Valuation- What's Music Really Worth?

as we all know, the experience of a note, a voice, 

a drum, an orchestra can lift the human experience to a higher plane and bring people together like nothing else on the planet.

some might go so far as say music is priceless.

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if you're one of them, you way wish to avoid
any encounters with the Music Industry.

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one of the signs that the MBAs have taken over that sonic asylum is the frequency with which words like 'value' and 'valuation' come up. it's boardroom talk for "what's do you think you can get for it?"

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there are a number of areas where valuation plays
a decisive role in modern music. at the top, it's a question worth millions of even billions of dollars.

the English company EMI owns more songs than anyone else in the world, including including Tamla Motown hits and Jagger/Keith Richards songs. last year, their songs generated generated £419.6 million aka $664,265,520.69 USD.

according to a recent report on The Times Online, artist payments take up 54.8 per cent of its revenues from its songwriting catalogue, leaving 45.2 per cent for itself — equating, in theory, to £189.7 million last year, aka $300,472,495.49 USD.

The Times article cited the story of "Chrysalis, which owns copyrights to songs by David Bowie, Blondie and OutKast, was the first music company to value its publishing catalogue in 2001...

...The music and radio group redid that exercise this year, and disclosed that its publishing catalogue was worth £190 million — after a valuation from Houlihan Lokey, the investment bank. Its income after payments to songwriters — known as its “net publishing share” (NPS) — was £11.3 million, and its profit margin is between 25 per cent and 30 per cent."

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how sweet it is...

right now there's a little war going on at the top between Sony and BMG. i read about it on coolfer.

"The warring parties could not even agree on the valuation of Sony BMG, the world’s second-largest music company, with Sony indicating that the business was worth $1.8 billion (£920 million) and Bertelsmann preferring a figure of $2.4 billion..."

the value in this case is generally computed by extrapolating the historic earning power of said copyright over 4-5 years into the future. with money like this involved, no wonder people take it so seriously.

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then there's the valuation that hits closer to home for most of us... how much does it cost me to hear music i want to hear?

in terms of that valuation, it was "how low can you go" this year, led in part by Amazon.com's Daily Deal pricing- that $3.99 price tag lofted titles like Arcade Fire's "The Suburbs" to the top of the charts.

elsewhere, a single tune can cost you $1.29 at a variety of outlets, or maybe 79 cents per download, on top of a $9.95 monthly subscription fee. 

all of which is remarkable close to what i paid for a 45 rpm single when i was a music-loving child - $1 CDN.

quibblers might point out that back then i was actually getting 2 songs for a dollar, as well as a physical object made up of petroleum and a paper sleeve, often with 4 colour artwork that had been shipped across the continent to the store at the mall in my small town...

if i still had some of those singles, and if i hadn't played the ass off them, they could be worth 10 to 100 times what i originally paid for them if i could find the right buyer... say on eBay.

the value of a used MP3 is virtually nothing. until, of course, you find yourself in court.

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if you steal - ie shoplift - a CD from a store and get caught, in Canada the charge will be Theft Under $5,000.

The Crown Attorney in Ontario generally treat this type of theft less seriously than other types of criminal charges. Generally a shoplifting allegation is considered to be on the lowest end of the criminal law spectrum- with murder at the opposite end of the spectrum. If you have been caught shoplifting, you may be able to avoid a criminal conviction without even going to trial if you are a first time offender.

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What kind of penalties are we looking at?

In general a misdemeanor is punishable with fines of less than $1000 dollars and less than one year in jail. Felonies are punishable with fines of over $1000 and multiple years in prison. There are also other punishments involved such as restitution, community service, probation etc...

Realistically the punishments involve little to no jail time, fines, and probation.

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if you have "stolen" an MP3 file, though, you may already be fucked.

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"stealing" in the digital world is a bit of a conundrum. unlike the tradition essence of theft, you have not deprived anyone of the use of their 'thing'.

if i go next door and take my neighbour's lawn mower, for instance, they can't cut their grass.
their life is clearly the poorer because i have deprived them of the use of something they owned.

in the digital world, if i make a copy of a sound file, the original still resides with the owner. they are still able to enjoy the use of it.

be that as it may, if i have downloaded a copy of a sound file, it's the contention of the Music Industry that the damages are  gi-normous. the valuation of this data goes literally through the roof.

Thomas-Rasset was found liable for illegally downloading and distributing 24 copyrighted songs last June and was ordered by a federal jury to pay $1.92 million in damages to six music labels...Tenenbaum, a postdoctoral student at BU, was found liable last July for illegally downloading and distributing 30 copyrighted songs. He was ordered to pay $22,500 per song by a federal jury in Boston.

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think that $22,500 for a single song is a bit extreme when stealing an entire CD of songs from a store would maybe net you a fine of less than $1,000 or some community service hours?

how about $80,000?


Last year, a federal jury ruled Thomas-Rasset, a mother of four from Brainerd, willfully violated the copyrights on 24 songs. She was ordered to pay $1.92 million in damages, or $80,000 per song. Last week, Chief U.S. District Judge Michael Davis reduced the verdict to about $54,000 in damages, calling the jury’s penalty “monstrous and shocking.”
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who disagrees with Judge Davis? the RIAA and US Department of Justice :


The Department of Justice says the jury’s $222K damage assessment in the RIAA lawsuit against Jammie Thomas is constitutional, in what appears to be a fairly serious blow to American file sharing defendants [updated in light of comment].

Thomas had been found guilty of sharing 24 songs on the Kazaa file sharing network — an average of $9,250 per song.  She and her lawyer argued that the damages were unconstitutional, given that those 24 songs would have cost only $23.76 on iTunes.

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does it pay to have friends in high places?





you betcha!

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value, it seems is akin to beauty...
it exists in the eye of the beholder...



or in this case, perhaps, the ear,




or maybe the imagination...

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but here's thought...

...perhaps it's not the the lawyers
and accountants or even the courts
who decide the value of music.

...perhaps it's us.

the listeners.
the audience.

the 'fans'.

maybe, since we are the ones
who give music meaning,
we are also the ones who decide
if it has any value at all...

and if so, how much.

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because no matter how great an Artist
you may be, without us "your music"
is nothing more than "your hobby".

...and all those in the copyright cartel
would do well to remember
that without us, "your" music
is just a bunch of data...

nothing more than ones
and zeros that ultimately
add up to nothing.

just a thought.

- 30 -

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