Music, Economics, and Beyond

“The whole point of digital music is the free of risk grazing”

–Cory Doctorow

Cory Doctorow, Canadian journalist and co-editor and of the off-beat blog Boing, is an activist in benefit of liberalizing the laws and regulations of copyright and a proponent of the Innovative Commons non-profit organization focused to expanding the range of creative works available for others to build after legally and discuss. Doctorow and others keep on writing prolifically about the apocalyptic changes facing Intellectual Property generally speaking and the music industry in specific. investing

In this article, we will explore the cataclysm facing U. T. industry through the site sort of the music industry, a simple industry in comparison to those of automotive or energy. However, in the convenience of this example we might uncover some lessons that apply to all industries. 

In the web-article, “The Inevitable March of Recorded Music Towards No cost, ” Michael Arrington says us that music COMPACT DISC sales continue to plummet alarmingly. “Artists like Royal prince and Nine Inch Fingernails or toenails are flouting their brands and either giving music away or telling their fans to steal it… Radiohead, which is no longer manipulated by their label, Capitol Records, put their new digital recording on sale on the net for whatever price people want to pay for it. ” As many others have iterated in recent years, Arrington will remind us that unless effective legal, technical, or other artificial impediments to development can be created, “simple monetary theory dictates that the price of music [must] show up to zero as more ‘competitors’ (in this circumstance, listeners who copy) get into the market. ”

Unless of course sovereign governments that sign up to to the Universal Copyright laws Convention take drastic actions, including the proposed mandatory music tax to support the industry, there almost are present no monetary or legal barriers to maintain the price of recorded music from falling toward zero. In response, artists and brands will probably return to focusing on other earnings streams that can, and will, be exploited. Especially, these include live music, merchandise, and limited model physical copies of their music.

According to creator Stephen J. Dubner, “The smartest thing about the Rolling Stones under Jagger’s leadership is the band’s workmanlike, corporate approach to touring. The economics of pop music include two main earnings streams: record sales and touring earnings. Record sales are a) unpredictable; and b) divided up among many get-togethers. In case you learn how to tour efficiently, meanwhile, the profits–including not only plane ticket sales but also corporate and business sponsorship, t-shirt sales, and so forth., –can be staggering. You can essentially control how much you earn by adding more dates, while it’s hard to control how many records you sell. ” (“Mick Jagger, Profit Maximizer, ” Freakonomics Blog, 26 July 2007).

To get a handle on the difficulties brought about by digital media in the music industry, we choose the data most counted after by the industry. This data comes through Neilsen SoundScan which functions a system for collecting information and tracking sales. Most relevant to the main topic of this column, SoundScan supplies the established method for tracking sales of music and music video products throughout the usa and Canada. The company collects data on a weekly basis and makes it available every Wed to subscribers from all facets of the music industry. These include management of record companies, posting firms, music retailers, impartial promoters, film entertainment manufacturers and distributors, and designer management companies. Because SoundScan provides the sales data employed by Billboard, the key company magazine, for the creation of its music graphs, this role effectively makes SoundScan the official method to obtain sales records in the background music industry.

You may also like