Music economics

2009-11-13

in Economics, Geek stuff, Law, Music, Politics

Fire escape ladder

According to data featured on Boing Boing, record labels are dying at the same time as musicians are doing better than ever on account of live performances. To a large extent, this must represent the impact of technology on the industry, particularly the internet and file sharing.

Morally and aesthetically, it is difficult to know how to feel about this. In recent decades, recorded studio music has been the major product of the music industry. More and more, that is now being acquired either free or with low margins for producers. Live music has the virtue of being irreplaceable, but the shift in that direction raises questions about where the moral and aesthetic value of music lies.

Personally, I think music studios have alienated the general public to the point that they deserve whatever financial misfortune they encounter. When it comes to musicians, the situation seems more complex. Is it right to keep rewarding someone (and often their heirs) for a song recorded at some point in time, or is it preferable to reward individual performances? Pragmatically, the options available are constrained. That said, there is a case to be made that music that produces a steady stream of enjoyment should produce a stream of revenue for the people who made it.

What do others think?

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{ 3 comments… read them below or add one }

BuddyRich November 14, 2009 at 12:50 pm

I think the record companies that can actually provide a useful service to artists will survive. Though often times they don’t act like it, they are nothing more than glorified middle men, who are being squeezed out on both ends of what they traditionally do. That being recording music for artists and then promoting and distributing that music to end retail channels.

In very rare cases do middle men exert such pressure (Walmart perhaps being an exception). Specifically with the rise of the internet and home technology, you can record your own music at home, promote yourself to a wide audience cheaply and sell directly to consumers via the internet. That doesn’t leave much left for the record companies to do, not at the percentages they traditionally command for their services. Maybe certain companies could specialize in promotion of artists, while others could specialize in studios, sound engineers, etc. to help artists create great sounding music but I think these older record companies will have to reinvent themselves to survive.

To a certain extent, you can see that is what is happening, only with a new player, the concert promoter Live Nation, signing a few big acts to be their middle man for the live tour, merchandising, etc.including future album rights. Some artists are giving away what is normally their money maker.

Tristan November 14, 2009 at 5:20 pm

“That said, there is a case to be made that music that produces a steady stream of enjoyment should produce a stream of revenue for the people who made it.”

What is the case? You’ve simply asserted intellectual property rights – but the “existence” of intellectual property rights is traditionally based on the need of recompense for the sake of creative activity. Said more simply: we promise rights to future revenue to encourage production of intellectual material. If such promise is not required for that materials production, there is no longer any reason for the promise.

The fact I made something doesn’t mean I have a right to charge other people to see it. Rather, for me to have a right to charge other people for me to see it, I need to prove that such a right is required for me to make it in the first place.

Sarah November 14, 2009 at 7:22 pm

I think the music industry swung way too far in the direction of generating income from recordings that are highly edited and manipulated to the point that the artists are incapable of reproducing the same sound in live shows. I can think of at least two bands that are significantly better live than recorded, and I think current trends will benefit good live bands at the expense of the record companies and ‘artists’ like Britney Spears. The way I see it, the value of music is in entertaining someone enough that they’re willing to pay the price you charge, and the mainstream record industry is demonstrably failing at that. It seems fewer and fewer people are prepared to pay for over-priced albums that they don’t yet know whether they will like, but they are prepared to pay a lot more than the cost of an album to see a band whose music they already know. Personally, I’m broadly in favour of artists taking more control of their careers and having a more direct relationship to their revenue stream, which is why I make a point of buying music that is self-produced by local and independent artists – is a great place to do this. I have some sympathy for the idea that artists deserve to profit from their work for some years after making it, particularly since it would be near impossible to rely on touring for income if one had young kids, so I would support IP rights for artists if they expire within 20-30 years at the most and the punishments against filesharers were proportionate (e.g. a fine of a few times the cost of the ‘stolen’ items).

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