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| The Big Music Project |
The economic principle I’m exploring is: Institutions are the “rules of the game” that influence choices.
My research question to help me study the economic principle is: What laws/rules that record companies put on jazz musicians to lower or raise their income?
My research question to help me study the economic principle is: What laws/rules that record companies put on jazz musicians to lower or raise their income?
The article published in RollingStone, an American monthly magazine founded by Jann Wenner that focuses on popular culture and focus to a younger readership interested in youth-oriented television shows, film actors, and popular music, titled “Musicians Get Only 12 Percent of the Money the Music Industry Makes” demonstrates this economic principle by arguing/showing that practices like recording music with record companies are outdated and take too much money away from musicians. Instead, by using technology such as streaming and live concerts musicians can cutout the middlemen and keep more money for themselves.
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| RollingStone |
Technology has given consumers more options for purchasing music. U.S. listeners spend over $20 billion a year on buying music. The entire industry including on-demand streams, CD sales, radio play, live events, have made more than $43 billion a year. However, artists only take home $5 billion, or about 12 percent.
This is because of “value leakage” involved in producing and distributing music, like the costs of running, fixing, streaming, etc… that the record companies have to do. “When you end up tracing all the dollars, around 10 percent of it gets captured by the artist. That’s amazingly low.” I am shocked by this. There are so many musicians out there and if I was dreaming of making it big out there, I would just give it up because it is not worth the hard work and risk of it all. I can’t afford anything with the money they give me.
I believe artists should be able to deliver their music directly to fans and take the majority, if not all, of the profit. But as said by Citigroup’s media, cable and satellite researcher Jason Bazinet, who co-authored the report, tells Rolling Stone that “the music business is still largely operating on the systems that it used to use decades ago, when songs were sold in stores and owned in homes and not licensed and leased via the Internet.” If Internet music companies were to “organically morph into music labels,” as Citi’s research report suggests, or if concert promoters merged with streaming services, the music business would be cutting out superfluous middlemen and offering that money back to artists themselves.” I think this is an excellent idea because musicians should be able to keep more of the money they earn---it's already difficult for artists to get into the industry and make a living.
Eventually, “Citi’s analysts estimate that the friction will decrease over time, however. It notes that artists are already getting more of industry revenue than in past years through avenues like touring and self-releasing music — both of which generate much more money than a traditional record label deal.” I glad that this old custom is being updated. We want music and if the companies don’t change their ways, there is going to be shortage of people wanting new music and not enough musicians dealing it out because of these unfair customs.
In my next blog post I will research the question: Does a jazz musician benefit more from live concerts or records?
This is because of “value leakage” involved in producing and distributing music, like the costs of running, fixing, streaming, etc… that the record companies have to do. “When you end up tracing all the dollars, around 10 percent of it gets captured by the artist. That’s amazingly low.” I am shocked by this. There are so many musicians out there and if I was dreaming of making it big out there, I would just give it up because it is not worth the hard work and risk of it all. I can’t afford anything with the money they give me.
I believe artists should be able to deliver their music directly to fans and take the majority, if not all, of the profit. But as said by Citigroup’s media, cable and satellite researcher Jason Bazinet, who co-authored the report, tells Rolling Stone that “the music business is still largely operating on the systems that it used to use decades ago, when songs were sold in stores and owned in homes and not licensed and leased via the Internet.” If Internet music companies were to “organically morph into music labels,” as Citi’s research report suggests, or if concert promoters merged with streaming services, the music business would be cutting out superfluous middlemen and offering that money back to artists themselves.” I think this is an excellent idea because musicians should be able to keep more of the money they earn---it's already difficult for artists to get into the industry and make a living.
Eventually, “Citi’s analysts estimate that the friction will decrease over time, however. It notes that artists are already getting more of industry revenue than in past years through avenues like touring and self-releasing music — both of which generate much more money than a traditional record label deal.” I glad that this old custom is being updated. We want music and if the companies don’t change their ways, there is going to be shortage of people wanting new music and not enough musicians dealing it out because of these unfair customs.
In my next blog post I will research the question: Does a jazz musician benefit more from live concerts or records?
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