Fish, Twinkies, and the Futility of Streaming Galaxie 500

     |    Wednesday November 21st, 2012

Consider the menhaden. I know, it’s probably something you’ve never done. You may not even know that a menhaden is a fish. Ever seen one of those cartoons in which a big fish is about to eat a smaller fish which is about to eat an even smaller fish and so on? There’s a menhaden in that picture somewhere. You yourself are unlikely to eat one, despite an early 19th century gastronome reporting that menhaden were highly prized on coastal American tables: they’re oily and bony, and my guess is that they taste “fishy.” Ah, but what drives humans from them is what makes them delectable, not only to larger fish, but to birds like ospreys and eagles.

In the eastern and southern United States, menhaden have always been so plentiful that fortunes have been built on them, harvesting them in huge quantities and grinding them up for fish meal and fish oil, rich in those omega-9 fatty acids that are so good for you. So you might well have eaten menhaden if you fertilized your vegetable garden with fish meal or took B vitamins. And the menhaden have always come back: they lay squillions of eggs, and a whole lot of them hatch. Just one of those American species like cod and the passenger pigeon and the Carolina parakeet whose numbers are uncountable.


Although, as some of you have realized, two of those species are extinct and the other is endangered. Cod once existed in such numbers that it’s amazing the Irish didn’t discover the American continent by walking across the Atlantic on their backs. No more. Passenger pigeon migrations used to darken the sky so much that people had to light lamps at noon in order to read. The last one died in the Cincinnati Zoo in 1914. As for the menhaden, word from the Chesapeake Bay, and specifically from the Atlantic States Marine Fisheries Commission, is that the population is down. Way down. The Omega Protein Company, America’s leading menhaden harvesting and processing company, disagrees. And they’re resisting the call to scale back the catch.


“”I think that’s the view of someone who’s never owned a business,” said [Omega spokesman] Ben Landry. “We have shareholders, and our duty is to maximize the resources that they’ve provided us. Executive compensation I don’t think factors into fisheries management.”


Okay, hold that thought for a minute.


Next, consider the Twinkie. That’s something you may actually have done in the past couple of days, whether you’ve eaten one recently or not. It’s the flagship product of Hostess, who’ve been making what can only be described as synthetic pastries for a half-century or more. By “synthetic pastries,” I add for our European readers, I mean weird, chemically-enhanced cakes injected wtih creamy fillings and sometimes frosted with a rubbery substance. Reading the list of ingredients requires a degree in organic chemistry. (Inorganic chemistry, too, come to think of it). While Hostess makes a lot of different products, the Twinkie is its most famous one both because it sponsored the Howdy Doody Show in the 1950s, a show any kid with a television at the time watched, and because when San Francisco City Councilman Dan White murdered his colleague Harvey Milk and Mayor George Moscone in the 1970s, his lawyer’s defense was that he was so amped up on Twinkies that he didn’t know what he was doing. Seriously. You can look it up. 

At any rate, as anyone who’s been near Facebook this past week knows, Hostess announced that it was going out of business, laying off its 18,000 workers, because the unions were bleeding it dry and it could no longer afford to make, among other things, Twinkies. Needless to say, the online masses, faced with the disappearance of a beloved icon of their childhood, one they hadn’t gone near in ages, noticed that pay to the top executives at Hostess had gone bazootie in recent years, and pay to the bakers and, I don’t know, maybe the chemical engineers who made that filling, hadn’t. Of course, the story wasn’t quite that simple, and at the time of writing, Hostess has agreed to negotiate with the unions and several other companies had stepped in to buy the brands, including the Mexican Grupa Bimbo, the world’s largest baking company (someone must still actually eat these things), and the funeral’s been called off for the moment.


Now let’s pick up another thread that’s been humming around the Ward Report for a while, namely getting paid for online music streaming. This one has been the focus of a lot of attention lately. For one thing, there was the annual Future of Music Summit Meeting in Chicago, at which David Lowery unsurprisingly weighed in, casting Orwellian aspersions at the suspiciously-named Internet Radio Fairness act. Greg Kot has a good summary here. Pandora, as the oldest streaming service out there, has received a lot of the attention, mostly because its president, Tim Westergren, is always portrayed as a former musician, which, indeed, he is. (I’d like to remind those who think that that automagically makes him sympathetic to musicians, instead of to his multi-billion-dollar firm, of Jeff “Skunk” Baxter, former lead guitarist for Steely Dan, who is now a Republican and missile-defense scientist. Being able to operate a guitar doesn’t necessarily turn you into John Lennon). But a bunch of current musicians, including some of the industry’s top earners, have signed a statement opposing Pandora’s lobbying for this “fairness” law, according to the Hollywood Reporter.


Nor is Internet radio the only place where musicians aren’t getting paid. The all-important YouTube, which, like it or not, gave the music business several big earners, most specifically Justin Bieber, whose whole early career is owed to the Google subsidiary, seems to be a lousy place to make money, essential as it is, according to this article in the Guardian. Forty bucks for a million plays? Well, that’s just the songwriter’s cut. I bet Bieber made hundreds. As far as I can make out, Google’s current music policies are pretty incoherent, not least because they have yet to introduce any kind of model that has any traction with consumers.


But Pandora and Spotify, well, they’re totally different beasts. And although, in a recent article, Spotify’s chairman, Daniel Ek, argues that per-play payment to an artist, no matter how small, is more sustainable for the artist over time than the one-time payment for a CD (and, along the way, predicts that physical product will be extinct within 18 months, which I sincerely doubt), he’s not explaining how musicians are expected to stay alive while their micropayments accumulate.


Which brings me to the real headliner of the past week, a story from Pitchfork, of all places, by indie-rock pioneer Damon Krukowski, who was part of Galaxie 500 and is currently half of Damon & Naomi. Damon’s been in this world of independent music since 1988, and he thought he’d seen it all. But in the first quarter of this year, one of Galaxie 500’s bigger hits, “Tugboat,” was played 7800 times on Pandora, for which he received a check, to be split among the three songwriters, of $0.21. Seven cents apiece, to save you the heavy math. Now, granted, next to a newer song by a more currently-popular artist, 7800 plays isn’t that much, but you can see how this thing might scale. Still, it’s not chopped liver, and presumably other Galaxie 500 and Damon & Naomi songs were also played during that quarter. Spotify did better: 5960 plays of “Tugboat” brought in a whopping $1.05 for the three songwriters. One thing that Spotify is supposed to be good for is for users to set up “channels” based around musicians, which can be shared, ideal for people with non-mainstream tastes. Maybe it just hasn’t caught on enough yet. Or maybe Pandora and Spotify just just aren’t interested in paying artists, Pandora’s multi-billion-dollar IPO notwithstanding. Krukowski then goes on to note that Pandora reported a loss of more than $20 million for the same quarter in which they paid Galaxie 500 the $o.21, and Spotify lost $56 million last year.


But here’s Krukowski’s real insight, which came when he saw that “the sale of recorded music has become irrelevant to the dominant business models I have to contend with as a working musician. Indeed, music itself seems to be irrelevant to these businesses — it is just another form of information, the same as any other that might entice us to click a link or a buy button on a stock exchange.” (Incidentally, you can listen to all the Galaxie 500 and Damon & Naomi music you want to at the links at the end of the article).


Or, to put it another way, these new businesses care as much about the critters who provide their raw material as Hostess does for its bakers and Omega does for the menhaden. The big fish are making out fine: who cares about a little overfishing in the world of talent or labor? As for the rest, let ’em eat Twinkies.

A shoutout this week to Jack King and Mark McDonough for their attention to the menhaden issue. Thanks for the fish, guys!