Economics Uncut

Economics Uncut

A Complete Guide to Life, Death and Misadventure

Edited by Simon W. Bowmaker

This highly innovative and intriguing book applies principles of microeconomics to unusual settings to inspire students, teachers and scholars alike in the ‘dismal science’. Leading experts show how economics reaches into the strangest of places and throws light onto the occasionally dark side of human nature.

Chapter 14: Economics of rock 'n' roll

Simon W. Bowmaker, Ronnie J. Phillips and Richard D. Johnson

Subjects: economics and finance, cultural economics, methodology of economics


14 Economics of rock ’n’ roll Simon W. Bowmaker, Ronnie J. Phillips and Richard D. Johnson The unique features of the music industry offer an opportunity for the economist to answer the basic questions of who gets what and why. At the level of the firm, the industry is characterized by the entrepreneurial spirit of the creative musician who seeks to produce music efficiently and of high quality in order to satisfy consumer demand. At this level, the production of music has much in common with a highly competitive market. However, the perfectly competitive model found in textbooks ultimately fails to explain the allocation of resources in the music industry because a distribution system that contains elements of monopoly stands between the producers and consumers of music. Added to this mixture is rapid technological change that promises to bring new profit opportunities for those willing to take risks and be entrepreneurial, whilst at the same time undermine the traditional way of doing business. This final chapter proceeds as follows. Section 1 provides a brief overview of the history of the music industry, revealing how technology has always been both its friend and foe. Next, Section 2 illustrates the size and scope of today’s global music market. Section 3 examines, first, the complex relationship between the major record companies (the ‘Majors’) and the independents (the ‘Indies’), second, the economics of recording contracts, and third, how technological change is affecting the record label/artist relationship. Section 4 analyses the...

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