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Seabrook’s Stories About Money

November 29, 2015

ROOSTER

I don’t believe in fairy tales, sermons, or stories about money, baby sister, but thanks for the cigarette.

From True Grit written by Joel Cohen and Ethan Cohen

seabrook 1

The author John Seabrook has written another extraordinary piece on Spotify for the New Yorker that one could charitably describe as struggling with truthiness.  But to paraphrase Mrs. Longworth, if you’re not feeling charitable, come sit next to me.

Of course this is not the first time Mr. Seabrook and the New Yorker have come to the rescue of the Darling of Goldman Sachs.  Who can forget John Seabrook’s puff piece on Daniel Ek that appeared in the New Yorker after Spotify’s Taylor Swift debacle.  That was an article that IPO underwriting syndicates like a whole lot more than…let’s just say reality.

That Daniel Ek piece had some howlers that belied what is increasingly appearing to be Mr. Seabrook’s self-directed military grade overwriting of anything he may have ever known about the music business.  For example:

Swift’s impressive first-week sales of “1989,” which were just under 1.3 million albums, making her the year’s top seller, are still well short of the all-time first-week high, 2.4 million, set by ’N Sync, in 2000. And the sixty-nine-per-cent drop-off in “1989” ’s second-week sales suggests that Swift’s seventy-one million Facebook fans didn’t rush out and buy the album when they couldn’t get it on Spotify. They just streamed whatever was available on YouTube, which pays artists even less than Spotify does, or on other sites. Or they set sail for the Pirate Bay, where the album was also No. 1.

Just to clarify–Mr. Seabrook is talking about this Taylor Swift record, the #12 album in the country this week according to HITS:

taylor

That’s the 1989 record that was released last year that had a 100% increase in sales week over week the same week that Adele’s 25 broke ‘N Sync’s record.  So I’d suggest a different interpretation of reality.  Either sales dropped because Universal’s sales team saturated the stores with Taylor so there would be a big first week, or Universal’s sales team didn’t saturate the stores enough so the reorders hadn’t come in yet.  And remember, approximately 50% of sales, particularly for big hits, comes from CDs.

But the passage from Mr. Seabrook’s Spotify profile illustrates how he bends causality to fit the narrative.  One thing you learn if you are actually in the business of finding compelling artists, helping them to capture a great performance in a recording, financing that recording and the marketing of the record to hopefully find and retain an audience, and then developing a sustainable career for that artist over their lifetimes.  Also called being in the music business.

Unlike science, selling records (including streams) is an unpredictable undertaking.  So why did Taylor have a drop-off the second week?  Because she did.  So do a lot of people.  The point is that she came back strong.  Some probably did stream on YouTube as Mr. Seabrook suggests (although the 1989 videos were actually on Vevo which pays more than YouTube), but it’s a bit of a reach to draw a causal connection for the two.  Unless you’re boosting Spotify for whatever reason that resonates well with Wall Street.

Which leads us to Mr. Seabrook’s latest Spotify puff piece concerning Adele.  I confess I have not read the piece yet, so will very likely have something to say about it when I get around to it.  However, I did see Mr. Seabrook’s tweets today which were even more breathtaking than his last outing in the New Yorker in defense of Spotify.

Here’s the quote:

The reason most artists don’t get paid from Spotify is that the labels use their money to pay huge advances to artists like Adele.

First of all, this is something close to an allegation of fraud as I read it, so one would think that a journalist of Mr. Seabrook’s stature would have at least a couple of sources (other than Spotify or BerkleeIce) that this is true.  Of course, he may be quibbling about the antecedent of “their” which could be either “artists” or it could also be “labels”.  It seems most likely to be “artists” given the context.

The complaints most frequently heard about Spotify royalties are not that artists and songwriters don’t get paid at all, it’s that they get paid shite.  So it’s a bit unclear who is alleging the new allegation that labels simply don’t account to their artists for Spotify royalties at all.

Another explanation might be that artists signed to a label, certainly a major label, “don’t get paid” because they have taken advances already against all royalties otherwise payable under their record deals.  If the artist is unrecouped, then the artist won’t get “paid” in the sense of getting a current check with their royalty statement because the artist already has the money–because they got an “advance,” i.e., a prepayment of future earned royalties.  If any.  This is also known as interest-free high risk capital investment.

Of course, the artists who complain the loudest about Spotify royalties are usually the artists who are not signed at all, so they collect both the artist share and the label share, and sometimes the songwriter and publisher royalty as well.

As to Mr. Seabrook’s class warfare swipe at Adele, I fail to see how labels rob from the poor to give to the rich when by definition an advance to Adele is paying her with her own money (all of which is probably recouped say like, I don’t know, today maybe).  Since labels will probably have given advances to other artists whose money they supposedly took from Spotify royalties to pay to Adele, then I’m not even sure that there would be any royalties to “take” unless all these artists would magically recoup all their advances from Spotify royalties.

So if artists are in various states of recoupment and Adele and artists like her are being paid with their own money, then how to square Mr. Seabrook’s allegation?  There’s also the faint possibility that labels might have access to this thing called credit.  But that doesn’t fit the narrative nearly as well as labels stealing billions from artists.  All the labels, all the time and at the same time.  Why?  Because Spotify.

Since Adele probably added a zero to the music business with 21, I think that any advance to Adele was well deserved.  Which is the main difference between label revenues from the sale of Adele’s recordings and Spotify royalties–that zero that Adele added to the industry was to the left of the decimal place.  Spotify adds zeros to the music industry, too–but to the right of the decimal place.

  1. December 1, 2015 at 06:32

    Ouch. True Grit was not written by Joel & Ethan Coen but rather by Charles Portis and published in 1968. The Brothers Coen did a nice job of re-making the film but this is another case of skipping over the original creative source and assigning credit to Hollywood moguls who capitalize on an idea instead of acknowledging the real author. Sometimes it takes a bit of digging to acknowledge the source.

  2. Chris Castle
    December 1, 2015 at 08:33

    Actually, the quoted line is only in the Cohen Brothers 2010 remake and the Cohen Brothers were given sole screenwriter credit (which likely was under a WGA union credit arbitration that even Hollywood moguls must submit to).

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