The bonds that fell to earth. Bowie's part in the financial crisis

Did David Bowie spark the global financial crisis?

It was a question seriously asked after Lehman Brothers collapsed in 2008.

A decade earlier in 1997 he pioneered what came to be called Bowie Bonds. The first was essentially a long-term loan to him in return for the future revenue from the 287 tracks he released before 1990.

He and his financial engineer collected $55 million. The bond holders collected the rights to the income from singles such as Space Oddity, Heroes, Changes and Ashes to Ashes. After 10 years Bowie had to return the $55 million (plus interest) and the bond holders had to return to rights to income from his tracks.

Securitisation, as it was called, had been around for a while, but Bowie showed it could be used for almost anything. By the late 2000s it was being used on an industrial scale to bundle the future income from bad US home loans with the future income from good ones and offload it to unsuspecting investors.

In the new movie The Big Short opening in Australia on Thursday Brad Pitt and Ryan Gosling outline what happened.

Bowie got the better end of his deal.

His bonds were given a AAA credit rating. Prudential Insurance bought the lot. Yet by 2004 they were downgraded to just above junk status. The growth of the internet and body blows to the traditional method of distribution meant his catalogue performed far worse than thought.

He knew it was going to happen.

An early internet service provider (he set up BowieNet at about the time Malcolm Turnbull helped set up Ozemail) he foresaw the arrival of digital downloads and streaming services years before they took off...

Here he is talking to the New York Times in 2002:

"I don't even know why I would want to be on a label in a few years, because I don't think it's going to work by labels and by distribution systems in the same way. The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it's not going to happen."

"Music itself is going to become like running water or electricity," he said. "You'd better be prepared for doing a lot of touring because that's really the only unique situation that's going to be left. It's terribly exciting. But on the other hand it doesn't matter if you think it's exciting or not; it's what's going to happen."

Bowie didn't spark the financial crisis. He was ahead of his time in applying to music the techniques that sparked the crisis.

As always, he spawned imitators. To this day a Los Angeles firm called Royalty Advance gives artists a quick cash advance on their royalties. But those artists are unlikely to ever do anything like as well out of securitising the future as Bowie.

A man of his time, and beyond his time, he was a one-off.

In The Age and Sydney Morning Herald

 

Read more >>

Blockbusters. The net is the force that is making us all alike

It's getting hard to see movies other than Star Wars.

 Playing on a record 941 Australian screens, The Force Awakens is squeezing other films out. Want to see a different film? You'd better be quick. Since December, other films have been on screens for mere days, replaced by others on for mere days, as The Force and The Force in 3D monopolise real estate and obliterate potential competition.

Fortunately, many filmgoers I know don't seem to want to watch other films. Some have seen The Force Awakens repeatedly. Others who aren't that interested feel they have to see it in order to find out what everyone else is talking about.

It isn't what we were told would happen.

Ten years ago, in an award-winning book titled The Long Tail: Why the Future of Business is Selling Less of More, the editor of Wired magazine Chris Anderson argued that blockbusters were on the way out. In their place would be "a market of multitudes". There would still be big sellers, of course, but beyond them would be an ever-growing tail of niche products that would do surprisingly well, "shattering the mainstream into a zillion different cultural shards".

Anderson used the example of a long-forgotten British book, Touching the Void, by mountain climber Joe Simpson. It sold poorly, until a decade later a fellow mountaineer, Jon Krakauer​, released another book, Into Thin Air, which became a sensation, causing Touching the Void to start selling with renewed vigour. It became a movie and a paperback and eventually outsold the Krakauer book two to one.

It happened because of the internet and online bookseller Amazon recommendations. Amazon's software told people who bought the Krakauer book that they might also like Simpson's story, and ecstatic reader feedback pushed the software to keep recommending it until it rose from the dead.

It could do it because bookstores no longer had physical limits...

"Scarcity requires hits," Anderson wrote. "If there are only a few slots on the shelves or the airwaves, it's only sensible to fill them with the titles that will sell best."

But with bookstores and record stores and movie stores suddenly limitless, and with search engines suddenly clever, the real money was to be made in the "long tail" of smaller sellers, which, when added together, would outsell the blockbusters.

Anderson's data seemed to show the tail growing. Record stores would have once sold only a few thousand units. Apple told him every one of the 1 million tracks in its iTunes store had sold at least once. Netflix told him that almost all of its massive collection of movies had been seen at least once. The tail seemed limitless.

Except it didn't work out that way. According to more recent data pulled together by Harvard Business School professor Anita Elberse, the long tail is weakening while blockbusters grow stronger.

She says of the 8 million digital music tracks sold in 2011, an astonishing 7.5 million were barely heard at all, selling fewer than 100 copies. An astounding 32 per cent sold only one copy.

"Yes, that's right: of all the tracks that sold at least one copy, about a third sold exactly one copy," Elberse writes.

It's the opposite of what Anderson predicted. Two years earlier, 27 per cent of tracks sold just one copy. Two years before that, 24 per cent sold one copy. The more digital sales have grown, the less important the tail has become.

Meanwhile, the head is swelling. When Anderson wrote his book, million-selling tracks accounted for 7 per cent of total sales. By 2011, they accounted for 15 per cent.

Google's Eric Schmidt, who endorsed Anderson's book at the time, now says things are moving in the other direction. "I would like to tell you that the internet has created such a level playing field that the long tail is absolutely the place to be, that there's so much differentiation," he told McKinsey Quarterly. "Unfortunately, that is not the case," he said.

"In fact, it is probable that the internet will lead to larger blockbusters and more concentration of brands. When you get everybody together, they still like to have one superstar."

Google ought to know. Few of us ever look past the first few search results. We want what others have found. In the 1950s, when the radio rule was that "no tune ought to be repeated within 24 hours", Todd Storz and Bill Stewart of radio station KOWH in Omaha, Nebraska, broke ranks by repeatedly playing the most popular tunes, to the exclusion of lesser-known songs.

The idea came from a restaurant across the road, where they noticed that when the staff were cleaning up they programmed the jukebox to play exactly the same songs their customers had been listening to all day. The top 40 has been with us ever since.

We want what others want. In 2006, three researchers from Columbia University set up a fake market in which 14,300 internet users were asked to rate 48 previously unknown songs. Those who were told how others rated the songs were far more likely to agree with their peers.

Australians flocked to December's Taylor Swift concerts partly because she is a good performer and also because others were going, too. It became an event, a communal experience, like the Olympics, a grand final, or the final episode of The Voice.Even Netflix, the ultimate long-tail company with a near unending catalogue, felt the need to create House of Cards.

The internet has made it easier for us to find things in the long tail, and diminished our need to do so. Why have separate pop stars for different countries when one or two will do for the entire world?

For a while, it looked as if the internet would free us to be different. Instead, for good or bad, it is binding us together.

In The Age and Sydney Morning Herald

Read more >>

Holden's tragedy. Elvis has left the room

What’s killing Holden is what killed the Top 40.

As a child growing up in the 1970s I scarcely missed an edition of American Top 40. It mattered to me because it was the Top 40. Record buyers and radio stations shared common music tastes.

But towards the end of the 1970s it began to splinter.

Some US stations didn’t play disco. They edited out the disco records before putting the program to air. Others played only country music, others only ‘black’, and others only white, including the new video hits channel MTV which famously didn’t play a black video until Michael Jackson broke through with one so good it could not be ignored.

Three decades on it is happening to news. Readers are increasingly choosing their own sorts of news, via a twitter stream or (in some cases) a newspaper that tells them the sort of things they want to hear.

Michael Jackson was a throwback. The era of universally shared musical taste probably ended earlier with Elvis. Bruce Springsteen thinks so. In a speech at a 2012 music festival he quoted a 1977 Elvis obituary:

“I can guarantee you one thing,” said music critic Lester Bangs. “We will never again agree on anything as we agreed on Elvis.”.

“So I won't bother saying goodbye to his corpse. I will say good-bye to you.”

There’s no longer a generally-agreed Top 40. There’s the adult contemporary chart, the soul chart, and so on. There’s more music, but different types of it are created for different types of people.

Which brings us to Holden.

When Elvis died Holden had close to 40 per cent of Australia’s market. We really did love “Football, Meat Pies, Kangaroos and Holden cars”. Four out of every five cars sold in Australia were made in Australia. And they looked pretty much identical.
Partly it is because we had little choice. The tariff (tax) added to the price of each imported car was 57.5 per cent.

And partly it’s because most of us probably did want the same thing - a big car. Holden gave birth to the Commodore as Elvis died. It is still with us, and it is still big. It’s competitor the Ford Falcon is big.

But our tastes have fractured. More of us have wanted small cars, more green cars, and more and more four wheel drives (now known as SUVs). But with only rare exceptions the Australian manufacturers have acted as if we didn’t. Like the makers of American Top 40 continuing to pretend there were still universal musical tastes through the 1980s each of Australia’s big four kept acting as if the key to survival was making a better version of the same big thing.

Economic theory shows us that’s what protected firms do.

Ever wondered why Qantas and Virgin flights leave at roughly the same times? It’d be more useful if they left at different times, but without outside competition they won’t.

A century ago a United States economist named Harold Hotelling explained why using Hotelling’s Law.

Imagine a kilometre long beach served by just two ice cream carts. Each sunbather wants a cart nearby. The best solution would be to put the carts where no sunbaker has to walk more than 250 meters, by placing one cart one quarter the way along and the other three quarters along.

But if that happened each cart would be tempted to move closer to the middle to grab some of the other’s business. Eventually the two would be next to each other.

Our big car makers kept specialising in big cars because they believed they could focus inwards, each trying to grab the other’s market share.

They might have gotten away with it (amid grumbles from consumers) except that the wall protecting them crumbled. On January 1 2010 last bricks were kicked away. The 10 per cent tariff was cut to 5 per cent. Offsets mean the effective rate is 3.5 per cent.

At the same time the dollar did what it had never done in the era of floating exchange rates. It climbed above $US1 and stayed there. In the quarter of a century to January 2010 the Aussie had averaged 72 US cents. It’s now 105 US cents. That makes foreign cars 45 per cent cheaper to import, and there’s no tariff wall to keep them out.

Free to buy what we want to we are shelling out for different cars like never before. Every third new car sold is an SUV. Every fifth car sold is small. Only every tenth new car sold in made in Australia. Every 25th new car sold is an Australian-made Holden.

Holden let go of 500 workers this week. It’s one size fits all business model has gone and it is not coming back.

In today's Sun Herald


Related Posts

. $275 million buys how many jobs? With Holden we don't know

. Stimulus over, we're not spending much (except on SUVs)

. AT40 "Keep your feet on the ground...

Read more >>

A half a century since Love Me Do. I don't bloody believe it.

The Guardian:

"Listening to it with fresh ears, Love Me Do sounds unlike anything else in the charts of the day... Love Me Do is weird. It's not compressed to hell.. nor string-sweetened.. It's dry, stark, almost "live": the extreme simplicity of the lyric and, on occasion, the stop/start, almost halting arrangement (check out the oddly burlesque bass drum "boomph" at around 1'52") makes you think that this is a group operating near the limits of their ability.

The lyric, while entirely within period romantic cliches, is both slightly awkward – "love me do": who ever says that when they're chatting someone up? – and direct ("someone like you"). Which makes it a pretty faithful expression of teen courting rituals, with their mixture of uncertainty and desire."

Enjoy.

Read more >>

It's a West Wing reunion - for a special cause

Details here

Read more >>

Tired of keyboards? Google is bringing back something better

Good, eh?.

Read more >>

#respillsongs, they're trending on Twitter

Highlights:

Six months in a leaky caucus #respillsongs

Still haven't found who I'm voting for #respillsongs

Rudd on the tracks - Bob Dylan #respillsongs

Tears in Kevin - Eric Clapton #respillsongs

Monday Ruddy Monday #respillsongs

Manic Monday. #respillsongs

"I see Rudd" #respillsongs

Down Among the Dead Men #respillsongs

I can get no (satis)factions #respillsongs

Peter Garrett serenades Caucus with "Short Memory" #respillsongs

You're so vain, you probably think this party's about you, don't you.@latikambourke #respillsongs

No Joy Division here "Rudd will tear us apart..." #respillsongs

"Rudd, Rudd Whine" #respillsongs

Am I ever gonna see you face again #respillsongs

(Tell me why) I don't like Monday's #respillsongs

I will come for you at night time (Washington Time) #respillsongs

The fool on the hill #respillsongs

Julia's got a gun #respillsongs

Murder on the Caucus Floor #respillsongs

Can you Feel the Knives Tonight #respillsongs

Don't Cry For Me Albanese #respillsongs

Dancing Crean #respillsongs

"Do you really want to usurp me?" #respillsongs

Against All Odds #respillsongs

While My Electorate Gently Weeps #respillsongs

"Imagine there's no Kevin" #respillsongs

Apocolypse Now - The full soundtrack #respillsongs

Read more >>

Thanks Whitney, you did good.

Only 48.

Read more >>

You say you want a revolution, extended to ten minutes

Just released, from the White Album sessions.

HT @colvinus TheBeatlesVideo

While we're at it:

Related Posts

. All Beatles, all weekend

. I am the walrus, graphically

. Talent. Chè has it.

Read more >>

Weekend listening - Stephen Fry's top five songs, chosen for the ABC

It's here. Just hit play.

Oh, and Her's Fry with Lady Ga Ga.

Enjoy.



Related Posts

. I think it's going to be a long, long time... space shuttle edition

. Really, really good news if you loved the 1970s. Casey's back!

Read more >>

I think it's going to be a long, long time... space shuttle edition

When the last space shuttle launches after midnight our time it'll be over.

No more people into space, from the US anyway.

Russia won. Who would have thought?

(My colleague points out they still have fuel)

The knowledge that we could step into space shaped my life, and shaped my children's lives.

So here's the soundtrack.

Enjoy it, before its a mere memory:

Back to Elton and Bernie.

"I miss the earth so much, I miss my wife..."

That song does so much more than it should, like all the good ones.

Here's an extract from an uplifting Chicago public radio documentary, Everyone speaks Elton John.

A group of musicians were assembled from ads in the paper and asked to play:

Everyone Speaks Elton John by 1petermartin

I think it's going to be a long, long time.

Related Posts

. What if Armstrong and Aldrin had been stranded on the moon?

. A second Apollo 11 Anniversary

. Let's remember

Read more >>

Unto us a child was born

Barack Hussein Obama, to an 18 year old girl from Wichita and a 25-year old student from Kenya.

Did they know, could they have guessed?

It's a moving document:

Related Posts

. Unto us a child is born

. Welcome Lavinia Martin (caution: impossibily cute baby photos)

Read more >>

So, the ABC has lost the rights to Paper Giants 2...

Here's a super-quick, super-good fix.

The ABC has already made a riveting drama series about the Packer dynasty.

Broadcast in 1970 and 1971 in black and white (naturally) Dynasty was way out of the ordinary in the quality of the scripts (by Tony Morphett). It used a "fictional" Sydney newspaper, magazine and television empire to deal with issues that were alive at the time such as the Vietnam War, Asian dictators, Australia's anti-apartheid demonstrations, abortion, defecting soviets, unsafe cars and so on. Two of the finest scripts were written by Bob Ellis.

I remember lines from Dynasty even now. And let me tell you, the acting was several notches above Homicide.

So here's my idea. Please message @abcmarkscott. While the Paper Giants buzz is still hot, spool up the tapes and rerun Dynasty on ABC2, as a reminder of what life was like then and how bold real-time political/corporate drama once was.

Except there are problems.

1. One-inch tape deteriorates. If the episodes haven't been transferred to film some may be lost, or literally lost. Tony Morphett's next blockbuster Certain Women was to have been sold to the BBC, but (as I heard it) the deal fell through because the ABC lost the tape of one of the episodes.

2. "Clearing rights" seems to take forever and often can't be done. The early acting contracts never envisioned replays decades later. Some of the actors or their estates will be hard to find. In the early 1990s I worked next to the team who were setting up the ABC cable television channels (yes, there were to be such things). The idea was simple... run old programs. But getting permission, from so many hard-to-trace people... let's just say it couldn't be done quickly.

So I recognise that, even if @abcmarkscott gets on the case as soon as work resumes Wednesday, nothing will go to air for a while. This needn't matter. The Paper Giants buzz will be around for a while. And I recognise that most probably not every episode will be able to be aired. This needn't matter. There are 24 episodes, all self contained, all extremely good.

Thanks to Don Story and CLASSIC AUSTRALIAN TELEVISION.


Related Posts

. First Bob and Blanche, now Ita and Kerry - the telemovie

. Rupert to the rescue - his little-known role in the creation of ABC News 24

. Memo Mark Scott: Just hit play

Read more >>

Listen in: "The US dollar took another pounding...

Those words sounded current this week as through a time warp on my favourite radio program I heard a replay of an extraordinarily unlikely 1974 hit single:





"The Americans" by Canadian commentator Gordon Sinclair (then 73 years old) must be about the only radio editorial ever to have to become a hit single, I thought...

...until I remembered this one, from my own home city of Adelaide:

Enjoy. Wallow. The group was "The Young Australians", the background was conscription for the Vietnam war, the year 1967, the voice TV executive Rex Heading (who is also famous for creating Humphrey B Bear).

It too became a hit single even though some DJs refused to play it, and was later included on Bob Hudson and Glenn A Baker's LP "Detestable Disks"





Have a good weekend.


Related Posts

. Really, really good news if you loved the 1970s. Casey's back!

. John Vincent is dead. He can't be.

. Remember when the ads used to be better than the programs?

Read more >>

Season's greetings

Related Posts

. Fruit store - the musical

. Is the Chamber of Commerce for real?

. IKEA HEIGHTS

Read more >>

Buying Christmas presents?

More at The Story of Stuff. Sorry.



Related Posts

. Henry: We've only just begun (to properly value the environment)

. James Hardie - the video and audio

. Astounding. The new Simpsons opening titles

Read more >>

Astounding. The new Simpsons opening titles:

"In his new title sequence for The Simpsons, already shown in the US and due to air in Britain on 21 October, the graffiti artist Banksy tracks away from the Simpson family on its suburban Springfield sofa to show a subterranean Asian sweatshop making Simpsons merchandise. A child dips images of Bart into a vat of acid, kittens are pulped to make stuffing for Bart dolls, the tongue of a beheaded dolphin licks envelopes, an enslaved panda hauls a cart, an exhausted, broken unicorn punches holes in DVDs."

- LRB blog

Related Posts

. Create your own Batman cartoon - really

. They do things differently at NewsCorp

. Journalism warning labels

Read more >>

Really, really good news if you loved the 1970s. Casey's back!

And in my city on 2CA in my city of Canberra of all places.

But here's what's important. The original 1970's American Top 40s can be heard on line at 2ca.com.au from 4.00 pm each Sunday.

The originals. Week by week. Endless summer. Endless 5KA teenagehood.

Sure, there are US radio stations that broadcast it on line, but the broadband links to the US are generally limited to 2Mbps, which Conroy reckons is way too slow. (And Conroy's NBN won't change it.) Within Australia they are often much faster, which makes Canberra's own 2CA the best bet.

Want proof that I am a big Casey Kasem fan? As I mentioned when he retired one of my proudest possessions is a boxed set of the LPs that constituted an actual Casey Kasem program, diverted by a 2SM staffer who knew how much it would mean to me.

Here's the rundown from July 1984. Prince and Bruce Springsteen were at 1 and 2.

At 40210784

Thanks Dominic.

Related Posts

. "Keep your feet on the ground...

. John Vincent is dead. He can't be.

. This will make you want to watch the news -- Soooo much

Read more >>

Writing. It's hard.

For many.

Julia Baird tweets:

"Writing is like getting married. One should never commit oneself until one is amazed at one's luck." Irish Murdoch.

Now JK Rowling has apparently made public one of her "spreadsheets"

"Her approach to spreadsheet plotting is to divide the columns by chapter number, story timeline, chapter title, main plots and subplots":

Click. Enjoy. Wallow.

HT: famulan via Samantha Maiden, VexNews, Kottle.Org


Related Posts

. What if Armstrong and Aldrin had been stranded on the moon?

. Where Eagle Rock began

. Talent. Chè has it.

Read more >>

Where do I fit?

I'm the bit highlighted in pale blue:

But step back:

Step back further.

Behold the entire beautiful Australian blogosphere:

The best way to fully appreciate its beauty is to download this very large pdf and roam.


It's from Mapping OnLine Publics.

And it reminds of the Total Perspective Vortex:

The Universe, as has been observed before, is an unsettlingly big place, a fact which for the sake of a quiet life most people tend to ignore.

Many would happily move to somewhere rather smaller of their own devising, and this is what most beings in fact do.

For instance, in one corner of the Eastern Galactic Arm lies the large forest planet Oglaroon, the entire “intelligent” population of which lives permanently in one fairly small and crowded nut tree. In which tree they are born, live, fall in love, carve tiny speculative articles in the bark on the meaning of life, the futility of death and the importance of birth control, fight a few extremely minor wars, and eventually die strapped to the underside of some of the less accessible outer branches.

In fact the only Oglaroonians who ever leave their tree are those who are hurled out of it for the heinous crime of wondering whether any of the other trees might be capable of supporting life at all, or indeed whether the other trees are anything other than illusions brought on by eating too many Oglanuts.

Exotic though this behaviour may seem, there is no life form in the Galaxy which is not in some way guilty of the same thing, which is why the Total Perspective Vortex is as horrific as it is...

The most horrifying form of torture/punishment in the known Universe, the Vortex is a small, featureless steel box, barely big enough for one man to stand in. The hopeless victims stand in the Vortex, and are suddenly shown, for the merest instant, the whole of the Universe: the whole infinity of creation, spanning over several trillion light years, and countless millennia, with an insignificant dot saying "You Are Here".

Related Posts

. It's back!!! Arthur, Ford, Trillian, Zaphod and the Guide itself return

. A brief history of pretty much everything

. No-one should be forcibly reduced to a single identity

Read more >>