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Government Is Dumb. More Evidence.

Written by Gary North on April 4, 2012

“Government is dumb.” That was a motto that Howard Ruff used to espouse. It made sense to me.

We see this in government policies to prevent monopolies in shrinking markets. It makes mergers illegal in industries that consumers are abandoning. Why intervene? Officially, to protect consumers. Actually, to gain more control, hire more people, and get promotions.

Here is a recent example. This was posted on Politico. That is where it belongs. It is all about politics.

Universal Music wants to buy the EMI music company for $1.9 billion. There are organizations loudly protesting this. They have appealed to the Federal Trade Commission to stop it. Why? The only reason that I can think of is to save the boneheads at Universal Music from buying what is clearly a mastodon in the tar pit.

Note: Universal Music is run by a man named Max Hole. I am not making this up.

Why should anyone care if Universal wants to own EMI? EMI produces records. As in CD’s. As in trademarked music. As in obsolete.

I love this:

They have been telling lawmakers and regulators in Washington recently that a combined Universal/EMI could have too much leverage in negotiating for radio airplay and store promotions, as well as in dictating terms of digital deals with the likes of iTunes, Spotify and future platforms.

Radio airplay? When was the last time you listened to pop music on a radio? When driving in your car, maybe, because you can’t stand talk radio. When did you last pull over to the side of the road to write down the name of some artist and song that you just heard on the radio? The next time will be my first.

When was the last time you walked into a store to buy a CD? I remember my last time. I bought a copy of the sound track of O Brother, Where Art Thou?. That was in 2000. From then on, I bought online. Nobody needs a record company to sell his CDs on-line.

Merging Universal’s 33 percent with EMI’s 10 percent share of the U.S. market would give the combined company a 43 percent market share in the U.S., IFPI figures show.

Universal/EMI’s clout would be even greater in some music segments — 51 percent of the Billboard Hot 100 for 2011, 60 percent of rap and 45 percent of Latin, country and R&B music — according to statistics compiled from Billboard and Nielsen SoundScan for opponents of the deal.

Meanwhile, 20 million kids are downloading free music. Do they care what percentage of this free music is controlled by Universal? No. “Just keep it coming, guys.”

Around 13 percent of Internet users download songs from file-sharing services and only 37 percent of music is legally acquired , according to market research firm NPD. And the recording industry is half the size it was compared with 1999 — when Napster was born — falling from $14 billion in 1999 to $7 billion in 2011, according to the Recording Industry Association of America. The trade group attributes that decline to both digital and physical piracy.

If Universal wants an increased share of a shrinking market, I say let them have it. Right between the eyes.

As the economy moves from atoms to electrons, from manufactured stuff to digital information, existing producers fight for market share. As people move from buying things to buying information, the question of who controls the distribution system is relegated to ancient history. Social media have more to do with sales than advertising budgets. The power of the pre-Internet distribution system is is falling steadily year by year.

Government is dumb. Pass it on.

For more evidence of stupidity, click the link.

Continue Reading on www.garynorth.com

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6 thoughts on “Government Is Dumb. More Evidence.

  1. This editorial is a random and uninformed tirade that displays absolutely no understanding of entertainment industry economics, anti-trust issues, consumer behavior or copyright issues. I agree that government is dumb…but this article is dumber.

  2. Dude, get real. It's a dying market. Sales have fallen 50% in 12 years and are headed further down. That's just a simple fact, there's no arguing with it. Probably half or more of the existing music/record companies will go out of business in the near future. Consolidation in the industry needs to happen. Either it happens through mergers and acquisitions, or through bankruptcy, but it will happen. So why does the government block it?

    As to what you're probably criticizing, why criticize the bearer of what you consider bad news? I remember 20 years ago all kinds of record/CD stores, even chains of them, not to mention every Borders and Kmart had very large sections devoted to selling CDs. Where are they now? Dead! Gone! For the past three years I've only purchased music from Amazon. I no longer buy CDs. No one I know does. He's just stating the obvious. Just because you don't like it is no reason to criticize the author.

  3. http://www.petition2congress.c...

    Go to this website and sign the petition to vet Obama and check into his eligibility to be president. Send this to everybody on your mailing list. Ask them to do the same. We must keep up the pressure on congress till they do the right thing.

    Off topic, yes, but very important. We have to force congress to investigate obama.

  4. jbynum61 says:

    How is the government dumb? They are the ones who are getting more powerful at our expense. We are the dumb ones, not government.

  5. sean murry says:

    Come november we voters will be powerful when we throw this fake out.

  6. Gummint is anything but dumb. It shoots it's mouth off constantly in various ways. More to the point, gummint is STUPID, oppressive, unresponsive, irresponsible, and hopelessly self-serving. Why do we put up with their crap?