Are you interested in ideas to liberalize the music industry? Do you ever wonder why it is so difficult to get airplay or make a meager living as a musician? Do you shake your fist and curse at the skies because it seems like the only artists signed to the largest music labels have sub-par talent that is appealing mostly to tweens worldwide? Do you believe, as Mick Jagger does, that making money in music was just a passing fancy for about 40 years and that the Internet, piracy, cheap recording and publishing technology, and the difficulties of being a touring musician means you are doomed to never be recognized financially for your talents, and your ego will just have to survive on accolades from your mom and best friends forever?

If you answered “Yes” to any of these questions, I highly suggest you read this July 2010 discussion paper written by Ivan Reidel of Harvard Law School, “The Price of Fame: The Antitrust Law and Economics of Broadcasting, Music, and Advertising.” He makes this complex topic accessible (seriously, just skim the jargon-y parts if you feel lost), his arguments are well thought out, and he provides concrete solutions. For example, he suggests that radio advertising takes valuable airtime away (and therefore earning potential) from hopeful musicians,

Indeed, that global leisure time [spent listening to the radio] is impoverished by ads also means that valuable talent that would have otherwise replaced those annoying commercials is instead squandered by societies’ inability to reward it. If ads could be replaced by the content audiences enjoy the most—songs for instance—the incomes lost and impoverished livelihoods of countless songwriters—the vast majority of which currently can’t make a living out of the public performance of their songs alone — would be able to receive a substantial boost from all the freed airtime.

While I have little knowledge of antitrust law, I am wary of supporting Reidel’s approach to using such laws as a defense against government regulation of the music industry. Although I wholeheartedly agree with the claim that musician and audience welfare is reduced by government intervention in pricing music licensing agreements, it would seem any call for removing government infringement upon the rights of artists to set their own prices for music can stand (strongly) on its own, without looking to another set of arbitrary rules which could one day be overturned. In other words – if we can agree a man owns himself, it follows he owns the product of his creative labors, and he therefore has the right to price that product as he wishes – end of story.

In any case, Reidel presents a thoughtful and thorough introduction to this topic as well as analysis of how the Department of Justice (DOJ) and the Federal Communications Commission (FCC) have created a government-enabled monopoly in the music industry. He identifies important roadblocks and inefficiencies as well as suggests solutions – and they are all things most artists are probably unaware of.

His chief complaint is that government-mandated use of blanket license fees effectively “prices fame no differently than obscurity.” How is this so? The blanket fee sets an artificial price floor for all music licenses, regardless of what the artist wishes to charge or what a consumer wishes to pay. This creates a system many artists cannot compete with because they wouldn’t mind pricing their music lower and others won’t buy at a higher price, and there is simply no recourse to change the system given the current restrictive laws ironically meant to protect musicians. What is really happening is pricing everyone but the most lucrative performers out of the market. I think it could be agreed upon that the most lucrative performers tend to be the most watered down artistically because they need to have the widest appeal to the largest buying population, which is usually teenage girls. Sigh.

The other unwanted outcome of this system most people do not consider is that these artificially high blanket prices make advertising (the other airtime component of broadcasting) artificially cheap by comparison, which is why consumers are then subjected to a disproportionately larger share of advertising than entertainment if the market was liberalized. This may not sound significant, but think about it – how irritated do you get that you either have to sit through tons of commercials on radio or TV or pay extra fees for services that remove them for you?

Reidel calls this diminished audience welfare, and I agree,

In the U.S. alone for instance the average person listens to 19 hours of radio each week, and radio reaches 93% of U.S. consumers each week,14 and 72% every day. By 1999 Anderson and Coate report that non-programme minutes exceeded “20 min per hour on some network television programs and 30 min per hour on certain radio programmes.” Multiply those ad spins by the number of listeners times the number of hours they spent on such unpleasant an activity, and this massive waste of time by audiences provides not only dramatic measure of diminished audience welfare but a proxy for the large toll imposed by ads on songwriters in the case of radio, and an even bigger pool of artists in the case of television.

He gives the example of record-breaking pop-phenom Taylor Swift’s 19,361 spins (number of times played) of her song “You Belong To Me” in 2009. He then points out that she was actually out-spun – but no one seems to have taken note.

As much as audiences like Swift however, when counting the number of plays of all performances on those same radios, Swift hardly even makes the top ten list of those with the most “spins” or plays. During the first week of August 2009, it was insurance company “Geico” that took the number one spot, with 42,544 spins or more than twice the number of plays Swift received. Home Depot came in second with 41,371 and Mac Donald’s third with 34,593. In that week, in fact, Swift only scratched the number ten spot slightly behind AT&T which obtained 19,574.

Reidel argues that the main factor stifling much-needed competition and liberalization of the music industry as well as the over-emphasis on advertising has been caused by government-enabled monopoly in favor of copyright “collectives,” and anti-payola laws which bar musicians from competitively pricing their music to gain radio play. Reidel supports auction-style platforms in place of the conventional “collectives” to create,

…a truly competitive payola market), where the price of songs can be determined through auctions as either negative or positive, solely on the basis of competition between radio stations offering airtime (advertising spots) and songwriters offering songs—which are simultaneously an input for broadcasters and a form to promote CDs, song downloads, concerts, and the like, for songwriters.

This paper is so good I’d end up just quoting the whole thing, so here is the link for your own reading pleasure.

Detroit has something of a Wild West romance about it. There is just enough lawlessness to make things interesting. Anyone who drives down Woodward Avenue past 8 mile on a regular basis knows that this threshold is where (among other things) driving laws take on a spirit of their own – people wander across busy lanes as if it’s the sidewalk. Red lights are treated as suggestions.

Apparently, so too, are property rights.

Via The Detroit Free Press (via BaS),

Bansky was here…[and] has tagged Detroit — most prominently a crumbling wall at the derelict Packard plant.

Discovered last weekend, the stenciled work shows a forlorn boy holding a can of red paint next to the words “I remember when all this was trees.” But by Tuesday, artists from the 555 Nonprofit Gallery and Studios, a feisty grassroots group, had excavated the 7-by-8-foot, 1,500-pound cinder block wall with a masonry saw and forklift and moved the piece to their grounds near the foot of the Ambassador Bridge in southwest Detroit.

The move — a guerilla act on top of Banksy’s initial guerilla act — has sparked an intense debate about the nature of graffiti art, including complicated questions of meaning, legality, value and ownership. Some say the work should be protected and preserved at all costs. Others say that no one had a right to move it — and that the power and meaning of graffiti art is so intrinsic to its location that to relocate it is to kill it.

Detroit’s unique profile as a kind of laboratory of extreme urban dilapidation and nascent revitalization adds yet another layer of complexity. “This may be unprecedented, because in most other cities, you wouldn’t be able to take a wall home,” said Luis Croquer, director of the Museum of Contemporary Art Detroit, which specializes in cutting-edge art.

While reading about this I was reminded of the libertarian theorist, Murray N. Rothbard’s discussion of art and private property rights in The Libertarian Manifesto.

Let us take, as our first example, a sculptor fashioning a work of art out of clay and other materials; and let us waive, for the moment, the question of original property rights in the clay and the sculptor’s tools. The question then becomes: Who owns the work of art as it emerges from the sculptor’s fashioning? It is, in fact, the sculptor’s “creation,” not in the sense that he has created matter, but in the sense that he has transformed nature-given matter—the clay—into another form dictated by his own ideas and fashioned by his own hands and energy. Surely, it is a rare person who, with the case put thus, would say that the sculptor does not have the property right in his own product.

We could therefore say this art “belongs” to Bansky – as he utilized the raw materials and turned them into something more than mere paint and cement. He made art. Now, the sticky issue of ownership of the materials which comprise the wall itself is not entirely clear. From the Free Press,

There is also the complicated question of ownership. The Packard plant, a massive haven for squatters and scrappers — 3.5 million square feet of almost total urban destruction and decay — has been at the center of an epic legal dispute between the City of Detroit and a land speculator dating back more than a decade. News reports have identified Romel Casab as the owner. He could not be reached for comment Friday.

So, it appears that, from its history of unregulated scrapping and barring further details, it is in fact Mr. Casab who owns this wall and thus, owns the artwork. However, the whole point of private property rights is that the owner gets to decide what to do, or not do with them. If Mr. Casab has no interest in retaining his ownership of the wall and takes no action, and the ephemeral Banksy feels similarly, I am led to believe the wall is effectively “up for grabs” strictly from the sense of property rights.

What remains then, is settling the philosophical question of whether removing Bansky’s art from its chosen location necessarily destroys the art, since location is intrinsic to the art itself.

Via Marginal Revolution via USA Today,

In Mexico, artists can pay their taxes with artwork

Can’t afford to pay your income taxes? Paint a picture instead.

That’s the deal Mexico has offered to artists since 1957, quietly amassing a modern art collection that would make most museum curators swoon. As the 2009 tax deadline approaches, tax collectors are getting ready to receive a whole new crop of masterworks.

“It’s really an amazing concept,” says José San Cristóbal Larrea, director of the program. “We’re helping out artists while building a cultural inheritance for the country.”

There’s a sliding scale: If you sell five artworks in a year, you must give the government one. Sell 21 pieces, the government gets six. A 10-member jury of artists ensures that no one tries to unload junk.

While I cannot speak to any of Mexico’s other tax policies or incentives for artists, I thought this was a very interesting method for artists to provide revenue to the government even if they are not making any revenue at their craft. However, it should be noted the perennial problem artists have generating cash revenue is clearly not addressed by such a policy.

Although it was my first guess, a recent NEA research report indicated the economic slowdown cannot be considered the primary reason for a marked decline in attendance to a variety of categories of live performing arts and museum events.

Still, the statistics are troubling, and mysterious. An article in Staten Island Live notes,

Between 2002 and 2008, percentages fell for moviegoing from 60 to 53.3, for jazz from 10.8 to 7.8, for museums/galleries from 26.5 to 22.7. Other categories with lower attendance include ballet, opera, musical and nonmusical theater, and art/crafts fairs and festivals.

The reading of “literature,” defined as “plays/poetry/novels/short stories,” was an exception, rising from 46.7 to 50.2, an increase NEA research director Sunil Iyengar credits, at least in part, to the growth of online reading. But the Internet did not stop a decline, from 56 percent to 54 percent, of reading of any kind that was not required by school or work.

I know some people read this and begin to panic, but I see opportunity. I do not imagine that the arts have squeezed their last ounce of creative juices out and are commencing a steady decline. Nor do I think live performance arts, museums, and galleries have permanently lost market share.

I also believe that one of the main reasons arts attendance has dropped has little to do with education or economics, but quality. Case in point – my husband and I are both trained artists, with degrees in art and music, respectively. While the economic downturn has certainly affected us, we try to make certain we do not deprive ourselves of creative sustenance. However, we have been repeatedly underwhelmed by performances we’ve attended and in particular, gallery openings of new art in the Metro Detroit area. Quality matters – and I believe it matters to people of all socio-economic backgrounds.

I am curious if the NEA report takes into consideration the quality of the shows or the level of enjoyment of the art consumers in question. Has art quality declined since 1982? Are people enjoying themselves as much? And why or why not? I think these are important questions to get a handle on.

Many people postulate that the Internet is to “blame” for lack of arts interest and yet, others simultaneously hail the Internet as the new arts frontier, since we are getting and creating more art online. While I find the Internet to be incredibly useful for exploration of arts and culture, I cannot say I particularly enjoy consuming art in this fashion. Certainly watching the Alvin Ailey Ballet on YouTube is enlightening, and provides greater access to audiences worldwide, but you would be hard-pressed to find someone prefer the Internet performance to a live one, holding all other factors equal.

I think the idea that television and Internet have resulted in decreased attention spans has some validity – but I cannot see how it could significantly contribute to a marked decline in arts attendance/consumption. However, I would also love to hear from people who know more about this than I.