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Inside the £500m Cheval Blanc Mayfair hotel: Plans reveal how new London five-star from chain loved by the Royals and A-listers Jay Z and Beyoncé will look

Three books on how the success of streaming comes at a cost to how music is made and enjoyed

In the latter days of the past decade, when asked at dinner parties what I did for a living, I would joke that I covered one dying industry for another dying industry. At that point, it seemed as though the newspaper for which I then worked was heading towards a giant financial hole, while the record labels that for decades had, more or less, used people’s desire for a tune as a licence to print money were facing catastrophe. Both industries faced the same problem: people had become used to not paying. The Guardian, my old paper, seems to have turned a corner by asking its readers to just give it money, and the recording industry has, too.

In April, the IFPI — the global body of the recording industry — released its latest annual Global Music Report. For the fourth consecutive year, revenues were up, to a total of $19.1bn, from a low of $14.3bn in 2014. Nearly half those revenues came from music streaming, driven by a 33 per cent rise in paid subscriptions to services such as Spotify, Apple Music and Tidal. Cause for champagne corks to pop? Not quite. It is worth remembering that 20 years ago, the IFPI reported global music revenues of $38.6bn. Today’s “booming” recording industry is less than half the size it was at the turn of the century.

The nadir for the recording industry coincided with the first shoots of its regrowth. In August 2007, the British record company EMI — the fourth of the majors, alongside Universal, Sony and Warner — was bought by private equity firm Terra Firma for $4.7bn; a year later, a Swedish company called Spotify took its music streaming service public. The former was, perhaps, the last gasp of the old way of doing things — less than four years after buying EMI, Terra Firma was unable to meet its debts, and ceded control of the company to its main lender, Citigroup. Before 2011 was out, the process of breaking up the company had begun.

Eamonn Forde’s account of the EMI disaster is surprisingly sympathetic to Terra Firma and to Guy Hands, the fund’s founder and chairman. EMI’s demise was foreshadowed before Hands arrived, with a blaze of hubris in the early 2000s. Forde, a longtime observer and chronicler of the music business recounts the “disastrous and expensive” signings of that era. The most infamous was Mariah Carey: signed in April 2001 for a rumoured £70m; less than a year later EMI paid her £28m to terminate her five-year contract. Then there was the quest for the achingly hip New York electronica band LCD Soundsystem, led by James Murphy, that saw EMI also agree to take on all the groups signed to Murphy’s DFA label — none of whom were within shouting distance of popularity, or a decent financial return.

As illegal downloads scythed through record company profits, it was apparent that the old days of largesse had to end — notwithstanding the launch of iTunes in 2001, which at least offered one revenue stream from the internet — and that someone who could reimagine a business model might transform the industry. Hands thought he was that person. A former trader, Hands had made his reputation in the art of securitisation — selling bonds backed by future cash flow in asset-rich, cost-heavy sectors such as pubs and rolling stock operators. A music business with a weighty back catalogue that included The Beatles and Pink Floyd and a lucrative, royalty-generating publishing division, appeared to brim with opportunity.

Hands also could not understand the logic of a business based on signing 10 artists in the hope one of them might be successful. He realised that the successful artists subsidised the failures, and he also noted that the internet had opened up the possibility of the stars deserting the majors altogether — as former EMI figureheads Radiohead did in October 2007, when they self-released their album In Rainbows — and those subsidies disappearing. Given that was the state of play, Hands reckoned, EMI had to be more efficient in how it went about signing artists.

A decade later, much of what Hands was trying to bring about is now music business orthodoxy. He preached the need to use data when signing artists, not just the “golden ears” of talent scouts; data are now a key part of the talent-spotting process. He also wanted to launch a streaming service on which EMI could promote its music to the public. If the public wouldn’t pay, EMI would give them music for free, and find other ways to make money from the artists, from advertising and branding.

Forde quotes one EMI executive as saying the company’s staff were not resistant to change. The issue was that Terra Firma was looking to impose change from the outside, without being “music people”. “They came in, they didn’t understand, and they tried to change things without that understanding. When you do that, you are going to get resistance.”

Yet change did come, not just to EMI, but to the entire industry. It was imposed from the outside, by some Swedes. Spotify’s founders were also not “music people”, but they understood the promise of the moment: that if someone could offer an alternative to music piracy, they would win both political and industry support. And it completely transformed music, in ways no one would have predicted. Take this fact: to qualify as having been listened to on Spotify, a song has to have been played for 30 seconds. Fair enough, right? Except that means hit songs have become increasingly predictable, offering up all their pleasures in the opening half-minute. Their makers dare not risk scaring off listeners. I was told earlier this year of one major band whose forthcoming album is largely lots of short songs. They get paid after 30 seconds, and the more tracks there are, the more opportunities for payment there are.

Or consider that for all the money that the streaming services have generated for the music industry, very little of it flows back to any musicians except the select few who dominate the streaming statistics, consolidating their popularity in a way that was impossible when radio was still the greatest disseminator of music. As Damon Krukowski, formerly of the beloved 1980s alt-rock band Galaxie 500, puts it in Ways of Hearing: “Most musicians I know are paid much too little, or much too much.” Plenty of money goes back to the labels, though, because the three remaining majors are among the owners of Spotify; they demanded equity in return for licensing their music to the streaming service. Hence the IFPI’s cheeriness about the state of the industry.

Spotify Teardown isn’t the fearsome exposé promised by the fact that the company tried to suppress the research on which it is based. Its title is misleading to tech ignoramuses, too: a teardown isn’t a demolition, but a reverse of building up, to try to make sense of how a platform works by taking it apart from the top. What becomes clear, though, is that the rise of Spotify has been aided by a very old-fashioned ability to create hype. And that hype has helped Spotify deflect attention from the fact that its main business is not helping listeners discover new music (something it’s not very good at), but collecting information about listeners in order to sell its audiences to advertisers. The authors — all Swedish academics — point to the way Spotify has changed its design over the years, away from tracks and artists and search options. Instead, music consumption has been reorganised around “behaviours, feelings and moods” channelled through curated playlists and motivational messages.

All of which, the authors argue, is of great use not just to those buying advertising on Spotify, but to the major labels who license their music to it. The data Spotify collects enable the industry to work out who its market is, where it lives, what else they like, how often they listen to music — almost anything, really. It’s the greatest assemblage of information about music listeners in history, and it has profoundly altered the industry: it has made Spotify music’s kingmaker. These days, when an artist travels abroad to promote a new album, the meeting with the local Spotify office is more important than the TV appearances or the newspaper interviews. As Justin Young of The Vaccines told me last year, Spotify enables him to plan his band’s set lists so they can play the most popular song in any given city.

So what? What does it matter if one model of music distribution has been replaced by another, even if the people in charge of the new model don’t really care about music? It matters because Spotify has profoundly changed the listener’s relationship with music. One thing anyone who interviews older musicians often hears is a romantic reverie about how, when you had to buy your own music as a kid, you listened to it until you liked it, because you wouldn’t be able to afford a new album for another month. Now you simply skip to the next one, and probably don’t give it your full attention. Without ownership, there’s no incentive to study.

Or consider the sheer expanse of Spotify. “Digital music is like grains of sand or something at the beach — like, it just goes as far as you can see,” says music distributor Jimmy Johnson in Ways of Hearing. “And there’s no reason to think that any of those grains of sand is any better than any of the others. You would never build a shelf to store your grains of sand.”

Faced with the impossibly wide choice of Spotify, it becomes easier just to return to old favourites — easier than when flicking through your vinyl or CDs, because the act of looking through your own music makes things you had not thought of in years leap out at you. Spotify actually makes people into more conservative listeners, a process aided by its algorithms, which steer you towards music similar to your most frequent listening.

The volume of music on Spotify and the other streaming services means they are not, and can never be, music companies. “No one at those companies — no one — is listening to everything,” Krukowski writes. “It’s impossible. It’s not a human task, on a human scale.”

The theme of Krukowski’s slim and compelling book is that the changes in the way the music industry works have been about controlling and eliminating excess noise. That’s in a literal sense — digital technology eliminated the crackles and pops of analogue vinyl — and in a metaphorical one, too. Streaming has stripped music of context, pared it back to being just about the song and the moment. But part of what made pop great was the excess noise, literal and metaphorical, that enhanced the signal, the thing we were meant to be listening to. “The real difference,” he writes, “is between a world enriched by noise and a world that strives towards signal only.”

Noise is the context of life. Without noise, the signal becomes meaningless. It is easy to transfer Krukowki’s analysis to other areas, to see how it becomes a metaphor for how the digital revolution has transformed the world.

The world of the old EMI was one of both signal and noise; where myths and legends could be created: The Beatles! Queen! The Beach Boys! Pink Floyd! It was never all about the signal. The world of Spotify is one of signal only, and if you don’t get that signal in the first 30 seconds of the song, then what’s the point of it? And that’s no way to live, if you love music.

LA Times : Reform capitalism or face revolution, billionaires are told at Milken

The gathering of billionaires, hedge fund managers and other financial industry professionals who converged on the Beverly Hilton hotel largely had a particular end in mind: how to increase their alpha, which, not to get too complicated, means improving their investment returns.

But while the 5,000 attendees could go to sessions on the state of capital markets, listen to the chairwoman of the International Monetary Fund and strike up conversations with some of the world’s most savvy investors, it all had to go down with a rather large dose of bitter medicine.

If the barricades have not been erected in the streets, they were told several times over, they could soon be unless there is reform of the American economic system.

“It’s not whether we should be capitalist or socialist. It’s how do we make sure that capitalism is working the way it has in the past,” said Alan Schwartz, a managing partner at global investment firm Guggenheim Partners, who warned of “class warfare.”

He noted that salaries and wages as a percentage of the economic pie is a postwar low of 40%, prompting a “throw out the rich” mentality that would require some form of income redistribution to head off.

The dire warnings were reflected in the conference’s theme, Driving Shared Prosperity, and in a host of panel discussions that didn’t forget members of the 1% were in the audience.

Consider Wednesday’s lunch session on the weighty topic, “The Future of the Free-Enterprise System.” The panel was hosted by Institute founder and L.A. billionaire philanthropist Michael Milken, and featured discussion of the threat of climate change as well as the rising popularity of socialism among young people.

Milken told the audience that there is concern over the free enterprise system: “Obviously it is not working for everyone.”

Kerry Healey, president of Babson College — a suburban Boston school ranked highly for its entrepreneurship education — talked up the “conscious capitalism” movement, which posits that businesses need a higher purpose beyond just making money money.

“We are trying to change people’s feelings about capitalism,” she said.

Niall Ferguson, a senior fellow at the conservative Hoover Institution at Stanford University, said that when young people say they favor socialism what they really mean is simply a bigger role for government.

“There’s evidence they really don’t know what socialism is,” he said, pointing out how his students seem to admire Eurporean social democracies, which are nonetheless capitalist.

Preceding all that, though, was a plug for the Washington, D.C., outpost of “Ned’s Club,” an elite offshoot of the SoHo House chain opening next year. It will be in the same the building where the Milken Institute is constructing its Center for the American Dream, a paean to capitalism.

The promotional video of the existing London location celebrated an opulent display of fine dining and merrymaking that was jarring amid all the talk of impending doom. But where better to prospect for members than at the conference?

This was the 22nd year that the Institute has held the event, which featured more than 100 public panels on a plethora of topics consistent with the research interest of the Institute, which seeks to find free market solutions to various challenges.

Panel topics on Wednesday alone, the last day of the conference, included discussions of blockchain technology, diabetes and obesity, harnessing the microbiome to treat disease, and artificial intelligence.

But it was telling that Milken hosted the conference’s last discussion, titled “Keeping the American Dream Alive” and featuring Ray Dalio, who built his Bridgewater Associates into one of the worlds largest hedge funds with some $150 billion under management.

Dalio made a reported $2 billion last year alone and has an estimated net worth that tops $18 billion, making him the country’s 25th richest person, according to Forbes.

He raised eyebrows last month with a post on LinkedIn that warned that unless the American economic system is reformed so “that the pie is both divided and grown well” the country is in danger of “great conflict and some form of revolution that will hurt most everyone and will shrink the pie.”

He returned to that theme in his talk, asserting that lack of income growth among the bottom 60% of the population had lead to a loss of hope reflected in rising death rates linked to suicides and opiate abuse.

Dalio contrasted that with the New Frontier years of the Kennedy administration, when the nation thought it could eliminate poverty and set a goal to reach the moon. “I think that is the magic of the United States and we are losing that,” he said.

It was hard to say that any comprehensive concrete solutions emerged out of the discussion, though Milken seemed to have his own thoughts with political undertones.

Amid the fierce debate today over immigration, he concluded the conference with excerpts of Ronald Reagan’s last speech in the White House in 1989, which celebrated immigrants as fundamental to renewing the American Dream.

“If we ever close the door to new Americans, our leadership in the world will soon be lost,” said Reagan in the video, which ended to wide applause.