25th January 2016

On Bowie theory and Bowie bonds

Most of the obituaries and memorials being written following David Bowie’s death will focus on his music, and rightly so. He produced a catalogue of innovative and important popular music over a long period of time, which at its best had that quality that the DJ John Peel observed marked out true musical innovation: you often couldn’t tell what he’d been listening to or what had influenced him. Or, on those occasions when you could, the style was so refracted back through his peculiar musical sensibilities that it ended up being quite distinctive in its own way. That said, and as a keen listener to his music over many years, it is important to note that there was also a fair bit of ‘filler’ amongst the ‘killer’, with decidedly prosaic music distributed throughout his back catalogue (although, unusually, I quite liked Tin Machine, but that’s another story …). I often listen to music while I’m working, and I must have cycled through his tracks thousands of times. But he has also figured directly in my academic work through important interventions made in the music industry not merely as a musician but also as a commentator and economic agent.

One example was his understanding of the implications of the internet and its likely implications for the music industry. In an interview that Bowie gave with John Pareles for the New York Times in 2002 as part of his promotion of Heathen he seemed to predict the shape of the post-MP3 crisis music industry which sees greater emphasis on live performance, the decline of royalty income and the rise of streaming services such as Spotify. “Music… is going to become like running water or electricity”, encouraging artists to “take advantage of these last few years because none of this is ever going to happen again. 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.” He was also “fully confident that copyright … will no longer exist in 10 years”, so he wasn’t right about everything, but right enough that his thinking was later picked up by Alan Krueger as inspiration for what he described as ‘Bowie theory’, because it helped explain the rapid rise in the cost of live performance that followed the collapse of income from recorded income. Once complimentary products, where live performance was subsided by recording income as the former promoted the latter, the two products were decoupled as live performance became valorised anew. If recorded music is akin to a readily availability utility, then the unique, place-based experience of live performance becomes something worth paying for.

Several reports have also argued that his knowledge of the internet was instrument in a second important intervention, which was to securitise the rights to future income from the sales of his recorded material. For example, Dan McCrum argues in the Financial Times that Bowie’s decision to sell the rights to his back catalogue through the creation of ‘Bowie bonds’ was because ‘sharing services such as Napster were already gaining popularity as a way to listen to music for free’. However, given that Napster did not emerge until 1999, and the bonds were issued in 1997, it was more likely that the upfront payment of $55m he received for giving up such rights was a greater incentive, and is better seen as part of a wider movement to capitalise all manner of assets that might generate a regular income for investors. Bowie would no doubt have been aware of the free exchange of music in MP3 format on Internet Relay Chat networks which prefigured the development of peer-to-peer networks such as Napster and its derivatives and no doubt sensed the way in which things were going, but it would have all been a bit murky at that point. In that sense, and in retrospect, he sensibly got out at the top of the market. In life, as in music, timing is everything.


This blog was first published on 11 January 2016 at http://andrewleyshon.com/. Photograph by stratopaul, used under a Creative Commons license.