controversy

by jenks

How To Stand In the Face of Powerlessness For A New Generation

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The ‘Source’ in the Distance

Last week, my friend Kris Krug flew down to the Gulf of Mexico on the TEDxOilSpill Expedition, a week-long project to document the crisis in the Gulf and bring a first hand report back to the TEDxOilSpill event in Washington, D.C. on June 28. Kris, a photographer, web strategist, and self-described “cyberpunk anti-hero from the future” (though, technically, from Vancouver) was there as part of the team of photographers, videographers, and writer traveling through Mississippi, Alabama, and Louisiana documenting the current situation in the coastal communities affected by the oil spill. (Kris’s shots from the expedition have also appeared in National Geographic photo essays: 1, 2, 3).

Talking with Kris — who has been one of the earliest and staunchest supporters of my writing here at Social-Creature (the header image on this site is one of his photos) — he suggested that while it’s not my usual ‘beat,’ if I felt so inspired, I should write some words about this situation.

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Early morning thunderstorm off the coast of Grand Isle, Louisiana.

The truth is that there is something in this endlessly tragic mire which I’ve kept thinking about over and over during the course of the now 69 days since the Deepwater Horizon oil rig exploded. And that recurring thought — beyond how devastating and heartbreaking this entire situation is — is how utterly foreign and disturbing it feels to be this completely powerless to do anything about it.

As a generation, mine has not known powerlessness. We have known no great war. No great depression. We were born a decade after the last U.S. draft ended. Our childhoods were filled with images like these:

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berlin wall coming down

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We were weaned on the sense that something could be done. A single person could stand up to a row of tanks in Tiananmen Square. People could tear the Berlin wall down. People could undo the totalitarian Soviet regime. By the time we got to high school, the Internet had arrived, followed quickly by college and the birth of the social web. The digital revolution added an unprecedented amplification to this sense of our own personal agency. Just over the past few short years we have experienced how sites like Twitter, YouTube, and Facebook have offered platforms for us to do something.

Last summer, the Washington Post called the aftermath of the Iran election a “A Twitter Revolution.” As police tried to suppress demonstrators who took to the streets to protest the declared results of the presidential elections in a place halfway around the planet, Twitter let the world know exactly what was going on, on the ground in Iran even as outside journalists were barred from the country. It was instantaneous, unfiltered, real, and it compelled our attention. The U.S. State Department even asked Twitter to delay scheduled maintenance on the site at the time in order avoid disrupting communications among tweeting Iranian citizens and the rest of the world. Ordinary voices of dissent had never had access to such mass media before, and just bearing witness, just knowing their struggle, just retweeting and communicating was an act of solidarity with those citizens of Iran who were protesting, and an act of defiance against the forces that would have them silenced. It was doing something.

Six months ago, after a 7.0 magnitude earthquake devastated Haiti, a place of no real political or economic importance, these digital tools helped mobilize the aid and compassion of the entire world almost instantly. Within just a few hours a text-based donation service was set up for the American Red Cross’s relief efforts. In just 2 days of the earthquake the program had raised over $5 million from over a half million different mobile phone users. Haitian-born musician Wyclef Jean’s Yele Haiti Foundation, also running its own text donation drive, raised another $1 million. It was a watershed moment. Never had so much money been raised for relief so quickly after a disaster. The digital tools facilitated this, but what drove people to make those donations was the desire to do something even if it was just giving a few dollars to help alleviate suffering.

We humans have such a deep need to feel like we’ve got any sense of agency in our lives, we’ll happily trick ourselves into perceiving we’re in control — or at the very least, that control over chaos is attainable. This proclivity is a large part of why God exists — or rather, why we believe he does. In a 2007 New York Times article exploring possible answers from evolutionary biology as to how we have come to believe in God, Robin Marantz Henig wrote:

Our brains are primed for [belief in the supernatural], ready to presume the presence of agents even when such presence confounds logic.

We automatically, and often unconsciously, look for an explanation of why things happen to us,” Barrett wrote, “and ‘stuff just happens’ is no explanation. Gods, by virtue of their strange physical properties and their mysterious superpowers, make fine candidates for causes of many of these unusual events.” The ancient Greeks believed thunder was the sound of Zeus’s thunderbolt. Similarly, a contemporary woman whose cancer treatment works despite 10-to-1 odds might look for a story to explain her survival. It fits better with her causal-reasoning tool for her recovery to be a miracle, or a reward for prayer, than for it to be just a lucky roll of the dice.


Oil coming on shore.

As an alternative to these external supernatural forces it’s become increasingly popular to reclaim a sense of power in the face of chaos or tragedy by elevating control of our inner selves to this transcendent status of godliness. In Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America Barbara Ehrenreich recounts, in a chapter titled, “Smile or Die: The Bright Side of Cancer,” how getting diagnosed with breast cancer led to her first introduction with the cult of “positive thinking.” The “Pink Ribbon Culture,” she writes, is defined by a mantra of “positive thinking” that is so extreme, at times it paints cancer as a “gift, deserving of the most heartfelt gratitude:”

In the mainstream of breast cancer culture there is very little anger, no mention of possible environmental causes, and few comments about the fact that in all but the most advanced, metastasized cases, it is the “treatments,” not the disease, that cause the immediate illness and pain. In fact, the overall tone is almost universally upbeat. The Best Friends Web site, for example, featured a series of inspirational quotes: “Don’t cry over anything that can’t cry over you,” “I cant stop the birds of sorrow from circling my head, but I can stop them from building a nest in my hair,” “When life hands out lemons, squeeze out a smile,” “Don’t wait for your ship to come in… swim out to meet it,” and much more of that ilk.

The cheerfulness of breast cancer culture goes beyond mere absence of anger to what looks all too often, like a positive embrace of the disease. As “Mary” reports, on the Bosom Buds message board: “I really believe I am a much more sensitive and thoughtful person now. I was a real worrier before. Now I don’t want to waste my energy on worrying. I enjoy life so much more now and in a lot of aspects I am much happier now.” [Another] such testimony to the redemptive powers of the disease: “I can honestly say I am happier now than I have ever been in my life — even before the breast cancer.

One survivor turned author credits it with revelatory powers, writing in her book The Gift of Cancer: A Call to Awakening that “cancer is your ticket to your real life. Cancer is your passport to the life you were truly meant to live. Cancer will lead you to God. Let me say that again. Cancer is your connection to the Divine.”

The effect of all this positive thinking is to transform breast cancer [from] an injustice or tragedy to rail against.

There was, I learned, an urgent medical reason to embrace cancer with a smile: a “positive attitude” is supposedly essential to recovery. It remains almost axiomatic, within the breast cancer culture, that survival hinges on “attitude”…. [the belief] that a positive attitude boosts the immune system, empowering it to battle cancer more effectively.

You’ve probably read that assertion so often, in one form or another, that it glides by without a moment’s thought about what the immune system is, how it might be affected by emotions, and what, if anything, it could do to fight cancer. The business of the immune system is to defend the body against foreign intruders, such as microbes, and it does so with a a huge onslaught of cells and whole cascades of different molecular weapons.

In 1970, the famed Australian medical researcher McFarlane Burnet had proposed that the immune system is engaged in constant “surveillance” for cancer cells, which, supposedly, it would destroy upon detection. Presumably, the immune system was engaged in busily destroying cancer cells — until the day came when it was too exhausted (for example, by stress) to eliminate the renegades. There was at least one a priori problem with this hypothesis: unlike microbes, cancer cells are not “foreign”; they are ordinary tissue cells that have mutated and are not necessarily recognizable as enemy cells. As a recent editorial in the Journal of Clinical Oncology put it: “What we must first remember is that the immune system is designed to detect foreign invaders, and avoid our own cells. With few exceptions, the immune system does not appear to recognize cancers within an individual as foreign, because they are actually part of the self.”

More to the point, there is no consistent evidence that the immune system fights cancers, with the exception of those cancers caused by viruses, which may be more truly “foreign.” People whose immune systems have been depleted by HIV or animals rendered immunodeficient are not especially susceptible to cancers, as the “immune surveillance” theory would predict. Nor would it make much sense to treat cancer with chemotherapy, which suppresses the immune system, if the latter were truly crucial to fighting the disease. Furthermore, no one has found a way to cure cancer by boosting the immune system with chemical or biological agents.

But despite all the evidence to the contrary, you can see the appeal of believing in the power of “positive thinking” anyway, can’t you? Instead of waiting passively for the treatments to kick in, breast cancer patients can now “work on themselves;” monitor their moods and “psychic energies.” In other words, the idea of a link between subjective feelings and the disease, fabricated though it may be, gives cancer patient something to do.

And this applies far beyond cancer, to any kind of overpowering misfortune. “We’re always being told that looking on the bright side is good for us,” writes Thomas Frank, author of What’s the Matter With Kansas?, in a review on the back cover of Bright-Sided, “But now we see that it’s a great way to brush off poverty, disease, and unemployment, to rationalize an order where all the rewards go to those on top. The people who are sick or jobless — why, they just aren’t thinking positively. They have no one to blame but themselves.”

It’s not that we’re assholes. It’s just that we desperately want to believe the world is a far more just place than it actually is. As David McRaney, journalist, and author of You Are Not So Smart, a blog about the workings of self-delusion, writes in a post about The Just World Fallacy, humans have “a tendency to react to horrible misfortune, like homelessness or drug addiction, by believing the people stuck in horrible situations must have done something to deserve it.” Here is the Just World fallacy in action:


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Oh, wait. Actually, THAT guy IS an asshole. As is Rhonda Byrne, creator of “The Secret,” who, in the wake of the 2006 tsunami, citing the law of attraction, announced that disasters like that can happen only to those who are “on the same frequency as the event.”


A flock of Brown Pelicans on some rocks in Alabama.

While, clearly, suggesting that the poor little pelicans (or anyone else) signed a deal with the devil or somehow attracted the oil spill upon themselves is just waaaay the fuck further out in looney-land than anyone who is not an asshole cares to travel, at their base, all these delusions are simply coping mechanisms. A way to synthesize a sense of being less powerless than you really are; a way to deal in the face of extreme evidence to the contrary. Because the reality is that feeling like we have NO control whatsoever, like our lives are simply dried up leaves in the autumn winds of chaos, like any choices we make are utterly meaningless and futile is actually terrible for our mental well-being and our health. Note: this is not the same as saying “thinking positive will cure your cancer,” it’s saying that extreme stress factors are, indeed, bad for you. Duh. “Torture a lab animal long enough,” Ehrenreich writes, “as the famous stress investigator Hans Selye did in the 1930s, and it becomes less healthy and resistant to disease.” In a post on Learned Helplessness — McRaney writes:

If, over the course of your life, you have experienced crushing defeat or pummeling abuse or loss of control, you learn over time there is no escape, and if escape is offered, you will not act – you become a nihilist who trusts futility above optimism.

Studies of the clinically depressed show that when they fail they often just give in to defeat and stop trying.

A study in 1976 by Langer and Rodin showed in nursing homes where conformity and passivity is encouraged and every whim is attended to, the health and wellbeing of the patients declines rapidly. If, instead, the people in these homes are given responsibilities and choices, they remain healthy and active.

This research was repeated in prisons. Sure enough, just letting prisoners move furniture and control the television kept them from developing health problems and staging revolts.

In homeless shelters where people can’t pick out their own beds or choose what to eat, the residents are less likely to try and get a job or find an apartment.


Perdido Beach, Alabama

The underlying thread here is always about control, or the loss of it. Chaos is unbelievably traumatizing — personally, and to us as a species. Researchers at the University of California, Irvine, have been studying the impact of the 9/11 attacks on male babies since 2005. Their just recently published findings reveal that in the aftermath of the 2001 tragedy pregnant women miscarried a disproportionate number of male fetuses. In September 2001, the death rate of male fetuses compared with female increased by 12 percent. That’s 120 extra losses in a single month. The theory behind this phenomenon is likely an evolutionary adaptation. Women have adapted to produce what, Tim Bruckner, the study’s lead author and a professor at UC Irvine, describes as “the alpha male.” Which could explain why male fetuses are more sensitive to their mothers’ stress hormones than female ones. When a pregnant woman experiences some sort of crisis — whether personal or not — her male baby is more vulnerable to be miscarried. In times of prosperity and security, male fetuses are more likely to be brought to term, because there’s a greater chance that they’ll be healthy and robust. During periods of scarcity, however, male miscarriages are much more common. Indeed, the phenomenon reported by Bruckner & Co. has been observed before — reduced male birth rates have been reported during other instances of national stress or suffering, like economic recessions or natural disasters.


Surface oil burns in the Gulf of Mexico as part of the oil spill clean-up.

Which brings us back to the Gulf of Mexico and the worst environmental disaster in US history; the cold, strange, numbing sense of a profound national powerlessness seeping in as we see sickening photos of helpless animals drowning in oil. Just thinking about how you can’t do anything about it for too long will make you want to check the fuck out of this whole story. I know. I want, as much as anyone else, to have something to be able to do to make all of this stop.

To a large extent this is completely new territory for my generation. Nationally, we have never been faced with something we couldn’t “do” something about. As the child of parents who lived through WWII, Refuseniks, no less — the 1 and a half million Russian Jews who were trapped in the Soviet Union, denied permission by the government to leave the country, in my parents’ case, for a decade — I know, personally, just how sheltered my generation’s childhood has been in contrast. It’s unprecedented for us. We’ve had so little practice at facing situations where we couldn’t just do something, at fighting them, at living through them. Not 9/11, not the financial crisis, not the wars in between, it’s this oil spill that is my generation’s unfortunate turn to figure out how to stand in the face of powerlessness.

In a Huffington Post piece a few weeks ago on why he “Co-opted BP’s Twitter Presence,” Leroy Stick, the alleged name behind the anonymous @BPGlobalPR twitter account, which posts ingeniously scathing commentary on BP with satire so black as to befit the disaster the company has wrought, wrote:

I started @BPGlobalPR because the oil spill had been going on for almost a month and all BP had to offer were bullshit PR statements. No solutions, no urgency, no sincerity, no nothing. That’s why I decided to relate to the public for them.  I started off just making jokes at their expense with a few friends, but now it has turned into something of a movement. As I write this, we have 100,000 followers and counting. [Currently, almost 179,000]. People are sharing billboards, music, graphic art, videos and most importantly information.

If you are angry, speak up.  Don’t let people forget what has happened here.  Don’t let the prolonged nature of this tragedy numb you to its severity. Re-branding doesn’t work if we don’t let it, so let’s hold BP’s feet to the fire.  Let’s make them own up to and fix their mistakes NOW and most importantly, let’s make sure we don’t let them do this again.

Right now, PR is all about brand protection. All I’m suggesting is that we use that energy to work on human progression.  Until then, I guess we’ve still got jokes.


A small quote of inspiration to the affected fishing community at a bait and tackle in Dauphin Island, Alabama

In the introduction to Bright-Sided, Ehrenreich writes:

Americans did not start out as positive thinkers…. In the Declaration of Independence, the founding fathers pledged to one another “our lives, our fortunes and our sacred honor.” They knew that they had no certainty of winning the war for independence and that they were taking a mortal risk. Just the act of signing the declaration made them all traitors to the crown, and treason was a crime punishable by execution. The point is, they fought anyway. There is a vast difference between positive thinking and existential courage.

We must find that courage now. To keep paying attention. To not tune out the story of this tragedy. To not let futility or apathy or simple delusion take over. We must have the courage to see things as they really are, to bear witness to what’s happening in the gulf, and we must have the courage to fight for answers, to fight for institutional change in the policies that have lead to this disaster, and to work for new solutions. The TEDxOilSpill event I mentioned at the beginning of this post, which is bringing together researchers and leaders to explore new ideas for our energy future, and how we can mitigate the crisis in the Gulf, is a start. There are also currently 126 local Meetups happening in conjunction with the event in 30 countries around the globe. We have to have the courage to do what we can, until we can actually do what we must.

That courage is, literally, what America was founded on, and I hope my generation discovers we too possess a reserve of it.

    



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by jenks

Sex, Drugs, & The Internet – Inspired By A True Story

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You know those movies about characters trail-blazing the business of some terrible vice? They’re always set in a not-too-distant past, have trailers full of period-specific songs, and include the words “inspired by a true story” on the poster. There’s the initial meteoric rise to power and wealth, followed by a period of unbridled excess — generally involving use of montage — and, ultimately, the inevitable downfall which was doomed to happen from the start, with, possibly, an epilogue of redemption. It’s a very specific film archetype, wherein the traditional bad guy is, instead, the quintessential American hero: the visionary entrepreneur who possesses the ingenuity and tenacity and just plain balls to seize an opportunity only he can see, and achieve a feat so stupendous — inventing the American cocaine trade, for instance, becoming the first black man to rise above the Italian mafia in the New York heroin business — you’re at once inspired and horrified by his success.

In 2001, Blow kicked off this trend of movies where you’re rooting for the drug dealer. The movie’s based on the life of George Jung, played by Johnny Depp, a Boston guy living in California, who starts off smuggling pot cross-country in the 60’s, and ends up becoming the American connection to Pablo Escobar’s Medellín Cartel, which, with Jung’s help, would go on to own 85% share of the U.S. cocaine market by the late 70’s / early 80’s:

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Then came 2005’s Lord of War, in which the illicit contraband is weaponry, and Nicolas Cage plays Ukranian-American gun trafficker, Yuri Orlov — a fictional character based on a composite of a number of actual post-soviet arms dealers — whose big break comes as he watches Mikhail Gorbachev give his resignation speech on television, Christmas Day 1991. Like a prospector who’s just struck oil (See also: There Will Be Blood, for a variation on this cinematic theme), he envisions, in this moment, the future of his business expanding with the gush of weapons — even tanks! — he’ll now be able to buy (illegally) from the just-dissolved Soviet Union’s stockpile in the Ukraine:

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2005 was also the year Weeds premiered on Showtime, in which Mary-Louise Parker plays a widowed housewife who becomes a suburban pot dealer, and a few seasons later ends up married to the head of a Mexican drug cartel.

By 2008, when American Gangster came out — which tells the story of Frank Lucas, played by Denzel Washington, who bypassed the entire Italian mafia to become the heroin king-pin of New York in the early 70’s by establishing his own direct supply connection in Asia during the Vietnam war and smuggling the drugs into the U.S. in the coffins of dead U.S. soldiers — rooting for the vice-peddling, psychotically enterprising, imminently doomed outlaw businessman — even though, good god! he’s a fucking heroin drug lord turning all of Harlem into addicted zombies!! — had become a familiar experience:

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Which is how we arrive at Middle Men, due out later this year, a based-on-reality story in which Luke Wilson plays Jack Harris, a mainstream businessman who partners with a pair of porn content providers (played by Gabriel Macht and Giovanni Ribisi) to form the first online adult billing company in the mid 1990’s:

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The drug dealer used to ALWAYS be the bad guy. You weren’t supposed to sympathize with him. Now it’s every fuckin’ movie like this. But the story isn’t just about the clever bastard with an idea for a supply to human nature’s demand, it’s about the vice itself. It’s not just George Jung’s story, it’s the history of blow we’re fascinated by — how a chance cell-mate pairing between a California pot smuggler and a member of the Medellín cartel would pave the way for the U.S. cocaine highway. How the Vietnam war became the camouflage for the heroin epidemic Frank Lucas created. How the Soviet Union’s collapse helped the business of illegal arms dealers. Each of these stories has this moment where entrepreneur and zeitgeist collide, and — for better or worse; mostly for worse — it changes the world. In Middle Men the focus of the story could have easily been the porn industry — but it isn’t. Porn is just the side effect. Like the preview voice-over announcer says, it’s the story of the worldwide web.

Finally.

It’s 2010. 20 years since the first web browser, 15 years since the first adult materials became commercially available online, 10 years since the dot com bubble burst, 5 years since MySpace was getting more page-views than Google, a year since Facebook overtook MySpace in unique visitors, and meanwhile, Americans now spend, on average, about as much time on the Internet as watching TV. In fact, if you’re under the age of 45, you spend considerably more time on the Internet than watching TV. Amid a global financial crisis, US online retail managed to grow 11% in 2009 to reach $155.2 billion. Overall online sales are projected to increase almost 200% between 2008 and 2012. 75% of us use social network sites. And the time we spend there is growing at 3 times the overall Internet rate, accounting for 10% of all Internet time — every second of which, by the way, 28,258 internet users are viewing porn.

Hollywood is finally catching on. Up next after Middle Men is the film adaptation of Ben Mezrich’s 2009 book, The Accidental Billionaires: The Founding Of Facebook, A Tale of Sex, Money, Genius, and Betrayal. It comes out just a couple of weeks after Wall Street 2:

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Here’s an excerpt from the book:

What neither he nor Mark [Zuckerberg, Facebook founder] had known when they started the damn thing was how addictive Facebook was. You didn’t just visit the site once. You vsited it every day. You came back gain and again, adding to your site, your profile, changing your pictures, your interestes, and most of all, updating your friends.

… Most kids who tried out [Facebook] once tended to come back  — 67 percent every day.

The Internet: It might not be illegal, but it’s unquestionably addictive.

Once considered the province of geeks, the Internet is now where all of us live. It is a huge, enormous thing that is changing how we do practically everything and permeating the very experience of our lives. It is now all of our’s vice. And it’s breeding a whole new generation of vice entrepreneurs. Drug dealers and gunrunners have new company.

In related news, is it just me or does the new poster for The Social Network seem, like, awfully familiar?

http://social-creature.com/wp-content/uploads/2010/06/socialnetwork.jpg

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http://social-creature.com/wp-content/uploads/2010/06/americapsycho.jpg

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Just sayin’.

socialnetwork-americanpsycho

    



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by jenks

All Your Music Are Belong To Us


(photo: Mick O )

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“They say the music business is in trouble. No! The business of selling CDs is in trouble; this is a religion.”
– Michael Rapino, CEO, Live Nation

I was in the weekly Southern California marketing meeting at House of Blues the morning it was announced that Tower Records was going out of business. It was a Friday in 2006, and the marketing departments from LA, Anaheim, and San Diego were all on the conference line. The moment I heard the news I wanted to get up and cheer, but as I looked around I saw only fallen faces. The other cities on the call were silent. A mourning pall had fallen over the rest of the room, but all I felt was a complete excitement. I was the youngest person there.

When I was in high school my friends started burning CDs with mp3s. In June of 1999, same time as I was walking up in my cap and gown to accept my high school diploma, a kid at Northeastern University unleashed Napster into the world. It was a few months later, when I got to college at Boston University, just a few miles up the road from Northeastern, when I first heard about this program everyone was using to find and share music. College has always been the setting for waves of new discoveries, from drugs, to new perspectives. At the fin de siècle, what most of us encountered for the first time in the dorms was high-speed internet, the gateway drug to more hardcore file downloading. Napster spread like wildfire across Boston campuses, and then beyond. At first it never occurred to us that there could be anything wrong about using it. The arrival and adoption of Shawn Fanning’s creation was so inextricably linked with my and my cohort’s transition from high school to college, it seemed like just another new thing that being 18 gave you access to, like nightclubs, or cigarettes. It felt like such a natural technological progression that when Napster was ultimately forced to shut down in 2001 it was hard not to see it as a devolution. That a fellow student’s invention had been deliberately destroyed was a lot easier to understand than the reasoning of the faraway, suddenly ominous music industry. It had the feeling of repression, an attack on innovation itself, let alone on the access it offered, and it left a bad aftertaste.

By the time I was out of college and working in the concert industry it had long become clear that shutting down the iceberg had not saved the Titanic. Things had vastly deteriorated. In the depths of the music industry’s despair, the October 2006 issue of Wired Magazine dared boldly proclaim that “The Rebirth of Music” was nigh:

wiredRecord labels have always been the center of gravity in the industry – the locus of power, ideas, and money. Labels discovered the talent, pushed the songs, and got the product on the air and into stores. The goal: move records, and later, CDs. “The labels were never in the business of selling music,” says David Kusek, vice president of Boston’s Berklee College of Music and coauthor of The Future of Music. “They were in the business of selling plastic discs.”

The articulation of this concept of music that could exist on its own, liberated from CDs, or any other physical medium, expressed how I, and my generation, had already understood music to be. When Tower Records announced it was going out of business that Friday morning, the first thing I could think was:

The Future is here!

It was the same month as the “Rebirth of Music” issue came out.

Of course, my desire to celebrate upon discovering music was, indeed, about to be reborn out of the ashes of CD stores was completely out of sync. For everyone else in the room — even though we, ourselves, were in the business of selling something that didn’t come on a plastic disc — it was like the day the music died.

But wait, let’s back up a few months. In the Summer of 2006 Live Nation bought House of Blues. After separating from parent company Clear Channel the year before, the concerts division was rebranded Live Nation, and went on a shopping spree like it was Google. From fan club operator Musictoday, to music merchandising company Trunk LTD, to, seriously, countless concert promotion companies and music festivals around the world, if you were sitting still for too long, Live Nation would buy you. Towards the end of the year, on the eve of the House of Blues merger approval, we gathered for a series of company-wide conference calls with Michael Rapino, the CEO steering the company in this new direction, and it was on these calls that I heard, for the first time, someone in our business who not only saw the same future that I (and Wired) expected, he understood exactly what it meant.

In October 2007, a year after Wired’s augury, and after 25 years at Warner Brothers Records, which had release all of her albums up till then, Madonna left the label to sign a $120 million “360 degree” deal with Live Nation. In addition to operating the world’s highest-earning female singer’s tours, which it had already been doing, Live Nation would now also be handling her albums, merchandising, film and TV projects, DVD releases, music-licensing agreements and more, and getting a cut of all of it, hence “360.” This move was so revolutionary that most people didn’t even get it. According to a Fortune article, in November 2007, Live Nation’s stock sagged 30% after news of the Madonna deal. The myopic reaction — based on an understanding of the music industry as defined solely by the already broken record label model in which dumping dollars into artists was nothing but a sure loss — prompted an emergency presentation to analysts and investors, with Rapino having to actually explain how this was an entirely different approach, and why it made sense. “Of course [analysts] have to go out and tell the world we overpaid,” Rapino said in the article, “And we did overpay, if you’re just buying the record. But when you’re buying all those rights, it’s a beautiful deal.” If Madonna does four tours and three albums with revenues comparable to her recent output, it was projected the contract would pay for itself in 10 years with profits from merchandise, sponsorships, DVDs, and on and on.

In a statement issued at the time of the deal, Madonna said: “The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift. For the first time in my career, the way that my music can reach my fans is unlimited. I’ve never wanted to think in a limited way and with this new partnership, the possibilities are endless. Who knows how my albums will be distributed in the future?”

But you know what? Who cares how? How had stopped mattering anymore. Under this model, every downloaded song would become not an act of theft, but a process of promotion for all the other things that couldn’t be copied online. As Madonna’s manager, Guy Oseary said in the Wall Street Journal, “In the past, people would tour to promote their albums; today they put out albums to promote their tours. The pendulum has swung, and Live Nation is at the forefront of touring.”

Unlike so much else in the music industry, this arrangement actually works in both the suits’ and the artists’ favor. To a large extent, the interests of artists and their concert promoters are already far more closely aligned than with their labels, and to drive this point home, as part of the deal, Madonna got equity in Live Nation to the tune of 1.7 million shares. A mutual investment between artist and industry is a complete turnaround from the label relationship, which has generally consisted of record companies tossing artists onto the sacrificial fire, hoping to gain favor with the gods. By now, three years later, U2, Jay-Z,  Shakira, and Nickelback have also eschewed the traditional record label route for similar kinds of deals with Live Nation, and no doubt more are to come.

But record labels aren’t the only middlemen Live Nation has sought to remove from the equation. On those company-wide calls in 2006, Rapino talked about the importance of owning the relationship with music fans directly, which included the ticket purchase process itself.  The contracts with Ticketmaster for both Live Nation and House of Blues were to be up within a couple of years at the time of the merge, and they would not be renewed. The idea was for concertgoers to start buying tickets directly from livenation.com, but from the very beginning there was a much greater goal as well. In 2007, Live Nation began experimenting with a program called OPEL — Open Platform Event Listings. Promoters for venues not operated by Live Nation, i.e. its competitors, were invited to have their events listed on livenation.com as well. The program never got too far off the ground (no doubt, for reasons that will become obvious below), but by the time the contract with Ticketmaster finally expired last year, it was already clear that Live Nation’s moves were about far more than even just owning its own vertical ecosystem.

The schism between Ticketmaster’s largest account by far, and Live Nation’s relationship with a company that already had the massive ticketing infrastructure it needed, made it a no-brainer that within just two months of this trial separation Live Nation would seek to buy Ticketmaster outright. Last week, the Department of Justice finally approved, with some concessions, the first big merger of the Obama administration.

Todd Martens writes on the LA Times Music Blog:

In the wake of the Department of Justice giving the green light to a merger between promoter/venue owner Live Nation and ticketing agency/management firm Ticketmaster Entertainment, Mitchell Frank, [owner of  Spaceland Productions, which promotes events at three independent LA venues] suddenly finds himself in the unenviable position of making money for the competitor.

Spaceland Productions has 15 months, Frank said, remaining on an exclusive contract with TicketWeb, the once-indie ticket seller now owned by Ticketmaster. “To make money for that behemoth, it turns my stomach,” Frank said. “I’m an indie promoter, and that’s what I do. So it’s kind of tough to give money to the mother ship.”

Frank was interviewed by the Justice Department and expressed concerns that he said appear to have gone unheard, largely that an approved partnership would have him working — and potentially providing information for — his competitor.

The newly formed Live Nation Entertainment… has the ability to book concerts, sell tickets and merchandise, and, with management company Front Line, direct access to such name acts as the Eagles, Jimmy Buffett, Neil Diamond, Van Halen, Fleetwood Mac, Christina Aguilera and more.

“That’s where the concern is,” said Jordan Kurland, whose Zeitgeist Management represents Death Cab for Cutie, She & Him, Grizzly Bear and more. “When you look at the intersection of Ticketmaster, Live Nation and Front Line? Information is power, and they will have a lot of it.”

Addressing the company’s vertical integration powers would have been a near impossibility, said one Washington, D.C.-based antitrust expert familiar with the proceedings. Many, including Mickelson in the Tribune, have cited the 1948 U.S. Supreme Court antitrust decision against Paramount Pictures, which essentially stated that Hollywood studios could not also own the theaters that had exclusive rights to show their films.

“The courts have been very favorable to vertical integration for 40 years,” said the antitrust expert, who agreed to speak only on condition of anonymity. “I like going back to Paramount vs. U.S. also, but that’s a very old case, and there have not been any vertical mergers blocked in about 40 years.”

In 2008, Ticketmaster had a market share of more than 83% for major venues, according to concert-industry tracking publication Pollstar. Its nearest competitor’s share was just under 4%. The Department of Justice said that breaking up prior contracts with Ticketmaster and TicketWeb would have done little to preserve competition in the ticketing space, adding that “a lot of the [venues] would not have wanted that.” The department estimates that 20% of Ticketmaster’s exclusive arrangements will expire each year and intends for venues and promoters to have more options when they do. In the meantime, however, Ticketmaster already retains information such as emails used to make purchases. Many of those emails came in through tickets bought to Live Nation events, but, then again, others did not. Now that Live Nation and Ticketmaster are one, who do all those ticket-buyer emails belong to? Live Nation Entertainment now has access to an enormous share of not only the concert industry, but of the actual concert-going population. Perhaps not 83%, when all is said and done, but still, through its competitors, it’s inevitably larger than what it actually even owns itself.

In the olden days, when labels dominated the system, they still had to share power with one another. The upheaval in the music business over the past decade, however, as the recording industry more or less tried to stick their fingers in their ears and go lalalalaalalalala hoping to ignore it into going away — oh, wait, they DID try experimenting with suing their own fans to see if that might be a viable way to make money — left the industry vulnerable to someone, anyone, with a clear understanding of changing consumer behavior, and the unclouded vision to see where the game was going. Not that it’s exactly the same, but after the Soviet system collapsed in the 1990’s, Russian organized crime exploded because basic government functions — such as social security, the pension system, some electrical grids, dispute settlement and the distribution and protection of property — either disappeared or were hopelessly inefficient. Organized crime had the impunity to take advantage of the general chaos, but just as importantly, if not more so, in the void left behind by the state, it had the actual organization.

Though, thankfully, this isn’t post-collapse Russia. The Justice Department said in legal filings that the merger, as initially proposed, would eliminate competition in the market for ticket sales, creating less pressure on the fees charged and potentially less innovation. No existing player, they said, would have the resources to compete. So in order for the $889-million deal to proceed, the two companies had to agree to make room for a couple of rivals. Under the agreement,  Ticketmaster will give Anschutz Entertainment Group access to its technology so that AEG — which owns and manages nearly 100 venues including Staples Center — can create its own ticketing service. Additionally, Ticketmaster agreed to divest a subsidiary that provides software for venue operators to sell their own tickets. But for Live Nation, ticket sales are just the tip of the iceberg. Even as tour revenues are rising, the margins in the concert industry are, as they have always been, anemic. According to Fortune, Live Nation’s cash-flow margins were 4.3% in 2007. Which is why what Live Nation is really after isn’t just being the iTunes of tickets but something that the other players in the music industry never understood they should have been after all along — or at least not until it was too late.

If you were to remove selling plastic discs from the entire music equation, the most profitable thing on the table becomes not just concerts, but the larger relationship between artists and fans. It’s why labels are pushing their own “360 degree” deals now (not that they really had any other choice, seeing as their primary revenue stream dried up like a fossil fuel) but inevitably, since labels don’t own or operate their own venues, it’s a smaller circumference. The Wall Street Journal recently wrote about the notable example of Lady Gaga, whose merchandise, touring, and Polaroid, Estée Lauder, and MAC contracts revenue is basically the tent-pole holding up all of Interscope. It’s the relationship artists have with their fans that drives the sales for everything else their brand is connected with, and owning that relationship is what the rebirth of music…. of the music business is really about. Right now, with the ability to book its own concerts, sell its own tickets and merchandise, and manage its exclusive artists all under one roof, Live Nation Entertainment has an entirely unprecedented model for owning the complete fan relationship from tickets to trinkets. A decade after Napster, the relationship with music fans IS the music business, and Live Nation is after owning that business on a massive scale. After the B.C. / AD digital changeover, control of the music business has shifted from the recording to the performing side of the industry, and Live Nation isn’t so much a monopoly in the music industry as it actually IS the music industry. If not yet fully in application, then in its model.

    



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by jenks

Don’t blame me. I’m from — wait… what?

blue

Last night, in a special election to replace the late Senator, Ted Kennedy, my home state of Massachusetts elected its first Republican to the senate since 1978, Scott Brown.

Massachusetts has never elected a Republican senator during my lifetime. I’ve never known anything but Democrats (except for one Governor, once), from my home state my ENTIRE LIFE. It’s always been other states that voted Republican. Red states. Far away. Where rich families would inevitably end up like the Bushes. Not the Kennedys. And it’s not even like the Bay State is all uber liberal, vegan hipsters or anything — Massachusetts is very much a working class kind of place — it’s just that we’ve always been Democrats, and that’s that.  Even New York, which is by and large perceived as the liberal bastion of the East Coast is really only Democratic in the City. Massachusetts has never had the “upstate” vs. “downtown” battle. The first shots of the American revolution were fired in the suburbs, after all, and as a first generation immigrant from the USSR, growing up in Boston since the age of six, the Bay State’s staunch Democratism has always had a sort of romance to it. Like, of course, there would be a unified sense of responsibility to uphold Democracy’s legacy here, kind of thing, in its New World cradle and all.

The realization that there was a maddening political divide tearing up the rest of the country didn’t even cross my radar until I was in college. Once I grew up and actually started to understand the polarizing nature of partisan politics, looking back on Massachusetts with that new perspective I think I just sort of assumed that my state was somehow smarter than the rest (all those college kids aside). We’d found a good thing, and we were sticking with it. We could not be tempted.

More a unifying sense of civic pride and responsibility than icky fundamentalist ideology, Democrat isn’t just how Massachusetts votes voted, it’s a part of our cultural identity. Like the Red Sox. Which is why the idea of a Republican winning the senate race in Massachusetts is just completely insane to me. It’s like imagining Boston throwing a parade down Comm. Ave. to celebrate the Yankees winning the World Series. I can’t even compute how this could happen. (Though, Jon Stewart explains it below, rather well).

In the 1972 Presidential election, Nixon won by a landslide. It was the second biggest electoral vote margin in United States history. Nixon got the majority of votes in 49 states. His opponent, George McGovern, could only get one: Massachusetts. A year later, Nixon’s VP, Spiro Agnew, resigned after being charged with bribery, extortion, and tax fraud. And the year after that, Nixon resigned in the face of impeachment over the Watergate Scandal. That was when wiseasses from the one state McGovern carried started sporting bumper stickers that read, “Don’t blame me. I’m from Massachusetts.” A sentiment that was more recently revived as “Don’t blame me. I voted for Kerry.” That’s just how Massachusetts is. Or… was.

Regardless of wherever else I’ve lived or been, Massachusetts has felt something like an insurance policy: No matter how crazy things got elsewhere, I could always go back to Blue. Until now, when the election of the first Republican senator in over 3 decades is an event so monumentally unimaginable, it shakes the whole foundation of what I’ve known as a lifelong institution.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Mass Backwards
www.thedailyshow.com

    



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