the falling costs to produce the content... the costs would have fallen naturally were they ever in a market place. A core part of the problem is that the old media system was a cartel. It used cartel pricing in the first place. Without the cartels in music for instance, CD prices could have been around 2-3 dollars at a decent mark up from costs. The price inflation on media is what made the music industry much more valuable than it actually was in simple commodity terms.

The solution to me needs to benefit the small players, but not by fixing the system for the cartels or elites. I think the state needs to play a role, and everything should be freely streamed by consumers for maximum efficiency, but that the federal state should probably manage the pool of aggregated values. The devil's in the details, but how else can we drive up the value of content when there is no market leverage on pricing due to extremely low production costs and infinite supply of digital commodities. Supply and demand sets the price right? Supply is unlimited and so the price is zero or near zero, or the price is almost arbitrary. If the state does it, then we can just declare the value of the entire music business to be 100 billion dollars per year, and then divvy it out to the artists, with caps on the top to create regional, national, and local acts, drive out the money laundering gangsters that are all over the industry, and create a genuinely reflective music culture.

Sunday, July 10, 2011

Distribution of power in society.

The private sector is the dominant sector in our society. As a general rule, I prefer to spread power away from any concentrations. I do not think that there are technocratic issues of talent so much as massive concentrations of power within institutions that create a demand for very specialized, key individuals which occupy those institutional slots. The state, while very large in areas of imperial assaults and maintenance of proxy state power (i.e. Colombia, Egypt, Israel, Saudi Arabia, Bahrain, Iraq, Afghanistan, etc), is still quite smaller than the much larger private sector. Control over most of the social space resides in the hands of the few, and it doesn't matter if it's Hellenistic Greece or Roman oligarchy or the Roman empire or our current variation on themes as old as written records.

As for markets, closed or open, I am not a fan. I am generally opposed to concentrations of power, and markets are simply mechanistic institutions, as old as settled societies, that are crude tools that at their best, determine prices of things and people (most importantly people) on the simple and archaic mechanics of buyer inputs and seller inputs. The information that gets written off as externalities--which are enormous and far reaching, demonstrates clearly the need for a different set of economic institutions that can more accurately determine values on stuff (services, commodities, et al) and on people. Both market systems and state systems have proven their abilities through politics to subordinate the many to the power of the few. There have been massive successful challenges to that rule, civil rights, women voting, or women allowed to occupy higher slots in the economy, labor rights for the bottom 60%, etc. This has created reformist mindsets that mitigate the effects of each type of system (competitive market systems or more coordinated state capitalist hybrids) but by and large, there has been no attempt at creating a system that enhances local power, prevents concentrations and blockages, and maximizes economic outputs for the maximum number of people.