Re-education on How We Value Things
Artists are rarely celebrated and valued as much as the art they produce. Typically, the value of art is dictated by the cultural majority, which is the population that influences the world’s views on sex, intelligence, faith, politics and other facets of human expression most. National power is very much associated with a state’s ability to enforce the cultural assimilation of their statehood neighbors, and thus, when musicians, authors, and scholars become popular in foreign nations, a cultural appreciation of that state’s brand and prowess increases in global favorability.
For the past several hundred years, the Western world has been society’s cultural majority, and thus the value of art, whether created in the West or stolen by the West, has been evaluated by the West.
Such a lopsided dominance on who assesses the value of global creativity and assets creates disparities in valuation, and thus, disparities in wealth. We see this disparity in many ways, for example, through how we measure intelligence. Many people think that if they score high on a standardized test like the GMAT or SAT, or get a high IQ, that they must be one of the most intelligent individuals in society. That assumption is incorrect. What about athletic intelligence in a game like football or basketball? What about emotional intelligence when prompted to react brashly in an argument? What about empathetic intelligence? The fact is, whoever makes the test, determines the outcome.
Historically, different forms of art have been touted with more ‘cultural value’ than that of other forms of expression. For example, who is to say that Michael Jackson’s Thriller, an album that has gone 30-times platinum and sold over 1B records, is more or less influential than Johann Sebastian Bach’s Toccata and Fugue in D Minor? Many westerners, with a skewed and myopic view of global value, would scoff at the comparison.
One thing is for sure, neither artist ever realized the value that their work provided to society through a 1-to-1 increase of their net worth, despite entire markets of musical variations, businesses, and cultural emotes being created from their work. In fact, there exists a massive disparity within the modern entertainment industry when it comes to the race, gender, and sex of celebrated creatives and their respective career net worth. In the context of the United States, the root of American popular music has been stolen, black culture. Now before you get all high and mighty, let’s take a look at the genesis of some of the most popular musical genres:
- Jazz — Buddy Bolden, an African-American bandleader called “the first man of jazz” by historian Donald M Marquis, was at the forefront of the jazz movement (BBC)
- Blues — The blues originated on Southern plantations in the 19th Century. Its inventors were slaves, ex-slaves and the descendants of slaves — African-American sharecroppers who sang as they toiled in the cotton and vegetable fields (All About Jazz, PBS)
- Funk — James Brown (God Father of Soul) and Alfred Ellis are the God-Fathers of Funk (Vulture)
- Hip-Hop — DJ Kool Herc is founding father of hip hop, a genre born from sociopolitical beginnings in an effort to relay the African American experience (History)
- Rock and Roll — Rock ’n’ roll was influenced by a Deep South black music genre called the Blues, and, over time these genre inspirations, mixed with a pattern of stolen lyrics and segregated music publishing, almost erased early contributors/founders of the genre. Rosetta Tharpe, the ‘Godmother of Rock ’n’ roll,’ was the black woman who invented that ‘rock and roll sound,’ was born over 100 years ago — twenty years before Elvis, and a decade before Chuck Berry (Mic, Slate, Splinter News)
The claim being made isn’t that the evolution of all music, the aforementioned brands included, isn’t an alloy of diverse artists moving our collective culture forward. The argument being made is that marginalized communities have been erased as pioneers in popular music outside of hip-hop, and, as cultural contributions have been minimized to that of ‘natural talent,’ so have the rewards to artists that deserve far more than they had before they died and were posthumously titled as ‘legends.’ The brands of each of these influencers are worth billions if we take into consideration that, without their contributions, certain genres would not exist as they do today, and many newer artists that were inspired by their work may have not become the icons we so quickly recognize and praise.
How do we end long-lasting disparities in wealth and attributed influence so that, regardless of the originating narrative, the person responsible for what’s produced more directly benefits from their work? The answer may be in finding ways to more closely associate artist net worth with artist brand worth.
The Wealth of a Brand
The very brand of an artist supersedes the net worth of their total assets and annual earnings. The only possible way to calculate the ‘worth’ of an icon’s impact on society is to sum the total revenue generated from their work. Every concert, album sale, products sold due to endorsement, featured commission and so forth.
In contrast, corporations enjoy valuations based on partially informed investment research and the court of public opinion. Brand valuations can sore upwards of multiple billions of dollars — even if the entire company is based on a lie. Theranos, a corporation initially touted as a breakthrough technology company, but is now infamous for its false claims to have devised blood tests that only needed very small amounts of blood, is a great example. It went from a valuation of $4B of hype and misinformation, to $0 and multiple lawsuits.
Corporate Personhood to Human Corporatehood
There exists an interesting and fleetingly accountable dynamic, particularly in the United States, where corporations benefit both from speculative societal value and corporate personhood. The very notion that a corporation has at least some of the legal rights and responsibilities enjoyed by a natural person (physical humans) should posit that natural persons should experience the same benefits held only by corporations — mainly that their brand worth can be fractionalized and speculatively evaluated by public opinion to assign, or deprive wealth. Of course, the only natural person markets that have thrived, to date, is that of the transatlantic slave trade and the continuation of human trafficking. These markets view the natural persons as assets themselves and have contributed to the continued systemic oppression of marginalized populations around the world. In fact, societal minorities, whether designated by wealth, geography, or ‘race,’ have often been the resource of human markets, and since such markets served as the foundation of the modern economy, particularly in the western world, the systems built atop of it have continued to disparage these communities legally and economically.
The modern economy is built on the preface that a second-class majority must exist to maintain a profitable, capitalistic society. Since value cannot be infinitely derived from a static amount of resources, the practice of continual exploitation is the only way to create a margin between revenue and expenses. As costs decrease, and technology becomes more available, that margin equivocates to the exploitation of less educated, non-wealthy individuals. There are many examples of this with the brands many of us love today:
- Nike — Utilization of child laborers
- Amazon — Poor work conditions and pay loopholes of factory workers
- Uber — High transactional fees to workers relegated as contractors
- Retail Banking — Utilization of withdrawing fees as residual tax on the poor
The list may be more infinite than what humanity perceives its natural resources to be.
If we abandon the notion of humans as an asset and rather focus on the sum of that person’s outputs, be it their artwork, music, and otherworldly contributions, we could derive markets that better capture that person’s value and impact in the world. The best summative term that captures such value is an individual’s ‘brand.’ A person’s brand could be assigned a fluctuating valuation, and, I’ll argue, even be securitized, to reward, and disincentivize the world’s most influential creators by more closely associating their net worth with the holistic value they provide society.
The idea of fractionalized brand ownership disrupts the current value model in which a creator’s value is packaged by an industry and sold at the creator’s economic detriment.
Brand as a Business: A Case Study in the Entertainment Industry
The music industry alone has been booming, generating $43B in 2017, the most its made since 2006. Yet artists got only 12% of the industry’s total revenue (USA Today). Listeners are spending more money than ever before, largely on streaming and live music, with consumer spending totaling more than $20 billion last year. Of that $20 billion, music business entities such as record labels took home $10 billion, with musicians taking home just $5.1 billion — the majority of their revenue coming from touring and concert sales (USA Today).
Why? As middlemen including labels, radio companies, and streaming services step in to sell and distribute music, they each take cuts of the profits, siphoning revenue away from artists (USA Today). As album sales become irrelevant, and the number of streams becomes the primary metric of success, the current business model of the music industry, for the artist, is quickly becoming outdated. Continuously going on tour, remaining relevant enough to earn endorsements, and remaining controversial enough to remain relevant isn’t a sustainable business model. Being an independent artist isn’t much easier, as marketing and distribution are left up to a team much smaller than global music studios like Universal or Sony Music Entertainment. Breakouts like Macklemore are exceedingly rare to come by.
Yet, for artists like Kanye West, Dr. Dre, Michael Jackson, and many others, the realm of their brand influence beyond their music, in verticals like fashion and retail products, has a significant effect on global trends in popular culture. These residual effects, and the resulting trends they inspire, are never adequately compensated for.
Their brand has much more value than they could ever earn via traditional means in the industry they create for.
In addition, there exists a disparity of wealth given creativity. Meaning that, depending on which category of creativity your iconic stature contributes toward most, a different net worth cap is prescribed for you. Michael Jackson ($500M), arguably one of the most influential artist of all time, was far less wealthy than Bernard Arnault ($41B), the chairman of luxury conglomerate LVMH, whose stable of brands includes fashion powerhouse Louis Vuitton. The core difference here is that corporate revenue insulates personal wealth more than an individual’s performances and masters given the current operating model of the music industry. Musicians are assets in a portfolio — not owners of a brand.
“The death of the music industry as we know it is near, because Artists are businesses. We’re not just Artists. Artists shouldn’t have managers, Artists should have CEOs. Let’s take someone like Travis Scott..How many Uzis (Vert) and Travis Scotts are there, and how many business people are there? I’d imagine there are far less Travis Scotts and Uzis. Don’t you think a Travis Scott would deserve the same amount of employees as a Dropbox in its first year, so that someday he can IPO for $10B? For artistry and artists, where’s the point where you IPO?” — Kanye West
The entertainment industry, by and large, operates this way. If we look at the NBA and NFL, we see the same trend. Iconic players like Lebron James and Kobe Bryant, despite their respective $0.44B and $0.5B fortunes, do not nearly make as much capital as they provide their respective sports organizations and endorsement partners. The fact that you can become the best in a major global vertical, and never become a billionaire, poses major concerns for capitalist markets that have a disproportionate amount of minorities contributing toward the success of that industry, and is a systemic reason why entertainment industries have capped the earning potential of portfolio assets. It’s a natural person market that limits economic opportunity in exchange for the freedom that couldn’t be afforded during earlier human markets. When a market exists that intentionally prohibits certain individuals operating within that industry from achieving wealth, particularly when those individuals contribute the most value toward the market as a whole, you may rightfully parallel such markets to ecosystems propagating ‘new slavery.’
The fact that you can become the best in a major global vertical, and never become a billionaire, poses major concerns for capitalist markets that have a disproportionate amount of minorities contributing toward the success of that industry.
Artists, at a certain height in their career, are in fact businesses. The value of their brand exceeds that of most corporations, and they directly contribute toward their nation state’s cultural prevalence in the world. And yet, there exists many blatant uses of artist brand assets that monetize such resources in secondary markets, without the original creator getting any royalties. This particularly affects artists of color. Games like Fortnite, literally sell the dances created by popular artists as emotes, methods of expressing emotion in a theatrical manner. Fortnite earns twice as much revenue per user than Google, Twitter, and Snap. The success, in large part, has been the availability of the emotes in tangent to the animated gameplay.
The game has been so popular, that it has increased the value of the company that created it, Epic Games, to $15B. The company earned $3B in profit in 2018 alone from the game. So where do we draw the line between fair use and exploitation of celebrity brand assets?
Looking Toward the Corporatization of Iconic Brands
So how can we corporatize the brand of an individual into a private business that, given the right conditions, could go public and fractionalize its equity ownership?
In Part II, we look at an extended case study of transforming an artist’s brand into an investable company and how such a process could create new markets, opportunities, and ethical concerns along with it.
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About Robby → Robby is a southern-bred activist and impact entrepreneur. He’s currently CEO of Emerging Impact and served as the former Head of ConsenSys Social Impact. Greenfield is a Brother of ΑΦΑ, a Wolverine Alum, and Emory MBA Alum. Before full-time crypto-life, Robby worked at Goldman Sachs, Teach for America, and Cisco Systems. He commonly writes about crypto-economics and blockchain technology with a social impact focus. Find out more about my projects in the social sector @ http://robtg4.co/