What the music industry reveals about economics

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For anyone thinking of entering the music industry, or working in it already, “Rockonomics” is an eye-opening and entertaining read

music tickets tell you about supply and demand, and the working of secondary markets? How do operas in early 19th-century Italy provide a natural experiment in the impact of copyright law on creativity? And how do the finances of a global concert tour illustrate Baumol’s cost disease? These are the sorts of questions that Alan Krueger, a chairman of the Council of Economic Advisers under Barack Obama, answers in “Rockonomics”.

Mr Krueger’s love of music shines through as he anatomises the industry’s finances and its increasingly “winner takes all” nature. Today the top 5% of performers claim 85% of concert revenue, for example, and the top 1% take 60%. He looks at how recording and touring revenues have changed, the business model of streaming, how contracts work and whether political activism makes business sense for artists.

He also provides much wonkish detail on radio royalties and the evolution of copyright law. He notes that William Baumol used the example of a string quartet when formulating his “cost disease” theory about the relationship between prices and productivity . A detailed analysis of the peculiarities of the Chinese music market is followed by a nod towards behavioural economics and music’s impact on happiness. There are also interviews with solo artists, bands and music executives.

Because it focuses on a single field, “Rockonomics” lacks the variety of “Freakonomics”. Despite its aspirations, the book is more effective at using economics to explain the music industry than vice versa. For readers with a budding interest in economics, other tomes will prove a more effective gateway drug. But for anyone thinking of entering the music industry, or working in it already, “Rockonomics” is an eye-opening and entertaining read.

 

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Trans....

The winners take it all...

millions of musos..*

Well there you have it. The public has successfully been taught to be intellectually lazy.

EatTheRich

alllibertynews They are all democrats so this is accepted.

Anything to do with the size of the audience that wants to see them ie based on merit?

If we are talking best singer by vocal ability best would go to Celine Dion or someone with similar or better vocal ability; most marketed and not exactly great songs or vocal ability goes to Taylor Swift! Her songs are not memorable! I’d rather listen to Alanis Morissette :)

So do well.

Need equality

Since they're all left wing liberals...why don't the performers put their money in one pile and split it equally?

The last two Taylor Swift albums post 1989 have been abominations

But performers are leftist, so that's ok

The music industry has always been corrupt.

And live nation is buying the live performance rights of musicians in a way to commodify recording artists. ...support local musicians by paying them directly and not supporting live nation venues or promoted shows if you want to boycott this.

Not ironic at all that the overwhelming majority of these elite one percent acts are progressives who preach Socialism for everyone else from their platforms.

Rockonomics still sounds like it would be a good read, might give it a go.

rilgood

Hasn’t this always been true?

i think it's the same in every sector

cue Bernie Sanders

That people think that the top 5% and the top 1% are much more valuable than all of the other performers.

So you mean the way music has always been?

They get nothing from me, far too overpriced

alllibertynews The top 5% do 85% of the work. AAA pitchers make a whole lot less than Mike trout. It's dumb, and any legit economist will tell you this, to act like people doing more productive work (thus being better compensated) should be paid the same as those who do little productive work

alllibertynews BuT MuH EqUaL PaY

Is economic inequality in the music industry more worthy of discussion than general economic inequality faced by millions around the world?

sunlorrie How long until someone starts blaming this on the racist patriarchy?

They should really spread that out some more. I’ve got a keyboard and play for my Nana occasionally, I deserve some of that money, damn 1%.

sunlorrie Time to subsidize crappy acts. It’s just not fair.

Are we supposed to be surprised by this? It’s called supply and demand.

So what! If the concert is built around me, I take the lion share... Plus this is entertainment! Not public service! No democracy there!

StineJosh Capitalism

If this was any other industry, AOC and Bernie would be howling about “inequality” and unfairness. And forcing the taxpayers to do something stupid, like subsidize crappy music or give musicians free instruments. Because you know, being a musician is a “human right.”

sunlorrie That the masses have no taste.......

An industry dominated by faux lefties living in denial and unable to amass such wealth and exposure without capitalism. Any of them going to bleat about this ‘unfairness’? Nope.

IAMANITABAKER wonder if you saw this article. I know you know.

So? That's perfectly natural and fair. I bet you'd pay more to see Mick Jagger than to see me singing...

great percents. Can you show us numbers?

How many of the top 25% can play an instrument in the 'music' industry? 🤔

Gimmick Economy EricRWeinstein

Can you sing? Because that’s the most important thing.

It is the model we all live under. Music shows it first.

It reveals that the rich get richer.

Does it teach that most people are idiots?

A lot. And most of it is ugly :)

Everything starts with THE STONES and ends to?

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