Streaming’s ESG Fail, and Why Artists Should Care About Data Centers and the Data Center Lobbying Connection

The music industry has a sudden interest in being very ESG. The public messaging on the “Music Climate Pact” seems to focus on all aspects of the music business EXCEPT streaming. Now why might that be? It may be because streaming is about the least ESG music and movie distribution method out there. Remember, ESG is a popular acronym that labels a company suitable for investing by people like BlackRock’s Larry Fink (who has been called out for investing heavily in the People’s Republic of China by none other than George Soros, which kind of says it all).

I thought this might be a good time to revisit the “data center lobbying” connection that we first posted about three years ago.

While they like the ESG label, they actually don’t look too hard at what they are applying the label to. A quick refresher–“E” stands for “Environment” which streaming fails for reasons we will discuss on the podcast and are discussed in the Minute Earth video above–especially true for YouTube and TikTok. “S” is for “Social” which company’s like Spotify fail miserably due to their exploitative royalty systems, multibillion dollar stock buybacks that only benefit insiders and income inequality. “G” is for “Governance”, and again companies like Spotify don’t get out of the gate on G because of their supervoting shares of stock that give Daniel Ek and his insider pal Martin Lorentzon 100% control over all Spotify governance decisions regardless of what Spotify’s replaceable board has to say or votes. And we haven’t even mentioned Tencent, the PRC surveillance company or Ek’s own investment in digital munitions.

So there’s that.

Senator 230

But–there’s also a connection in the US (and probably other countries) between the physical location of Big Tech data centers and political power. That’s called Senator Ron Wyden, who just happens to be on the wrong side of every copyright issue (including the unrealized capital gains tax that would crush songwriters and publishers who are selling their song catalogs).

It’s not just Ron Wyden–Senator Klobuchar has a data center connection, too, as does Senator Ben Sasse.

Be advised, then–when they start whinging about ESG, etc., for the music business, we should really be starting with streaming itself, and indeed, the entire Internet. And the political clout that goes with running that network of physical plant.

Greenpeace “Dirty Data” research. www.greenpeace.org/archive-interna…-greenpeace.pdf

Nature magazine sums it up (www.nature.com/articles/d41586-018-06610-y):

“Upload your latest holiday photos to Facebook, and there’s a chance they’ll end up stored in Prineville, Oregon, a small town where the firm has built three giant data centres and is planning two more. [Hello, Senator Wyden.] Inside these vast factories, bigger than aircraft carriers, tens of thousands of circuit boards are racked row upon row, stretching down windowless halls so long that staff ride through the corridors on scooters.

These huge buildings are the treasuries of the new industrial kings: the information traders. The five biggest global companies by market capitalization this year are currently Apple, Amazon, Alphabet, Microsoft and Facebook, replacing titans such as Shell and ExxonMobil. Although information factories might not spew out black smoke or grind greasy cogs, they are not bereft of environmental impact. As demand for Internet and mobile-phone traffic skyrockets, the information industry could lead to an explosion in energy use.”

According to the National Resources Defense Council www.nrdc.org/resources/americas…ing-amounts-energy:

“Data centers are the backbone of the modern economy — from the server rooms that power small- to medium-sized organizations to the enterprise data centers that support American corporations and the server farms that run cloud computing services hosted by Amazon, Facebook, Google, and others. However, the explosion of digital content, big data, e-commerce, and Internet traffic is also making data centers one of the fastest-growing consumers of electricity in developed countries, and one of the key drivers in the construction of new power plants.

Google emits less than 8 grams of carbon dioxide equivalent per day to serve an active Google user—defined as someone who performs 25 searches and watches 60 minutes of YouTube a day, has a Gmail account, and uses our other key services.”

In Google-speak “less than 8” usually means 7.9999999999. So let’s call it 8. As of 2016 there were 1 billion active gmail users. So rough justice, Google acknowledges that it emits about 8 billion grams of carbon dioxide daily, or 9,000 tons. And based on the characteristically tricky way Google framed the measurement, that doesn’t count the users who don’t have a gmail account, don’t use “our other key services” and may watch more than an hour a day of YouTube.

Songwriter Needs Help: GoFundMe Fundraiser for Hugh Prestwood and Judy Ahrens

If you ever thought we were too aggressive in our campaign to end the 15 year freeze on statutory royalties for physical, consider the situation of songwriter Hugh Prestwood and his wife, photojournalist Judy Ahrens. Songwriters and photographers are two occupations that are devastated by the digital blight that has visited apocalyptic devastation on creators.

As Hugh says in their GoFundMe page, his songwriting income was destroyed by the massive change in the economics of songwriting that split apart the album format with no commensurate increase in songwriter royalties. Songs became a major driver of wealth for hardware manufacturers and Internet providers (remember dancing cows chanting rip, mix, burn?) in the 2000s, and streaming drives wealth for catalogs and platforms. The doubling effect of Moore’s Law imposes a halving effect on creator royalties. Hugh and Judy are living proof of what happens to an aging population of creators who could not have possibly planned around the digital blight–other than learning to code, I guess.

Of course we want to encourage readers to contribute what you can to Hugh and Judy’s GoFundMe, but we also want to make a larger point.

The Copyright Royalty Judges need to understand that there are real consequences to real people when they freeze mechanical royalties. While the Judges are not responsible for all the harms that accrue to songwriters in the rigged statutory licensing and royalty scheme, they do play a part and they can make a difference. Songwriters may not expect the Judges to fix their problems, but they do expect them not to make it worse. Freezing rates for 15 years makes it worse.

The Judges should also understand that they have an opportunity to do something to add fairness back into the system that the Judges effectively control. Creators like Hugh and Judy will never appear in their courtroom alongside the well-heeled lobbyists and lawyers who make millions off of the rate proceedings and the black box in what has become a laughingstock.

Congress, too, needs to listen up. It is well past time for a songwriter advocate to be a permanent part of the Copyright Royalty Board proceedings for mechanical royalty rate settings. A songwriter advocate would speak for people like Hugh and Judy. As Linda said of Willie Lohman in Death of a Salesman, “Attention must be paid.” I’m not asking that songwriters should be able to overrule the lobbyists, although that’s not a bad idea.

But at least hear them out before they’re all gone.

Catchup and Watch the Free Webinar on Radio Royalties and the American Music Fairness Act #irespectmusic

We had a great panel in Austin to discuss the history of the U.S. broadcast terrestrial loophole and strategies to stop the century-long Big Radio free ride on the backs of the world’s recording artists. Strategy number one is to support the bi-partisan American Music Fairness Act (or “AMFA”) introduced in Congress as HR4130 and sponsored by Rep. Ted Deutch and Rep. Darrell Issa.

The panel of Texas artist Terrany Johnson pka Tee Double, Texas music lawyer Gwendolyn Seale, Sean Glover of SoundExchange and me discussed the importance of the bill to Texas artists. As Tee Double said, the issue and the AMFA bill are “genreless” because the issue is critical to all Texas artists regardless of genre or locale, and in fact to all American artists.

The panel’s main purpose was to educate viewers about the radio loophole–American is one of a handful of countries including China, Iran and North Korea that does not pay artists when their recordings are played on the radio. We emphasized that artists have the power to close that loophole through asking their Member of Congress to support the AMFA legislation through candidate forums and petitions to Congress like the Copyright Alliance petition or the petition at IRespectMusic.org.

One key topic was that artists should not be gaslighted by Big Radio’s argument that they should be able to force artists to work for free because “exposure”. This is one of the great dodges.

No Exposure Bucks!

Hosting the panel alone helps to raise awareness of the opportunity to bend the arc of the moral universe and we want to thank all the great organizations that reached out to inform their members and supporters by hosting the educational panel. Hosting the event were the Austin area musician support organizations @ATXMusicians, @AustinMusic Foundation, @IRMAustin (I Respect Music Austin) and @TALATexas with help from @SoundExchange, the Copyright Alliance (@Unite4Copyright) and the Texas Music Office (@TXMusicOffice).

If you missed it you can watch it below and get the background materials here. Be sure to say hello to the panelists @sealeinthedeal, @terranyjohnson, Sean Glover and @musictechpolicy.

Takeaways are: Make sure you support artist pay for radio play and AMFA by filling out the Copyright Alliance petition or the petition at www.irespectmusic.org! Also consider calling or emailing your Congressperson and asking them to support AMFA. You can get that information by checking WhoAreMyRepresentatives.

In any event, artists, producers or labels should register for SoundExchange at www.soundexchange.com. Find out if SoundExchange is holding money for you already and whether your recordings are correctly registered with SoundExchange. Do this even if you are registered as a songwriter with a PRO like ASCAP or BMI–the PROs work for songwriters, SoundExchange works for artists, producers and record companies.

And while you’re at it, register to vote and get your band registered, too! We plan to have candidate forums in 2022 and you want to be ready to vote for artist rights! If you want to work on these efforts, please leave your contact with me.

Watch this space for updates on the American Music Fairness Act and artist pay for radio play or sign up for the MusicFirst Coaltion newsletter to stay in the loop. And finally if you have any questions, write to me or leave a comment.

Thanks!

Do we know much about what share of average salary that consumer spends on streaming?

I ran across an interesting 2019 study by researchers at the University of Glasgow (sorry Celtics fans) and the University of Oslo that takes a deep dive into streaming (summarized in this handy infographic).

The research…shows that when plotted against the changing average salary of a US citizen over history, consumers were willing to pay roughly 4.83% of an average weekly salary in vinyl’s peak year of production in 1977, a price which slips down to roughly 1.22% of an average weekly salary in 2013, the peak of digital album sales.

The advent of streaming over the last decade, now means for just $9.99, or just over 1% of the current average weekly salary in the USA, consumers now have unlimited access to almost all of the recorded music ever released via platforms like Spotify, Apple Music, YouTube, Pandora, and Amazon.

And then there’s the environmental impact of streaming. MTP readers will recall that I’ve been on the “dirty data” tip for years and tried to discourage readers from accepting–and in my mind being deceived by–Big Tech’s misdirection play about being green. They dearly want you to believe that the what powers everything from Google searches, to YouTube videos, to Spotify streaming is magic elves running on golden flywheels transmitted over gossamer wings.

This study confirms what we’ve seen in other reporting on the pollution of data centers sucking down hydro power in states like Oregon (represented by anti-artist mainliner Senator Ron Wyden–coincidence?). The study tells us:

“These figures seem to confirm the widespread notion that music digitalised is music dematerialised. The figures may even suggest that the rises of downloading and streaming are making music more environmentally friendly. But a very different picture emerges when we think about the energy used to power online music listening. Storing and processing music online uses a tremendous amount of resources and energy – which a high impact on the environment.”

It is possible to demonstrate this by translating the production of plastics and the generation of electricity (for storing and transmitting digital audio files) into greenhouse gas equivalents (GHGs).

The research shows GHGs of 140 million kilograms in 1977, 136 million kilograms in 1988, and 157 million in 2000. But by 2016 the generation of GHGs by storing and transmitting digital files for those listening to music online is estimated to be between 200 million kilograms and over 350 million kilograms in the US alone.

So it already fails on the S (due to horrendous treatment of creators) and it’s refusal to exercise pricing power even though consumers pay so little; and the G (given Spotify’s extreme control by Daniel Ek’s supervoting stock to the exclusion of shareholders). It also looks like Spotify also falls down on the E, too, with its polluting business model. No ESG ETF for Spotify?

Not likely. The greedy Stockholm syndrome exploits everyone.

George Soros: Investors in Xi’s China face a rude awakening

[ARW readers could probably guess that I’m not a fan of George Soros–a man who for reasons of his own has financed most of the anti-artist front groups around the world. But when he’s right, he’s right and in this op-ed from the Financial Times, he’s definitely right and Blackrock is definitely wrong.]

The crackdown by the Chinese government is real. Unnoticed by the financial markets, the Chinese government quietly took a stake and a board seat in TikTok owner ByteDance in April. The move gives Beijing one seat on a three-person board of directors and first-hand access to the inner workings of a company that has one of the world’s largest troves of personal data. 

The market is more aware that the Chinese government is taking influential stakes in Alibaba and its subsidiaries.  Xi does not understand how markets operate. As a consequence, the sell-off was allowed to go too far. It began to hurt China’s objectives in the world.

Recognising this, Chinese financial authorities have gone out of their way to reassure foreign investors and markets have responded with a powerful rally. But that is a deception. Xi regards all Chinese companies as instruments of a one-party state. Investors buying into the rally are facing a rude awakening. That includes not only those investors who are conscious of what they are doing, but also a much larger number of people who have exposure via pension funds and other retirement savings. 

Read the post in the Financial Times