Biden’s strategic political reserve

This is an audio transcript of the FT News Briefing podcast episode: Biden’s strategic political reserve

Joanna S Kao
Good morning from the Financial Times. Today is Wednesday, November 24th, and this is your FT News Briefing.

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Today we’ll pick apart the Biden administration’s announcement that it will release crude oil from America’s reserves.

Derek Brower
Some people have described it as a strategic political reserve as opposed to the Strategic Petroleum Reserve.

Joanna S Kao
Our US energy editor Derek Brower explains how the move might have backfired. And FT video journalist and producer Donell Newkirk will talk about his documentary on the music business and how artists navigate the changing industry landscape. I’m Joanna Kao, in for Marc Filippino, and here’s the news you need to start your day.

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Yesterday, the US government said it will authorise the release of 50m barrels of crude oil from the country’s Strategic Petroleum Reserve, or SPR. That’s the equivalent of about two and a half days worth of US oil consumption. The White House said that the goal is to bring down fuel prices, but oil prices actually ended up higher. The FT’s US energy editor Derek Brower says commodities markets knew this was coming and weren’t impressed.

Derek Brower
All in all, the market looked at this and thought, well, that’s not a huge amount compared to what we were expecting. And anyway, in a couple of weeks time, Opec, which the US administration has been asking to increase supply, may decide to do the opposite, may withhold some planned increases or may even cut, some analysts believe. And so when you factor all those things in, the impact on prices was not quite what the administration hoped. Prices have risen, not come down.

Joanna S Kao
So, Derek, is this a blunder on the part of the White House? Did it miscalculate the oil market?

Derek Brower
Some analysts say that the administration isn’t very well equipped to handle the nuances of the oil market. I think that may be a bit unfair, has lots of very bright people working in it. I think actually it’s working just fine for the administration in terms of what the administration wants to do with an SPR release, which is signal to Americans who are about to drive home for the Thanksgiving holiday, to see their mother-in-law, to signal to them that they were acting to try to drive down petrol prices, gasoline prices. Even if it doesn’t work, that can now blame Opec and Saudi Arabia and Russia. And for the US administration that’s important because inflation across the economy is such a huge drain on President Biden’s popularity at the moment.

Joanna S Kao
So it sounds like more of a political move then.

Derek Brower
Yeah, some people have described it as the strategic political reserve as opposed to the Strategic Petroleum Reserve. This reserve that was that the White House announced yesterday it was going to tap and release oil from. And some other people described it as a symbolic move.

Joanna S Kao
The US is actually coordinating this oil release with several other big countries, including the UK, also China. How common is this?

Derek Brower
Well, this is really interesting as well, because the last time that the US got involved in a co-ordinated release was in 2011, when there was a civil war in Libya, which is a Big Oil producer, and Libya’s oil production was pretty much shut off. So that was a genuine oil supply emergency and prices, oil prices were heading north of $120. Today, there is no real emergency in terms of supply. In fact, supply is increasing around the world. What there is is a political emergency for President Biden about inflation in the US. So the International Energy Agency in the past would co-ordinate these emergency releases. This time, the IEA was not involved in co-ordinating this, and some IEA members like Germany, were quite hostile to the idea of using emergency reserves of petroleum that are there for supply disruptions like hurricanes or civil wars.

Joanna S Kao
Derek Brower is the FT’s US energy editor.

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The way we listen to music is so different than it used to be. It’s largely because of technology. People have so many ways to listen to music now. And artists have new ways to make a living. FT video producer Donell Newkirk documented the journey of his own cousin, the artist producer Dirty Blonde. Donell dropped the video on our website earlier this year.

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This film is about the evolution of the music business. The industry has gone digital with streaming now reigning supreme.

Joanna S Kao
Donell told us what inspired him to make the film.

Donell Newkirk
Watching my cousin Dirty Blonde, watching him and at the beginning of his journey, I just wanted to document everything and really show an insider’s perspective of the music industry in 2020 and beyond the current music industry. I’ve seen other documentary films. I was really inspired by Hoop Dreams and The Last Dance, Michael Jordan’s Last Dance. So I just wanted to show what the music industry was from the inside.

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My name is Dirty Blonde. I’m a recording artist and record producer. I’m from upstate New York. I’m trying to make it in the industry for about two years now.

Donell Newkirk
We grew up in the church, our grandparents, so we’re all pretty musically inclined. Singing in the choir, playing instruments. He played the drums since he was like a toddler. And so when he started making music, it was kind of just a natural transition.

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As with, I think, every artist, you know, they start out with that dream of getting a record deal and making it big, but you have to adjust. It’s not easy to get a record deal. It’s not easy to get yourself out there as an artist. As you see in the documentary at 300 records trying out performing for a record label, playing all his music, sing his heart out, giving it all he had. Essentially a tryout for the record label. And they gave him his feedback, and then they’ll they’ll see if they want to work with him or not based on his music and his character and things like that, his charisma. So yeah, we’ve seen it all. He’s went from record label meetings to independent platforms and releasing music online, things like that. Watching him adjust in finding platforms to where you can put your music out there independently and then marketing himself on social media and things like that. He’s just had to adjust in and go with what the trends are and to stay relevant.

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Before Covid happened, I was about to do a festival, but because the virus hit, it got shut down. So now I’m doing a virtual live performance with eMusic Live. It’s just a new way of of of entertainment is a new way of revenue too as an artist, you know.

Joanna S Kao
It’s not just artists. Record labels have had a huge adjustment as well. Labels once dominated the industry, and a lot of people would say they exploited artists with terrible contracts. Donell interviewed several record label executives for his documentary.

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What’s the right choice for an artist? Kind of for the artist to decide, right? I think today artists probably have more choices, and so it’s hard, whereas in the past it was simple. You really have one path which was through a major record label, and I believe that artists should do whatever deal is best for them. Some artists don’t need a lot of money. Then you got it.

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Because the labels are so flush with cash right now from streaming as they compete with each other for talent, they’re also driving up the price of signing talent. All that means that we’ve got artists that are really in a better position to negotiate contracts and they can now command bigger advances, better terms like higher royalty rates or even ownership of their masters, with the label just acting as a distributor.

Donell Newkirk
Some artists don’t need the label. You can blow up on TikTok. You can distribute your music independently and therefore you automatically own your masters and you own the majority share in the royalties. So you’re getting all your money back. You’re not splitting it with anyone besides the rest of your team.

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But labels are great for some artists. They do are very still very powerful. They still have a great marketing teams that can really help you focus. They help you to get sync licensing and sponsorships and things like that. So they do, they do serve a purpose for some artists, but every artist just has to really look at their situation and see what works best for them and what’s most important for them.

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I learned that it’s not just about music, it’s about business, too. As an artist, you are a business like Jay-Z said, “I’m not a businessman. I’m a business, man.” There’s different ways to make money. I think as a smaller artist, you know, it’s about the hustle.

Joanna S Kao
You can watch the entire documentary on FT.com. We’ll have a link in the show notes. Special thanks to FT video producer Donell Newkirk, to Jess Smith for producing this piece and to Breen Turner for mixing it.

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And a musical note before we go about Radiohead, one of the earliest bands to leverage technology. The English rock band streamed the release of the album Kid A more than 20 years ago. That’s prehistoric in internet time. In 2007, they made the album In Rainbows, available as a pay-what-you-want digital purchase. And this month, the band’s released an interactive exhibition timed to the reissue of Kid A and Amnesiac. It’s downloadable on computers and video game platforms. Radiohead produce a psychedelic experience together with Epic Games, the developer behind the wildly successful game Fortnite.

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You can read more and all of these stories at FT.com. This has been your daily FT News Briefing. We’ll be off for the next two days for the US thanksgiving holiday, but make sure you check back next week for the latest business news. The FT News Briefing is produced by Fiona Symon and Marc Filippino. Our editor is Jess Smith. I’m Joanna Kao, and I’ve been hosting for Marc this week. We also had help from Peter Barber, Gavin Kallmann and Michael Bruning. Our global head of audio is Cheryl Brumley, and our theme song is by Metaphor Music.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.