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Friday, December 19, 2014

Digitized Products: How about just giving up?

Joshua Gans:

Digitized Products: How about just giving up?: In a very interesting talk, music producer, Steve Albini, reviewed the impact of the internet on the music industry’s woes. ...

From my part, I believe the very concept of exclusive intellectual property with respect to recorded music has come to a natural end, or something like an end. Technology has brought to a head a need to embrace the meaning of the word “release”, as in bird or fart. It is no longer possible to maintain control over digitized material and I don’t believe the public good is served by trying to.

Basically, he is saying that the whole notion of getting people to pay for music itself that they want to listen to at their leisure is not worth pursuing.

What I like about this analysis is that it gets us to fundamentals. In music, there are people who want to supply music and there are people who want to listen to it. The problem is that the competition for listener’s attention is intense. That’s the core of the economics of the industry. If there is a fundamental imbalance in competition — in this case, favoring listeners — you can’t assume that suppliers will get much. Unless, of course, the suppliers can supply something else that is scarce — for instance, connections through online communities or, mostly likely, through concerts. The Eagles — yes, The Eagles from the 1970s — earned $100 million last year. I don’t recall any Number One albums from them. It was all from other stuff.

Last time I saw the Eagles live was "A Day on the Green" at the Oakland Coliseum long, long ago (I think it was 1975).

    Posted by on Friday, December 19, 2014 at 11:20 AM in Economics | Permalink  Comments (13)


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