WARNER MUSIC IPO

The crime here goes back to 2004, when Time Warner blew out its record division for $2.6 billion.

Today Warner Music is valued at $15 billion.

Assuming you’d taken that $2.6 billion, invested it an annual rate of return of 10%, after fourteen years, i.e. today, you’d have $11.95 billion.

10% is a pretty good rate of return. Look at all the hedge funds in a negative position, that have gone out of business.

The sale of Warner Music back in 2004 was an ignorant one based on emotion.

Let’s look at the company, comprised of Warner/Atlantic/Elektra and many associated labels.

There was the thought that the value of recorded music would go down to zero. And that no one would make music anymore because of the lack of remuneration. Well, one thing’s for sure, today we’ve got too much music, furthermore, income is now going up after being halved, because of streaming. Proving that the music business itself is run by hustlers with no familiarity with tech or trends, and that Time Warner was a boondoggle from day one, after Steve Ross died the enterprise was run off the rails.

Let’s start with the flawed merger with Time (which Ross was in favor of). A conglomerate with a future, based on its cable system, cable channels and music companies, merges with a dead tree enterprise on its way down. Talk about not seeing the future, Time declined to nearly nothing and was then blown out. As for AOL…anybody who actually was online knew AOL was a walled garden and that the future was the worldwide web, with access to all via broadband. Once again, AOL went down in value and was blown out.

And they blew out the record division too. Even though it was the record division that generated all the profits that built the cable system.

You see music scales. If you have a hit, it costs very little to continue to sell that hit. In other words, costs are amortized quickly and then the rest is almost pure profit, especially in the era of digital, without production costs, never mind shipping and returns, and the era of streaming, where music lives forever and pays forever.

None of this was hidden when Warner Music was sold by Time Warner. It’s just that the majordomos had no respect for music, they were building a TV empire that ended up being sold to AT&T, as if a conglomerate is the best place to put content. At least NBC, Universal and Comcast are essentially in the same business, i.e. visual programming. Furthermore, Comcast had the pipes to distribute said content. The synergy with AT&T and Warner is hard to figure out. The wireless business was not built on paid-for visual content. But, AT&T bought DirectTV, which anybody savvy would know was going down, because people would cut the cord, and the satellite service, no matter how good for the distribution of television, lacks a high speed internet component. But AT&T needs growth for Wall Street. Same deal with Verizon, which purchased AOL, supposedly for its ad tech, but that didn’t play out, certainly not for the cost…proving that the history of the past three decades is technologists making marks out of traditional media empires, the truth being they just want to lay off their duds.

So, Warner Music has assets that will never go down to zero. Call it the history of recorded music, Warner has one of the best catalogs extant. People are gonna want to listen to “Suite: Judy Blue Eyes” and “Stairway To Heaven” and “Little Red Corvette”…until the copyright runs out, which it never seems to, these tracks are gonna rain revenue for decades! It’s even a better investment than real estate! You never have to refurbish the buildings, the tracks are evergreen forever!

But Richard Parsons and Jeffrey Bewkes seemed to be ignorant to this fact. Hell, Parsons came from Amex. As for Bewkes, he was enamored of TV. Proving, once again, even though there’s no qualification to work in the music business, it does require expertise, it is a skill, and decisions should be made by those having said skills, with a clear vision of the future.

This IPO was just about Blavatnik getting his investment back, Warner Music doesn’t need the money.

Then again, HBO, or Netflix, an independent company, needs to do a documentary on Len Blavatnik. Exactly how did he acquire this wealth? And now Blavatnik has laundered his reputation, by donating to cultural institutions, to seemingly every museum in London and $75 million to the University of Oxford for a new school of government.

What happened when Communism fell, when Yeltsin was in power, before the kleptocratic Putin took power? Maybe Blavatnik’s billions are totally legit, but maybe not. But just like with Jeffrey Epstein, when a billionaire gives you money…you take it and shut up.

Then again, the people dancing to Ed Sheeran have no idea about all of this.

Then again, Warner could completely shut down the cost heavy investment in new music and still be worth many billions.

But new music is sexy, which brings us to…

IT’S STILL ROCK ‘N’ ROLL TO ME

https://bit.ly/3cyi11L

Bottom line, most of the money is in rock, not hip-hop.

That’s what the stats say.

But whenever you employ Nielsen stats there’s a question of reality. Like physical and tracks…do they really matter anymore?

But one thing is for sure, hip-hop is nowhere near as dominant as the major players and the major media say it is. This narrative is similar to the one that got Time Warner to blow out its music division sixteen years ago. The sky is falling, no one will pay! People only want to hear hip-hop music, the rest is irrelevant!

Only it’s not. The other genres combined surpass hip-hop, and the same is true even if you throw in pop.

But now we’ve got a different metric, streaming and it is skewing perception.

Look at concert grosses. Rock overwhelmingly dominates. And there’s a huge component of today’s country, which is really just the rock of the seventies, albeit with bogus lyrics about church and trucks and family.

And not only in ticket sales is rock king, but merch too.

And if you’ve gone to any of these classic rock shows, it’s definitely not all oldsters. As for kids not being able to pay these high ticket prices…the prices are only that high because the demand is so great!

Now in the old days a sale was a sale, whether you listened to a record or not was irrelevant. Records were promoted via radio and print, and only those promoted had a huge number of sales.

Print is nearly worthless. The eighties and nineties paradigm of TV is a joke and radio still promotes, but mostly the promotion of music is about internet word of mouth. But the truth is the youngsters have more time to waste online, and they’ve got more time to listen to music, so they stream their favorites ad infinitum and then the media anoints the Spotify Top 50 and says THIS IS THE MUSIC OF AMERICA!

But it’s not.

Now what you hear on today’s Active Rock radio does not resemble anything close to classic rock, it’s noisy and discordant and oftentimes has poor vocals. As for Adult Alternative…a lot of those acts are inherently niche. However, both of these formats have a significant number of fans. But imagine if they were promoting acts that could write songs who had good voices…

Look at the classic acts. Not only could the Beatles write, they could sing! Same deal with the Eagles. Only on Active Rock and AAA is it believed you need no skills to survive. Sure, Bob Dylan’s voice is questionable/an acquired taste, but he is the best rock lyricist of all time!

In other words, the niches are driving today’s new rock off the cliff. And those who make it are playing to these niches, for these formats. Whereas if there was a push behind acts that covered the basics…

As our country grows more diverse, only in the music business do offerings and promotion get narrower. It’d be like Netflix only producing teen dramas. They might be successful, but most people would not tune in. They might even make money, but imagine how much more could be made if other genres were produced too!

That’s today’s major music business.

But music is so far ahead of movies and TV. For ten bucks a month, or a near equivalent around the world, you get the history of recorded music at your fingertips. And it is about subscriptions. Adobe went to subscription, Microsoft too. You charge less and charge forever. Stop paying and you’ve got nothing. People will pay. But we still have Nielsen factoring in sales. This would be like Apple factoring in how many people install their software via CD-ROM. Oh, that’s right, it’s all downloaded, the computers don’t even come with CD drives!

But Nielsen is so backward because that’s how the labels like it.

Proving, once again, all the innovation has been made by youngsters and outsiders.

Proving, once again, the conventional wisdom is wrong.

There’s a story in today’s WSJ comparing the value of Warner to Spotify. They’re both in the music business, but their models are totally different. Music is the ultimate in scale. Spotify doesn’t scale at all, it always has to pay sixty something percent in royalties, which is why Spotify is pivoting into podcasts, which is why its stock jumped after it acquired Joe Rogan’s show.

But Spotify is looking to the future, the music business is always stuck in the past.

You’re pissed Daniel Ek is a billionaire? Without Daniel Ek, Warner Music would be worth less than half.

But streaming was inevitable, because it’s on demand distribution, which now rules the world. Apple and HBO dribble out episodes, Netflix delivers them all at once. On Spotify, you get it all and you get it now. Which is the way people want it.

I don’t agree with all of Russ Crupnick’s conclusions here. But he’s the first person other than myself railing against the unending focus on hip-hop.

I’ve got no argument with the power of hip-hop, or its impact upon the market, but to believe it’s the only sound people want to listen to is…

Myopic.

Gaslit Nation

My skin acted up.

For those playing the home game, I have pemphigus foliaceus. Google it if you want, but be prepared to bleed.

It took eighteen months and four doctors to diagnose. According to the organization, and there’s one for every disease, the average patient sees five doctors in a year, proving that I’m my mother’s son…as in it’s illegal to be sick and if I just hang in there it will go away when the truth is if the medical establishment doesn’t know what’s going on keep searching, keep going to more doctors, because you are right and they are wrong.

And despite everybody e-mailing me their fakokta solutions, none of them work, because pemphigus foliaceus is an immune disorder, anything topical is palliative at best, in order to speak to the underlying condition you must get Rituxan, which is what they give lymphoma patients.

But the last thing I wanted to do was go to the infusion center.

But I did.

At first you’re freaked out. They take your temperature. They don’t allow anybody but the patient inside. And after being indoors for weeks, the thought of touching an unprotected door handle was overwhelming.

So, you sit in a chair for four to six hours as they drip this poison into your body, you go home and fall asleep and for the following three or four days you’re off-kilter and then you’re back.

And then you have to do it all over again.

That’s right, two infusions exactly two weeks apart.

But the problem is you don’t get the total beneficial effect for two months. Maybe you see some improvement in two weeks, a month should show results, but meanwhile, I’m itching up a storm, my legs are covered in giant red blotches, if I hadn’t experienced this before, I’d be freaking out.

But the problem is since we’re all at home, we’ve got too much time to think about our problems, there are few distractions. As for going out protesting…the dermatologist asked me if I was taking self-quarantining seriously, she emphasized how important it is.

So I’m home.

But at night I go hiking. Where fewer and fewer people are wearing masks.

Yup, Trump and his minions won. They don’t look manly, what are the odds of infection anyway, let’s all return to normal. And you may feel fine, but you’re supposed to be protecting me, and you’re not.

So I’m driving to the park last night, and I had to go when it was still hot, to beat the curfew, and Howard Stern is talking about Blackout Tuesday, how he grew up in Roosevelt, New York, which went from white to black seemingly overnight. And he’s castigating those whites who are so self-righteous but who he knew would move immediately if a black family moved in next door. And it was so riveting, that I wanted to continue to listen.

But I was out of cell range.

So I pulled up Gaslit Nation instead.

Gaslit Nation is a podcast hosted by Sarah Kendzior and Andrea Chalupa. Sarah tweeted that the episode would be delayed because they wanted to get it right, they wanted to cover the insanity of our president and our country that had occurred in D.C. earlier.

And I remembered this. And downloaded the podcast. Usually I stream, that’s what unlimited plans are for, but, like I said, I was gonna be out of cell range, for about ten minutes.

And at first it was just talking heads in my ears.

And then…

The episode is entitled “Reichstag Fire.” Do you know about the Reichstag Fire?

Probably not, American schools are so busy teaching to the test that kids don’t learn anything, they don’t emerge fully-rounded citizens.

Anyway, Hitler took power, and then a month later there was this fire. The Nazis blamed the fire on the communists, when in truth it was a single perpetrator. But that didn’t matter, Hitler, et al, quashed the communists, the resistance, so there would be no contrary opinions, and then immediately passed a law getting rid of most civil liberties. You had to keep Germany safe, right?

Now I don’t want to make this about Hitler and Nazis, and that isn’t the point anyway. It’s all about authoritarianism.

And Kendzior and Chalupa are experts on authoritarianism. And that’s where we’re headed.

Forget the hoi polloi white nationalists and other Trump supporters, go straight to the top, go to Trump, that’s where the problem resides.

In other words, be afraid, be very afraid.

You keep saying it can’t happen here, and then it continues to do so. Wake up!

Sarah and Andrea walk you through the authoritarian playbook. Bringing out the military is a key element. And what is making me write this tonight is last night’s stories of unbranded cops. Because Sarah and Andrea predicted this in the podcast I’d listened to just hours before! You don’t know who is a cop and who isn’t, who is on your side and who isn’t, who to trust and who to not.

“A dangerous new factor in an uneasy moment: Unidentified law enforcement officers”

So, Trump and his cronies are blaming the problems on antifa and other leftist organizations. This is conscious, truth is irrelevant, it’s about scapegoating and eliminating dissent. You want to be safe from the rioters, right?

This is why involving the military is such a big deal. Force is needed to quiet opposing opinion.

But Mark Zuckerberg keeps saying disinformation is fine and “The New York Times” prints the Cotton opinion piece demanding the military be employed.

Sarah and Andrea rip “The New York Times” a new asshole. The paper was wrong about Iraq, it’s wrong about so many things. It’s complicit with those in power. And this is absolutely true, the “Times refuses to review Kendzior’s new book, because it’s just too dangerous, it might piss off the owners of this country.

And then there’s the denial. Yes, those in power, both in D.C. and the media, keep saying they didn’t foresee the troubles, and therefore they can’t be held accountable. It’s all about accountability. And I’m sure you noticed that they’ve arrested more people on the streets of Minneapolis than were arrested on Wall Street in 2008.

And isn’t it funny that Trump couldn’t get it together to fight Covid-19, but he lost no time jumping to action when it came to fighting dissent in the wake of the death of George Floyd. There you’ve got his priorities.

In other words, we’re on the road to autocracy and the trusted sources are not to be, trusted that is.

I know, I know, this sounds like apocalyptic drivel, but you just couldn’t conceive of what is happening now, whereas both Sarah and Andrea detailed it completely back in 2016, when Trump got elected.

But they’re in their early forties and not part of the media elite.

That’s right, Ronan Farrow is a hero because he stood up to big old NBC and then the “The New York Times” criticizes the accuracy of his work and there’s a pissing match and now Blackout Tuesday supporters are hassling Alec Baldwin for launching his podcast with Woody Allen two days ago. He should have respected the blackout.

Alec bit back, said he thought Woody was innocent, after all the only place he’s been convicted was in the court of public opinion and that he, Alec, is sick of politically correct behavior that achieves nothing.

In other words, we’re not fighting over the major issues. The two Allens, Satchel (Ronan) and Woody, dominate the headlines in big media and no one is covering what’s happening in the streets until there’s outright revolt.

Change always comes from outside. New York and D.C. like it just the way it is. Furthermore, the right has been trying to cancel California, demonizing it because of its power, as goes California, so goes the nation, without the Golden State’s economy, the entire U.S. craters.

So, the public has been neutered. Social media is pissed upon because that’s the only place regular people can communicate.

So, now is the time to listen to outsiders. Listening to the “Reichstag Fire” episode of Gaslit Nation will be the most important thing you do today. Turn off the television, forget the minute by minute news, take an hour to get historical insight into where we are now.

Trump is not unique. He’s just the latest in a long line of authoritarians. And one thing is for sure, he doesn’t want the truth revealed. He doesn’t want you to know about his dealings with Russia, he doesn’t want you to see his tax returns, he wants no investigation into his administration’s behavior and…

You sit at home and rely on checks and balances. From a do-nothing Congress and a right wing packed court system. Never forget, the Supreme Court handed victory in 2000 to Bush.

Write Sarah Kendzior and Andrea Chalupa off. Write me off. That’s what you’ve been doing for decades, pursuing wealth and ignoring process, if you can understand it at all.

But now is the time to wake up, to understand our democracy is hanging by a thread. And that the Republicans won’t save you, the Democrats won’t save you, the media won’t save you…

But you have to save yourself.

This one is on you. It’s your responsibility. To educate yourself and act accordingly.

And there’s no better place to start than with the “Reichstag Fire” episode of the Gaslit Nation podcast.

Gaslit Nation – Reichstag Fire – apple

Gaslit Nation – Reichstag Fire – spotify

Robert Kolker is the author of the best-selling book “Hidden Valley Road” (an Oprah’s Book Club choice!) as well as the “New York” magazine article upon which the HBO feature film “Bad Education” is based and the book “Lost Girls,” the film of which recently debuted on Netflix. First, we explore the mechanics of a book deal, how “Hidden Valley Road” came to be, and then we go deep into the essence of the story, about the Galvin family of Colorado Springs, with twelve children, six of whom became schizophrenic.

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It’s everywhere, covered in the NYT, WSJ and WaPo.

You see good intentions are no longer good enough.

And celebrities no longer get a pass.

If you stand for nothing, no one is interested.

This is the opposite of the past four decades, when it became about building your brand all over the world and maximizing your financial potential. Now, it’s about saying no as much as yes, and realizing you’re no better, no different from the people on the street.

We used to live in a two-tiered society. Those who had made it, who had power, and those who did not. And there was a very thin layer of those who succeeded, and they thought they were immune.

But as Bob Dylan sang in “It’s Alright, Ma (I’m Only Bleeding),”

But even the President of the United States sometimes must have to stand naked

You see Trump has lost control of the narrative. As have the traditional media outlets. And no one is looking to the words of celebrities for truth.

We saw this first with Gal Gadot’s “Imagine.” It was immediately excoriated:

This ‘Imagine’ Cover Is No Heaven

And now it’s open season to react against those who are well-intentioned but clueless.

Naomi Klein talks about the shock doctrine, how momentous political events allow bad actors, i.e. corporations and the government, to institute change that benefits them and leaves the people out.

We’re experiencing a shock right now, and everybody who does not align themselves with the people, whether it be in the street or in their minds, will be on the wrong side of history.

This is what Mark Zuckerberg doesn’t understand. Even at Snapchat they’re cracking down on promoting Trump:

Snapchat to stop promoting Trump after controversial posts

This is a giant sea change, an end to false equivalencies, if you’re not willing to re-evaluate everything, you’re going to get lost in the shuffle.

And if you don’t have an open mind, you’re going to become a pariah, lose all your relationships and quite possibly your livelihood, like that drummer:

“DW Drums artist Hilary Jones unleashes racist rant online”

Now is the time to get on the side of the people, the masses, who’ve been abused too long.

And the abuse has come at the hands of the employers.

Contract work, gig work? Now is the time to make people employees, otherwise you’re going to incur their wrath. Companies don’t want to hire people as employees because they don’t want to pay the benefits and they don’t want to deal with firing them. But just like California cracked down on Uber and Lyft and other gig work, this cancer on our society will have to be treated or the employers too will become pariahs, just like the aforementioned drummer and Amy Cooper.

Same deal with individuals. Think before you speak, otherwise you could sacrifice your livelihood, your entire career. And sure, cancel culture is unfair, but it’s a backlash over eons of abuse. If you think there’s too much #MeToo, you don’t understand that women are afraid to walk the streets, are on high alert at work, just imagine if you’re an African-American woman!

But the right has been laughing about the special interest infighting of the left for years. And it’s true, the left is not monolithic, but constituents’ hearts and minds are in the right place, and now it’s a time of hearts and minds.

Unlike the heartless Bill Barr. These people have to go.

And it’s not only me, I’m sure you’re aware of George Will’s column:

“Trump must be removed. So must his congressional enablers.”

I’m sure you’re aware of the Lincoln Project, I’m sure you’re aware of the latest ad:

“Mourning in America”:

This is how it was in the sixties, you were either for us or against us. And you’ve got to choose.

I’m speaking to those who straddle both sides most especially. Who are left on social issues and right on fiscal ones. They’re the same. I’m not saying you won’t get rewards from working hard, but if you’re paying a low tax rate, if you’re the beneficiary of the carried interest rule, if most of your income is taxed at capital gains rates, if you make a lot and don’t give enough away because you’re protecting your lifestyle…you’re in trouble. Both the NYT and LAT did stories how rioters have gone to Beverly Hills. Turns out the vaunted BH police force is no match for the people when they organize:

“Beverly Hills, Buckhead, SoHo: The New Sites of Urban Unrest”

And you don’t need to be rich to organize, and you don’t need to be famous. The tools are at your disposal, everybody counts, and if you dismiss someone…there will be backlash.

This does not mean everyone gets to play in the NBA, everyone gets to be rich… But it does mean we focus on the national safety net, we stop blaming people for their poverty and we do our best to lift people up.

People don’t want to change, it’s too hard.

But sometimes events force them to.

You don’t want to evaluate your positions, you don’t want to learn you’re wrong.

And if you live in an echo chamber, it’s to your detriment.

The right/left, Fox/MSNBC world no longer holds. First and foremost, because all the mainstream media outlets did not predict this and are not in control of the narrative. Chaos is not only in the streets, but in the national consciousness, what is truth?

And the fact that there were protests in over 140 communities for over a week… I lived through the sixties, protest was never that wide for that long.

As for patting yourself on the back for being so enlightened… Posting on social media… Don’t kid yourself, you’re not that important. Either be a leader, or get out of the way, the social media paradigm of gaining followers and likes is irrelevant. Think about it, none of that b.s. helped spread the word on the protests. It was mostly one to one, you talked with your friends, it was all about dialogue.

But we do need leaders.

But we’re flipping the script. For too long we’ve said if you’re rich you get a voice and your voice matters more than everybody else’s.

Now, it’s about intelligence, insight. The media believes it controls whose story is amplified, whose is boosted. But now, the people do that, the people have been in control of breaking acts, TV shows, every important story for over a decade now. The public broke “The Tiger King,” the national media was caught flat-footed.

So, if you’re resting on your status, check yourself.

You don’t only need to learn the plight of African-Americans, but that of the poor, the underclass, the drug-addicted.

And this is not about voting. That’s how the old guard dupes you into being under their control. Those in control of the system have to bend to the will of the people, like with the civil rights laws and the amendment to the Constitution that allowed women to vote. Those who are saying the Constitution is inviolate, and we must adhere to it, interpreting it as those who wrote it did, are on the wrong side of the future. Like I said, everything is up for grabs, even the Electoral College. The ground is shifting under your feet, this is an earthquake, your edifice might fall.

You might think we’re going back to business as usual, that after we clean up from the protests everything will just be hunky-dory, but this will not be the end, but the beginning, it’s the will of the people.

The will of the people has been subverted for years, how long do you expect it to last? There’s a price for gerrymandering and voter suppression and team playing.

It’s no longer us versus them, we’re all in it together.

Like the cops who kneeled with the protesters, they realized the only way out of this is to all be on one side. Those who have force only will go down in defeat. Hell, even Trump and Barr’s shenanigans are being blasted by some Republicans. Trump might sacrifice Barr, but he’s never sacrificing himself.

But this is about much more than Trump.

We’re sick of hearing about guns being needed by the public to keep order. I didn’t see all those Second Amendment nitwits out in the street on the side of the police, no, they’re just afraid. It’s all puff and no substance.

And we’re sick of hearing it’s our fault that we’re on drugs, that we’re obese, as the government tears down healthy food guidelines in school.

We’re sick of drinking tainted water, we’re sick of climate change.

Yup, it’s all up for grabs. You thought this was just about George Floyd, you’re wrong, that was just the trigger, it’s been brewing for decades.

And what we’ve learned in the internet era is the will of the people always wins. It always goes people’s ways. You might be able to put your finger in the dike for a short time, but you’re still gonna be overrun by the flood.

This is something you feel in your heart. You don’t need to be out in the street, you don’t need to be protesting. You know it’s wrong. We’ve been sold a bill of goods since 1980, that if we just let the corporations run ragged the wealth would trickle down to the hoi polloi and everything would be groovy. But this did not happen, and this is still the paradigm. Hell, look at the most recent tax cuts.

And if you think people don’t know all this, you’re dreaming. People are informed.

Then again, they’re misinformed. And the miscreants misinforming the public are crying now that social networks are cracking down on them.

But the truth is the social networks are going to crack down further. Zuckerberg is gonna cave, just you watch. Because he’s ignorant now, saying there was no history to looting begetting shooting, but as he gains insight and the blowback sustains…

This is the story of today’s America, the pressure. Change first, don’t wait to be forced to.

Don’t just cough up what you need to reluctantly, give workers what they deserve now. And I’m speaking to those self-righteous record companies too. How come acts can’t own their records, writers own their books! How come profits can’t be split 50/50? So Vivendi and Warner Music can make more on the stock market? That’s one thing we’ve seen since Covid-19, the stock market has got nothing to do with economic reality on the street.

And right now, we’re all on the street. You can’t hide. Everybody knows the truth.

Wake up, it’s judgment day.

“When Did Instagram Go Dark” We have mixed feelings about #Blackout Tuesday, too.”

“Opinion: Blackout Tuesday Backfired spectacularly. Five ways to support Black Lives Matter”

Why Some Black Lives Matter supporters are upset about those black squares on Instagram – Use the hashtag #BlackoutTuesday, not #BlackLivesMatter, they say, so vital voices are not drowned out.”