Michael Jackson and the "Zombieconomy"

Snip from a Harvard Business blog post by Umair Haque on the digital-age business lessons to be learned from Michael Jackson's death, and analysis of the purported revenue from his career over the last three decades:

Want to know why we have a zombieconomy? Because the beancounters killed the incentives to create real value.

Let's use MJ's tragic death as a mini case-study. $300 million over, for example, 25 years? That's $12 million a year.

I'm deliberately leaving out ads, endorsements, concerts, etc., to focus on the the structural problems in one industry: music.

If the world's biggest pop star only made $12 million a year from his recordings, why would anyone make serious music? Where did the rest of the money go? Why, straight into record labels' pockets. Did they make better music with it? Nope — they made Britney and Lady GaGa. And that's how they killed themselves: by underinvesting in quality, to rake in the take.

Wait a second — that sounds familiar. You can add back in the endorsements, etc. now — they only double the figure: to about $25 million.

If the world's biggest pop star only made $25 million a year in total, something's very, very wrong. Where's the rest of the money? Why can't a resource as scarce as the King of Pop capture more value?

Michael Jackson and the Zombieconomy (via Bob Lefsetz)

Boing Boing editor/partner and tech culture journalist Xeni Jardin hosts and produces Boing Boing's in-flight TV channel on Virgin America airlines (#10 on the dial), and writes about living with breast cancer. Diagnosed in 2011. @xeni on Twitter. email: xeni@boingboing.net.

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Daemon

“If the world’s biggest pop star only made $25 million a year in total, something’s very, very wrong.”

Actually, I find it offensive that anyone is described as “only” making $25million in a year. The fact that he only made that much because he was raped by his corporate overlords is even more offensive.

I mean, seriously, $1mil/year buys you more than anyone you will ever need.
anechoic

@LOMLATE: ‘The market will create the music the market wants to hear’

that is priceless! I’ve not laughed so hard since I sold my record label — thanks!
Halloween Jack

Wow, what a crappy blog post. Never mind that someone in Harvard Business school should have more class than to use “lulz” in a blog post, ever; the post itself rests on a flawed premise–that Jackson was working, either recording or touring, for 25 years straight. Hint: no.

It was still better than Kuntsler’s blog post, which was just horrifically bad. “One CNN reporter called him a genius the equal of Mozart. That’s a little like calling Rachel Maddow the reincarnation of Eleanor Roosevelt.” Huh? Oh, is it because both Maddow and Eleanor are lesbians? And he seems to return at least once too often to the subject of Jackson’s gender identity: “America was a fat man jerking off on the sofa watching a vampire of no particular sex vogue deliriously on the boob tube.” I wonder if Kuntsler has just never recovered from seeing oil prices crash after their high.
Anonymous

hi my nema i love michael jackson so mach and you are the bast man in the world and you are not along am hear with you and you are in my hart i love you and am from kuwait …… i love you .
Anonymous

you are the king of pop
you will never stop
you were a child you were free
you had your best paly, you will always be
in evil ways they try to destroy
his beautiful day and joys

you would never heart a chil
you would say thats wild
peopel would say your jacko
but to you there wacko
michael is always in everyones hearts
he will never part

a legend never dies
there were alot of cries
we love your music
you were never sick

we miss you so much
you will always trust
we will love you 4 ever
you were always and still is better
you are here to stay
your way.
Anonymous

I wonder why Jackson never did a deal, like Bowie did…issuing bonds, that will generate revenue, in perpetuity?
ral8158

You compare Lady GaGa to Britney Spears?! You must have missed a certain video called “Paparazzi”, which is even more epic than Thriller. Lady GaGa is a true artist and has permanently changed the face of dance and pop music.

In her own words, “hating pop culture doesn’t make you cool, so you might as well embrace it.”
Casper

Why would someone try to make popular music if the top pop stars “only” make $25 mm per year?

Because $25 mm per year, for one year, is enough to live off for the rest of your life if your spending is reasonable in any way at all. Enough to have an exceptionally nice house, educate all your kids, retire at leisure, and still party “like a rock star” quite often.

And a more modest sum is still a lot of money.

Also, performing music is really fun, and having groupies is really fun. Without a drug habit and/or stupid spending habits like building your own amusement park, that’s more than enough money to provide adequate incentive.

Better to ask why countless bands struggle playing in bars in front of 50 people for beer money – and still love it.
Beanolini

Michael Jackson himself gave an interesting interview on ‘digital-age business lessons’:

The record company argument – which is that it’s like giving away the master tape, and we have to stop it – is obviously a logical argument. But I really don’t care … The thought of people borrowing my records from their friends and taping them has never bothered me. My concern is that as many people as possible hear the music. In fact, since they’re going to do it anyway, I think I’d prefer that they do it with digital quality. I’m still going to make enough money to live on one way or another, whether it’s through publishing royalties, live performance, or whatever … It might in some ways even be a good thing. Because if the profits get smaller, then maybe the lawyers and the accountants will start to fade away, and the music business can again be run by people who love music.

(Quoted from Clinton Heylin’s “Bootleg“).

This was TWENTY YEARS ago, and he was talking about the upcoming DAT medium. Guess we’re still waiting for the lawyers and accountants to fade away.
lomlate

I’m sorry but I just don’t accept the premise of this article. It states:

“they made Britney and Lady GaGa.”

But if you look at it, Britney and Lady GaGa make music that people want to hear. They make incredibly popular music.

By saying:

“they killed themselves: by underinvesting in quality, to rake in the take.”

You’re actually saying “i’m annoyed because they didn’t put money in profitless music that fits my definition of artistic integrity’. Well, yeah? Why should they? Their role isn’t to waste money producing ‘quality’ music that makes you feel good about the art. It’s to make music people want to hear.

The market will create the music the market wants to hear, and if this author doesn’t like that he/she should blame the consumers, not the companies that are simply following the invisible hand.
Anonymous

Wacky argument postulating

Michael Jackson = great art

and

Britney Spears = teh suck

I’m sorry, the only difference I see here is, Michael Jackson was popular with twelve-year-olds when you were twelve, and Britney Spears was popular with twelve-year-olds 15 or 20 years later. Another 15 or 20 years from now, when it’s fifty-year-old Britney dead from a “heart attack,” all her fans will be crying about what an artistic light unto the world she was, and how all the new stuff blows.
misshouseunited

It’s true, but not to the extent that this portrays. Everyone knows record labels are greedy, money-grubbing bastards, but that figure probably makes it look a little worse than it is. You have to consider that the income wouldn’t be so evenly spread out over the course of his career. You have to suppose that the majority of the money was directly associated with touring, and a smaller portion directly resulting from cd sales. In the years where he was recording or not recording or touring at all, the income could realistically have been less than $1M/year.
Since all artists tend to account for most of their touring in close proximity to the release of new albums, that means he would have gone through periods of lessened income, then actually incurring expenses for the record production (there’s your evil record company wacky stunts in action), followed by 1-2 years of raking it in. We know that in recent years, his financial situation had not been entirely stable (understatement of the year) so it be pretty obvious the way in which he made his money likely encouraged a paycheck-to-paycheck lifestyle on a mind-blowing scale. Condense all the years of touring and recording on a solid basis together, and it’s probably more like $250M across 15-25 years, and the rest coming from the recording or non-touring years, which sounds a lot more impressive to me.
Anonymous

i love thriller im listen to it right now i love u michael why did you take drugs
Takuan

“they like what we tell them to like”
ral8158

oh, I was only skimming and thought Xeni was saying SHE disliked Lady Gaga. forget I said anything.

I’m still hoping for a superstar duet between my two favorite ladies <3
mdh

The market will create the music the market wants to hear, and if this author doesn’t like that he/she should blame the consumers, not the companies that are simply following the invisible hand.

The most important aspect of the invisible hand is the marks it leaves on its victims… they’re invisible. So it feels just like free will.
kisters

Ed Chalpin deserved Band of Gypsys!!
tweaked

#2:

Actually, I’d say that $25 mil a year is even enough to support a pretty serious drug habit. Just not a buying-record-companies-and-gold-plated-statues-of-shit habit.
Anonymous

@ral8158 you say epic? I say masturbatory homage to the excess and artifice of the 80s. And why not compare GaGa to Britney? GaGa was always a big fan, and seems to want to create a mystique that won’t be torn down viciously as Britney’s has in the last few years. It’s all just a show anyways.
Obviously

Can I have a 25 million a year job since apparently it’s not a lot of money?

Okay I get it, most of the money is going to the record labels. But seriously, nobody really needs 25 million dollars a year.
batchild

James Kunstler’s weekly message was about MJ and the economy, too, but as usual his take is pretty depressing. http://kunstler.com/blog/
Marchhare

The intertubes have tripled my live show consumption. I know about more shows because Internet publicity. And, wonderfully, I know many more bands than I did in the 80s. Had I only known how incredible some of the non-mainstream stuff was back then!

Today I do with The Google.

I’m sure I’m not alone.
EeyoreX

Very good article. On the whole it’s more about investment bankers than about MJ.

BUT, to take a text about the Zombieeconomy and illustrate it with a screenshot from that one small exceptional part of the Thriller video in wich MJ is NOT a zombie but, rather, a werewolf?
That’s a pretty epic fail.
mdh

Beanolini – that’s a very interesting snippet.

Guess we’re still waiting for the lawyers and accountants to fade away.

And that is true of so much more than the music industry.
Takuan

you obviously do your own nails.
Takuan

how to kill Big Music?
Anonymous

hey there, this is from my blog… I wrote this about a year ago. same thing though..

What’s wrong with the record biz?
The problem is that we’ve over-convenienced the industry, and made music much less of a difficult commodity to get. The lowering of demand for packaged cd sales is directly correlative to these simple factors: 1) music today is lame and has been overly marginalized. people buy it now like they buy shoes. it’s an extension of vanity, and has little to do with actual singing, playing, or compositional abilities. 2) It’s virtually free now. Why run out and buy something that I know another person already has that i can burn onto my own cd? 3) people are less easily fooled. In the olden days, you’d buy a tape or record, and it would be a crap shoot. You really didn’t know what exactly to expect from a record, and you’d have only to go on faith and hope that it’s what you wanted ( of course there were fewer big selling acts, but they were constants, and as such, could be expected to come up with the same stuff they always did, until they decided it was time to sell out and make some dough, after achieving street credibility ie. van halen or red hot chili peppers, shadows of their former selves, watered down for profit. )

The essential problem is simply bad fruit. Say you were buying oranges. Imagine that there are hundreds of orange sellers trying to get the business. Now imagine that years have passed, and everyone copied everyone else’s business model and growing techniques for how to make and sell an orange down to the point where everyone’s oranges have become virtually identical. Eventually, experiments relating to different breeds and their marketability would occur, and those less desirable by the majority of customers would be forgotten, leaving only the most popular variety.

Over time, it becomes less of a matter of the quality they can produce in their oranges, and more about what they can do/leave undone to get away with cutting corners and putting out substandard oranges, while still turning a big profit, with less flavor less color etc. If EVERY orange grower does this, people will lose all their likes for oranges altogether, save for remembering the bygone days when they tasted good, and there was a variety of them. Eventually, these oranges would be given away, perhaps as a promo vehicle to sell grapes or something.

Now replace the oranges with music, and that’s what’s wrong with the industry.
Anonymous

Guys guys guys…

“If the world’s biggest pop star only made $25 million a year in total, something’s very, very wrong.”

This is not about $25m as something to live off. He’s saying, if the biggest star in a very short-head-long-tail market like music is only making $25m a year, that’s bad because the majority in the industry only earn a tiny fraction of the big players. You’d expect Michael Jackson to have made like half a billion a year.
therascalking13

I hate antagonizing on boingboing, but…
@1: ral8158

It’s attacking strawmen to even address the “more epic than Thriller” comment, as I just watched that video and there’s not an original thought in it. In 25 years, no one will remember it. That doesn’t mean it’s not a great video and done exceptionally well, but it does nothing new and therefore has not changed any face of any form of music. That’s just hyperbole.

‘In her own words, “hating pop culture doesn’t make you cool, so you might as well embrace it.”‘
What the hell does this even mean. Here, let me try…
“Killing people doesn’t make you cool, so you might as well embrace it.”

Is she seriously indicating that just because doing something doesn’t make you cool you ought to do the opposite? The logical flaws in that make her look like an idiot, which quite frankly I don’t doubt, running around making comments like that.
Keith

He’s saying, if the biggest star in a very short-head-long-tail market like music is only making $25m a year, that’s bad because the majority in the industry only earn a tiny fraction of the big players. You’d expect Michael Jackson to have made like half a billion a year.

Exactly! MJ made this amount and he was The King of Pop. The Little Surfs of Pop like [name your favorite band]? They’re living off of T-shirt sales.

See: Amanda Palmer, as an example.
Lobster

“If the world’s biggest pop star only made $12 million a year from his recordings, why would anyone make serious music?”

Maybe because if you only sell a quarter as well as the best, you’re still making $3 million a year?
Quix

I think a lot of people are missing the fundamental point here. Sure $25 million dollars a year is a LOT of money, but we are presuming here that that this number marks the highest income obtainable by being a musician.

Compare then the salary of the largest contributor to music-culture to the salaries of the largest contributors to corporate culture, the CEOs and hedge fund managers who make up into the *billions* of dollars per year.

Who here is contributing more to human society, who here actually has more value as a creative entity? Why are we paying someone 40 times as much to be the best at gambling as we pay to be the best at making music?

There’s a very good question here as to why the majority of opportunities in our culture favor optimizing the returns on other individuals contributions and value, rather than actually contributing something original ourselves.
Keith

The market will create the music the market wants to hear…

I think I have that album. “The sound of one invisible hand clapping,” by the Libertarian Douche Bags. I hear they’re very popular right now.
Brainspore

Maybe people will continue to “make serious music” because that is their passion in life, just as some people are driven to teach or paint or do any number of things that don’t have a snowball’s chance in hell of making anywhere NEAR $12 million a year.
Anonymous

I’m going to go out on a limb here and say that making money should not be the goal of writing music or making any art. If it’s good and you happen to make money on it, kudos. But if it’s created with the sole intention of generating revenue, you will end up like MJ.
travispulley

@lomlate #5 your faith in the market dominated by the recording industry appears very strong, but at least you didn’t call it “free”.

The record industry enjoys a collusion between itself and the various means of distribution. They find an act that makes money for them, they promote it, and it goes on long enough for people to get sick of it and toss it in the wastebin.

The music people want to hear? How do they know they want to hear it if they’ve never heard it? And how would they hear it if they record industry doesn’t like it? Music goes bad when it’s produced without inspiration to make a buck.

Oh, and then they started suing their customers when people quit buying their overpriced “not-very-valuable” music, and that’s what the author meant by killing themselves by underinvesting in quality. Sharing mp3′s over the internet? That’s the invisible hand of the free market flipping the record industry the invisible middle finger.
Takuan

if libertarian, that is “one hand fapping”.
thequickbrownfox

When people use the term “Pop Culture” they are generally referring to the output of corporate behemoths like Fox and Clear Channel.

There is, as always, the dichotomy of “mainstream” and “indie” except the former has become a claustrophobic, self-referential vortex.

I mean, who the hell is this Lady Gaga? Or these Jonas Brothers? They don’t exist in my world, except perhaps in the occasional ad for ring-tones.
Takuan

come to think of it, what is the oldest recorded archetype of the sacrifice of the youngest and brightest?
Takuan

http://en.wikipedia.org/wiki/Myth_of_Osiris_and_Isis
Anonymous

i would prefer”hating pop culture doesn’t make you cool, so you might as well destroy it.”
Takuan

http://en.wikipedia.org/wiki/Baldr
- Antinous / Moderator
  
  And…
Vardyr

#42 PFH: It’s not that the beginners are competing against the best musicians in the world. They’re competing against not only musicians, but the combined efforts of musicians, producers, studio technicians, marketers, and loads of financial support others can only dream about. Recorded music is rarely a representation of sole musicianship.

I know very few people who enjoy live music anymore. Recently, I couldn’t help but cringe as I listened to a friend complain that her favorite band improvised a live guitar solo. It wasn’t what she knew, what she could hum to, nor what she had listened to repeatedly for years. That made it not worth listening to.

From what I gather, most people don’t want to hear musicians. They want puppets performing familiar acts they’ve heard countless times before, with as little variation as possible.

To me, that’s boring and lifeless. I’ll keep attending concerts at dive bars and contributing what little I can to the musicians who can barely afford to restring their instruments. They perform for the love of music, and it shines through every note. Even the wrong ones.

What this has to do with the original article, I’m not sure. My apologies.
Ugly Canuck

Ah. Michael Jackson. RIP.
We could all share the spectacle of your weirdness: a common experience of the strange, to help even the freakiest outliers amongst us feel relatively normal.
We all beheld his unique weirdness, so much so that it even became the symbol of the common, the too-well-known, the over-exposed: that’s the nature of the mass media, I guess. Strangers started talking to each other about him, after the news of his death, while waiting in postal and bank lines. They had this “weirdo” in common: who needs race or religion to feel a part of a community?

His music IMO could be a bit over-produced, but it was a “we’re ga-ga for tech, never enough tech” time in pop music. I mean, everybody in the 1980s was over-produced. ( While the punks, moving characteristically in the opposite direction to the mainstream, made too big a thing out of being under-produced.)
For certain, he set more rumps a-shaking than many another musician. But whether he holds the all-time record in this regard, I cannot say.
As to his immorality: not the first famous person or artist to – perhaps accurately – face such complaints, charges, rumors and whispers! Still, his blood has now turned to music, and the man is beyond all worldly shame and punishment as to his personal failings: and his ultimate reputation will rest upon how his recordings age, beyond the simple pull of the nostalgia of his current audience.
An accurate critical judgment needs some time, even a revolving of the generations, to pass, I think. But that won’t stop people from opining. Nor me, neither.
This is so bad, it’s getting dangerous: best I beat it, and make History.
Itsumishi

This is what recording loses us. It began when we started writing down music precisely, but recorded music is its final terrible form. Every beginner must compete against the best in the world. Most give up. What we have lost is no longer in living memory.

Everything is wrong with that statement.

The car didn’t take away our ability to walk any more than recording took away our ability to improvise.

I was once part of an impromptu percussion jam on Mt Buller (All Tomorrows Parties festival) playing chairlift machinery. It started with me and 2 friends and shortly after turned into about 40 people banging various parts of the machinery, tap dancing and stomping on nearby pieces of wood and metal, jangling chains, running sticks against pipes, etc.

Oh and of course what we have lost before we started writing music down is no longer in written memory. We started writing it more than 4000 years ago and due to the fact that it wasn’t written anywhere it’d be pretty hard to know what the hell it sounded like!

-

You’re actually saying “i’m annoyed because they didn’t put money in profitless music that fits my definition of artistic integrity’. Well, yeah? Why should they? Their role isn’t to waste money producing ‘quality’ music that makes you feel good about the art. It’s to make music people want to hear.

World wide live music attendance is going up pretty much in every country in the world since the ability to download whatever music you wanted free became so easily available.

I think that proves that people did want to hear other music, it just wasn’t being crammed down their throats enough and once it because easy enough to access without it being crammed down their throats they sought it out.

Hell in my city I can attend one of about 30 different live music shows a night (any night) within a half an hour bike ride of my house. Sometimes there will only be ten or so people. There will always be someone there watching though.
JamesStrocel

THERASCALKING13: I think what is meant by Lady Gaga’s comment is that her critics will complain ad nauseam about how she’s the death of music without naming, let alone producing anything other people will want to hear, as if hating what is popular automatically gives you some sort of cultural legitimacy.

I find the “Zombieconomy” argument a little fallacious in itself because it’s predicated on the notion that throwing money at the problem of musical quality is going to fix it. There’s no Michael Jackson successor toiling away in his basement in bug-tussle, Nebraska. Talented people will find their way audiences. No recording executive will consciously say to himself “This guy sucks, but he’ll be cheaper because he has no artistic integrity”
Keith

But if you look at it, Britney and Lady GaGa make music that people want to hear. They make incredibly popular music.

You’re mixing up your cause and effect. Britney and Lady Gaga make catchy, easy to listen too music (or rather, their producers do), that when combined with their manufactured persona, is titillating but non offensive. Then this whole package is marketed on a massive scale, drowning out other “product” (other music alternatives) creating an artificial shortage.

There’s only so much bandwidth and if 98% of it is playing Michael Jackson and Britney Spears, then your lazy music buying public aren’t exposed to Wilco and Metric and Frank Black (or whoever), because that requires effort. Most people aren’t going to spend the time to search out other music, when all their friends are listening to whatever they hear on the radio.

It’s selection bias. Lady Gaga is innovative and good, for pop music, but that’s because the window of available comparisons has been artificially narrowed, so that she only has to compete with 39 other mass marketed musicians who all fit the record label criteria of marketable, rather than having to compete with all music, everywhere.

Lady Gag is the best and brightest zombie in the street, but still a zombie.

The author of this piece is making the point that this is not only a problem for the music industry, but a symptom of the same lack of diversity in our economic system as a whole. Everyone is selling derivatives (1000 pieces of Michael Jackson), rather than producing anything new of value.
Anonymous

@ EeyoreX

agreed!
one could even argue that later in the video he is a “zombie” since he is dancing with the undead and appears so himself. why not use that screencap?
pfh

If we had paid MJ $24 million a year, just think, he would have produced music that was *twice as good*.

Ridiculous.

The means of producing music are cheaper than they have ever been, I think that is a far more important achievement.

Meanwhile: Can you dance, more than just twitching to music? Can you sing? Can you play an instrument?

Can you improvise?

This is what recording loses us. It began when we started writing down music precisely, but recorded music is its final terrible form. Every beginner must compete against the best in the world. Most give up. What we have lost is no longer in living memory.