2009.MM.DD - Playboy - Duffonomics (Duff's column)

11/25/2009

This (Ever Changing) Business of Music

By Duff McKagan

Last week, Green Day's Billie Joe Armstrong stood onstage at the American Music Awards and spoke out about the need for the public to support alternative and punk bands' “past, present and future.” I'm sure that he meant to highlight the fact that every area of the economy, including music, is struggling right now. Look past the glitz and bling and you'll see an industry straining for its last gasp.

In 1964 a book was published that would became the business bible for all musicians, record labels and artist managers. This Business of Music is a very readable and detailed look inside what makes the music industry work. The problem now is that the music industry itself nothing at all like what it was then.

The music business is changing so rapidly, in fact, that if a book were published on the topic today it would be out of date by spring. Back in 2004, when I was writing a semester-long university paper on digital rights management (basically, the factors that go into splitting the profits on a song you pay for online), I was thwarted by the almost weekly changes happening in that specialized sector alone. But change brought on by newer and better technology doesn’t necessarily have to be a bad thing. It's just a fact of life, and musicians either have to adapt or get new jobs.

Existence is a comfort zone for most musicians however, while major label executives are clenching hard right now just trying to make a buck. The difference between the people that make money off of music and those that actually make the music is now really starting to widen. An underground music scene is starting to quicken its step. Wal-Mart and Best Buy have taken the biggest artists for their own, offering huge one-way deals in lieu of a major label. For the rest of us, who want to find the latest and most original music not on the radio? We can again find it in the clubs and in the underground, which are filling up with the sounds of the future.

12/23/2009

As the Economy Rebounds, is Job Growth Next?

By Duff McKagan

First off, I must applaud the House for passing the Financial Overhaul Bill last week. We desperately need oversight and regulations in our financial institutions if we hope to somewhat avoid the greed-filled mistakes made on a large scale over the last 10 or so years. It’s a legislative victory for the Obama Administration.

Another piece of responsible news is that Goldman Sachs will be changing its 2009 executive compensation plan. Apparently, instead of cash bonuses, Goldman execs will receive stock that cannot be sold for at least five years. This makes a lot of sense. Long-term health of a company will behoove everyone. Shareholders will now also have a vote in the firm’s compensation of executive’s in 2010.

There has been a whole lot of really positive economic news as of late: Wells Fargo is set to pay back $25 billion in bailout money while Citi announced they are financially healthy enough and will now pay back the TARP loan to the Federal Government (troubled assets relief program). Retail sales gained 1.3 percent in November, nearly double what Wall Street analysts have predicted.

While headlines may be giving us with jobs a sense of relief, those of us who cannot find employment may very well have to wait for the job sector to take part in this recovery. Small businesses and especially retail small businesses have been the hardest hit over the last two years. Those who have hung on, did so with the bare minimum. Hiring back those employees they had to lay off may take some time. Those businesses that could not survive have been like an anchor to parts of our economy—empty retail space stranding that sector of the real estate market, and bankruptcy gumming up the credit market.

Trends do look good though. Trends that appear to have kindled at least a fragile national recovery; credit markets that are opening up to risky borrowers; businesses that are started to replenish depleted inventories; continued low-interest rates courtesy of the Federal Reserve.

By encouraging business investment, these factors could be enough to spark job growth sometime in 2010. This, in turn, should boost consumer confidence and make them more likely to spend.