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Category: Economics / Money / Investing (Page 5 of 9)

Economics, Money, and Investing.

A Reality Check for the Recording Industry

For several years now there have been stories in the news about the RIAA suing private individuals who engaged in music file sharing and downloading. Recently ASCAP tried to get into the act with the idea of charging royalties for ringtones and with their demands worded in such a way that it sounded like one would have to pay a royalty for whistling a tune.

What we are seeing are the dying gasps of an obsolete business model and I’d like to point out some realities that should be remembered by all involved.

Music has been a part of humanity for a very long time, thousands of years. The recording industry is a very recent phenomenon that has only existed for the last 100 years, ever since it became possible to record and play music on a machine. The invention of the phonograph made it possible for a business to spring up around the idea of selling pre-recorded music. This business model was viable as long as it was possible to control the means of production of the media. The end of this business model began with the introduction of tape cassettes, the first popular recording medium that made it easy for private individuals to copy music recordings for themselves and also to sell them. But cassettes still involved physical media and themselves cost money. There were also quality issues because a copy was never as good as the original, and successive copies rapidly became worse in quality. With the introduction of digital recording and the Internet, it became possible for private individuals to make copies without limit, with no loss of quality, and to transport copies anywhere in the world instantly, without physical media. This ability signaled the final end for the recording industry that sprang up 100 years ago.

Representatives of the recording industry loudly proclaim that the end of their business means the end of your music. They threaten that if nobody purchases their music, there will be no more good music and they would have you believe that the “recording industry” is music. This is, of course, a bald-faced lie. Representatives of the recording industry hope that people overlook the fact that their business is very young, only 100 years old, and they hope that people overlook the glaringly obviously fact that the greatest music produced by humankind was created before the recording industry even existed.

Music is art, not CDs. The music moguls who have made billions of dollars from selling the work of talented artists do not want to lose their cash cow. It has nothing to do with whether music will be created. Bach, Beethoven, Mozart, and all the rest did not create their music with the hopes of selling records, going “platinum”, or any of that. They created music because they were inspired, music was in their heart, and they wanted to say something with their music. The recording industry promotes the idea that they are music when in fact they are simply merchants of copies of works created by talented artists.

Whether they want to recognize it or not, the music moguls have lost their cash cow. They have lost it irretrievably because technology has moved past the need to sell physical media whose production and distribution can be controlled. The game is over. The business model is obsolete and dead, and can never be revived. It’s just sad and somewhat sickening to watch the recording industry press their law firms to come up with ever more outrageous attempts to rescue them from their sinking ship.

As we watch the death of the recording industry, bear in mind that the recording industry is not music, it is a particular way of marketing recorded music. Music is not going to go away. Keep a sense of perspective and don’t lose sight of the fact that the recording industry is made up of merchants no different than the fish merchant down the street. The fish merchant did not create the fish, he just sells the fish. The same is true of the recording industry merchants. Don’t be fooled by the hyped threats.

The U.S. is Going to Miss the Biggest Opportunity of the 21st Century

Electric vehicles are the wave of the future. Bio-diesel (algae, bacteria), and electric, and combinations of the two are where the future lies. But the U.S. is going to blow it.

For most of the 20th century, the U.S. was the world leader in car manufacturing. This is no longer the case and it looks like the mammoth dinosaur corporations that make up “Detroit” are so hidebound they’re unable to cope with the coming changes. Now it’s looking like the whole thing is going to go bankrupt in the U.S.

But, cars are not dead. In fact, there will be more car sales in the 21st century than in the 20th century as the billion people in China, and the billion people in India reach a level of income that enables them to have cars. The U.S. car industry could be there, ready for the market, but it won’t be.

In order to change this, just about everything from the past must be dropped and new procedures put in place, from corporate governance down to the lowest position in the company. Design cycles must be vastly accelerated. It’s no longer possible to spend five years taking a car from concept to production. In five years, all of the technology changes, and any product that passes through the standard Detroit design cycle will be obsolete before it hits the streets. Consider the Chevy Volt. How long have we been hearing about it? Years. And it’s still years from introduction. That’s ridiculous.

Will it get fixed? I doubt it. But there’s a tremendous opportunity sitting there. The U.S. could again become the leading car maker in the world with the latest technology and best value. But I fear it will not happen. By the time things change in the U.S., if they change, market leadership will have already moved to Asia where the problem is understood and companies move much more quickly to adapt to technology and changing markets.

http://www.nytimes.com/2009/04/02/business/global/02electric.html?th&emc=th

World faces irreversible climate change, researchers warn

The world is facing an increasing risk of “irreversible” climate shifts because worst-case scenarios warned of two years ago are being realized, an international panel of scientists has warned.

Temperatures, sea levels, acid levels in oceans and ice sheets were already moving “beyond the patterns of natural variability within which our society and economy have developed and thrived,” scientists said in a report released Thursday.

The findings came at the end of a three-day conference in Copenhagen, Denmark, where nearly 2,000 researchers gathered to discuss climate change.

See the rest of the story here.

For those personally worrying about foreclosure, Please read this post

This is a cross-post from a forum, reposted here with the author’s permission. I thought it might be of value to some of my readers:

A post in another forum served as a reminder of the economic fragility that many solidly middle class families are facing these days. My day job is in the affordable housing non-profit field, and my agency is among many on the front lines in saving homes and saving families from foreclosure.

So I will repeat what I said in the other thread:

For anyone who is getting behind in their mortgages and worrying about foreclosure, please get help from a non-profit housing organization sooner rather than later. There are new programs and new funds available to help, and banks are much more agreeable to loan modifications and deferrals than they were just a little while ago.

When you’re starting to get behind get some help – call the local HUD-certified housing counselling agency. A list can be found here, or call the HOPE hotline at 888-985=HOPE (4673).

There are a lot of pseudo counsellors and “debt relief specialists” out there preying upon people who are financially and mentally exhausted by economic turmoil. Stay away from them and get help from the non-profits who are the front line of defense in the current housing troubles. My agency has rescued dozens from foreclosure and saved more than 70 rental units that were abandoned by their owners, during the past year alone. There are many more like us.

Please get the name of the people near you from the HOPE line or website, and please be patient with them, they’re among the most overwhelmed workers in our country right now.

If anyone has questions on the availability of resources or anything else to do with these housing rescue programs please feel free to PM me. I will, of course, keep any information private.

Don’t go it alone – individual cases may differ tremendously, but many people can actually be helped if they get help early and find people who can intervene with lenders.

Andy

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