1. “I wish there had been a music business 101 course I could have taken.” Kurt Cobain. There are many musicians like Cobain who are thrust into situations without financial help they can trust. Every musician should take a lesson from the comedian and actress Tina Fey: “I came to New York in 1997 to work on Saturday Night Live. I realized I have no head for business. And it would have been very easy for me to let someone take control of my money – for me to say, ‘Here, sign my checks…whatever.’ But… as much as it makes me super sleepy, I have to pay a lot of attention when my business manager talks to me about money. He talks to me about taxes, and I get really, really sleepy. But I listen.” Most people get bored quickly learning about business topics. I’ve thought a lot about how to fix this problem, but I really don’t have a great solution. Warren Buffett tries to make business entertaining in his own way and that helps. But the unfortunate fact is: few people are willing to do the necessary work to learn business concepts. I fear the situation will get worse with time and not better. Once upon a time people learned about business when they joined a big company and went through what was effectively an apprenticeship. Today companies are smaller and fewer people receive that training. I wrote about many of the basic business principles that apply to the entertainment business in my blog post on Louis CK. I supplement what I said in that post in my usual format below.

2. “At the end of the day, there’s only a few major stars in the music business, and then there’s all these people that are aspiring to be that.” John Legend.  One of my favorite articles on the music business was written by Duncan Watts and is entitled: “Is Justin Timberlake a Product of Cumulative Advantage?” This article by Watts (the link is in the notes) makes important points that must be understood if you want to understand modern economics generally. The key insight is simple: People don’t make decisions independently. Something called “preferential attachment” happens in some situations and this phenomenon produces the “power law distributions that rule everything around the music industry.” This power law phenomenon is not new but as Nassim Taleb points out, it has received an accelerating boost from digitization and the internet. A writer of a story about Nassim Taleb put it this way: “We live in Extremistan, where black swans proliferate, winners tend to take all and the rest get nothing –there’s Domingo and a thousand opera singers working in Starbucks.” In an article entitled The Music Industry’s New Math New York Magazine  points out: “Since 2008, there have been 66 No. 1 songs, and six artists are behind almost half of them. (In 1986, there were 31 No. 1 songs by 29 different people).”

There are ten more points to go. Find them here.